FIRST TRUST
First Trust Exchange-Traded Fund
Book 2
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund (QCLN)
First Trust S&P REIT Index Fund (FRI)
First Trust Water ETF (FIW)
First Trust Natural Gas ETF (FCG)
First Trust Chindia ETF (FNI)
First Trust NASDAQ(R) ABA Community Bank Index Fund (QABA)
Semi-Annual Report
For the Six Months Ended
June 30, 2022
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TABLE OF CONTENTS
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FIRST TRUST EXCHANGE-TRADED FUND
SEMI-ANNUAL REPORT
JUNE 30, 2022
Shareholder Letter.......................................................... 2
Market Overview............................................................. 3
Fund Performance Overview
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW).................. 4
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)............... 6
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)............ 8
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund (QCLN)....... 10
First Trust S&P REIT Index Fund (FRI).................................... 12
First Trust Water ETF (FIW).............................................. 14
First Trust Natural Gas ETF (FCG)........................................ 16
First Trust Chindia ETF (FNI)............................................ 18
First Trust NASDAQ(R) ABA Community Bank Index Fund (QABA)............... 20
Notes to Fund Performance Overview.......................................... 22
Understanding Your Fund Expenses............................................ 23
Portfolio of Investments
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW).................. 25
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)............... 28
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)............ 29
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund (QCLN)....... 32
First Trust S&P REIT Index Fund (FRI).................................... 35
First Trust Water ETF (FIW).............................................. 38
First Trust Natural Gas ETF (FCG)........................................ 40
First Trust Chindia ETF (FNI)............................................ 42
First Trust NASDAQ(R) ABA Community Bank Index Fund (QABA)............... 45
Statements of Assets and Liabilities........................................ 48
Statements of Operations.................................................... 50
Statements of Changes in Net Assets......................................... 52
Financial Highlights........................................................ 56
Notes to Financial Statements............................................... 61
Additional Information...................................................... 71
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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 (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 by investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of 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 market overview by Robert F. Carey, Chief Market Strategist of
the Advisor, you may obtain an understanding of how the market environment
affected the performance of each Fund. The statistical information that follows
may help you understand each Fund's performance compared to that of relevant
market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor 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
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SHAREHOLDER LETTER
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FIRST TRUST EXCHANGE-TRADED FUND
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
JUNE 30, 2022
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for certain
funds in the First Trust Exchange-Traded Fund (the "Funds"), which contains
detailed information about the Funds for the six months ended June 30, 2022.
The trillions of dollars of stimulus funneled into the U.S. financial system by
the Federal government throughout the bulk of the coronavirus ("COVID-19")
pandemic was effective in bolstering economic activity, as reflected by some
impressive gross domestic product ("GDP") statistics. It also fueled inflation.
I will touch on that angle as well. Data from the U.S. Bureau of Economic
Analysis indicates that annualized real GDP growth rates over the four quarters
comprising 2021 were 6.3%, 6.7%, 2.3% and 6.9%, respectively. It appears,
however, that the upside from those stimulus dollars may be waning. In the first
two quarters of 2022, the U.S. economy contracted. Real GDP declined by an
annualized 1.6% in the first quarter and declined by an annualized 0.9% in the
second quarter. Why the downturn? Well, the lion's share of the stimulus
programs for individuals ended in September 2021. The war between Russia and
Ukraine, which commenced in late February 2022, China's COVID-19 shutdown this
year and the ongoing supply chain bottlenecks have also provided a drag on the
global economy and securities markets, in my opinion. While the standard
definition of a recession is two consecutive quarters of negative GDP growth,
the official arbiter of declaring recessions in the U.S. belongs to the National
Bureau of Economic Research, and it factors in additional economic indicators in
its evaluation process. Even if we were to experience a recession, it does not
necessarily mean it will be deep in scope. Currently, the Federal Reserve (the
"Fed") is still hoping to orchestrate a soft landing for the economy, though it
admits it will be challenging.
In addition to the recent decline in economic activity, the financial media is
paying a good deal of attention to the inverted yield curve in the Treasury
market, particularly the spread between the yields on the 2-Year and 10-Year
Treasury Note ("T-Note"). As of July 27, 2022, the closing yield on the 2-Year
T-Note was 3.00%, 21 basis points ("bps") above the 2.79% yield on the 10-Year
T-Note. The current inversion has only been in play in earnest since July 5,
2022. Yields on shorter-maturity bonds should be lower than those further out on
the curve. For the 30-year period ended July 27, 2022, the average yield on the
10-Year T-Note was 113 bps higher than the average yield on the 2-Year T-Note.
Historically, such inversions have portended that a recession is likely to
arrive in the next 12-24 months. At its meeting on July 27, 2022, the Fed raised
the Federal Funds target rate by 75 bps to combat the spike in inflation. The
target rate currently sits at 2.50%, marking the upper bound of its 2.25% to
2.50% range. The Fed's next meeting is scheduled for September 20-21, 2022.
In the current climate, the number one goal is to tame inflation. The Fed has
made it clear that it is committed to doing so. The Consumer Price Index stood
at a trailing 12-month rate of 9.1% in June 2022, its highest level since 1981.
Surging inflation is the number one concern of Americans. It is certainly going
to be a hot button issue in the upcoming mid-term elections in November. A
recent CNN poll revealed that 75% of Americans consider inflation their top
economic concern and only 25% approve of President Joe Biden's efforts to
curtail it. This dovetails into another concern: the markets. With respect to
returns, on a year-to-date and 12-month basis, all the major domestic and
foreign stock and bond indices were sitting in negative territory, based on
their respective total returns through June 30, 2022. Sell-offs are a natural
part of market cycles. We all know that prices do not go up in a straight line.
As previously noted, the Fed, the economy and the markets are battling some
significant headwinds. The good news is we know what they are. Suffice it to
say, it will take some time to remedy them. 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
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MARKET OVERVIEW
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FIRST TRUST EXCHANGE-TRADED FUND
SEMI-ANNUAL REPORT
JUNE 30, 2022 (UNAUDITED)
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT AND CHIEF MARKET STRATEGIST
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has more than 30 years of experience as
an Equity and Fixed-Income Analyst and is a recipient of the Chartered Financial
Analyst ("CFA") designation. He is a graduate of the University of Illinois at
Champaign-Urbana with a B.S. in Physics. He is also a member of the Investment
Analysts Society of Chicago and the CFA Institute. Mr. Carey has appeared as a
guest on such programs as Bloomberg TV, CNBC, and WBBM Radio, and has been
quoted by several publications, including The Wall Street Journal, The Wall
Street Reporter, Bloomberg News Service, and Registered Rep.
STATE OF THE ECONOMY/INVESTING
As we head into the second half of 2022, the latest hot topic appears to be
whether or not the U.S. economy is on the cusp of a recession. After all, real
gross domestic product ("GDP") declined by an annualized 1.6% in the first
quarter of 2022, according to data from the U.S. Bureau of Economic Analysis.
The technical definition of a recession is two consecutive quarters of negative
GDP growth. Opinions on this topic vary. Some pundits believe the U.S. economy
is already in a recession. Brian Wesbury, Chief Economist at First Trust, is not
one of them. Wesbury notes that the official arbiter of recessions, the National
Bureau of Economic Research, considers other factors beyond just real GDP,
including the job market, manufacturing activity and real income. While subject
to change, Wesbury does not currently foresee a recession arriving until late
2023 or 2024. Investors should monitor the actions of the Federal Reserve (the
"Fed") over the next few months. We are anticipating additional interest rate
hikes by the Fed to combat the surge in inflation, which reached 9.1% on a
trailing 12-month basis in June 2022, as measured by the Consumer Price Index.
The global growth forecast from the International Monetary Fund ("IMF") released
in April 2022 projected a 3.6% real GDP growth rate for 2022, down from 6.1% in
2021. The IMF is calling for a 3.7% growth rate for the U.S. in 2022, down from
5.7% the previous year. Advanced Economies are expected to register a 3.3%
growth rate, down from 5.2%. While the gap has narrowed from prior years,
Emerging Market and Developing Economies are still expected to grow faster than
Advanced Economies. Their 2022 growth rate estimate is 3.8%, down from 6.8% a
year ago.
Investors continued to funnel capital into exchange-traded funds ("ETFs") and
related exchange-traded products ("ETPs") in the first half of 2022 despite the
sharp sell-off in the markets. ETFGI, an independent research and consultancy
firm, reported that total assets invested in ETFs/ETPs listed in the U.S. stood
at $6.18 trillion at the close of June 2022, down from $7.21 trillion at the end
of 2021. In the first half of 2022, net inflows to ETFs/ETPs listed in the U.S.
totaled $307.49 billion, with $158.73 billion of it flowing to equity funds.
Total assets invested in ETFs/ETPs listed globally stood at $8.86 trillion, down
from $10.27 trillion at the end of 2021. In the first half of this year, net
inflows to ETFs/ETPs listed globally totaled $463.81 billion, with $277.22
billion of it flowing to equity funds.
U.S. STOCKS AND BONDS
In the first half of 2022, three of the major U.S. stock indices posted
double-digit declines. The S&P 500(R) Index (the "Index"), S&P MidCap 400(R)
Index and S&P SmallCap 600(R) Index posted total returns of -19.96%, -19.54%,
and -18.94%, respectively, according to Bloomberg. Only one of the 11 major
sectors that comprise the Index posted positive total returns. The
top-performing sector was Energy, up 31.84%, while the worst-performing sector
was Consumer Discretionary, down 32.82%. Bloomberg's 2022 and 2023 consensus
earnings growth rate estimates for the Index were 10.37% and 8.49%,
respectively, as of July 1, 2022.
The Index posted a price-only return (dividends not included) of -20.58% in the
first half of 2022, the worst showing since a 21.01% decline in the first half
of 1970, according to MarketWatch. The definition of a bear market is a 20%
price decline from the most recent peak of a security or index. Statistics
provided by Dow Jones Market Data indicate that, since 1932, the Index has
endured a first-half decline of 15% or more on five occasions (1932, 1939, 1940,
1962 and 1970). The Index rebounded over the following six months in each of
those instances. The average second-half return for the five occurrences was
23.66%, with a median return of 15.25%, according to MarketWatch. Keep in mind,
past performance is no guarantee of future results.
In the U.S. bond market, all the major bond groups posted negative total returns
in the first half of 2022. The top performing major debt group we track was
intermediate Treasuries. The Bloomberg U.S. Treasury: Intermediate Index posted
a total return of -5.80%. The worst performing debt group we track was long-term
municipal bonds. The Bloomberg Municipal Bond: Long Bond (22+) Index posted a
total return of -14.66%. The yield on the benchmark 10-Year Treasury Note rose
151 basis points to 3.02% in the first half of 2022, according to Bloomberg. For
comparative purposes, its average yield for the 20-year period ended June 30,
2022, was 2.92%.
FOREIGN STOCKS AND BONDS
The U.S. Dollar rose by 9.43% against a basket of major currencies in the first
half of 2022, as measured by the U.S. Dollar Index ("DXY"), according to
Bloomberg. The DXY Index closed at a reading of 104.69 on June 30, 2022,
significantly above its 20-year average of 88.49. The stronger U.S. Dollar had a
negative influence on the returns of foreign securities held by U.S. investors,
provided they were unhedged.
The Bloomberg EM Hard Currency Aggregate Index of emerging markets debt posted a
total return of -18.50% (USD), while the Bloomberg Global Aggregate Index of
higher quality debt declined by 13.91% (USD). With respect to equities, the MSCI
Emerging Markets Index of stocks posted a total return of -17.63% (USD), while
the MSCI World ex USA Index was down 18.76% (USD) on a total return basis,
according to Bloomberg.
Page 3
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FUND PERFORMANCE OVERVIEW (UNAUDITED)
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FIRST TRUST NASDAQ-100 EQUAL WEIGHTED INDEX FUND (QQEW)
The First Trust NASDAQ-100 Equal Weighted Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the Nasdaq-100 Equal
Weighted Index(SM) (the "Index"). The Fund will normally invest at least 90% of
its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index. The Index is the equal-weighted
version of the Nasdaq-100 Index(R), which includes 100 of the largest U.S. and
international non-financial companies listed on The Nasdaq Stock Market LLC
("Nasdaq") based on market capitalization. The Index is rebalanced quarterly and
reconstituted annually and the Fund will make corresponding changes to its
portfolio shortly after the Index changes are made public. The Fund's shares are
listed for trading on the Nasdaq. The first day of secondary market trading in
shares of the Fund was April 25, 2006.
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PERFORMANCE
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AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (4/19/06) Ended Ended (4/19/06)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -25.97% -21.74% 10.88% 14.06% 10.07% 67.62% 272.52% 373.27%
Market Price -25.96% -21.72% 10.86% 14.06% 10.08% 67.41% 272.83% 373.48%
INDEX PERFORMANCE
Nasdaq-100 Equal Weighted
Index(SM) -25.79% -21.30% 11.56% 14.76% 10.75% 72.79% 296.23% 423.07%
S&P 500(R) Index -19.96% -10.62% 11.31% 12.96% 8.96% 70.86% 238.16% 301.31%
Nasdaq-100 Index(R) -29.22% -20.38% 16.37% 17.27% 13.47% 113.45% 391.89% 674.50%
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(See Notes to Fund Performance Overview on page 22.)
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% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
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Information Technology 41.2%
Consumer Discretionary 14.5
Health Care 13.1
Communication Services 11.9
Industrials 8.0
Consumer Staples 7.1
Utilities 4.2
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Total 100.0%
=======
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% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
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Moderna, Inc. 1.1%
Exelon Corp. 1.1
Datadog, Inc., Class A 1.1
Xcel Energy, Inc. 1.1
Okta, Inc. 1.1
Kraft Heinz (The) Co. 1.1
Old Dominion Freight Line, Inc. 1.1
American Electric Power Co., Inc. 1.1
AstraZeneca PLC, ADR 1.0
Charter Communications, Inc., Class A 1.0
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Total 10.8%
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Nasdaq(R), Nasdaq-100(R), Nasdaq-100 Index(R), and Nasdaq-100 Equal Weighted
Index(SM) are registered trademarks and service marks of Nasdaq, Inc. (together
with its affiliates hereinafter referred to as the "Corporations") and are
licensed for use by First Trust. The Fund has not been passed on by the
Corporations as to its legality or suitability. The Fund is not issued,
endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 4
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST NASDAQ-100 EQUAL WEIGHTED INDEX FUND (QQEW) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust
NASDAQ-100 Equal Nasdaq-100 Equal S&P 500(R) Nasdaq-100
Weighted Index Fund Weighted Index(SM) Index Index(R)
12/11 $10,000 $10,000 $10,000 $10,000
06/12 10,918 10,945 10,949 11,544
12/12 11,486 11,545 11,600 11,835
06/13 13,278 13,406 13,203 13,029
12/13 16,074 16,278 15,356 16,204
06/14 17,357 17,631 16,452 17,479
12/14 19,150 19,507 17,459 19,349
06/15 19,604 20,028 17,674 20,204
12/15 19,577 20,070 17,701 21,236
06/16 19,013 19,542 18,381 20,563
12/16 20,950 21,606 19,818 22,782
06/17 24,266 25,100 21,669 26,605
12/17 26,399 27,394 24,144 30,298
06/18 27,645 28,766 24,784 33,525
12/18 25,038 26,131 23,086 30,310
06/19 30,636 32,078 27,366 36,933
12/19 33,997 35,706 30,354 42,270
06/20 36,900 38,873 29,419 49,409
12/20 46,693 49,341 35,938 62,927
06/21 51,974 55,104 41,419 71,321
12/21 54,939 58,443 46,257 80,229
06/22 40,671 43,371 37,024 56,786
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 5
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST NASDAQ-100-TECHNOLOGY SECTOR INDEX FUND (QTEC)
The First Trust NASDAQ-100-Technology Sector Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the Nasdaq-100 Technology
Sector Index(SM) (the "Index"). The Fund will normally invest at least 90% of
its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index. The Index is an equal-weighted
index composed of the securities comprising the Nasdaq-100 Index(R) that are
classified as "technology" according to the Industry Classification Benchmark
classification system. The Nasdaq-100 Index(R) includes 100 of the largest U.S.
and international non-financial companies listed on the Nasdaq based on market
capitalization. The Index is rebalanced quarterly and reconstituted annually and
the Fund will make corresponding changes to its portfolio shortly after the
Index changes are made public. The Fund's shares are listed for trading on the
Nasdaq. The first day of secondary market trading in shares of the Fund was
April 25, 2006.
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PERFORMANCE
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AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (4/19/06) Ended Ended (4/19/06)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -34.71% -28.02% 13.50% 17.31% 12.01% 88.37% 393.53% 527.75%
Market Price -34.70% -27.99% 13.50% 17.31% 12.01% 88.36% 393.54% 528.01%
INDEX PERFORMANCE
Nasdaq-100 Technology Sector
Index(SM) -34.52% -27.57% 14.20% 18.05% 12.71% 94.22% 425.39% 594.74%
S&P 500(R) Index -19.96% -10.62% 11.31% 12.96% 8.96% 70.86% 238.16% 301.31%
S&P 500 Information Technology
Index -26.91% -13.56% 20.22% 18.69% 13.53% 151.10% 454.78% 681.33%
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(See Notes to Fund Performance Overview on page 22.)
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% OF TOTAL
SECTOR CLASSIFICATION(1) LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 90.2%
Communication Services 9.8
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Total 100.0%
=======
(1) The above sector classification is based on Standard & Poor's Global
Industry Classification Standard ("GICS"), and is different than the
industry sector classification system used by the Index to select
securities, which is the Industry Classification Benchmark ("ICB") system,
the joint classification system of Dow Jones Indexes and FTSE Group.
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Datadog, Inc., Class A 2.7%
Okta, Inc. 2.7
Atlassian Corp. PLC, Class A 2.6
VeriSign, Inc. 2.6
QUALCOMM, Inc. 2.6
Baidu, Inc., ADR 2.5
Fortinet, Inc. 2.5
Zscaler, Inc. 2.5
Cadence Design Systems, Inc. 2.5
Intuit, Inc. 2.5
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Total 25.7%
=======
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Nasdaq(R), Nasdaq-100(R), Nasdaq-100 Index(R), and Nasdaq-100 Technology Sector
Index(SM) are registered trademarks and service marks of Nasdaq, Inc. (together
with its affiliates hereinafter referred to as the "Corporations") and are
licensed for use by First Trust. The Fund has not been passed on by the
Corporations as to its legality or suitability. The Fund is not issued,
endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 6
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST NASDAQ-100-TECHNOLOGY SECTOR INDEX FUND (QTEC) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust
NASDAQ-100- Nasdaq-100
Technology Sector Technology Sector S&P 500(R) S&P 500 Information
Sector Index Fund Index(SM) Index Technology Index
12/11 $10,000 $10,000 $10,000 $10,000
06/12 10,456 10,489 10,949 11,334
12/12 10,802 10,870 11,600 11,482
06/13 12,068 12,183 13,203 12,211
12/13 14,920 15,111 15,356 14,746
06/14 16,878 17,148 16,452 16,064
12/14 18,625 18,985 17,459 17,712
06/15 18,165 18,567 17,674 17,847
12/15 18,368 18,834 17,701 18,763
06/16 18,906 19,456 18,381 18,703
12/16 23,009 23,766 19,818 21,361
06/17 27,392 28,374 21,669 25,042
12/17 31,720 32,959 24,144 29,657
06/18 34,048 35,480 24,784 32,881
12/18 30,228 31,591 23,086 29,573
06/19 38,166 40,010 27,366 37,596
12/19 44,849 47,168 30,354 44,446
06/20 49,123 51,833 29,419 51,091
12/20 62,258 65,890 35,938 63,951
06/21 71,684 76,077 41,419 72,751
12/21 79,033 84,160 46,257 86,029
06/22 51,601 55,108 37,024 62,879
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 7
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ-100 EX-TECHNOLOGY SECTOR INDEX FUND (QQXT)
The First Trust NASDAQ-100 Ex-Technology Sector Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the Nasdaq-100 Ex-Tech
Sector Index(SM) (the "Index"). The Fund will normally invest at least 90% of
its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index. The Index is an equal-weighted
index composed of the securities comprising the Nasdaq-100 Index(R) that are not
classified as "technology" according to the Industry Classification Benchmark
classification system. The Nasdaq-100 Index(R) includes 100 of the largest U.S.
and international non-financial companies listed on the Nasdaq based on market
capitalization. The Index is rebalanced quarterly and reconstituted annually and
the Fund will make corresponding changes to its portfolio shortly after the
Index changes are made public. The Fund's shares are listed for trading on the
Nasdaq. The first day of secondary market trading in shares of the Fund was
February 15, 2007.
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (2/8/07) Ended Ended (2/8/07)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -19.65% -17.49% 9.38% 12.29% 9.05% 56.55% 218.81% 279.60%
Market Price -19.69% -17.54% 9.37% 12.39% 9.05% 56.50% 221.47% 279.50%
INDEX PERFORMANCE
Nasdaq-100 Ex-Tech Sector
Index(SM) -19.48% -17.04% 10.03% 12.97% 9.73% 61.24% 238.52% 317.13%
Russell 1000(R) Index -20.94% -13.04% 11.00% 12.82% 8.58% 68.52% 234.08% 254.86%
------------------------------------------------------------------------------------------------------------------------------------
(See Notes to Fund Performance Overview on page 22.)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 24.2%
Health Care 22.1
Industrials 13.5
Communication Services 13.2
Consumer Staples 11.9
Information Technology 8.1
Utilities 7.0
-------
Total 100.0%
=======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Moderna, Inc. 1.8%
Exelon Corp. 1.8
Xcel Energy, Inc. 1.8
Old Dominion Freight Line, Inc. 1.8
American Electric Power Co., Inc. 1.8
Dexcom, Inc. 1.8
AstraZeneca PLC, ADR 1.8
O'Reilly Automotive, Inc. 1.7
Cintas Corp. 1.7
Costco Wholesale Corp. 1.7
-------
Total 17.7%
=======
-----------------------------
Nasdaq(R), Nasdaq-100(R), Nasdaq-100 Index(R), and Nasdaq-100 Ex-Tech Sector
Index(SM) are registered trademarks and service marks of Nasdaq, Inc. (together
with its affiliates hereinafter referred to as the "Corporations") and are
licensed for use by First Trust. The Fund has not been passed on by the
Corporations as to its legality or suitability. The Fund is not issued,
endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 8
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ-100 EX-TECHNOLOGY SECTOR INDEX FUND (QQXT) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust
NASDAQ-100 Nasdaq-100
Ex-Technology Sector Ex-Tech Sector Russell 1000(R)
Index Fund Index(SM) Index
12/11 $10,000 $10,000 $10,000
06/12 11,277 11,306 10,938
12/12 12,031 12,091 11,642
06/13 14,290 14,431 13,261
12/13 16,992 17,206 15,497
06/14 17,770 18,054 16,624
12/14 19,600 19,964 17,550
06/15 20,664 21,118 17,850
12/15 20,530 21,055 17,711
06/16 19,288 19,821 18,373
12/16 20,092 20,705 19,845
06/17 22,961 23,736 21,685
12/17 24,192 25,079 24,148
06/18 24,954 25,939 24,836
12/18 22,843 23,809 22,993
06/19 27,396 28,652 27,325
12/19 29,319 30,752 30,219
06/20 31,612 33,255 29,370
12/20 40,018 42,231 36,554
06/21 43,568 46,125 42,019
12/21 44,744 47,535 46,224
06/22 35,952 38,275 36,545
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 9
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) GREEN ENERGY INDEX FUND (QCLN)
The First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund (the "Fund")
seeks investment results that correspond generally to the price and yield
(before the Fund's fees and expenses) of an equity index called the Nasdaq(R)
Clean Edge(R) Green Energy Index(SM) (the "Index"). The Fund will normally
invest at least 90% of its net assets (including investment borrowings) in the
common stocks and depositary receipts that comprise the Index. The Index is
designed to track the performance of small, mid and large capitalization
clean-energy companies that are publicly traded in the United States. The Index
is rebalanced quarterly and reconstituted semi-annually and the Fund will make
corresponding changes to its portfolio shortly after the Index changes are made
public. The Fund's shares are listed for trading on the Nasdaq. The first day of
secondary market trading in shares of the Fund was February 14, 2007.
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (2/8/07) Ended Ended (2/8/07)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -23.09% -24.45% 24.42% 19.70% 6.97% 198.11% 503.78% 181.97%
Market Price -23.06% -24.45% 24.41% 19.73% 6.97% 198.00% 505.26% 182.05%
INDEX PERFORMANCE
Nasdaq(R) Clean Edge(R) Green
Energy Index(SM) -22.98% -24.15% 24.75% 19.70% 7.19% 202.11% 503.93% 191.22%
Russell 2000(R) Index -23.43% -25.20% 5.17% 9.35% 6.34% 28.65% 144.49% 157.71%
------------------------------------------------------------------------------------------------------------------------------------
(See Notes to Fund Performance Overview on page 22.)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 36.4%
Consumer Discretionary 21.9
Industrials 17.1
Materials 12.1
Utilities 10.9
Financials 1.2
Energy 0.4
-------
Total 100.0%
=======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
NIO, Inc., ADR 9.8%
Enphase Energy, Inc. 8.9
Tesla, Inc. 7.5
ON Semiconductor Corp. 7.0
Albemarle Corp. 6.8
SolarEdge Technologies, Inc. 4.3
XPeng, Inc., ADR 4.0
Plug Power, Inc. 3.3
Brookfield Renewable Partners, L.P. 3.3
Wolfspeed, Inc. 2.7
-------
Total 57.6%
=======
-----------------------------
Nasdaq(R), Clean Edge(R), and Nasdaq(R) Clean Edge(R) Green Energy Index(SM) are
registered trademarks and service marks of Nasdaq, Inc. and Clean Edge, Inc.,
respectively (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 10
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) GREEN ENERGY INDEX FUND (QCLN) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust
NASDAQ(R) Nasdaq(R)
Clean Edge(R) Green Clean Edge(R) Russell 2000(R)
Energy Index Fund Green Energy Index(SM) Index
12/11 $10,000 $10,000 $10,000
06/12 9,679 9,659 10,853
12/12 9,950 9,869 11,634
06/13 14,874 14,714 13,479
12/13 18,883 18,685 16,151
06/14 21,717 21,495 16,666
12/14 18,307 18,101 16,941
06/15 19,647 19,430 17,746
12/15 17,128 16,947 16,193
06/16 15,449 15,247 16,552
12/16 16,764 16,497 19,644
06/17 19,599 19,310 20,624
12/17 22,084 21,784 22,521
06/18 21,262 20,993 24,246
12/18 19,385 19,146 20,039
06/19 23,355 23,073 23,442
12/19 27,659 27,314 25,153
06/20 33,122 32,719 21,888
12/20 78,420 77,799 30,178
06/21 77,369 76,912 35,471
12/21 75,978 75,736 34,652
06/22 58,435 58,332 26,533
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 11
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST S&P REIT INDEX FUND (FRI)
The First Trust S&P REIT Index Fund (the "Fund") seeks investment results that
correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the S&P United States REIT Index (the
"Index"). The Fund will normally invest at least 90% of its net assets
(including investment borrowings) in the real estate investment trusts ("REITs")
that comprise the Index. The Index seeks to measure the performance of publicly
traded REITs domiciled in the U.S. that meet certain eligibility requirements.
The Index is rebalanced quarterly and the Fund will make corresponding changes
to its portfolio shortly after the Index changes are made public. The Fund's
shares are listed for trading on the NYSE Arca. The first day of secondary
market trading in shares of the Fund was May 10, 2007.
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (5/8/07) Ended Ended (5/8/07)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -20.36% -6.49% 4.74% 6.67% 4.36% 26.03% 90.75% 90.85%
Market Price -20.38% -6.49% 4.74% 6.69% 4.36% 26.03% 91.08% 90.87%
INDEX PERFORMANCE
S&P United States REIT Index* -20.20% -6.20% 5.26% 7.22% N/A 29.20% 100.89% N/A
FTSE EPRA/NAREIT North
America Index -20.50% -7.20% 4.69% 6.55% 4.47% 25.76% 88.63% 93.84%
Russell 3000(R) Index -21.10% -13.87% 10.60% 12.57% 8.27% 65.47% 226.86% 232.97%
------------------------------------------------------------------------------------------------------------------------------------
* On November 6, 2008, the Fund's underlying index changed from the S&P REIT
Composite Index to the S&P United States REIT Index. Effective December
31, 2008, the S&P REIT Composite Index was discontinued. Therefore, the
Fund's performance and historical returns shown for the periods prior to
November 6, 2008 are not necessarily indicative of the performance that
the Fund, based on its current Index, would have generated. The inception
date of the Index was June 30, 2008. Returns for the Index are only
disclosed for those periods in which the Index was in existence for the
whole period.
(See Notes to Fund Performance Overview on page 22.)
-----------------------------------------------------------
% OF TOTAL
REIT CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Specialized 24.3%
Residential 20.1
Industrial 15.1
Retail 14.6
Health Care 11.0
Office 7.7
Diversified 3.9
Hotel & Resort 3.3
-------
Total 100.0%
=======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Prologis, Inc. 8.4%
Equinix, Inc. 5.8
Public Storage 4.6
Realty Income Corp. 4.0
Welltower, Inc. 3.6
Digital Realty Trust, Inc. 3.6
Simon Property Group, Inc. 3.0
VICI Properties, Inc. 2.8
AvalonBay Communities, Inc. 2.6
Equity Residential 2.4
-------
Total 40.8%
=======
-----------------------------
S&P United States REIT Index ("Index") is a product of S&P Dow Jones Indices LLC
or its affiliates ("SPDJI") and has been licensed for use by First Trust. S&P(R)
is a registered trademark of Standard & Poor's Financial Services LLC ("S&P");
and these trademarks have been licensed for use by SPDJI and sublicensed for
certain purposes by First Trust. The Fund is not sponsored, endorsed, sold or
promoted by SPDJI, Dow Jones, S&P, or their respective affiliates and none of
such parties make any representation regarding the advisability of investing in
such product nor do they have any liability for any errors, omissions, or
interruptions of the Index.
Page 12
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST S&P REIT INDEX FUND (FRI) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust S&P United States FTSE EPRA/NAREIT Russell 3000(R)
S&P REIT Index Fund REIT Index North America Index Index
12/11 $10,000 $10,000 $10,000 $10,000
06/12 11,464 11,493 11,462 10,932
12/12 11,739 11,799 11,815 11,641
06/13 12,454 12,558 12,370 13,278
12/13 11,953 12,082 11,966 15,547
06/14 14,028 14,213 14,010 16,626
12/14 15,493 15,739 15,335 17,499
06/15 14,512 14,779 14,406 17,838
12/15 15,798 16,139 15,613 17,583
06/16 17,845 18,284 17,661 18,220
12/16 17,049 17,511 16,889 19,822
06/17 17,352 17,873 17,195 21,592
12/17 17,694 18,270 17,661 24,010
06/18 17,890 18,520 17,945 24,783
12/18 16,948 17,576 16,970 22,756
06/19 19,722 20,518 19,824 27,014
12/19 20,959 21,872 21,128 29,815
06/20 17,061 17,861 16,695 28,777
12/20 19,266 20,225 19,069 36,036
06/21 23,385 24,614 23,293 41,481
12/21 27,458 28,931 27,196 45,285
06/22 21,868 23,087 21,621 35,730
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 13
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST WATER ETF (FIW)
The First Trust Water ETF (the "Fund") seeks investment results that correspond
generally to the price and yield (before the Fund's fees and expenses) of an
equity index called the ISE Clean Edge Water Index (the "Index"). The Fund will
normally invest at least 90% of its net assets (including investment borrowings)
in the common stocks and depositary receipts that comprise the Index. The Index
is designed to track the performance of small, mid and large capitalization
companies that derive a substantial portion of their revenues from the potable
water and wastewater industry, according to Clean Edge. The Fund's shares are
listed for trading on the NYSE Arca. The Index is rebalanced and reconstituted
semi-annually and the Fund will make corresponding changes to its portfolio
shortly after the changes are made public. The first day of secondary market
trading in shares of the Fund was May 11, 2007.
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (5/8/07) Ended Ended (5/8/07)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -23.70% -13.23% 11.63% 13.09% 9.66% 73.38% 242.17% 303.88%
Market Price -23.73% -13.29% 11.62% 12.98% 9.65% 73.29% 238.78% 303.75%
INDEX PERFORMANCE
ISE Clean Edge Water Index -23.50% -12.30% 12.38% 13.81% 10.37% 79.28% 264.45% 345.52%
Russell 3000(R) Index -21.10% -13.87% 10.60% 12.57% 8.27% 65.47% 226.86% 232.97%
------------------------------------------------------------------------------------------------------------------------------------
(See Notes to Fund Performance Overview on page 22.)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Industrials 52.1%
Utilities 22.7
Health Care 11.2
Information Technology 8.1
Materials 3.9
Consumer Staples 2.0
-------
Total 100.0%
=======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
American Water Works Co., Inc. 4.4%
Essential Utilities, Inc. 4.4
IDEX Corp. 4.2
Danaher Corp. 4.1
Agilent Technologies, Inc. 4.1
AECOM 4.0
Roper Technologies, Inc. 3.9
Xylem, Inc. 3.9
Ecolab, Inc. 3.9
Algonquin Power & Utilities Corp. 3.6
-------
Total 40.5%
=======
-----------------------------
Nasdaq(R), Clean Edge(R), and ISE Clean Edge Water Index are registered
trademarks and service marks of Nasdaq, Inc. and Clean Edge, Inc., respectively
(together with its affiliates hereinafter referred to as the "Corporations") and
are licensed for use by First Trust. The Fund has not been passed on by the
Corporations as to its legality or suitability. The Fund is not issued,
endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 14
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST WATER ETF (FIW) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust ISE Clean Edge Russell 3000(R)
Water ETF Water Index Index
12/11 $10,000 $10,000 $10,000
06/12 10,992 11,037 10,932
12/12 12,684 12,778 11,641
06/13 13,583 13,741 13,278
12/13 16,605 16,853 15,547
06/14 17,078 17,380 16,626
12/14 16,665 17,015 17,499
06/15 15,562 15,936 17,838
12/15 15,030 15,440 17,583
06/16 17,644 18,188 18,220
12/16 19,871 20,538 19,822
06/17 21,695 22,434 21,592
12/17 24,689 25,604 24,010
06/18 24,491 25,420 24,783
12/18 22,493 23,404 22,751
06/19 28,118 29,349 27,008
12/19 30,840 32,281 29,809
06/20 28,768 30,257 28,772
12/20 37,378 39,434 36,034
06/21 43,344 45,854 41,485
12/21 49,295 52,578 45,285
06/22 37,612 40,222 35,730
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 15
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NATURAL GAS ETF (FCG)
The First Trust Natural Gas ETF (the "Fund") seeks investment results that
correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the ISE-Revere Natural Gas(TM) Index (the
"Index"). The Fund will normally invest at least 90% of its net assets
(including investment borrowings) in the common stocks, depositary receipts and
master limited partnership ("MLP") units that comprise the Index. The Index is
designed to track the performance of mid and large capitalization companies that
derive a substantial portion of their revenue from mid-stream activities and/or
the exploration and production of natural gas. The Fund's shares are listed for
trading on the NYSE Arca. The Index is rebalanced and reconstituted quarterly
and the Fund will make corresponding changes to its portfolio shortly after the
Index changes are made public. The first day of secondary market trading in
shares of the Fund was May 11, 2007.
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (5/8/07) Ended Ended (5/8/07)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV 29.15% 37.14% 3.73% -10.65% -8.21% 20.09% -67.59% -72.69%
Market Price 29.23% 37.05% 3.75% -10.66% -8.21% 20.21% -67.61% -72.69%
INDEX PERFORMANCE
ISE-Revere Natural Gas(TM) Index 29.53% 38.03% 3.35% -10.82% -8.11% 17.92% -68.19% -72.21%
S&P Composite 1500(R) Energy Index 30.95% 38.07% 6.30% 3.58% 3.07% 35.74% 42.10% 58.18%
Russell 3000(R) Index -21.10% -13.87% 10.60% 12.57% 8.27% 65.47% 226.86% 232.97%
------------------------------------------------------------------------------------------------------------------------------------
(See Notes to Fund Performance Overview on page 22.)
-----------------------------------------------------------
% OF TOTAL
SUB-INDUSTRY CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Oil & Gas Exploration & Production 79.7%
Oil & Gas Storage & Transportation 14.3
Integrated Oil & Gas 4.0
Gas Utilities 2.0
-------
Total 100.0%
=======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Western Midstream Partners, L.P. 5.1%
DCP Midstream, L.P. 4.8
Hess Midstream, L.P., Class A 4.4
Occidental Petroleum Corp. 4.0
ConocoPhillips 3.8
EOG Resources, Inc. 3.7
Pioneer Natural Resources Co. 3.6
Hess Corp. 3.5
Diamondback Energy, Inc. 3.4
Devon Energy Corp. 3.2
-------
Total 39.5%
=======
-----------------------------
Nasdaq(R) and ISE-Revere Natural Gas(TM) Index are registered trademarks and
service marks of Nasdaq, Inc. (together with its affiliates hereinafter referred
to as the "Corporations") and are licensed for use by First Trust. The Fund has
not been passed on by the Corporations as to its legality or suitability. The
Fund is not issued, endorsed, sold or promoted by the Corporations. THE
CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 16
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NATURAL GAS ETF (FCG) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust Natural ISE-Revere Natural S&P Composite 1500(R) Russell 3000(R)
Gas ETF Gas(TM) Index Energy Index Index
12/11 $10,000 $10,000 $10,000 $10,000
06/12 9,052 9,080 9,706 10,932
12/12 8,649 8,706 10,434 11,641
06/13 8,906 8,980 11,448 13,278
12/13 10,823 10,946 13,084 15,547
06/14 13,116 13,295 14,780 16,626
12/14 6,276 6,346 11,885 17,499
06/15 5,350 5,363 11,328 17,838
12/15 2,567 2,559 9,262 17,583
06/16 2,847 2,831 10,704 18,220
12/16 3,067 3,065 11,790 19,822
06/17 2,443 2,450 10,161 21,592
12/17 2,713 2,732 11,549 24,010
06/18 2,800 2,828 12,407 24,783
12/18 1,770 1,788 9,319 22,751
06/19 1,767 1,791 10,464 27,008
12/19 1,490 1,516 10,255 29,809
06/20 945 922 6,542 28,772
12/20 1,144 1,114 6,789 36,034
06/21 2,141 2,093 9,990 41,485
12/21 2,272 2,230 10,533 45,285
06/22 2,934 2,889 13,793 35,730
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 17
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST CHINDIA ETF (FNI)
The First Trust Chindia ETF (the "Fund") seeks investment results that
correspond generally to the price and yield (before the Fund's fees and
expenses) of an equity index called the ISE ChIndia(TM) Index (the "Index"). The
Fund will normally invest at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the
Index. The Index is a modified market capitalization weighted index designed to
track the performance of U.S. listed securities issued by small, mid and large
capitalization companies domiciled in China or India. The Fund's shares are
listed for trading on the NYSE Arca. The Index is rebalanced and reconstituted
semi-annually and the Fund will make corresponding changes to its portfolio
shortly after the Index changes are made public. The first day of secondary
market trading in shares of the Fund was May 11, 2007.
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (5/8/07) Ended Ended (5/8/07)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -14.66% -35.04% 3.81% 8.77% 5.76% 20.54% 131.84% 133.42%
Market Price -14.54% -34.94% 3.80% 8.76% 5.76% 20.53% 131.65% 133.59%
INDEX PERFORMANCE
ISE ChIndia(TM) Index -14.38% -34.61% 4.38% 9.33% 6.32% 23.93% 144.01% 153.11%
MSCI Emerging Markets Index -17.63% -25.28% 2.18% 3.06% 2.46% 11.38% 35.23% 44.39%
Russell 3000(R) Index -21.10% -13.87% 10.60% 12.57% 8.27% 65.47% 226.86% 232.97%
------------------------------------------------------------------------------------------------------------------------------------
(See Notes to Fund Performance Overview on page 22.)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 44.1%
Information Technology 15.2
Financials 15.1
Communication Services 11.6
Health Care 6.0
Real Estate 2.5
Utilities 2.2
Industrials 1.5
Energy 1.1
Consumer Staples 0.7
-------
Total 100.0%
=======
-----------------------------------------------------------
% OF TOTAL
COUNTRY ALLOCATION(1) LONG-TERM INVESTMENTS
-----------------------------------------------------------
China 64.6%
India 34.7
Hong Kong 0.7
-------
Total 100.0%
=======
(1) Calculated based on country of risk.
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Pinduoduo, Inc., ADR 8.0%
Alibaba Group Holding Ltd., ADR 7.7
JD.com, Inc., ADR 7.4
Infosys Ltd., ADR 6.4
HDFC Bank Ltd., ADR 6.2
ICICI Bank Ltd., ADR 6.0
NIO, Inc., ADR 4.6
Baidu, Inc., ADR 3.9
Dr. Reddy's Laboratories Ltd., ADR 3.7
Tata Motors Ltd., ADR 3.4
-------
Total 57.3%
=======
-----------------------------
Nasdaq(R) and ISE ChIndia(TM) Index are registered trademarks and service marks
of Nasdaq, Inc. (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 18
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST CHINDIA ETF (FNI) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust ISE ChIndia(TM) MSCI Emerging Russell 3000(R)
Chindia ETF Index Markets Index Index
12/11 $10,000 $10,000 $10,000 $10,000
06/12 10,602 10,618 10,393 10,932
12/12 11,710 11,752 11,822 11,641
06/13 11,854 11,932 10,691 13,278
12/13 15,902 16,032 11,514 15,547
06/14 16,896 17,071 12,221 16,626
12/14 16,279 16,474 11,263 17,499
06/15 17,436 17,678 11,595 17,838
12/15 16,226 16,499 9,582 17,583
06/16 15,635 15,941 10,196 18,220
12/16 15,877 16,247 10,654 19,822
06/17 20,381 20,908 12,618 21,592
12/17 23,395 24,044 14,627 24,010
06/18 22,943 23,633 13,653 24,783
12/18 18,556 19,171 12,494 22,751
06/19 21,562 22,332 13,818 27,008
12/19 23,930 24,838 14,798 29,809
06/20 24,511 25,521 13,351 28,772
12/20 35,715 37,332 17,509 36,034
06/21 37,826 39,620 18,813 41,485
12/21 28,801 30,258 17,062 45,285
06/22 24,579 25,907 14,054 35,730
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 19
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) ABA COMMUNITY BANK INDEX FUND (QABA)
The First Trust NASDAQ(R) ABA Community Bank Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the Nasdaq OMX(R) ABA
Community Bank Index(SM) (the "Index"). The Fund will normally invest at least
90% of its net assets (including investment borrowings) in the common stocks
that comprise the Index. The Index is designed to track the performance of
small, mid and large capitalization companies that comprise the community
banking industry. The Fund's shares are listed for trading on the Nasdaq. The
Index is rebalanced quarterly and reconstituted semi-annually and the Fund will
make corresponding changes to its portfolio shortly after the Index changes are
made public. The first day of secondary market trading in shares of the Fund was
July 1, 2009.
------------------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (6/29/09) Ended Ended (6/29/09)
6/30/22 6/30/22 6/30/22 6/30/22 to 6/30/22 6/30/22 6/30/22 to 6/30/22
FUND PERFORMANCE
NAV -14.67% -8.06% 1.78% 9.02% 9.10% 9.24% 137.16% 210.17%
Market Price -14.74% -8.16% 1.78% 9.04% 9.09% 9.24% 137.60% 210.02%
INDEX PERFORMANCE
Nasdaq OMX(R) ABA Community
Bank Index(SM) -14.45% -7.50% 2.43% 9.71% 9.79% 12.76% 152.55% 237.03%
S&P Composite 1500(R) Financials
Index -18.22% -12.09% 6.99% 12.24% 11.66% 40.17% 217.24% 319.62%
Russell 3000(R) Index -21.10% -13.87% 10.60% 12.57% 13.45% 65.47% 226.86% 415.97%
------------------------------------------------------------------------------------------------------------------------------------
(See Notes to Fund Performance Overview on page 22.)
-----------------------------------------------------------
% OF TOTAL
INDUSTRY CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Banks 92.1%
Thrifts & Mortgage Finance 7.7
IT Services 0.2
-------
Total 100.0%
=======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Commerce Bancshares, Inc. 3.6%
SouthState Corp. 2.6
First Financial Bankshares, Inc. 2.5
Pinnacle Financial Partners, Inc. 2.5
Valley National Bancorp 2.4
United Bankshares, Inc. 2.1
Wintrust Financial Corp. 2.1
Bank OZK 2.0
Old National Bancorp 1.9
First Interstate BancSystem, Inc., Class A 1.9
-------
Total 23.6%
=======
-----------------------------
Nasdaq(R), Nasdaq OMX(R), OMX(R), American Bankers Association(R), ABA(R) and
the Nasdaq OMX(R) ABA Community Bank Index(SM) are registered trademarks and
service marks of Nasdaq, Inc. and American Bankers Association (together with
its affiliates hereinafter referred to as the "Corporations") and are licensed
for use by First Trust. The Fund has not been passed on by the Corporations as
to its legality or suitability. The Fund is not issued, endorsed, sold or
promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO
LIABILITY WITH RESPECT TO THE FUND.
Page 20
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) ABA COMMUNITY BANK INDEX FUND (QABA) (CONTINUED)
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
DECEMBER 31, 2011 - JUNE 30, 2022
First Trust
NASDAQ(R) ABA Nasdaq OMX(R)
Community Bank ABA Community S&P Composite 1500(R) Russell 3000(R)
Index Fund Bank Index(SM) Financials Index Index
12/11 $10,000 $10,000 $10,000 $10,000
06/12 10,994 11,032 11,342 10,932
12/12 11,352 11,424 12,696 11,641
06/13 13,452 13,582 15,078 13,278
12/13 16,222 16,432 17,046 15,547
06/14 16,217 16,478 17,927 16,626
12/14 16,663 16,981 19,583 17,499
06/15 18,184 18,591 19,628 17,838
12/15 17,977 18,429 19,443 17,583
06/16 17,671 18,171 19,128 18,220
12/16 24,731 25,521 24,164 19,822
06/17 23,870 24,709 25,669 21,592
12/17 24,868 25,826 29,214 24,010
06/18 26,139 27,226 28,227 24,783
12/18 20,854 21,775 25,407 22,751
06/19 23,402 24,516 29,772 27,008
12/19 25,609 26,911 33,339 29,809
06/20 17,762 18,730 25,398 28,772
12/20 22,786 24,123 32,703 36,039
06/21 28,355 30,122 40,931 41,484
12/21 30,556 32,568 44,001 45,285
06/22 26,073 27,862 35,984 35,730
Performance figures assume reinvestment of all distributions and do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption or sale of Fund shares. An index is a statistical composite that
tracks a specified financial market or sector. Unlike the Fund, the indices do
not actually hold a portfolio of securities and therefore do not incur the
expenses incurred by the Fund. These expenses negatively impact the performance
of the Fund. The Fund's past performance does not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 21
--------------------------------------------------------------------------------
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. The total returns would have been lower if certain fees had not been
waived and expenses reimbursed by the Advisor.
Each Fund's per share net asset value ("NAV") is the value of one share of the
Fund and is computed by dividing the value of all assets of the Fund (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of outstanding
shares. The price used to calculate market return ("Market Price") is determined
by using the midpoint of the national best bid and offer price ("NBBO") as of
the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists
of the highest displayed buy and lowest sell prices among the various exchanges
trading the Fund at the time the Fund's NAV is calculated. Prior to January 1,
2019, the price used was the midpoint between the highest bid and the lowest
offer on the stock exchange on which shares of the Fund were listed for trading
as of the time that the Fund's NAV was calculated. Since shares of each Fund did
not trade in the secondary market until after the Fund's inception, for the
period from inception to the first day of secondary market trading in shares of
the Fund, the NAV of each Fund is used as a proxy for the secondary market
trading price to calculate market returns. NAV and market returns assume that
all distributions have been reinvested in each Fund at NAV and Market Price,
respectively.
An index is a statistical composite that tracks a specified financial market or
sector. Unlike each Fund, the indices do not actually hold a portfolio of
securities and therefore do not incur the expenses incurred by each Fund. These
expenses negatively impact the performance of each Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The total returns presented reflect the reinvestment of dividends on
securities in the indices. The returns presented do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund shares. The investment return and principal value of shares of each
Fund will vary with changes in market conditions. Shares of each Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. Each Fund's past performance is no guarantee of future performance.
Page 22
FIRST TRUST EXCHANGE-TRADED FUND
UNDERSTANDING YOUR FUND EXPENSES
JUNE 30, 2022 (UNAUDITED)
As a shareholder of First Trust NASDAQ-100 Equal Weighted Index Fund, First
Trust NASDAQ-100-Technology Sector Index Fund, First Trust NASDAQ-100
Ex-Technology Sector Index Fund, First Trust NASDAQ(R) Clean Edge(R) Green
Energy Index Fund, First Trust S&P REIT Index Fund, First Trust Water ETF, First
Trust Natural Gas ETF, First Trust Chindia ETF or First Trust NASDAQ(R) ABA
Community Bank Index Fund (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 June 30, 2022.
ACTUAL EXPENSES
The first line in the following table provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Six-Month
Period" to estimate the expenses you paid on your account during this six-month
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the following table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as brokerage
commissions. Therefore, the second line in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
--------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
JANUARY 1, 2022 JUNE 30, 2022 PERIOD (a) PERIOD (b)
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST NASDAQ-100 EQUAL WEIGHTED INDEX
FUND (QQEW)
Actual $1,000.00 $ 740.30 0.58% $2.50
Hypothetical (5% return before expenses) $1,000.00 $1,021.92 0.58% $2.91
FIRST TRUST NASDAQ-100-TECHNOLOGY SECTOR INDEX
FUND (QTEC)
Actual $1,000.00 $ 652.90 0.57% $2.34
Hypothetical (5% return before expenses) $1,000.00 $1,021.97 0.57% $2.86
FIRST TRUST NASDAQ-100 EX-TECHNOLOGY SECTOR
INDEX FUND (QQXT)
Actual $1,000.00 $ 803.50 0.60% $2.68
Hypothetical (5% return before expenses) $1,000.00 $1,021.82 0.60% $3.01
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) GREEN ENERGY
INDEX FUND (QCLN)
Actual $1,000.00 $ 769.10 0.58% $2.54
Hypothetical (5% return before expenses) $1,000.00 $1,021.92 0.58% $2.91
FIRST TRUST S&P REIT INDEX FUND (FRI)
Actual $1,000.00 $ 796.40 0.50% $2.23
Hypothetical (5% return before expenses) $1,000.00 $1,022.32 0.50% $2.51
FIRST TRUST WATER ETF (FIW)
Actual $1,000.00 $ 763.00 0.52% $2.27
Hypothetical (5% return before expenses) $1,000.00 $1,022.22 0.52% $2.61
Page 23
FIRST TRUST EXCHANGE-TRADED FUND
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
--------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
JANUARY 1, 2022 JUNE 30, 2022 PERIOD (a) PERIOD (b)
--------------------------------------------------------------------------------------------------------------------------
FIRST TRUST NATURAL GAS ETF (FCG)
Actual $1,000.00 $1,291.50 0.60% $3.41
Hypothetical (5% return before expenses) $1,000.00 $1,021.82 0.60% $3.01
FIRST TRUST CHINDIA ETF (FNI)
Actual $1,000.00 $ 853.40 0.60% $2.76
Hypothetical (5% return before expenses) $1,000.00 $1,021.82 0.60% $3.01
FIRST TRUST NASDAQ(R) ABA COMMUNITY BANK
INDEX FUND (QABA)
Actual $1,000.00 $ 853.30 0.60% $2.76
Hypothetical (5% return before expenses) $1,000.00 $1,021.82 0.60% $3.01
(a) These expense ratios reflect an expense cap for certain Funds. See Note 3
in Notes to Financial Statements.
(b) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (January 1,
2022 through June 30, 2022), multiplied by 181/365 (to reflect the
six-month period).
Page 24
FIRST TRUST NASDAQ-100 EQUAL WEIGHTED INDEX FUND (QQEW)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 100.0%
AUTOMOBILES -- 2.0%
583,211 Lucid Group, Inc. (a) (b) $ 10,007,901
14,462 Tesla, Inc. (b) 9,739,000
----------------
19,746,901
----------------
BEVERAGES -- 3.1%
277,156 Keurig Dr Pepper, Inc. 9,808,551
108,024 Monster Beverage Corp. (b) 10,013,825
60,235 PepsiCo, Inc. 10,038,765
----------------
29,861,141
----------------
BIOTECHNOLOGY -- 7.1%
40,423 Amgen, Inc. 9,834,916
46,746 Biogen, Inc. (b) 9,533,379
162,256 Gilead Sciences, Inc. 10,029,043
74,456 Moderna, Inc. (b) 10,636,040
16,325 Regeneron Pharmaceuticals,
Inc. (b) 9,650,197
55,564 Seagen, Inc. (b) 9,831,494
35,973 Vertex Pharmaceuticals, Inc. (b) 10,136,832
----------------
69,651,901
----------------
COMMERCIAL SERVICES & SUPPLIES
-- 2.0%
27,098 Cintas Corp. 10,121,916
89,390 Copart, Inc. (b) 9,713,117
----------------
19,835,033
----------------
COMMUNICATIONS EQUIPMENT
-- 0.9%
217,628 Cisco Systems, Inc. 9,279,658
----------------
ELECTRIC UTILITIES -- 4.2%
107,572 American Electric Power Co., Inc. 10,320,458
166,526 Constellation Energy Corp. 9,535,279
233,500 Exelon Corp. 10,582,220
148,449 Xcel Energy, Inc. 10,504,251
----------------
40,942,208
----------------
ENTERTAINMENT -- 3.9%
126,874 Activision Blizzard, Inc. 9,878,410
74,352 Electronic Arts, Inc. 9,044,921
101,866 NetEase, Inc., ADR 9,510,210
53,135 Netflix, Inc. (b) 9,291,717
----------------
37,725,258
----------------
FOOD & STAPLES RETAILING -- 2.0%
21,095 Costco Wholesale Corp. 10,110,412
239,489 Walgreens Boots Alliance, Inc. 9,076,633
----------------
19,187,045
----------------
FOOD PRODUCTS -- 2.1%
271,701 Kraft Heinz (The) Co. 10,362,676
162,727 Mondelez International, Inc.,
Class A 10,103,720
----------------
20,466,396
----------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 4.0%
39,958 Align Technology, Inc. (b) 9,456,860
136,610 Dexcom, Inc. (b) 10,181,543
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
HEALTH CARE EQUIPMENT &
SUPPLIES (CONTINUED)
28,570 IDEXX Laboratories, Inc. (b) $ 10,020,356
48,876 Intuitive Surgical, Inc. (b) 9,809,902
----------------
39,468,661
----------------
HOTELS, RESTAURANTS & LEISURE
-- 3.7%
94,836 Airbnb, Inc., Class A (b) 8,447,991
4,968 Booking Holdings, Inc. (b) 8,688,982
65,066 Marriott International, Inc.,
Class A 8,849,627
131,726 Starbucks Corp. 10,062,549
----------------
36,049,149
----------------
INDUSTRIAL CONGLOMERATES -- 0.9%
52,566 Honeywell International, Inc. 9,136,496
----------------
INTERACTIVE MEDIA & SERVICES
-- 3.9%
2,211 Alphabet, Inc., Class A (b) 4,818,344
2,200 Alphabet, Inc., Class C (b) 4,812,390
67,607 Baidu, Inc., ADR (b) 10,055,189
136,826 Match Group, Inc. (b) 9,535,404
57,539 Meta Platforms, Inc., Class A (b) 9,278,164
----------------
38,499,491
----------------
INTERNET & DIRECT MARKETING
RETAIL -- 4.9%
89,222 Amazon.com, Inc. (b) 9,476,269
224,568 eBay, Inc. 9,357,749
147,187 JD.com, Inc., ADR 9,452,349
14,899 MercadoLibre, Inc. (b) 9,488,726
160,608 Pinduoduo, Inc., ADR (b) 9,925,574
----------------
47,700,667
----------------
IT SERVICES -- 7.0%
47,560 Automatic Data Processing, Inc. 9,989,502
142,412 Cognizant Technology Solutions
Corp., Class A 9,611,386
106,741 Fiserv, Inc. (b) 9,496,747
115,518 Okta, Inc. (b) 10,442,827
84,441 Paychex, Inc. 9,615,297
129,778 PayPal Holdings, Inc. (b) 9,063,696
60,259 VeriSign, Inc. (b) 10,083,138
----------------
68,302,593
----------------
LIFE SCIENCES TOOLS & SERVICES
-- 0.9%
49,981 Illumina, Inc. (b) 9,214,497
----------------
MACHINERY -- 1.0%
116,053 PACCAR, Inc. 9,555,804
----------------
MEDIA -- 3.1%
21,855 Charter Communications, Inc.,
Class A (b) 10,239,723
246,302 Comcast Corp., Class A 9,664,890
1,629,507 Sirius XM Holdings, Inc. (a) 9,988,878
----------------
29,893,491
----------------
See Notes to Financial Statements Page 25
FIRST TRUST NASDAQ-100 EQUAL WEIGHTED INDEX FUND (QQEW)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS (CONTINUED)
MULTILINE RETAIL -- 1.0%
63,055 Dollar Tree, Inc. (b) $ 9,827,122
----------------
PHARMACEUTICALS -- 1.1%
155,451 AstraZeneca PLC, ADR 10,270,647
----------------
PROFESSIONAL SERVICES -- 1.0%
58,543 Verisk Analytics, Inc. 10,133,208
----------------
ROAD & RAIL -- 2.0%
328,260 CSX Corp. 9,539,235
40,395 Old Dominion Freight Line, Inc. 10,352,431
----------------
19,891,666
----------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 15.4%
115,495 Advanced Micro Devices, Inc. (b) 8,831,903
65,827 Analog Devices, Inc. 9,616,666
104,988 Applied Materials, Inc. 9,551,808
19,934 ASML Holding N.V. 9,486,192
19,065 Broadcom, Inc. 9,261,968
255,553 Intel Corp. 9,560,238
30,407 KLA Corp. 9,702,266
22,475 Lam Research Corp. 9,577,721
207,595 Marvell Technology, Inc. 9,036,610
164,243 Microchip Technology, Inc. 9,539,234
170,369 Micron Technology, Inc. 9,417,998
59,760 NVIDIA Corp. 9,059,018
59,632 NXP Semiconductors N.V. 8,827,325
78,838 QUALCOMM, Inc. 10,070,766
104,149 Skyworks Solutions, Inc. 9,648,363
62,586 Texas Instruments, Inc. 9,616,339
----------------
150,804,415
----------------
SOFTWARE -- 16.9%
26,149 Adobe, Inc. (b) 9,572,103
40,661 ANSYS, Inc. (b) 9,729,771
53,933 Atlassian Corp. PLC, Class A (b) 10,107,044
56,160 Autodesk, Inc. (b) 9,657,274
65,788 Cadence Design Systems, Inc. (b) 9,870,174
58,133 Crowdstrike Holdings, Inc.,
Class A (b) 9,798,898
110,300 Datadog, Inc., Class A (b) 10,504,972
156,280 DocuSign, Inc. (b) 8,967,346
176,483 Fortinet, Inc. (b) 9,985,408
25,465 Intuit, Inc. 9,815,230
38,078 Microsoft Corp. 9,779,573
19,901 Palo Alto Networks, Inc. (b) 9,829,900
106,693 Splunk, Inc. (b) 9,438,063
31,820 Synopsys, Inc. (b) 9,663,734
67,187 Workday, Inc., Class A (b) 9,377,961
85,390 Zoom Video Communications,
Inc., Class A (b) 9,219,558
66,198 Zscaler, Inc. (b) 9,897,263
----------------
165,214,272
----------------
SPECIALTY RETAIL -- 2.0%
16,177 O'Reilly Automotive, Inc. (b) 10,219,982
126,336 Ross Stores, Inc. 8,872,577
----------------
19,092,559
----------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 1.0%
71,707 Apple, Inc. $ 9,803,781
----------------
TEXTILES, APPAREL & LUXURY
GOODS -- 0.9%
33,944 Lululemon Athletica, Inc. (b) 9,253,474
----------------
TRADING COMPANIES &
DISTRIBUTORS -- 1.0%
193,823 Fastenal Co. 9,675,644
----------------
WIRELESS TELECOMMUNICATION
SERVICES -- 1.0%
74,247 T-Mobile US, Inc. (b) 9,989,191
----------------
TOTAL COMMON STOCKS
-- 100.0% 978,472,369
(Cost $1,052,655,819) ----------------
MONEY MARKET FUNDS -- 0.8%
7,869,193 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
1.39% (c) (d) 7,869,193
(Cost $7,869,193) ----------------
PRINCIPAL
VALUE DESCRIPTION VALUE
---------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.8%
$ 7,400,832 BNP Paribas S.A., 1.44% (c),
dated 06/30/22, due 07/01/22,
with a maturity value of
$7,401,128. Collateralized by
U.S. Treasury Note, interest
rate of 1.25%, due 05/31/28.
The value of the collateral
including accrued interest
is $7,564,397. (d) 7,400,832
(Cost $7,400,832) ----------------
TOTAL INVESTMENTS -- 101.6% 993,742,394
(Cost $1,067,925,844)
NET OTHER ASSETS AND
LIABILITIES -- (1.6)% (14,851,991)
----------------
NET ASSETS -- 100.0% $ 978,890,403
================
(a) All or a portion of this security is on loan (see Note 2D - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $14,872,086 and the
total value of the collateral held by the Fund is $15,270,025.
(b) Non-income producing security.
(c) Rate shown reflects yield as of June 30, 2022.
(d) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
Page 26 See Notes to Financial Statements
FIRST TRUST NASDAQ-100 EQUAL WEIGHTED INDEX FUND (QQEW)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
---------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 14,872,086
Non-cash Collateral(2) (14,872,086)
----------------
Net Amount $ --
================
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At June 30, 2022, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 7,400,832
Non-cash Collateral(4) (7,400,832)
----------------
Net Amount $ --
================
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At June 30, 2022, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 978,472,369 $ 978,472,369 $ -- $ --
Money Market Funds.............................. 7,869,193 7,869,193 -- --
Repurchase Agreements........................... 7,400,832 -- 7,400,832 --
---------------------------------------------------------------------
Total Investments............................... $ 993,742,394 $ 986,341,562 $ 7,400,832 $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 27
FIRST TRUST NASDAQ-100-TECHNOLOGY SECTOR INDEX FUND (QTEC)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 100.0%
INTERACTIVE MEDIA & SERVICES
-- 9.8%
9,039 Alphabet, Inc., Class A (a) $ 19,698,331
8,998 Alphabet, Inc., Class C (a) 19,682,675
276,413 Baidu, Inc., ADR (a) 41,110,905
559,707 Match Group, Inc. (a) 39,005,981
235,260 Meta Platforms, Inc., Class A (a) 37,935,675
----------------
157,433,567
----------------
IT SERVICES -- 7.6%
582,158 Cognizant Technology Solutions
Corp., Class A 39,289,844
473,108 Okta, Inc. (a) 42,768,963
246,606 VeriSign, Inc. (a) 41,264,582
----------------
123,323,389
----------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 38.2%
471,663 Advanced Micro Devices, Inc. (a) 36,068,070
269,080 Analog Devices, Inc. 39,309,897
428,382 Applied Materials, Inc. 38,974,194
81,465 ASML Holding N.V. 38,767,564
77,918 Broadcom, Inc. 37,853,344
1,045,545 Intel Corp. 39,113,838
124,211 KLA Corp. 39,633,246
91,981 Lam Research Corp. 39,197,703
848,255 Marvell Technology, Inc. 36,924,540
671,517 Microchip Technology, Inc. 39,001,707
697,003 Micron Technology, Inc. 38,530,326
244,228 NVIDIA Corp. 37,022,523
243,686 NXP Semiconductors N.V. 36,072,839
322,203 QUALCOMM, Inc. 41,158,211
425,364 Skyworks Solutions, Inc. 39,405,721
255,828 Texas Instruments, Inc. 39,307,972
----------------
616,341,695
----------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
SOFTWARE -- 41.9%
107,091 Adobe, Inc. (a) $ 39,201,731
166,413 ANSYS, Inc. (a) 39,820,967
220,806 Atlassian Corp. PLC, Class A (a) 41,379,044
229,838 Autodesk, Inc. (a) 39,522,943
269,484 Cadence Design Systems, Inc. (a) 40,430,685
237,415 Crowdstrike Holdings, Inc.,
Class A (a) 40,018,672
451,071 Datadog, Inc., Class A (a) 42,960,002
638,600 DocuSign, Inc. (a) 36,642,868
721,845 Fortinet, Inc. (a) 40,841,990
104,447 Intuit, Inc. 40,258,052
155,845 Microsoft Corp. 40,025,671
81,409 Palo Alto Networks, Inc. (a) 40,211,161
436,493 Splunk, Inc. (a) 38,612,171
130,310 Synopsys, Inc. (a) 39,575,147
275,275 Workday, Inc., Class A (a) 38,422,885
349,652 Zoom Video Communications,
Inc., Class A (a) 37,751,926
270,503 Zscaler, Inc. (a) 40,442,904
----------------
676,118,819
----------------
TECHNOLOGY HARDWARE, STORAGE
& PERIPHERALS -- 2.5%
293,236 Apple, Inc. 40,091,226
----------------
TOTAL INVESTMENTS -- 100.0% 1,613,308,696
(Cost $2,076,718,059)
NET OTHER ASSETS AND
LIABILITIES -- 0.0% 194,199
----------------
NET ASSETS -- 100.0% $ 1,613,502,895
================
(a) Non-income producing security.
ADR - American Depositary Receipt
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 1,613,308,696 $ 1,613,308,696 $ -- $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
Page 28 See Notes to Financial Statements
FIRST TRUST NASDAQ-100 EX-TECHNOLOGY SECTOR INDEX FUND (QQXT)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS (a) -- 99.9%
AUTOMOBILES -- 3.3%
106,984 Lucid Group, Inc. (b) (c) $ 1,835,846
2,734 Tesla, Inc. (c) 1,841,130
----------------
3,676,976
----------------
BEVERAGES -- 5.1%
51,768 Keurig Dr Pepper, Inc. 1,832,070
20,180 Monster Beverage Corp. (c) 1,870,686
11,320 PepsiCo, Inc. 1,886,591
----------------
5,589,347
----------------
BIOTECHNOLOGY -- 12.0%
7,575 Amgen, Inc. 1,842,997
8,811 Biogen, Inc. (c) 1,796,915
30,378 Gilead Sciences, Inc. 1,877,664
13,889 Moderna, Inc. (c) 1,984,044
3,061 Regeneron Pharmaceuticals,
Inc. (c) 1,809,449
10,734 Seagen, Inc. (c) 1,899,274
6,758 Vertex Pharmaceuticals, Inc. (c) 1,904,337
----------------
13,114,680
----------------
COMMERCIAL SERVICES & SUPPLIES
-- 3.4%
5,117 Cintas Corp. 1,911,353
16,936 Copart, Inc. (c) 1,840,266
----------------
3,751,619
----------------
COMMUNICATIONS EQUIPMENT
-- 1.6%
40,969 Cisco Systems, Inc. 1,746,918
----------------
ELECTRIC UTILITIES -- 6.9%
20,114 American Electric Power Co., Inc. 1,929,737
30,619 Constellation Energy Corp. 1,753,244
43,470 Exelon Corp. 1,970,060
27,822 Xcel Energy, Inc. 1,968,685
----------------
7,621,726
----------------
ENTERTAINMENT -- 6.5%
23,796 Activision Blizzard, Inc. 1,852,756
13,834 Electronic Arts, Inc. 1,682,906
19,083 NetEase, Inc., ADR 1,781,589
10,124 Netflix, Inc. (c) 1,770,384
----------------
7,087,635
----------------
FOOD & STAPLES RETAILING -- 3.3%
3,980 Costco Wholesale Corp. 1,907,535
45,207 Walgreens Boots Alliance, Inc. 1,713,345
----------------
3,620,880
----------------
FOOD PRODUCTS -- 3.4%
49,998 Kraft Heinz (The) Co. 1,906,924
30,246 Mondelez International, Inc.,
Class A 1,877,974
----------------
3,784,898
----------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 6.8%
7,581 Align Technology, Inc. (c) 1,794,195
25,833 Dexcom, Inc. (c) 1,925,334
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
HEALTH CARE EQUIPMENT &
SUPPLIES (CONTINUED)
5,418 IDEXX Laboratories, Inc. (c) $ 1,900,255
9,255 Intuitive Surgical, Inc. (c) 1,857,571
----------------
7,477,355
----------------
HOTELS, RESTAURANTS & LEISURE
-- 6.2%
17,869 Airbnb, Inc., Class A (c) 1,591,771
932 Booking Holdings, Inc. (c) 1,630,059
12,241 Marriott International, Inc.,
Class A 1,664,898
24,738 Starbucks Corp. 1,889,736
----------------
6,776,464
----------------
INDUSTRIAL CONGLOMERATES -- 1.6%
9,893 Honeywell International, Inc. 1,719,502
----------------
INTERNET & DIRECT MARKETING
RETAIL -- 8.1%
16,738 Amazon.com, Inc. (c) 1,777,743
42,123 eBay, Inc. 1,755,266
27,265 JD.com, Inc., ADR 1,750,958
2,799 MercadoLibre, Inc. (c) 1,782,599
30,128 Pinduoduo, Inc., ADR (c) 1,861,910
----------------
8,928,476
----------------
IT SERVICES -- 6.5%
8,879 Automatic Data Processing, Inc. 1,864,945
19,946 Fiserv, Inc. (c) 1,774,596
15,737 Paychex, Inc. 1,791,972
24,385 PayPal Holdings, Inc. (c) 1,703,048
----------------
7,134,561
----------------
LIFE SCIENCES TOOLS & SERVICES
-- 1.6%
9,490 Illumina, Inc. (c) 1,749,576
----------------
MACHINERY -- 1.6%
21,705 PACCAR, Inc. 1,787,190
----------------
MEDIA -- 5.1%
4,026 Charter Communications, Inc.,
Class A (c) 1,886,301
45,941 Comcast Corp., Class A 1,802,725
304,006 Sirius XM Holdings, Inc. (b) 1,863,557
----------------
5,552,583
----------------
MULTILINE RETAIL -- 1.7%
11,845 Dollar Tree, Inc. (c) 1,846,043
----------------
PHARMACEUTICALS -- 1.8%
29,103 AstraZeneca PLC, ADR 1,922,835
----------------
PROFESSIONAL SERVICES -- 1.7%
10,988 Verisk Analytics, Inc. 1,901,913
----------------
ROAD & RAIL -- 3.4%
61,462 CSX Corp. 1,786,086
7,658 Old Dominion Freight Line, Inc. 1,962,592
----------------
3,748,678
----------------
See Notes to Financial Statements Page 29
FIRST TRUST NASDAQ-100 EX-TECHNOLOGY SECTOR INDEX FUND (QQXT)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SPECIALTY RETAIL -- 3.3%
3,031 O'Reilly Automotive, Inc. (c) $ 1,914,865
23,778 Ross Stores, Inc. 1,669,929
----------------
3,584,794
----------------
TEXTILES, APPAREL & LUXURY
GOODS -- 1.6%
6,391 Lululemon Athletica, Inc. (c) 1,742,251
----------------
TRADING COMPANIES &
DISTRIBUTORS -- 1.7%
36,663 Fastenal Co. 1,830,217
----------------
WIRELESS TELECOMMUNICATION
SERVICES -- 1.7%
13,936 T-Mobile US, Inc. (c) 1,874,949
----------------
TOTAL COMMON STOCKS
-- 99.9% 109,572,066
(Cost $104,409,022) ----------------
MONEY MARKET FUNDS -- 1.6%
1,606,121 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
1.39% (d) (e) 1,606,121
123,607 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 1.34% (d) 123,607
----------------
TOTAL MONEY MARKET FUNDS
-- 1.6% 1,729,728
(Cost $1,729,728) ----------------
PRINCIPAL
VALUE DESCRIPTION VALUE
---------------------------------------------------------------
REPURCHASE AGREEMENTS -- 1.4%
$ 1,510,527 BNP Paribas S.A., 1.44% (d),
dated 06/30/22, due 07/01/22,
with a maturity value of
1,510,587. Collateralized by
U.S. Treasury Note, interest
rate of 1.25%, due 05/31/28.
The value of the collateral
including accrued interest
is $1,543,911. (e) 1,510,527
(Cost $1,510,527) ----------------
TOTAL INVESTMENTS -- 102.9% 112,812,321
(Cost $107,649,277)
NET OTHER ASSETS AND
LIABILITIES -- (2.9)% (3,154,667)
----------------
NET ASSETS -- 100.0% $ 109,657,654
================
(a) The industry allocation is based on Standard & Poor's Global Industry
Classification Standard (GICS), and is different than the industry sector
classification system used by the Index to select securities, which is the
Industry Classification Benchmark (ICB) system, which is maintained by
FTSE International Limited.
(b) All or a portion of this security is on loan (see Note 2D - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $3,040,174 and the
total value of the collateral held by the Fund is $3,116,648.
(c) Non-income producing security.
(d) Rate shown reflects yield as of June 30, 2022.
(e) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
---------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 3,040,174
Non-cash Collateral(2) (3,040,174)
----------------
Net Amount $ --
================
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At June 30, 2022, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 1,510,527
Non-cash Collateral(4) (1,510,527)
----------------
Net Amount $ --
================
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At June 30, 2022, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
Page 30 See Notes to Financial Statements
FIRST TRUST NASDAQ-100 EX-TECHNOLOGY SECTOR INDEX FUND (QQXT)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 109,572,066 $ 109,572,066 $ -- $ --
Money Market Funds.............................. 1,729,728 1,729,728 -- --
Repurchase Agreements........................... 1,510,527 -- 1,510,527 --
---------------------------------------------------------------------
Total Investments............................... $ 112,812,321 $ 111,301,794 $ 1,510,527 $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 31
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) GREEN ENERGY INDEX FUND (QCLN)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 99.9%
AUTOMOBILES -- 21.6%
8,460,917 NIO, Inc., ADR (a) $ 183,771,117
332,888 Niu Technologies, ADR (a) 2,862,837
210,642 Tesla, Inc. (a) 141,850,536
1,072,056 Workhorse Group, Inc. (a) (b) 2,787,346
2,375,329 XPeng, Inc., ADR (a) 75,392,942
----------------
406,664,778
----------------
CHEMICALS -- 10.1%
613,332 Albemarle Corp. 128,174,121
1,060,471 Livent Corp. (a) 24,062,087
454,302 Sociedad Quimica y Minera de
Chile S.A., ADR 37,947,846
----------------
190,184,054
----------------
COMMERCIAL SERVICES & SUPPLIES
-- 0.4%
1,107,327 Li-Cycle Holdings Corp. (a) (b) 7,618,410
----------------
CONSTRUCTION & ENGINEERING
-- 0.8%
221,665 Ameresco, Inc., Class A (a) 10,099,057
316,830 Infrastructure and Energy
Alternatives, Inc. (a) 2,544,145
319,410 ReneSola Ltd., ADR (a) (b) 1,517,198
----------------
14,160,400
----------------
ELECTRICAL EQUIPMENT -- 14.9%
226,724 Acuity Brands, Inc. 34,924,565
186,583 American Superconductor
Corp. (a) (b) 966,500
984,609 Array Technologies, Inc. (a) 10,840,545
1,954,836 Ballard Power Systems,
Inc. (a) (b) 12,315,467
280,233 Blink Charging Co. (a) (b) 4,632,252
1,064,558 Bloom Energy Corp., Class A (a) 17,565,207
2,213,692 ChargePoint Holdings,
Inc. (a) (b) 30,305,443
266,538 EnerSys 15,715,080
383,573 Eos Energy Enterprises,
Inc. (a) (b) 464,123
361,720 Fluence Energy, Inc. (a) (b) 3,429,106
654,399 FTC Solar, Inc. (a) (b) 2,368,924
2,404,161 FuelCell Energy, Inc. (a) 9,015,604
3,790,282 Plug Power, Inc. (a) (b) 62,804,973
991,539 Romeo Power, Inc. (a) (b) 444,904
736,963 Shoals Technologies Group, Inc.,
Class A (a) 12,145,150
1,010,064 Stem, Inc. (a) 7,232,058
1,377,588 Sunrun, Inc. (a) 32,180,456
244,280 TPI Composites, Inc. (a) 3,053,500
211,177 Vicor Corp. (a) 11,557,717
906,393 Wallbox N.V. (a) (b) 8,048,770
----------------
280,010,344
----------------
ELECTRONIC EQUIPMENT, INSTRUMENTS
& COMPONENTS -- 1.7%
246,256 Advanced Energy Industries, Inc. 17,971,763
295,445 Itron, Inc. (a) 14,603,846
----------------
32,575,609
----------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
INDEPENDENT POWER AND RENEWABLE
ELECTRICITY PRODUCERS -- 10.9%
748,060 Atlantica Sustainable
Infrastructure PLC $ 24,132,416
398,218 Azure Power Global Ltd. (a) (b) 4,539,685
1,804,042 Brookfield Renewable Partners,
L.P. (c) 62,780,662
537,262 Clearway Energy, Inc., Class C 18,718,208
550,119 NextEra Energy Partners,
L.P. (c) (d) 40,796,825
367,627 Ormat Technologies, Inc. 28,803,575
1,851,318 ReNew Energy Global PLC,
Class A (a) (b) 11,978,027
751,542 Sunnova Energy International,
Inc. (a) 13,850,919
----------------
205,600,317
----------------
MACHINERY -- 0.9%
1,245,741 Lion Electric (The) Co. (a) (b) 5,244,569
1,983,572 Microvast Holdings, Inc. (a) (b) 4,403,530
1,462,081 Proterra, Inc. (a) (b) 6,784,056
----------------
16,432,155
----------------
METALS & MINING -- 2.0%
1,163,938 MP Materials Corp. (a) 37,339,131
----------------
MORTGAGE REAL ESTATE INVESTMENT
TRUSTS -- 1.2%
569,903 Hannon Armstrong Sustainable
Infrastructure Capital,
Inc. (b) 21,576,527
----------------
OIL, GAS & CONSUMABLE FUELS
-- 0.4%
527,113 Archaea Energy, Inc. (a) 8,186,065
----------------
PROFESSIONAL SERVICES -- 0.1%
86,584 Willdan Group, Inc. (a) 2,387,987
----------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 34.7%
1,249,002 Allegro MicroSystems, Inc. (a) 25,841,851
421,375 Canadian Solar, Inc. (a) 13,121,617
430,649 Daqo New Energy Corp., ADR (a) 30,739,726
857,858 Enphase Energy, Inc. (a) 167,488,196
698,809 First Solar, Inc. (a) 47,609,857
262,061 JinkoSolar Holding Co., Ltd.,
ADR (a) (b) 18,129,380
292,425 Maxeon Solar Technologies
Ltd. (a) (b) 3,886,328
810,975 Navitas Semiconductor
Corp. (a) (b) 3,130,364
2,632,233 ON Semiconductor Corp. (a) 132,427,642
382,290 Power Integrations, Inc. 28,675,573
292,757 SolarEdge Technologies, Inc. (a) 80,121,736
1,139,918 SunPower Corp. (a) (b) 18,022,104
309,557 Universal Display Corp. 31,308,595
810,600 Wolfspeed, Inc. (a) 51,432,570
----------------
651,935,539
----------------
Page 32 See Notes to Financial Statements
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) GREEN ENERGY INDEX FUND (QCLN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS (CONTINUED)
SPECIALTY RETAIL -- 0.2%
452,424 EVgo, Inc. (a) (b) $ 2,719,068
1,096,488 Volta, Inc. (a) 1,425,435
----------------
4,144,503
----------------
TOTAL COMMON STOCKS
-- 99.9% 1,878,815,819
(Cost $2,340,878,292) ----------------
MONEY MARKET FUNDS -- 3.4%
64,966,629 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
1.39% (e) (f) 64,966,629
(Cost $64,966,629) ----------------
PRINCIPAL
VALUE DESCRIPTION VALUE
---------------------------------------------------------------
REPURCHASE AGREEMENTS -- 3.2%
$ 61,099,927 BNP Paribas S.A., 1.44% (e),
dated 06/30/22, due 07/01/22,
with a maturity value of
$61,102,370. Collateralized by
U.S. Treasury Note, interest
rate of 1.25%, due 05/31/28.
The value of the collateral
including accrued interest
is $62,450,287. (f) 61,099,927
(Cost $61,099,927) ----------------
TOTAL INVESTMENTS -- 106.5% 2,004,882,375
(Cost $2,466,944,848)
NET OTHER ASSETS AND
LIABILITIES -- (6.5)% (123,724,523)
----------------
NET ASSETS -- 100.0% $ 1,881,157,852
================
(a) Non-income producing security.
(b) All or a portion of this security is on loan (see Note 2D - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $124,338,428 and the
total value of the collateral held by the Fund is $126,066,556.
(c) Security is a Master Limited Partnership ("MLP").
(d) This security is taxed as a "C" corporation for federal income tax
purposes.
(e) Rate shown reflects yield as of June 30, 2022.
(f) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
---------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 124,338,428
Non-cash Collateral(2) (124,338,428)
----------------
Net Amount $ --
================
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At June 30, 2022, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 61,099,927
Non-cash Collateral(4) (61,099,927)
----------------
Net Amount $ --
================
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At June 30, 2022, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
See Notes to Financial Statements Page 33
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) GREEN ENERGY INDEX FUND (QCLN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 1,878,815,819 $ 1,878,815,819 $ -- $ --
Money Market Funds.............................. 64,966,629 64,966,629 -- --
Repurchase Agreements........................... 61,099,927 -- 61,099,927 --
---------------------------------------------------------------------
Total Investments............................... $ 2,004,882,375 $ 1,943,782,448 $ 61,099,927 $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
Page 34 See Notes to Financial Statements
FIRST TRUST S&P REIT INDEX FUND (FRI)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 99.5%
DIVERSIFIED REITS -- 3.9%
13,634 Alexander & Baldwin, Inc. $ 244,730
2,044 Alpine, Inc.ome Property Trust,
Inc. 36,628
9,878 American Assets Trust, Inc. 293,377
12,700 Armada Hoffler Properties, Inc. 163,068
31,762 Broadstone Net Lease, Inc. 651,439
1,134 CTO Realty Growth, Inc. 69,310
25,623 Empire State Realty Trust, Inc.,
Class A 180,130
24,604 Essential Properties Realty
Trust, Inc. 528,740
7,250 Gladstone Commercial Corp. 136,590
19,440 Global Net Lease, Inc. 275,270
3,052 One Liberty Properties, Inc. 79,291
3,783 PS Business Parks, Inc. 707,988
47,371 STORE Capital Corp. 1,235,436
36,187 WP Carey, Inc. 2,998,455
----------------
7,600,452
----------------
HEALTH CARE REITS -- 10.9%
18,202 CareTrust REIT, Inc. 335,645
4,422 Community Healthcare Trust, Inc. 160,121
44,835 Diversified Healthcare Trust 81,600
11,554 Global Medical REIT, Inc. 129,751
28,442 Healthcare Realty Trust, Inc. 773,622
42,974 Healthcare Trust of America,
Inc., Class A 1,199,404
101,223 Healthpeak Properties, Inc. 2,622,688
7,402 LTC Properties, Inc. 284,163
112,580 Medical Properties Trust, Inc. 1,719,097
8,600 National Health Investors, Inc. 521,246
44,129 Omega Healthcare Investors, Inc. 1,243,997
42,267 Physicians Realty Trust 737,559
43,328 Sabra Health Care REIT, Inc. 605,292
2,405 Universal Health Realty Income
Trust 127,970
74,986 Ventas, Inc. 3,856,530
85,167 Welltower, Inc. 7,013,502
----------------
21,412,187
----------------
HOTEL & RESORT REITS -- 3.3%
39,934 Apple Hospitality REIT, Inc. 585,832
6,467 Ashford Hospitality Trust,
Inc. (a) 38,673
11,768 Braemar Hotels & Resorts, Inc. 50,485
9,157 Chatham Lodging Trust (a) 95,691
39,559 DiamondRock Hospitality Co. (a) 324,779
6,201 Hersha Hospitality Trust (a) 60,832
134,096 Host Hotels & Resorts, Inc. 2,102,625
43,781 Park Hotels & Resorts, Inc. 594,108
24,642 Pebblebrook Hotel Trust 408,318
31,300 RLJ Lodging Trust 345,239
10,346 Ryman Hospitality Properties,
Inc.(a) 786,606
30,971 Service Properties Trust 161,978
20,086 Summit Hotel Properties, Inc. (a) 146,025
40,373 Sunstone Hotel Investors, Inc. (a) 400,500
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
HOTEL & RESORT REITS (CONTINUED)
21,454 Xenia Hotels & Resorts, Inc. (a) $ 311,727
----------------
6,413,418
----------------
INDUSTRIAL REITS -- 15.0%
50,519 Americold Realty Trust, Inc. 1,517,591
72,125 Duke Realty Corp. 3,963,269
7,821 EastGroup Properties, Inc. 1,207,015
24,764 First Industrial Realty Trust,
Inc. 1,175,795
1,243 Indus Realty Trust, Inc. 73,784
12,269 Industrial Logistics Properties
Trust 172,748
5,246 Innovative Industrial Properties,
Inc. 576,378
53,776 LXP Industrial Trust 577,554
7,525 Plymouth Industrial REIT, Inc. 131,988
138,876 Prologis, Inc. 16,338,761
30,957 Rexford Industrial Realty, Inc. 1,782,814
33,622 STAG Industrial, Inc. 1,038,247
14,172 Terreno Realty Corp. 789,806
----------------
29,345,750
----------------
OFFICE REITS -- 7.7%
27,866 Alexandria Real Estate Equities,
Inc. 4,041,406
26,754 Boston Properties, Inc. 2,380,571
32,150 Brandywine Realty Trust 309,926
8,170 City Office REIT, Inc. 105,801
21,088 Corporate Office Properties Trust 552,295
27,907 Cousins Properties, Inc. 815,722
2,849 Creative Media & Community
Trust Corp. 20,228
32,978 Douglas Emmett, Inc. 738,048
17,031 Easterly Government Properties,
Inc. 324,270
21,138 Equity Commonwealth (a) 581,929
17,415 Franklin Street Properties Corp. 72,620
19,726 Highwoods Properties, Inc. 674,432
27,132 Hudson Pacific Properties, Inc. 402,639
20,397 JBG SMITH Properties 482,185
19,705 Kilroy Realty Corp. 1,031,163
9,084 Office Properties Income Trust 181,226
10,623 Orion Office REIT, Inc. 116,428
30,823 Paramount Group, Inc. 222,850
23,138 Piedmont Office Realty Trust,
Inc., Class A 303,570
3,240 Postal Realty Trust, Inc.,
Class A 48,276
12,031 SL Green Realty Corp. 555,214
15,028 Veris Residential, Inc. (a) 198,971
29,858 Vornado Realty Trust 853,640
----------------
15,013,410
----------------
RESIDENTIAL REITS -- 20.0%
26,168 American Campus Communities,
Inc. 1,687,051
55,438 American Homes 4 Rent, Class A 1,964,723
29,472 Apartment Income REIT Corp. 1,226,035
28,646 Apartment Investment and
Management Co., Class A (a) 183,334
See Notes to Financial Statements Page 35
FIRST TRUST S&P REIT INDEX FUND (FRI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS (CONTINUED)
RESIDENTIAL REITS (CONTINUED)
26,229 AvalonBay Communities, Inc. $ 5,094,983
5,265 Bluerock Residential Growth
REIT, Inc. 138,417
2,201 BRT Apartments Corp. 47,300
19,986 Camden Property Trust 2,687,717
2,882 Centerspace 235,027
2,530 Clipper Realty, Inc. 19,532
32,452 Equity LifeStyle Properties, Inc. 2,286,893
64,199 Equity Residential 4,636,452
12,255 Essex Property Trust, Inc. 3,204,805
41,440 Independence Realty Trust, Inc. 859,051
114,500 Invitation Homes, Inc. 4,073,910
21,657 Mid-America Apartment
Communities, Inc. 3,782,828
4,337 NexPoint Residential Trust, Inc. 271,106
22,815 Sun Communities, Inc. 3,635,798
56,151 UDR, Inc. 2,585,192
9,465 UMH Properties, Inc. 167,152
16,401 Washington Real Estate
Investment Trust 349,505
----------------
39,136,811
----------------
RETAIL REITS -- 14.6%
17,801 Acadia Realty Trust 278,052
14,102 Agree Realty Corp. 1,017,177
401 Alexander's, Inc. 89,086
56,192 Brixmor Property Group, Inc. 1,135,640
4,833 CBL & Associates Properties,
Inc.(a) 113,527
2,304 Cedar Realty Trust, Inc. 66,332
13,410 Federal Realty Investment Trust 1,283,873
7,628 Getty Realty Corp. 202,142
12,643 InvenTrust Properties Corp. 326,063
115,940 Kimco Realty Corp. 2,292,134
41,094 Kite Realty Group Trust 710,515
40,268 Macerich (The) Co. 350,734
33,002 National Retail Properties, Inc. 1,419,086
24,960 Necessity Retail REIT (The), Inc. 181,709
8,991 NETSTREIT Corp. 169,660
787 Pennsylvania Real Estate
Investment Trust (a) 2,636
21,366 Phillips Edison & Co., Inc. 713,838
112,860 Realty Income Corp. 7,703,824
29,104 Regency Centers Corp. 1,726,158
23,302 Retail Opportunity Investments
Corp. 367,706
15,967 RPT Realty 156,956
2,467 Saul Centers, Inc. 116,220
61,599 Simon Property Group, Inc. 5,846,977
34,099 SITE Centers Corp. 459,314
25,196 Spirit Realty Capital, Inc. 951,905
19,584 Tanger Factory Outlet Centers,
Inc. 278,485
20,709 Urban Edge Properties 314,984
5,659 Urstadt Biddle Properties, Inc.,
Class A 91,676
8,667 Whitestone REIT 93,170
----------------
28,459,579
----------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
SPECIALIZED REITS -- 24.1%
42,105 CubeSmart $ 1,798,726
53,407 Digital Realty Trust, Inc. 6,933,831
14,063 EPR Properties 659,977
17,077 Equinix, Inc. 11,219,931
25,190 Extra Space Storage, Inc. 4,285,323
5,917 Farmland Partners, Inc. 81,655
15,077 Four Corners Property Trust, Inc. 400,897
44,119 Gaming and Leisure Properties,
Inc. 2,023,297
5,842 Gladstone Land Corp. 129,459
54,509 Iron Mountain, Inc. 2,654,043
15,828 Life Storage, Inc. 1,767,354
15,785 National Storage Affiliates Trust 790,355
28,651 Public Storage 8,958,308
2,906 Safehold, Inc. 102,785
180,661 VICI Properties, Inc. 5,381,891
----------------
47,187,832
----------------
TOTAL COMMON STOCKS -- 99.5% 194,569,439
(Cost $231,619,699) ----------------
MONEY MARKET FUNDS -- 0.2%
440,498 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 1.34% (b) 440,498
(Cost $440,498) ----------------
TOTAL INVESTMENTS -- 99.7% 195,009,937
(Cost $232,060,197)
NET OTHER ASSETS AND
LIABILITIES -- 0.3% 605,806
----------------
NET ASSETS -- 100.0% $ 195,615,743
================
(a) Non-income producing security.
(b) Rate shown reflects yield as of June 30, 2022.
Page 36 See Notes to Financial Statements
FIRST TRUST S&P REIT INDEX FUND (FRI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 194,569,439 $ 194,569,439 $ -- $ --
Money Market Funds.............................. 440,498 440,498 -- --
---------------------------------------------------------------------
Total Investments............................... $ 195,009,937 $ 195,009,937 $ -- $ --
=====================================================================
* See Portfolio of Investments for Sub-industry breakout.
See Notes to Financial Statements Page 37
FIRST TRUST WATER ETF (FIW)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 100.0%
BEVERAGES -- 2.1%
1,705,990 Primo Water Corp. $ 22,826,146
----------------
BUILDING PRODUCTS -- 9.0%
632,967 A.O. Smith Corp. 34,610,636
371,907 Advanced Drainage Systems, Inc. 33,497,663
1,144,146 Zurn Water Solutions Corp. 31,166,537
----------------
99,274,836
----------------
CHEMICALS -- 3.9%
281,460 Ecolab, Inc. 43,277,290
----------------
COMMERCIAL SERVICES & SUPPLIES
-- 4.4%
351,467 Montrose Environmental Group,
Inc. (a) 11,865,526
273,407 Tetra Tech, Inc. 37,333,726
----------------
49,199,252
----------------
CONSTRUCTION & ENGINEERING
-- 7.5%
682,772 AECOM 44,530,390
171,899 Valmont Industries, Inc. 38,613,672
----------------
83,144,062
----------------
ELECTRONIC EQUIPMENT, INSTRUMENTS
& COMPONENTS -- 4.1%
249,523 Badger Meter, Inc. 20,183,915
520,351 Itron, Inc. (a) 25,720,950
----------------
45,904,865
----------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 3.0%
93,191 IDEXX Laboratories, Inc. (a) 32,684,879
----------------
LIFE SCIENCES TOOLS & SERVICES
-- 8.2%
380,562 Agilent Technologies, Inc. 45,199,349
180,788 Danaher Corp. 45,833,374
----------------
91,032,723
----------------
MACHINERY -- 26.0%
815,957 Energy Recovery, Inc. (a) 15,845,885
872,190 Evoqua Water Technologies
Corp. (a) 28,354,897
816,763 Flowserve Corp. 23,383,925
293,344 Franklin Electric Co., Inc. 21,490,381
258,521 IDEX Corp. 46,955,169
118,155 Lindsay Corp. 15,693,347
434,795 Mueller Industries, Inc. 23,170,226
1,221,684 Mueller Water Products, Inc.,
Class A 14,330,353
749,593 Pentair PLC 34,308,872
172,318 Watts Water Technologies, Inc.,
Class A 21,167,543
557,731 Xylem, Inc. 43,603,410
----------------
288,304,008
----------------
MULTI-UTILITIES -- 3.6%
2,997,853 Algonquin Power & Utilities
Corp. (b) 40,261,166
----------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
PROFESSIONAL SERVICES -- 3.0%
748,946 Stantec, Inc. $ 32,796,345
----------------
SOFTWARE -- 4.0%
110,683 Roper Technologies, Inc. 43,681,046
----------------
TRADING COMPANIES & DISTRIBUTORS
-- 2.2%
1,103,429 Core & Main, Inc., Class A (a) 24,606,467
----------------
WATER UTILITIES -- 19.0%
294,737 American States Water Co. 24,024,013
328,348 American Water Works Co., Inc. 48,848,332
435,712 California Water Service Group 24,203,802
4,645,148 Cia de Saneamento Basico do
Estado de Sao Paulo, ADR 37,114,732
1,053,071 Essential Utilities, Inc. 48,283,305
155,048 Middlesex Water Co. 13,594,609
237,706 SJW Group 14,835,231
----------------
210,904,024
----------------
TOTAL COMMON STOCKS -- 100.0% 1,107,897,109
(Cost $1,151,337,640) ----------------
MONEY MARKET FUNDS -- 1.7%
19,257,332 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
1.39% (c) (d) 19,257,332
15,495 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 1.34% (c) 15,495
----------------
TOTAL MONEY MARKET FUNDS
-- 1.7% 19,272,827
(Cost $19,272,827) ----------------
PRINCIPAL
VALUE DESCRIPTION VALUE
---------------------------------------------------------------
REPURCHASE AGREEMENTS -- 1.6%
$ 18,111,168 BNP Paribas S.A., 1.44% (c),
dated 06/30/22, due 07/01/22,
with a maturity value of
$18,111,893. Collateralized by
U.S. Treasury Note, interest
rate of 1.25%, due 05/31/28.
The value of the collateral
including accrued interest
is $18,511,440. (d) 18,111,168
(Cost $18,111,168) ----------------
TOTAL INVESTMENTS -- 103.3% 1,145,281,104
(Cost $1,188,721,635)
NET OTHER ASSETS AND
LIABILITIES -- (3.3)% (36,191,375)
----------------
NET ASSETS -- 100.0% $ 1,109,089,729
================
Page 38 See Notes to Financial Statements
FIRST TRUST WATER ETF (FIW)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
(a) Non-income producing security.
(b) All or a portion of this security is on loan (see Note 2D - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $36,352,324 and the
total value of the collateral held by the Fund is $37,368,500.
(c) Rate shown reflects yield as of June 30, 2022.
(d) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
---------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 36,352,324
Non-cash Collateral(2) (36,352,324)
----------------
Net Amount $ --
================
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At June 30, 2022, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 18,111,168
Non-cash Collateral(4) (18,111,168)
----------------
Net Amount $ --
================
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At June 30, 2022, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 1,107,897,109 $ 1,107,897,109 $ -- $ --
Money Market Funds.............................. 19,272,827 19,272,827 -- --
Repurchase Agreements........................... 18,111,168 -- 18,111,168 --
---------------------------------------------------------------------
Total Investments............................... $ 1,145,281,104 $ 1,127,169,936 $ 18,111,168 $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 39
FIRST TRUST NATURAL GAS ETF (FCG)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 99.8%
GAS UTILITIES -- 2.0%
209,488 National Fuel Gas Co. $ 13,836,682
----------------
OIL, GAS & CONSUMABLE FUELS
-- 97.8%
157,513 Amplify Energy Corp. (a) 1,030,135
555,186 Antero Resources Corp. (a) 17,016,451
565,964 APA Corp. 19,752,144
299,402 Callon Petroleum Co. (a) 11,736,558
1,499,088 Centennial Resource
Development, Inc., Class A (a) 8,964,546
237,269 Chesapeake Energy Corp. 19,242,516
174,237 Civitas Resources, Inc. 9,110,853
741,417 CNX Resources Corp. (a) 12,203,724
471,622 Comstock Resources, Inc. (a) 5,697,194
286,640 ConocoPhillips 25,743,138
754,627 Coterra Energy, Inc. 19,461,830
116,247 Crescent Energy, Inc.,
Class A (b) 1,450,763
1,900,904 Crescent Point Energy Corp. 13,534,436
1,089,832 DCP Midstream, L.P. (c) 32,237,231
392,631 Devon Energy Corp. 21,637,894
188,816 Diamondback Energy, Inc. 22,875,058
233,141 Earthstone Energy, Inc.,
Class A (a) (b) 3,182,375
707,725 Enerplus Corp. 9,363,202
224,936 EOG Resources, Inc. 24,841,932
528,194 EQT Corp. 18,169,874
79,597 Gulfport Energy Corp. (a) 6,328,757
221,879 Hess Corp. 23,505,861
1,060,113 Hess Midstream, L.P.,
Class A (b) (c) (d) 29,683,164
1,899,677 Kosmos Energy Ltd. (a) 11,759,001
116,479 Laredo Petroleum, Inc. (a) 8,030,062
456,448 Magnolia Oil & Gas Corp.,
Class A 9,580,843
891,077 Marathon Oil Corp. 20,031,411
333,390 Matador Resources Co. 15,532,640
445,657 Murphy Oil Corp. 13,454,385
257,016 Northern Oil and Gas, Inc. 6,492,224
70,586 Oasis Petroleum, Inc. 8,586,787
367,369 Obsidian Energy Ltd. (a) (b) 2,843,436
454,570 Occidental Petroleum Corp. 26,765,082
437,693 Ovintiv, Inc. 19,341,654
265,415 PDC Energy, Inc. 16,352,218
108,336 Pioneer Natural Resources Co. 24,167,595
659,947 Range Resources Corp. (a) 16,333,688
130,829 Ranger Oil Corp., Class A (a) 4,300,349
25,500 Riley Exploration Permian, Inc. 616,590
267,335 SandRidge Energy, Inc. (a) 4,189,139
72,535 SilverBow Resources, Inc. (a) (b) 2,057,093
406,156 SM Energy Co. 13,886,474
2,379,960 Southwestern Energy Co. (a) 14,874,750
324,130 Talos Energy, Inc. (a) 5,014,291
3,816,404 Tellurian, Inc. (a) 11,372,884
647,110 Vermilion Energy, Inc. 12,333,917
728,277 W&T Offshore, Inc. (a) 3,146,157
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS
(CONTINUED)
1,415,446 Western Midstream Partners,
L.P. (c) $ 34,409,492
----------------
662,241,798
----------------
TOTAL COMMON STOCKS -- 99.8% 676,078,480
(Cost $648,180,371) ----------------
MONEY MARKET FUNDS -- 2.6%
15,927,014 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
1.39% (e) (f) 15,927,014
1,290,181 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class - 1.34% (e) 1,290,181
----------------
TOTAL MONEY MARKET FUNDS
-- 2.6% 17,217,195
(Cost $17,217,195) ----------------
PRINCIPAL
VALUE DESCRIPTION VALUE
---------------------------------------------------------------
REPURCHASE AGREEMENTS -- 2.2%
$ 14,979,066 BNP Paribas S.A., 1.44% (e),
dated 06/30/22, due 07/01/22,
with a maturity value of .
$14,979,665. Collateralized by
U.S. Treasury Note, interest
rate of 1.25%, due 05/31/28.
The value of the collateral
including accrued interest
is $15,310,116. (f) 14,979,066
(Cost $14,979,066) ----------------
TOTAL INVESTMENTS -- 104.6% 708,274,741
(Cost $680,376,632)
NET OTHER ASSETS AND
LIABILITIES -- (4.6)% (31,086,566)
----------------
NET ASSETS -- 100.0% $ 677,188,175
================
(a) Non-income producing security.
(b) All or a portion of this security is on loan (see Note 2D - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $29,833,001 and the
total value of the collateral held by the Fund is $30,906,080.
(c) Security is a Master Limited Partnership ("MLP").
(d) This security is taxed as a "C" corporation for federal income tax
purposes.
(e) Rate shown reflects yield as of June 30, 2022.
(f) This security serves as collateral for securities on loan.
Page 40 See Notes to Financial Statements
FIRST TRUST NATURAL GAS ETF (FCG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
---------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 29,833,001
Non-cash Collateral(2) (29,833,001)
----------------
Net Amount $ --
================
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At June 30, 2022, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 14,979,066
Non-cash Collateral(4) (14,979,066)
----------------
Net Amount $ --
================
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At June 30, 2022, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 676,078,480 $ 676,078,480 $ -- $ --
Money Market Funds.............................. 17,217,195 17,217,195 -- --
Repurchase Agreements........................... 14,979,066 -- 14,979,066 --
---------------------------------------------------------------------
Total Investments............................... $ 708,274,741 $ 693,295,675 $ 14,979,066 $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 41
FIRST TRUST CHINDIA ETF (FNI)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 100.0%
AIR FREIGHT & LOGISTICS -- 0.6%
31,187 ZTO Express Cayman, Inc., ADR $ 856,083
----------------
AUTOMOBILES -- 13.3%
97,481 Li Auto, Inc., ADR (a) 3,734,497
281,045 NIO, Inc., ADR (a) 6,104,297
171,478 Tata Motors Ltd., ADR (a) (b) 4,436,136
103,989 XPeng, Inc., ADR (a) 3,300,611
----------------
17,575,541
----------------
BANKS -- 12.2%
148,571 HDFC Bank Ltd., ADR 8,165,462
444,287 ICICI Bank Ltd., ADR 7,881,652
----------------
16,047,114
----------------
BIOTECHNOLOGY -- 1.6%
96,542 I-Mab, ADR (a) 1,090,925
28,864 Zai Lab Ltd., ADR (a) 1,001,003
----------------
2,091,928
----------------
CAPITAL MARKETS -- 0.9%
22,881 Futu Holdings Ltd., ADR (a) 1,194,617
----------------
CONSUMER FINANCE -- 1.3%
53,411 360 DigiTech, Inc., ADR 924,010
133,555 Lufax Holding Ltd., ADR 801,330
----------------
1,725,340
----------------
DIVERSIFIED CONSUMER SERVICES
-- 1.8%
64,329 New Oriental Education &
Technology Group, Inc.,
ADR (a) 1,309,738
204,878 TAL Education Group, ADR (a) 997,756
----------------
2,307,494
----------------
ENTERTAINMENT -- 5.5%
37,579 Bilibili, Inc., ADR (a) (b) 962,022
204,878 iQIYI, Inc., ADR (a) 860,488
47,118 NetEase, Inc., ADR 4,398,937
200,964 Tencent Music Entertainment
Group, ADR (a) 1,008,839
----------------
7,230,286
----------------
HOTELS, RESTAURANTS & LEISURE
-- 4.6%
25,854 Huazhu Group Ltd., ADR 985,037
88,341 MakeMyTrip Ltd. (a) 2,268,597
148,928 Melco Resorts & Entertainment
Ltd., ADR (a) 856,336
38,082 Trip.com Group Ltd., ADR (a) 1,045,351
18,472 Yum China Holdings, Inc. 895,892
----------------
6,051,213
----------------
INDEPENDENT POWER AND RENEWABLE
ELECTRICITY PRODUCERS -- 2.2%
56,535 Azure Power Global Ltd. (a) (b) 644,499
349,097 ReNew Energy Global PLC,
Class A (a) (b) 2,258,658
----------------
2,903,157
----------------
INSURANCE -- 0.7%
109,520 China Life Insurance Co., Ltd.,
ADR (b) 946,253
----------------
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
INTERACTIVE MEDIA & SERVICES
-- 6.1%
23,123 Autohome, Inc., ADR $ 909,428
34,828 Baidu, Inc., ADR (a) 5,179,968
41,540 Kanzhun Ltd., ADR (a) 1,091,671
38,173 Weibo Corp., ADR (a) 882,942
----------------
8,064,009
----------------
INTERNET & DIRECT MARKETING
RETAIL -- 24.4%
89,046 Alibaba Group Holding Ltd.,
ADR (a) 10,122,749
111,265 Dada Nexus Ltd., ADR (a) 902,359
152,408 JD.com, Inc., ADR 9,787,642
169,858 Pinduoduo, Inc., ADR (a) 10,497,224
90,331 Vipshop Holdings Ltd., ADR (a) 893,374
----------------
32,203,348
----------------
IT SERVICES -- 13.6%
30,017 GDS Holdings Ltd., ADR (a) (b) 1,002,268
453,489 Infosys Ltd., ADR 8,394,081
174,270 Kingsoft Cloud Holdings Ltd.,
ADR (a) 775,501
148,666 Vnet Group, Inc., ADR (a) 897,943
817,257 Wipro Ltd., ADR 4,339,635
33,588 WNS (Holdings) Ltd., ADR (a) 2,507,008
----------------
17,916,436
----------------
OIL, GAS & CONSUMABLE FUELS
-- 1.1%
16,007 China Petroleum & Chemical
Corp., ADR 716,953
16,103 PetroChina Co., Ltd., ADR 751,044
----------------
1,467,997
----------------
PHARMACEUTICALS -- 4.5%
88,288 Dr. Reddy's Laboratories Ltd.,
ADR 4,890,273
79,838 HUTCHMED China Ltd.,
ADR (a) 1,009,152
----------------
5,899,425
----------------
REAL ESTATE MANAGEMENT &
DEVELOPMENT -- 2.5%
182,370 KE Holdings, Inc., ADR (a) 3,273,541
----------------
ROAD & RAIL -- 0.8%
121,216 Full Truck Alliance Co., Ltd.,
ADR (a) (b) 1,098,217
----------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 1.6%
17,172 Daqo New Energy Corp., ADR (a) 1,225,738
13,712 JinkoSolar Holding Co., Ltd.,
ADR (a) 948,596
----------------
2,174,334
----------------
TOBACCO -- 0.7%
424,244 RLX Technology, Inc., ADR (a) 903,640
----------------
TOTAL COMMON STOCKS -- 100.0% 131,929,973
(Cost $155,059,114) ----------------
Page 42 See Notes to Financial Statements
FIRST TRUST CHINDIA ETF (FNI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
PRINCIPAL
VALUE DESCRIPTION VALUE
---------------------------------------------------------------
REPURCHASE AGREEMENTS -- 3.8%
$ 2,000,000 Citigroup, Inc., 1.50% (c), dated
06/30/22, due 07/01/22, with a
maturity value of $2,000,083.
Collateralized by U.S.
Treasury Securities, interest
rates of 0.75% to 3.88%, due
11/15/24 to 04/15/29. The
value of the collateral
including accrued interest
is $2,040,000. (d) $ 2,000,000
2,000,000 Daiwa Capital Markets America,
Inc., 1.49% (c), dated
06/30/22, due 07/01/22, with
a maturity value of
$2,000,083. Collateralized by
U.S. Treasury Securities,
interest rates of 0.00% to
7.63%, due 07/26/22 to
02/15/50. The value of the
collateral including accrued
interest is $2,040,000. (d) 2,000,000
1,022,715 JPMorgan Chase & Co., 1.48% (c),
dated 06/30/22, due 07/01/22,
with a maturity value of
$1,022,757. Collateralized by
U.S. Treasury Securities,
interest rates of 2.88% to
3.38%, due 05/15/44 to
05/15/49. The value of the
collateral including accrued
interest is $1,043,169. (d) 1,022,715
----------------
TOTAL REPURCHASE AGREEMENTS
-- 3.8% 5,022,715
(Cost $5,022,715) ----------------
TOTAL INVESTMENTS -- 103.8% 136,952,688
(Cost $160,081,829)
NET OTHER ASSETS AND
LIABILITIES -- (3.8)% (5,022,447)
----------------
NET ASSETS -- 100.0% $ 131,930,241
================
(a) Non-income producing security.
(b) All or a portion of this security is on loan (see Note 2D - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $4,905,238 and the
total value of the collateral held by the Fund is $5,022,715.
(c) Rate shown reflects yield as of June 30, 2022.
(d) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
---------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 4,905,238
Non-cash Collateral(2) (4,905,238)
----------------
Net Amount $ --
================
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At June 30, 2022, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 5,022,715
Non-cash Collateral(4) (5,022,715)
----------------
Net Amount $ --
================
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At June 30, 2022, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
See Notes to Financial Statements Page 43
FIRST TRUST CHINDIA ETF (FNI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 131,929,973 $ 131,929,973 $ -- $ --
Repurchase Agreements........................... 5,022,715 -- 5,022,715 --
---------------------------------------------------------------------
Total Investments............................... $ 136,952,688 $ 131,929,973 $ 5,022,715 $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
Page 44 See Notes to Financial Statements
FIRST TRUST NASDAQ(R) ABA COMMUNITY BANK INDEX FUND (QABA)
PORTFOLIO OF INVESTMENTS
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS -- 99.9%
BANKS -- 92.0%
10,489 1st Source Corp. $ 476,201
3,693 ACNB Corp. (a) 109,645
13,085 Amalgamated Financial Corp. 258,821
14,502 Amerant Bancorp, Inc. 407,796
4,540 American National Bankshares,
Inc. 157,129
29,448 Ameris Bancorp 1,183,221
6,793 Arrow Financial Corp. 216,085
31,814 Atlantic Union Bankshares Corp. 1,079,131
13,882 BancFirst Corp. 1,328,646
23,993 Bancorp (The), Inc. (b) 468,343
3,191 Bank First Corp. (a) 241,910
6,784 Bank of Marin Bancorp 215,596
50,942 Bank OZK 1,911,853
3,292 Bankwell Financial Group, Inc. 102,217
14,579 Banner Corp. 819,486
5,759 BayCom Corp. 119,096
7,206 BCB Bancorp, Inc. 122,718
32,854 Brookline Bancorp, Inc. 437,287
9,570 Business First Bancshares, Inc. 203,937
2,969 Cambridge Bancorp 245,536
6,216 Camden National Corp. 273,815
7,188 Capital City Bank Group, Inc. 200,473
9,358 Capstar Financial Holdings, Inc. 183,604
10,424 Carter Bankshares, Inc. (b) 137,597
31,871 Cathay General Bancorp 1,247,750
10,436 CBTX, Inc. 277,493
6,618 Citizens & Northern Corp. 159,957
6,346 City Holding Co. 506,918
6,186 Civista Bancshares, Inc. 131,514
7,150 CNB Financial Corp. 172,959
5,484 Coastal Financial Corp. (b) 209,050
7,458 Colony Bankcorp, Inc. (a) 112,541
33,351 Columbia Banking System, Inc. 955,506
51,204 Commerce Bancshares, Inc. 3,361,543
7,589 Community Trust Bancorp, Inc. 306,899
16,762 ConnectOne Bancorp, Inc. 409,831
21,055 CrossFirst Bankshares, Inc. (b) 277,926
59,823 CVB Financial Corp. 1,484,209
16,643 Dime Community Bancshares, Inc. 493,465
13,605 Eagle Bancorp, Inc. 645,013
15,794 Enterprise Financial Services
Corp. 655,451
6,903 Equity Bancshares, Inc., Class A 201,291
3,425 Esquire Financial Holdings, Inc. 114,053
5,541 Farmers & Merchants Bancorp,
Inc. (a) 183,906
14,423 Farmers National Banc Corp. 216,345
6,488 Financial Institutions, Inc. 168,818
15,115 First Bancorp 527,514
8,689 First Bancshares (The), Inc. 248,505
8,324 First Bank 116,370
23,443 First Busey Corp. 535,673
3,591 First Business Financial Services,
Inc. 112,003
7,098 First Community Bankshares, Inc. 208,752
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
BANKS (CONTINUED)
40,053 First Financial Bancorp $ 777,028
60,528 First Financial Bankshares, Inc. 2,376,935
5,268 First Financial Corp. 234,426
23,968 First Foundation, Inc. 490,865
4,545 First Guaranty Bancshares,
Inc. (a) 110,489
54,312 First Hawaiian, Inc. 1,233,426
4,095 First Internet Bancorp 150,778
46,437 First Interstate BancSystem,
Inc., Class A 1,769,714
25,218 First Merchants Corp. 898,265
8,672 First Mid Bancshares, Inc. 309,330
9,808 First of Long Island (The) Corp. 171,934
4,015 First Western Financial, Inc. (b) 109,168
7,314 Five Star Bancorp 193,236
12,870 Flushing Financial Corp. 273,616
68,177 Fulton Financial Corp. 985,158
5,925 FVCBankcorp, Inc. (b) 111,568
12,505 German American Bancorp, Inc. 427,421
5,371 Great Southern Bancorp, Inc. 314,526
5,089 Guaranty Bancshares, Inc. 184,476
36,629 Hancock Whitney Corp. 1,623,764
12,921 Hanmi Financial Corp. 289,947
21,739 HarborOne Bancorp, Inc. 299,781
17,969 Heartland Financial USA, Inc. 746,432
25,633 Heritage Commerce Corp. 274,017
14,887 Heritage Financial Corp. 374,557
7,932 HomeStreet, Inc. 275,002
6,667 HomeTrust Bancshares, Inc. 166,675
51,060 Hope Bancorp, Inc. 706,670
18,479 Horizon Bancorp, Inc. 321,904
19,839 Independent Bank Corp. 1,575,812
8,926 Independent Bank Corp./MI 172,093
17,928 Independent Bank Group, Inc. 1,217,490
26,792 International Bancshares Corp. 1,073,823
27,473 Lakeland Bancorp, Inc. 401,655
10,749 Lakeland Financial Corp. 713,949
18,576 Live Oak Bancshares, Inc. 629,541
14,527 Macatawa Bank Corp. 128,419
6,719 Mercantile Bank Corp. 214,672
12,454 Meta Financial Group, Inc. 481,596
10,800 Metrocity Bankshares, Inc. 219,348
6,769 Mid Penn Bancorp, Inc. 182,560
9,354 Midland States Bancorp, Inc. 224,870
6,650 MidWestOne Financial Group, Inc. 197,638
5,152 MVB Financial Corp. 160,279
18,163 NBT Bancorp, Inc. 682,747
3,242 Northeast Bank 118,430
2,467 Northrim BanCorp, Inc. 99,321
53,738 Northwest Bancshares, Inc. 687,846
25,188 OceanFirst Financial Corp. 481,846
124,245 Old National Bancorp 1,837,584
18,856 Old Second Bancorp, Inc. 252,293
10,080 Origin Bancorp, Inc. 391,104
4,688 Orrstown Financial Services, Inc. 113,309
40,260 Pacific Premier Bancorp, Inc. 1,177,202
49,810 PacWest Bancorp 1,327,935
5,053 Parke Bancorp, Inc. 105,911
See Notes to Financial Statements Page 45
FIRST TRUST NASDAQ(R) ABA COMMUNITY BANK INDEX FUND (QABA)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
COMMON STOCKS (CONTINUED)
BANKS (CONTINUED)
6,341 PCB Bancorp $ 118,450
7,791 Peapack-Gladstone Financial
Corp. 231,393
12,021 Peoples Bancorp, Inc. 319,759
3,042 Peoples Financial Services Corp. 169,865
32,395 Pinnacle Financial Partners, Inc. 2,342,482
6,282 Preferred Bank 427,302
15,072 Premier Financial Corp. 382,075
10,443 Primis Financial Corp. 142,338
5,830 Professional Holding Corp.,
Class A (b) 116,892
7,486 QCR Holdings, Inc. 404,169
8,139 RBB Bancorp 168,233
23,707 Renasant Corp. 682,999
7,564 Republic Bancorp, Inc., Class A 364,963
25,215 Republic First Bancorp, Inc. (b) 96,069
16,672 S&T Bancorp, Inc. 457,313
19,186 Sandy Spring Bancorp, Inc. 749,597
26,044 Seacoast Banking Corp. of Florida 860,494
8,416 Shore Bancshares, Inc. 155,696
6,398 Sierra Bancorp 139,029
55,411 Simmons First National Corp.,
Class A 1,178,038
7,166 SmartFinancial, Inc. 173,131
3,386 Southern First Bancshares,
Inc. (b) 147,596
13,623 Southside Bancshares, Inc. 509,773
32,009 SouthState Corp. 2,469,494
12,394 Stock Yards Bancorp, Inc. 741,409
21,512 Texas Capital Bancshares, Inc. (b) 1,132,392
5,707 Third Coast Bancshares, Inc. (b) 124,983
30,843 TowneBank 837,387
14,263 TriCo Bancshares 650,963
10,670 Triumph Bancorp, Inc. (b) 667,515
26,067 Trustmark Corp. 760,896
20,528 UMB Financial Corp. 1,767,461
57,378 United Bankshares, Inc. 2,012,246
44,967 United Community Banks, Inc. 1,357,554
4,451 Unity Bancorp, Inc. 117,862
12,551 Univest Financial Corp. 319,297
8,482 USCB Financial Holdings, Inc. (b) 97,882
214,726 Valley National Bancorp 2,235,298
22,886 Veritex Holdings, Inc. 669,644
27,697 Washington Federal, Inc. 831,464
7,360 Washington Trust Bancorp, Inc. 356,003
25,563 WesBanco, Inc. 810,603
7,053 West BanCorp, Inc. 171,670
11,402 Westamerica BanCorp 634,635
24,288 Wintrust Financial Corp. 1,946,683
----------------
87,062,776
----------------
IT SERVICES -- 0.2%
5,790 Cass Information Systems, Inc. 195,702
----------------
THRIFTS & MORTGAGE FINANCE
-- 7.7%
12,097 Blue Foundry Bancorp (b) 145,043
11,865 Bridgewater Bancshares, Inc. (b) 191,501
SHARES DESCRIPTION VALUE
---------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE
(CONTINUED)
58,889 Capitol Federal Financial, Inc. $ 540,601
47,564 Columbia Financial, Inc. (b) 1,037,371
3,353 FS Bancorp, Inc. 96,265
3,611 Greene County Bancorp, Inc. 163,542
910 Hingham Institution for Savings 258,231
3,540 Home Bancorp, Inc. 120,820
29,866 Kearny Financial Corp. 331,811
21,683 Luther Burbank Corp. 282,963
18,350 Merchants Bancorp 415,994
20,738 Northfield Bancorp, Inc. 270,216
10,480 Ponce Financial Group, Inc. (b) 96,835
3,948 Southern Missouri Bancorp, Inc. 178,686
119,087 TFS Financial Corp. 1,635,065
8,141 TrustCo Bank Corp. 251,068
10,011 Waterstone Financial, Inc. 170,688
27,430 WSFS Financial Corp. 1,099,669
----------------
7,286,369
----------------
TOTAL COMMON STOCKS -- 99.9% 94,544,847
(Cost $110,592,456) ----------------
MONEY MARKET FUNDS -- 0.3%
288,606 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
1.39% (c) (d) 288,606
(Cost $288,606) ----------------
PRINCIPAL
VALUE DESCRIPTION VALUE
---------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.3%
$ 271,429 BNP Paribas S.A., 1.44% (c),
dated 06/30/22, due 07/01/22,
with a maturity value of
$271,440. Collateralized by
U.S. Treasury Note, interest
rate of 1.25%, due 05/31/28.
The value of the collateral
including accrued interest
is $277,428. (d) 271,429
(Cost $271,429) ----------------
TOTAL INVESTMENTS -- 100.5% 95,104,882
(Cost $111,152,491)
NET OTHER ASSETS AND
LIABILITIES -- (0.5)% (469,508)
----------------
NET ASSETS -- 100.0% $ 94,635,374
================
(a) All or a portion of this security is on loan (see Note 2D - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $547,905 and the
total value of the collateral held by the Fund is $560,035.
(b) Non-income producing security.
(c) Rate shown reflects yield as of June 30, 2022.
(d) This security serves as collateral for securities on loan.
Page 46 See Notes to Financial Statements
FIRST TRUST NASDAQ(R) ABA COMMUNITY BANK INDEX FUND (QABA)
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2022 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
---------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 547,905
Non-cash Collateral(2) (547,905)
----------------
Net Amount $ --
================
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At June 30, 2022, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
---------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 271,429
Non-cash Collateral(4) (271,429)
----------------
Net Amount $ --
================
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At June 30, 2022, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of June 30, 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
6/30/2022 PRICES INPUTS INPUTS
---------------------------------------------------------------------
Common Stocks*.................................. $ 94,544,847 $ 94,544,847 $ -- $ --
Money Market Funds.............................. 288,606 288,606 -- --
Repurchase Agreements........................... 271,429 -- 271,429 --
---------------------------------------------------------------------
Total Investments............................... $ 95,104,882 $ 94,833,453 $ 271,429 $ --
=====================================================================
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 47
FIRST TRUST EXCHANGE-TRADED FUND
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2022 (UNAUDITED)
FIRST TRUST FIRST TRUST
NASDAQ-100 FIRST TRUST NASDAQ-100
EQUAL NASDAQ-100- EX-TECHNOLOGY
WEIGHTED TECHNOLOGY SECTOR SECTOR
INDEX FUND INDEX FUND INDEX FUND
(QQEW) (QTEC) (QQXT)
---------------- ----------------- ----------------
ASSETS:
Investments, at value............................................... $ 993,742,394 $ 1,613,308,696 $ 112,812,321
Cash................................................................ 766,856 1,207,817 --
Receivables:
Dividends..................................................... 326,912 345,144 44,526
Securities lending income..................................... 93,380 -- 16,814
Capital shares sold........................................... -- -- --
Investment securities sold.................................... -- -- --
Reclaims...................................................... -- -- --
Prepaid expenses.................................................... 5,876 11,945 2,691
-------------- --------------- --------------
Total Assets.................................................. 994,935,418 1,614,873,602 112,876,352
-------------- --------------- --------------
LIABILITIES:
Due to custodian.................................................... -- -- --
Payables:
Collateral for securities on loan............................. 15,270,025 -- 3,116,648
Investment advisory fees...................................... 333,016 567,348 32,344
Licensing fees................................................ 264,282 482,475 28,706
Shareholder reporting fees.................................... 36,354 91,236 4,490
Audit and tax fees............................................ 19,820 18,329 20,509
Investment securities purchased............................... -- -- --
Capital shares redeemed....................................... -- -- --
Trustees' fees................................................ -- 86 --
Other liabilities................................................... 121,518 211,233 16,001
-------------- --------------- --------------
Total Liabilities............................................. 16,045,015 1,370,707 3,218,698
-------------- --------------- --------------
NET ASSETS.......................................................... $ 978,890,403 $ 1,613,502,895 $ 109,657,654
============== =============== ==============
NET ASSETS CONSIST OF:
Paid-in capital..................................................... $1,101,529,081 $ 1,912,781,238 $ 119,734,671
Par value........................................................... 112,000 141,000 15,500
Accumulated distributable earnings (loss)........................... (122,750,678) (299,419,343) (10,092,517)
-------------- --------------- --------------
NET ASSETS.......................................................... $ 978,890,403 $ 1,613,502,895 $ 109,657,654
============== =============== ==============
NET ASSET VALUE, per share.......................................... $ 87.40 $ 114.43 $ 70.75
============== =============== ==============
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share)........................... 11,200,002 14,100,002 1,550,002
============== =============== ==============
Investments, at cost................................................ $1,067,925,844 $ 2,076,718,059 $ 107,649,277
============== =============== ==============
Securities on loan, at value........................................ $ 14,872,086 $ -- $ 3,040,174
============== =============== ==============
Page 48 See Notes to Financial Statements
FIRST TRUST FIRST TRUST
NASDAQ(R) FIRST TRUST NASDAQ(R) ABA
CLEAN EDGE(R) S&P FIRST TRUST FIRST TRUST FIRST TRUST COMMUNITY
GREEN ENERGY REIT WATER NATURAL GAS CHINDIA BANK
INDEX FUND INDEX FUND ETF ETF ETF INDEX FUND
(QCLN) (FRI) (FIW) (FCG) (FNI) (QABA)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$2,004,882,375 $ 195,009,937 $1,145,281,104 $ 708,274,741 $ 136,952,688 $ 95,104,882
2,875,926 -- -- -- -- 14,914
301,967 741,649 1,684,857 483,283 132,509 171,646
572,855 -- 7,232 7,798 9,193 215
-- -- -- -- 8,118,779 --
2,592,773 2,572,960 -- 17,831,744 -- --
124,039 -- 169,819 -- -- --
8,304 4,818 7,555 4,531 3,166 2,720
-------------- -------------- -------------- -------------- -------------- --------------
2,011,358,239 198,329,364 1,147,150,567 726,602,097 145,216,335 95,294,377
-------------- -------------- -------------- -------------- -------------- --------------
-- -- -- -- 48,639 --
126,066,556 -- 37,368,500 30,906,080 5,022,715 560,035
648,766 52,403 373,291 320,303 27,929 27,672
505,536 19,795 151,942 200,941 16,451 23,529
153,784 1,220 17,467 7,148 12,854 8,122
18,977 26,073 19,719 22,318 22,620 20,499
-- -- -- -- 8,119,209 --
2,595,736 2,586,187 -- 17,862,027 -- --
-- -- -- -- -- --
211,032 27,943 129,919 95,105 15,677 19,146
-------------- -------------- -------------- -------------- -------------- --------------
130,200,387 2,713,621 38,060,838 49,413,922 13,286,094 659,003
-------------- -------------- -------------- -------------- -------------- --------------
$1,881,157,852 $ 195,615,743 $1,109,089,729 $ 677,188,175 $ 131,930,241 $ 94,635,374
============== ============== ============== ============== ============== ==============
$2,497,777,166 $ 228,979,783 $1,121,540,514 $1,083,673,730 $ 245,480,765 $ 122,192,207
360,000 76,000 154,000 308,984 32,500 19,000
(616,979,314) (33,440,040) (12,604,785) (406,794,539) (113,583,024) (27,575,833)
-------------- -------------- -------------- -------------- -------------- --------------
$1,881,157,852 $ 195,615,743 $1,109,089,729 $ 677,188,175 $ 131,930,241 $ 94,635,374
============== ============== ============== ============== ============== ==============
$ 52.25 $ 25.74 $ 72.02 $ 21.92 $ 40.59 $ 49.81
============== ============== ============== ============== ============== ==============
36,000,002 7,600,002 15,400,002 30,898,365 3,250,002 1,900,002
============== ============== ============== ============== ============== ==============
$2,466,944,848 $ 232,060,197 $1,188,721,635 $ 680,376,632 $ 160,081,829 $ 111,152,491
============== ============== ============== ============== ============== ==============
$ 124,338,428 $ -- $ 36,352,324 $ 29,833,001 $ 4,905,238 $ 547,905
============== ============== ============== ============== ============== ==============
See Notes to Financial Statements Page 49
FIRST TRUST EXCHANGE-TRADED FUND
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 (UNAUDITED)
FIRST TRUST FIRST TRUST
NASDAQ-100 FIRST TRUST NASDAQ-100
EQUAL NASDAQ-100- EX-TECHNOLOGY
WEIGHTED TECHNOLOGY SECTOR SECTOR
INDEX FUND INDEX FUND INDEX FUND
(QQEW) (QTEC) (QQXT)
---------------- ----------------- ----------------
INVESTMENT INCOME:
Dividends........................................................... $ 6,228,149 $ 8,237,112 $ 800,114
Securities lending income (net of fees)............................. 619,704 -- 97,892
Foreign withholding tax............................................. (25,254) (123,824) --
-------------- --------------- --------------
Total investment income....................................... 6,822,599 8,113,288 898,006
-------------- --------------- --------------
EXPENSES:
Investment advisory fees............................................ 2,271,962 5,187,653 239,951
Licensing fees...................................................... 567,990 1,296,913 59,988
Accounting and administration fees.................................. 277,341 549,465 30,642
Shareholder reporting fees.......................................... 47,977 118,290 11,637
Custodian fees...................................................... 43,755 96,979 5,788
Transfer agent fees................................................. 26,560 44,820 2,999
Audit and tax fees.................................................. 14,646 14,640 14,644
Legal fees.......................................................... 10,770 30,328 1,203
Listing fees........................................................ 4,606 4,637 4,582
Trustees' fees and expenses......................................... 3,762 4,369 3,459
Expenses previously waived or reimbursed............................ -- -- --
Other expenses...................................................... 10,429 26,447 2,725
-------------- --------------- --------------
Total expenses................................................ 3,279,798 7,374,541 377,618
Less fees waived and expenses reimbursed by the investment
advisor.................................................... -- -- (17,692)
-------------- --------------- --------------
Net expenses.................................................. 3,279,798 7,374,541 359,926
-------------- --------------- --------------
NET INVESTMENT INCOME (LOSS)........................................ 3,542,801 738,747 538,080
-------------- --------------- --------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... (27,774,204) (51,040,719) (2,921,794)
In-kind redemptions........................................... 35,172,985 346,997,337 1,280,512
Foreign currency transactions................................. -- -- --
-------------- --------------- --------------
Net realized gain (loss)............................................ 7,398,781 295,956,618 (1,641,282)
-------------- --------------- --------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................... (363,543,740) (1,494,695,890) (25,691,725)
Foreign currency translation.................................. -- -- --
-------------- --------------- --------------
Net change in unrealized appreciation (depreciation)................ (363,543,740) (1,494,695,890) (25,691,725)
-------------- --------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)............................. (356,144,959) (1,198,739,272) (27,333,007)
-------------- --------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................................. $ (352,602,158) $(1,198,000,525) $ (26,794,927)
============== =============== ==============
Page 50 See Notes to Financial Statements
FIRST TRUST FIRST TRUST
NASDAQ(R) FIRST TRUST NASDAQ(R) ABA
CLEAN EDGE(R) S&P FIRST TRUST FIRST TRUST FIRST TRUST COMMUNITY
GREEN ENERGY REIT WATER NATURAL GAS CHINDIA BANK
INDEX FUND INDEX FUND ETF ETF ETF INDEX FUND
(QCLN) (FRI) (FIW) (FCG) (FNI) (QABA)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 5,391,564 $ 3,553,615 $ 8,168,829 $ 10,150,337 $ 413,508 $ 1,518,771
3,379,021 -- 29,133 41,050 51,636 446
(333,002) -- (230,601) (15,497) (39,150) --
-------------- -------------- -------------- -------------- -------------- --------------
8,437,583 3,553,615 7,967,361 10,175,890 425,994 1,519,217
-------------- -------------- -------------- -------------- -------------- --------------
4,316,919 336,485 2,604,552 1,350,654 178,804 234,964
1,079,229 89,734 325,569 337,663 35,761 52,867
481,189 57,177 310,723 169,411 23,227 30,953
165,546 12,207 53,224 20,208 15,739 13,496
80,764 13,086 49,114 26,097 3,759 10,365
39,378 5,608 28,676 16,846 2,235 2,937
14,663 17,501 14,628 15,621 15,737 14,621
21,833 1,457 10,437 3,196 1,343 1,039
4,647 4,866 6,106 6,106 6,106 4,582
4,095 3,477 3,768 3,554 3,461 3,460
-- 16,550 -- 72,860 -- --
20,023 2,665 9,371 3,765 2,734 2,564
-------------- -------------- -------------- -------------- -------------- --------------
6,228,286 560,813 3,416,168 2,025,981 288,906 371,848
-- -- -- -- (20,700) (19,403)
-------------- -------------- -------------- -------------- -------------- --------------
6,228,286 560,813 3,416,168 2,025,981 268,206 352,445
-------------- -------------- -------------- -------------- -------------- --------------
2,209,297 2,992,802 4,551,193 8,149,909 157,788 1,166,772
-------------- -------------- -------------- -------------- -------------- --------------
(70,269,653) (2,682,495) (5,128,384) (15,050,091) (5,608,356) (1,938,922)
95,258,189 6,893,946 53,162,514 105,154,481 484,988 3,093,654
-- -- -- (179) -- --
-------------- -------------- -------------- -------------- -------------- --------------
24,988,536 4,211,451 48,034,130 90,104,211 (5,123,368) 1,154,732
-------------- -------------- -------------- -------------- -------------- --------------
(661,209,662) (60,569,142) (426,976,139) (15,114,109) (9,998,345) (21,267,355)
-- -- -- 53 -- --
-------------- -------------- -------------- -------------- -------------- --------------
(661,209,662) (60,569,142) (426,976,139) (15,114,056) (9,998,345) (21,267,355)
-------------- -------------- -------------- -------------- -------------- --------------
(636,221,126) (56,357,691) (378,942,009) 74,990,155 (15,121,713) (20,112,623)
-------------- -------------- -------------- -------------- -------------- --------------
$ (634,011,829) $ (53,364,889) $ (374,390,816) $ 83,140,064 $ (14,963,925) $ (18,945,851)
============== ============== ============== ============== ============== ==============
See Notes to Financial Statements Page 51
FIRST TRUST EXCHANGE-TRADED FUND
STATEMENTS OF CHANGES IN NET ASSETS
FIRST TRUST FIRST TRUST
NASDAQ-100 NASDAQ-100-
EQUAL WEIGHTED TECHNOLOGY SECTOR
INDEX FUND INDEX FUND
(QQEW) (QTEC)
------------------------------- -------------------------------
Six Months Six Months
Ended Ended
6/30/2022 Year Ended 6/30/2022 Year Ended
(Unaudited) 12/31/2021 (Unaudited) 12/31/2021
-------------- -------------- -------------- --------------
OPERATIONS:
Net investment income (loss)............................ $ 3,542,801 $ 3,239,829 $ 738,747 $ 496,531
Net realized gain (loss)................................ 7,398,781 182,704,258 295,956,618 794,536,396
Net change in unrealized appreciation (depreciation).... (363,543,740) 16,405,196 (1,494,695,890) 57,064,938
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from operations...................................... (352,602,158) 202,349,283 (1,198,000,525) 852,097,865
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................... (3,239,311) (3,291,356) (525,400) (661,890)
-------------- -------------- -------------- --------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................... 66,574,333 456,270,076 316,548,201 1,499,345,517
Cost of shares redeemed................................. (123,256,720) (439,183,900) (1,554,326,443) (1,650,885,696)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from shareholder transactions........................ (56,682,387) 17,086,176 (1,237,778,242) (151,540,179)
-------------- -------------- -------------- --------------
Total increase (decrease) in net assets................. (412,523,856) 216,144,103 (2,436,304,167) 699,895,796
NET ASSETS:
Beginning of period..................................... 1,391,414,259 1,175,270,156 4,049,807,062 3,349,911,266
-------------- -------------- -------------- --------------
End of period........................................... $ 978,890,403 $1,391,414,259 $1,613,502,895 $4,049,807,062
============== ============== ============== ==============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................. 11,750,002 11,650,002 23,100,002 24,250,002
Shares sold............................................. 650,000 4,100,000 2,250,000 9,500,000
Shares redeemed......................................... (1,200,000) (4,000,000) (11,250,000) (10,650,000)
-------------- -------------- -------------- --------------
Shares outstanding, end of period....................... 11,200,002 11,750,002 14,100,002 23,100,002
============== ============== ============== ==============
Page 52 See Notes to Financial Statements
FIRST TRUST FIRST TRUST FIRST TRUST
NASDAQ-100 NASDAQ(R) S&P FIRST TRUST
EX-TECHNOLOGY SECTOR CLEAN EDGE(R) GREEN ENERGY REIT WATER
INDEX FUND INDEX FUND INDEX FUND ETF
(QQXT) (QCLN) (FRI) (FIW)
----------------------------- ------------------------------- ------------------------------- -------------------------------
Six Months Six Months Six Months Six Months
Ended Ended Ended Ended
6/30/2022 Year Ended 6/30/2022 Year Ended 6/30/2022 Year Ended 6/30/2022 Year Ended
(Unaudited) 12/31/2021 (Unaudited) 12/31/2021 (Unaudited) 12/31/2021 (Unaudited) 12/31/2021
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 538,080 $ 578,162 $ 2,209,297 $ (6,701,443) $ 2,992,802 $ 2,920,372 $ 4,551,193 $ 5,118,233
(1,641,282) 17,867,933 24,988,536 156,408,842 4,211,451 5,009,018 48,034,130 83,216,427
(25,691,725) (2,765,567) (661,209,662) (450,506,660) (60,569,142) 39,250,974 (426,976,139) 200,157,259
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
(26,794,927) 15,680,528 (634,011,829) (300,799,261) (53,364,889) 47,180,364 (374,390,816) 288,491,919
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
(566,461) (515,676) (412,680) (275,655) (1,764,421) (2,732,665) (4,201,171) (4,964,311)
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
3,671,041 8,843,090 114,250,368 1,748,106,641 61,360,798 152,028,630 25,811,096 802,243,154
(3,787,044) (33,811,304) (422,329,479) (623,172,866) (46,924,856) (34,511,600) (143,920,310) (168,774,018)
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
(116,003) (24,968,214) (308,079,111) 1,124,933,775 14,435,942 117,517,030 (118,109,214) 633,469,136
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
(27,477,391) (9,803,362) (942,503,620) 823,858,859 (40,693,368) 161,964,729 (496,701,201) 916,996,744
137,135,045 146,938,407 2,823,661,472 1,999,802,613 236,309,111 74,344,382 1,605,790,930 688,794,186
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 109,657,654 $ 137,135,045 $1,881,157,852 $2,823,661,472 $ 195,615,743 $ 236,309,111 $1,109,089,729 $1,605,790,930
============= ============= ============== ============== ============== ============== ============== ==============
1,550,002 1,850,002 41,550,002 28,500,002 7,250,002 3,200,002 16,950,002 9,550,002
50,000 100,000 1,950,000 22,650,000 2,000,000 5,300,000 300,000 9,450,000
(50,000) (400,000) (7,500,000) (9,600,000) (1,650,000) (1,250,000) (1,850,000) (2,050,000)
------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
1,550,002 1,550,002 36,000,002 41,550,002 7,600,002 7,250,002 15,400,002 16,950,002
============= ============= ============== ============== ============== ============== ============== ==============
See Notes to Financial Statements Page 53
FIRST TRUST EXCHANGE-TRADED FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FIRST TRUST FIRST TRUST
NATURAL GAS CHINDIA
ETF ETF
(FCG) (FNI)
------------------------------- -------------------------------
Six Months Six Months
Ended Ended
6/30/2022 Year Ended 6/30/2022 Year Ended
(Unaudited) 12/31/2021 (Unaudited) 12/31/2021
-------------- -------------- -------------- --------------
OPERATIONS:
Net investment income (loss)............................ $ 8,149,909 $ 3,905,504 $ 157,788 $ (73,066)
Net realized gain (loss)................................ 90,104,211 80,321,337 (5,123,368) 53,141,145
Net change in unrealized appreciation (depreciation).... (15,114,056) 30,765,415 (9,998,345) (93,625,547)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from operations...................................... 83,140,064 114,992,256 (14,963,925) (40,557,468)
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................... (8,137,949) (6,273,849) (153,600) --
-------------- -------------- -------------- --------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................... 456,619,452 389,376,422 48,337,932 59,830,685
Cost of shares redeemed................................. (277,658,646) (178,298,282) (8,436,850) (169,075,322)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from shareholder transactions........................ 178,960,806 211,078,140 39,901,082 (109,244,637)
-------------- -------------- -------------- --------------
Total increase (decrease) in net assets................. 253,962,921 319,796,547 24,783,557 (149,802,105)
NET ASSETS:
Beginning of period..................................... 423,225,254 103,428,707 107,146,684 256,948,789
-------------- -------------- -------------- --------------
End of period........................................... $ 677,188,175 $ 423,225,254 $ 131,930,241 $ 107,146,684
============== ============== ============== ==============
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................. 24,648,365 11,748,365 2,250,002 4,350,002
Shares sold............................................. 18,550,000 24,200,000 1,200,000 900,000
Shares redeemed......................................... (12,300,000) (11,300,000) (200,000) (3,000,000)
-------------- -------------- -------------- --------------
Shares outstanding, end of period....................... 30,898,365 24,648,365 3,250,002 2,250,002
============== ============== ============== ==============
Page 54 See Notes to Financial Statements
FIRST TRUST
NASDAQ(R) ABA
COMMUNITY BANK
INDEX FUND
(QABA)
-----------------------------
Six Months
Ended
6/30/2022 Year Ended
(Unaudited) 12/31/2021
------------- -------------
$ 1,166,772 $ 2,254,086
1,154,732 8,564,425
(21,267,355) 18,576,945
------------- -------------
(18,945,851) 29,395,456
------------- -------------
(1,085,791) (2,215,667)
------------- -------------
29,940,777 41,856,729
(33,220,385) (36,109,870)
------------- -------------
(3,279,608) 5,746,859
------------- -------------
(23,311,250) 32,926,648
117,946,624 85,019,976
------------- -------------
$ 94,635,374 $ 117,946,624
============= =============
2,000,002 1,900,002
500,000 750,000
(600,000) (650,000)
------------- -------------
1,900,002 2,000,002
============= =============
See Notes to Financial Statements Page 55
FIRST TRUST EXCHANGE-TRADED FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST NASDAQ-100 EQUAL WEIGHTED INDEX FUND (QQEW)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 118.42 $ 100.88 $ 73.78 $ 54.61 $ 57.88 $ 46.18
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.32 0.28 0.34 0.36 0.32 0.24
Net realized and unrealized gain (loss) (31.05) 17.54 27.11 19.16 (3.29)(a) 11.74
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (30.73) 17.82 27.45 19.52 (2.97) 11.98
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.29) (0.28) (0.35) (0.35) (0.30) (0.28)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 87.40 $ 118.42 $ 100.88 $ 73.78 $ 54.61 $ 57.88
========== =========== =========== =========== =========== ===========
TOTAL RETURN (b) (25.97)% 17.67% 37.35% 35.78% (5.16)%(a) 26.00%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 978,890 $ 1,391,414 $ 1,175,270 $ 907,438 $ 461,464 $ 529,632
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.58% (c) 0.57% 0.58% 0.59% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.58% (c) 0.57% 0.58% 0.59% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.62% (c) 0.25% 0.41% 0.56% 0.52% 0.45%
Portfolio turnover rate (d) 14% 23% 28% 29% 27% 26%
FIRST TRUST NASDAQ-100-TECHNOLOGY SECTOR INDEX FUND (QTEC)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 175.32 $ 138.14 $ 100.08 $ 67.97 $ 71.92 $ 52.62
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.06 0.02 0.58 0.70 0.65 0.48
Net realized and unrealized gain (loss) (60.91) 37.19 38.09 32.09 (3.98) 19.39
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (60.85) 37.21 38.67 32.79 (3.33) 19.87
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.04) (0.03) (0.61) (0.68) (0.62) (0.57)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 114.43 $ 175.32 $ 138.14 $ 100.08 $ 67.97 $ 71.92
========== =========== =========== =========== =========== ===========
TOTAL RETURN (b) (34.71)% 26.94% 38.82% 48.36% (4.70)% 37.86%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,613,503 $ 4,049,807 $ 3,349,911 $ 2,912,388 $ 1,950,669 $ 2,200,711
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.57% (c) 0.56% 0.57% 0.57% 0.57% 0.58%
Ratio of net expenses to average net
assets 0.57% (c) 0.56% 0.57% 0.57% 0.57% 0.58%
Ratio of net investment income (loss) to
average net assets 0.06% (c) 0.01% 0.50% 0.82% 0.84% 0.76%
Portfolio turnover rate (d) 9% 25% 31% 23% 21% 21%
(a) The Fund received a reimbursement from the Advisor in the amount of
$22,098 in connection with a trade error, which represents less than $0.01
per share. Since the Advisor reimbursed the Fund, there was no effect on
the Fund's total return.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 56 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST NASDAQ-100 EX-TECHNOLOGY SECTOR INDEX FUND (QQXT)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 88.47 $ 79.43 $ 58.39 $ 45.66 $ 48.53 $ 40.44
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.35 0.35 0.22 0.20 0.18 0.12
Net realized and unrealized gain (loss) (17.70) 9.00 21.04 12.73 (2.88) 8.13
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (17.35) 9.35 21.26 12.93 (2.70) 8.25
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.37) (0.31) (0.22) (0.20) (0.17) (0.16)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 70.75 $ 88.47 $ 79.43 $ 58.39 $ 45.66 $ 48.53
========== =========== =========== =========== =========== ===========
TOTAL RETURN (a) (19.65)% 11.80% 36.48% 28.35% (5.58)% 20.41%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 109,658 $ 137,135 $ 146,938 $ 102,183 $ 77,618 $ 101,914
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.63% (b) 0.62% 0.62% 0.64% 0.64% 0.63%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.90% (b) 0.40% 0.34% 0.38% 0.34% 0.25%
Portfolio turnover rate (c) 16% 25% 35% 31% 26% 25%
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) GREEN ENERGY INDEX FUND (QCLN)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 67.96 $ 70.17 $ 24.91 $ 17.63 $ 20.28 $ 15.47
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.07 (0.13) 0.11 0.13 0.12 0.05
Net realized and unrealized gain (loss) (15.77) (2.07) 45.36 7.36 (2.59) 4.85
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (15.70) (2.20) 45.47 7.49 (2.47) 4.90
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.01) (0.01) (0.21) (0.21) (0.11) (0.09)
Return of capital -- -- -- -- (0.07) --
---------- ----------- ----------- ----------- ----------- -----------
Total distributions (0.01) (0.01) (0.21) (0.21) (0.18) (0.09)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 52.25 $ 67.96 $ 70.17 $ 24.91 $ 17.63 $ 20.28
========== =========== =========== =========== =========== ===========
TOTAL RETURN (a) (23.09)% (3.14)% 183.52% 42.69% (12.22)% 31.73%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,881,158 $ 2,823,661 $ 1,999,803 $ 144,467 $ 83,731 $ 91,262
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.58% (b) 0.58% 0.60% 0.63% 0.65% 0.66%
Ratio of net expenses to average net
assets 0.58% (b) 0.58% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.20% (b) (0.24)% 0.04% 0.58% 0.59% 0.23%
Portfolio turnover rate (c) 10% 28% 43% 26% 45% 32%
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 57
FIRST TRUST EXCHANGE-TRADED FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST S&P REIT INDEX FUND (FRI)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 32.59 $ 23.23 $ 26.14 $ 21.63 $ 23.28 $ 23.07
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.39 0.50 0.52 0.56 0.69 0.71
Net realized and unrealized gain (loss) (7.01) 9.33 (2.72) 4.55 (1.65) 0.16
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (6.62) 9.83 (2.20) 5.11 (0.96) 0.87
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.23) (0.47) (0.71) (0.60) (0.69) (0.66)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 25.74 $ 32.59 $ 23.23 $ 26.14 $ 21.63 $ 23.28
========== =========== =========== =========== =========== ===========
TOTAL RETURN (a) (20.36)% 42.52% (8.10)% 23.67% (4.19)% 3.79%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 195,616 $ 236,309 $ 74,344 $ 198,642 $ 115,696 $ 161,791
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.50% (b) 0.51% 0.52% 0.51% 0.52% 0.48%
Ratio of net expenses to average net
assets 0.50% (b) 0.50% 0.50% 0.50% 0.50% 0.48%
Ratio of net investment income (loss) to
average net assets 2.67% (b) 2.04% 2.04% 2.40% 3.05% 2.77%
Portfolio turnover rate (c) 5% 6% 6% 10% 10% 7%
FIRST TRUST WATER ETF (FIW)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 94.74 $ 72.13 $ 59.91 $ 43.96 $ 48.58 $ 39.61
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.29 0.36 0.38 0.32 0.35 0.54
Net realized and unrealized gain (loss) (22.74) 22.60 12.24 15.96 (4.65) 8.98
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (22.45) 22.96 12.62 16.28 (4.30) 9.52
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.27) (0.35) (0.40) (0.33) (0.32) (0.55)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 72.02 $ 94.74 $ 72.13 $ 59.91 $ 43.96 $ 48.58
========== =========== =========== =========== =========== ===========
TOTAL RETURN (a) (23.70)% 31.89% 21.20% 37.11% (8.89)% 24.25%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $1,109,090 $ 1,605,791 $ 688,794 $ 536,168 $ 290,107 $ 298,775
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.52% (b) 0.53% 0.54% 0.55% 0 .55% 0.56%
Ratio of net expenses to average net
assets 0.52% (b) 0.53% 0.54% 0.55% 0.55% 0.56%
Ratio of net investment income (loss) to
average net assets 0.70% (b) 0.47% 0.66% 0.61% 0.72% 1.26%
Portfolio turnover rate (c) 9% 15% 15% 12% 11% 24%
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 58 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST NATURAL GAS ETF (FCG)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 17.17 $ 8.80 $ 12.05 $ 14.69 $ 22.75 $ 26.15
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.30 0.20 0.10 0.10 0.02 (0.02)
Net realized and unrealized gain (loss) 4.72 8.47 (3.01) (2.39) (7.86) (3.02)
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations 5.02 8.67 (2.91) (2.29) (7.84) (3.04)
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.27) (0.30) -- (0.11) -- (0.23)
Return of capital -- -- (0.34) (0.24) (0.22) (0.13)
---------- ----------- ----------- ----------- ----------- -----------
Total distributions (0.27) (0.30) (0.34) (0.35) (0.22) (0.36)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 21.92 $ 17.17 $ 8.80 $ 12.05 $ 14.69 $ 22.75
========== =========== =========== =========== =========== ===========
TOTAL RETURN (a) 29.15% 98.69% (23.22)% (15.87)% (34.77)% (11.53)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 677,188 $ 423,225 $ 103,429 $ 95,209 $ 88,874 $ 184,262
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.60% (b) 0.62% (c) 0.67% 0.65% 0.63% 0.64%(c)
Ratio of net expenses to average net
assets 0.60% (b) 0.61% (c) 0.60% 0.60% 0.60% 0.63%(c)
Ratio of net investment income (loss) to
average net assets 2.41% (b) 1.41% 1.48% 0.65% 0.07% (0.11)%
Portfolio turnover rate (d) 23% 42% 103% 61% 47% 53%
FIRST TRUST CHINDIA ETF (FNI)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 47.62 $ 59.07 $ 39.75 $ 30.93 $ 39.57 $ 27.39
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05 (0.12) 0.09 0.14 0.04 0.34
Net realized and unrealized gain (loss) (7.03) (11.33) 19.42 8.81 (8.16) 12.61
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (6.98) (11.45) 19.51 8.95 (8.12) 12.95
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.05) -- (0.19) (0.13) (0.52) (0.77)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 40.59 $ 47.62 $ 59.07 $ 39.75 $ 30.93 $ 39.57
========== =========== =========== =========== =========== ===========
TOTAL RETURN (a) (14.66)% (19.38)% 49.25% 28.96% (20.68)% 47.36%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 131,930 $ 107,147 $ 256,949 $ 111,291 $ 133,007 $ 375,915
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.65% (b) 0.59% 0.60% 0.60% 0.59% 0.60%
Ratio of net expenses to average net
assets 0.60% (b) 0.59% 0.60% 0.60% 0.59% 0.60%
Ratio of net investment income (loss) to
average net assets 0.35% (b) (0.03)% 0.20% 0.35% 1.06% 0.91%
Portfolio turnover rate (d) 14% 43% 46% 26% 22% 35%
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) For the years ended December 31, 2021 and 2017, ratios reflect excise tax
of 0.01% and 0.03%, respectively, which are not included in the expense
cap.
(d) 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 59
FIRST TRUST EXCHANGE-TRADED FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST NASDAQ(R) ABA COMMUNITY BANK INDEX FUND (QABA)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/2022 -----------------------------------------------------------------------
(UNAUDITED) 2021 2020 2019 2018 2017
------------ ----------- ----------- ----------- ----------- -----------
Net asset value, beginning of period $ 58.97 $ 44.75 $ 51.91 $ 43.16 $ 52.34 $ 52.81
---------- ----------- ----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.58 1.01 1.11 1.04 0.81 0.74
Net realized and unrealized gain (loss) (9.20) 14.20 (7.13) 8.72 (9.17) (0.46)
---------- ----------- ----------- ----------- ----------- -----------
Total from investment operations (8.62) 15.21 (6.02) 9.76 (8.36) 0.28
---------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.54) (0.99) (1.14) (1.01) (0.82) (0.75)
---------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 49.81 $ 58.97 $ 44.75 $ 51.91 $ 43.16 $ 52.34
========== =========== =========== =========== =========== ===========
TOTAL RETURN (a) (14.67)% 34.08% (11.00)% 22.80% (16.14)% 0.55%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 94,635 $ 117,947 $ 85,020 $ 142,752 $ 228,762 $ 314,032
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.63% (b) 0.63% 0.64% 0.60% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 1.99% (b) 1.82% 2.75% 1.98% 1.50% 1.37%
Portfolio turnover rate (c) 8% 23% 14% 15% 11% 14%
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The returns presented do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 60 See Notes to Financial Statements
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on August 8,
2003, and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of twenty-two exchange-traded funds. This report
covers the nine funds (each a "Fund" and collectively, the "Funds") listed
below:
First Trust NASDAQ-100 Equal Weighted Index Fund - (The Nasdaq Stock
Market LLC ("Nasdaq") ticker "QQEW")
First Trust NASDAQ-100-Technology Sector Index Fund - (Nasdaq ticker
"QTEC")
First Trust NASDAQ-100 Ex-Technology Sector Index Fund - (Nasda ticker
"QQXT")
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund - (Nasdaq
ticker "QCLN")
First Trust S&P REIT Index Fund - (NYSE Arca, Inc. ("NYSE Arca") ticker
"FRI")
First Trust Water ETF - (NYSE Arca ticker "FIW")
First Trust Natural Gas ETF - (NYSE Arca ticker "FCG")
First Trust Chindia ETF - (NYSE Arca ticker "FNI")
First Trust NASDAQ(R) ABA Community Bank Index Fund - (Nasdaq ticker
"QABA")
Each Fund represents a separate series 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." The investment objective of each Fund is to seek
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of the following indices:
FUND INDEX
First Trust NASDAQ-100 Equal Weighted Index Fund Nasdaq-100 Equal Weighted Index(SM)
First Trust NASDAQ-100-Technology Sector Index Fund Nasdaq-100 Technology Sector Index(SM)
First Trust NASDAQ-100 Ex-Technology Sector Index Fund Nasdaq-100 Ex-Tech Sector Index(SM)
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund Nasdaq(R) Clean Edge(R) Green Energy Index(SM)
First Trust S&P REIT Index Fund S&P United States REIT Index
First Trust Water ETF ISE Clean Edge Water Index
First Trust Natural Gas ETF ISE-Revere Natural Gas(TM) Index
First Trust Chindia ETF ISE ChIndia(TM) Index
First Trust NASDAQ(R) ABA Community Bank Index Fund Nasdaq OMX(R) ABA Community Bank Index(SM)
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 the data
reflecting the earlier closing of the principal markets for those securities.
Each Fund's NAV is calculated by dividing the value of all assets of each Fund
(including accrued interest and dividends), less all liabilities (including
accrued expenses and dividends declared but unpaid), by the total number of
shares outstanding.
Each Fund's investments are valued daily at market value or, in the absence of
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 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:
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
Common stocks, real estate investment trusts ("REITs"), master limited
partnerships ("MLPs") and other equity securities listed on any national
or foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the principal market for such securities.
Shares of open-end funds are valued at fair value which is based on NAV
per share.
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.
Overnight repurchase agreements are valued at amortized cost when it
represents the best estimate of fair value.
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.
In addition, differences between the prices used to calculate a Fund's NAV and
the prices used by such Fund's corresponding index could result in a difference
between a Fund's performance and the performance of its underlying index.
The Funds are subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodologies used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value each Fund's investments as of June 30, 2022, is
included with each Fund's Portfolio of Investments.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
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 MLPs generally are comprised
of return of capital and investment income. A Fund records estimated return of
capital and investment income based on historical information available from
each MLP. These estimates may subsequently be revised based on information
received from the MLPs after their tax reporting periods are concluded.
Distributions received from a Fund's investments in REITs may be comprised of
return of capital, capital gains and income. The actual character of the amounts
received during the year 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. OFFSETTING ON THE STATEMENTS OF ASSETS AND LIABILITIES
Offsetting Assets and Liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset on the
Statements of Assets and Liabilities, and disclose instruments and transactions
subject to master netting or similar agreements. These disclosure requirements
are intended to help investors and other financial statement users better assess
the effect or potential effect of offsetting arrangements on a fund's financial
position. The transactions subject to offsetting disclosures are derivative
instruments, repurchase agreements and reverse repurchase agreements, and
securities borrowing and securities lending transactions.
This disclosure, if applicable, is included within each Fund's Portfolio of
Investments under the heading "Offsetting Assets and Liabilities." For financial
reporting purposes, the Funds do not offset financial assets and financial
liabilities that are subject to master netting arrangements ("MNAs") or similar
agreements on the Statements of Assets and Liabilities. MNAs provide the right,
in the event of default (including bankruptcy and insolvency), for the
non-defaulting counterparty to liquidate the collateral and calculate the net
exposure to the defaulting party or request additional collateral.
D. SECURITIES LENDING
The Funds may lend securities representing up to 33 1/3% of the value of their
total assets to broker-dealers, banks and other institutions to generate
additional income. When a Fund loans its portfolio securities, it will receive,
at the inception of each loan, collateral equal to at least 102% (for domestic
securities) or 105% (for international securities) of the market value of the
loaned securities. The collateral amount is valued at the beginning of each
business day and is compared to the market value of the loaned securities from
the prior business day to determine if additional collateral is required. If
additional collateral is required, a request is sent to the borrower. Securities
lending involves the risk that the Fund may lose money because the borrower of
the Fund's loaned securities fails to return the securities in a timely manner
or at all. The Fund could also lose money in the event of (i) a decline in the
value of the collateral provided for the loaned securities, (ii) a decline in
the value of any investments made with cash collateral or (iii) an increase in
the value of the loaned securities if the borrower does not increase the
collateral accordingly and the borrower fails to return the securities. These
events could also trigger adverse tax consequences for the Funds.
Under the Funds' Securities Lending Agency Agreement, the securities lending
agent will generally bear the risk that a borrower may default on its obligation
to return loaned securities. Brown Brothers Harriman & Co. ("BBH") acts as the
Funds' securities lending agent and is responsible for executing the lending of
the portfolio securities to creditworthy borrowers with the exception of FNI.
The Bank of New York Mellon ("BNYM") acts as FNI's securities lending agent and
is responsible for executing the lending of the portfolio securities to
creditworthy borrowers. The Funds, however, will be responsible for the risks
associated with the investment of cash collateral. A Fund may lose money on its
investment of cash collateral, which may affect its ability to repay the
collateral to the borrower without the use of other Fund assets. Each Fund that
engages in securities lending receives compensation (net of any rebate and
securities lending agent fees) for lending its securities. Compensation can be
in the form of fees received from the securities lending agent or dividends or
interest earned from the investment of cash collateral. The fees received from
the securities lending agent are accrued daily. The dividend and interest earned
on the securities loaned is accounted for in the same manner as other dividend
and interest income. During the six months ended June 30, 2022, QQEW, QQXT,
QCLN, FIW, FCG, FNI, and QABA participated in the securities lending program.
In the event of a default by a borrower with respect to any loan, BBH or BNYM
will exercise any and all remedies provided under the applicable borrower
agreement to make the Funds whole. These remedies include purchasing replacement
securities by applying the collateral held from the defaulting broker against
the purchase cost of the replacement securities. If, despite such efforts by BBH
and BNYM to exercise these remedies, a Fund sustains losses as a result of a
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
borrower's default, BBH or BNYM will indemnify the Fund by purchasing
replacement securities at its own expense, or paying the Fund an amount equal to
the market value of the replacement securities, subject to certain limitations
which are set forth in detail in the Securities Lending Agency Agreement between
the Trust on behalf of the Funds and BBH or BNYM.
E. REPURCHASE AGREEMENTS
Repurchase agreements involve the purchase of securities subject to the seller's
agreement to repurchase the securities at a mutually agreed upon date and price,
under the terms of a Master Repurchase Agreement ("MRA"). During the term of a
repurchase agreement, the value of the underlying securities held as collateral
on behalf of a Fund, including accrued interest, is required to exceed the value
of the repurchase agreement, including accrued interest. The underlying
securities for all repurchase agreements are held at the Funds' custodian or
designated sub-custodians under tri-party repurchase agreements.
MRAs govern transactions between a Fund and select counterparties. The MRAs
contain provisions for, among other things, initiation, income payments, events
of default, and maintenance of collateral for repurchase agreements.
Repurchase agreements received for lending securities are collateralized by U.S.
Treasury securities. The U.S. Treasury securities are held in a joint custody
account at BBH or BNYM on behalf of the Funds participating in the securities
lending program. In the event the counterparty defaults on the repurchase
agreement, the U.S. Treasury securities can either be maintained as part of a
Fund's portfolio or sold for cash. A Fund could suffer a loss to the extent that
the proceeds from the sale of the underlying collateral held by the Fund is less
than the repurchase price and the Fund's costs associated with the delay and
enforcement of the MRA.
While the Funds may invest in repurchase agreements, any repurchase agreements
held by the Funds during the six months ended June 30, 2022 were received as
collateral for lending securities.
F. 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 December 31, 2021 was as follows:
Distributions Distributions Distributions
paid from paid from paid from
Ordinary Income Capital Gains Return of Capital
------------------ ---------------- -----------------
First Trust NASDAQ-100 Equal Weighted Index Fund $ 3,291,356 $ -- $ --
First Trust NASDAQ-100-Technology Sector Index Fund 661,890 -- --
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 515,676 -- --
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund 275,655 -- --
First Trust S&P REIT Index Fund 2,732,665 -- --
First Trust Water ETF 4,964,311 -- --
First Trust Natural Gas ETF 6,273,849 -- --
First Trust Chindia ETF -- -- --
First Trust NASDAQ(R) ABA Community Bank Index Fund 2,215,667 -- --
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
As of December 31, 2021, the components of distributable earnings on a tax basis
for each Fund were as follows:
Accumulated
Undistributed Capital and Net Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
------------------ ---------------- -----------------
First Trust NASDAQ-100 Equal Weighted Index Fund $ -- $(41,657,511) $ 274,748,302
First Trust NASDAQ-100-Technology Sector Index Fund -- (87,032,982) 986,139,564
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 72,211 (12,461,720) 29,658,380
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund -- (102,551,191) 119,996,386
First Trust S&P REIT Index Fund 264,063 (917,724) 22,342,931
First Trust Water ETF 153,922 (7,085,901) 372,919,181
First Trust Natural Gas ETF -- (514,196,506) 32,399,852
First Trust Chindia ETF -- (84,735,549) (13,729,950)
First Trust NASDAQ(R) ABA Community Bank Index Fund 38,419 (11,584,896) 4,002,286
G. 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.
Certain countries assess a capital gains tax on securities sold in their local
markets. This tax is accrued as the securities in these foreign markets
appreciate in value and is paid at the time of sale to the extent a capital gain
is realized. Taxes accrued on securities in an unrealized appreciation position,
if any, are included in "Net change in unrealized appreciation (depreciation) on
deferred foreign capital gains tax" on the Statements of Operations. The capital
gains tax paid on securities sold, if any, is included in "Net realized gain
(loss) on foreign capital gains tax" on the Statements of Operations.
India's Finance Bill, 2018 ("Finance Bill, 2018") was enacted into law on March
29, 2018 and amongst other provisions, it introduced a long-term capital gains
tax beginning April 1, 2018. Long-term capital gains on the sale of listed
shares in excess of INR 0.1 million are taxed at the rate of 10% (plus
applicable surcharge and cess (which is a type of tax)) subject to satisfaction
of certain conditions. Long-term capital gains accruing as of January 31, 2018
are considered exempt due to a grandfather clause in the provision. The
aforesaid exemption from long-term capital gains tax is available with respect
to shares acquired between October 1, 2004 and March 31, 2018 only if on such
acquisitions Securities Transaction Tax ("STT") was chargeable. Certain
exceptions in this regard, such as acquisition of shares in a public offer,
bonus, rights issued, etc. for which the condition of chargeability of STT on
acquisition is not applicable, have been notified.
In the case of the sale of listed shares held by a Fund for one year or less,
the income is classified as short-term capital gains and is taxable at 15% (plus
applicable surcharge and cess) provided the shares are sold on the stock
exchange and subjected to STT. For above purposes, the applicable rate of
surcharge is 2% or 5% (depending on the level of income of the Fund). The
Finance Bill, 2018 increases the cess imposed on the sum of tax and surcharge
from 3% to 4%. The cess 4% rate is applied to the capital gains tax, resulting
in a higher effective rate of capital gains tax.
Where the sale of shares is outside the stock exchange and not subject to STT,
the long-term capital gains are taxed at 10% (plus applicable surcharge and
cess) and short-term capital gains are taxed at 30% (plus applicable surcharge
and cess). The Finance Bill, 2018, approves the carry forward of long-term
capital losses to be offset against long-term capital gains. Short-term losses
can be netted against both short-term gains and long-term gains.
Until March 31, 2020, dividends received by a Fund from Indian companies were
exempt from tax in India because Indian companies were required to pay dividend
distribution tax. The Indian Finance Act, 2020 has amended the dividend taxation
framework effective April 1, 2020 and accordingly dividends would now be taxable
in the hands of the shareholders at 20%, plus applicable surcharge and cess.
Subsequent to the Indian Finance Act, 2020, "The Taxation and Other Laws
(Relaxation and Amendment of Certain Provisions) Bill, 2020" (the "Bill") was
enacted into law and is effective retroactively to April 1, 2020. The Bill caps
the maximum surcharge at 15% of the tax on dividend income earned by the Fund.
The highest effective tax rate proposed for non-corporate entities on dividends
will be 23.92%. Note the Fund will not obtain relief under the US-India tax
treaty as the treaty rate of 25% is higher than the domestic rate. Any excess
taxes withheld can be off-set against capital gains tax liability during the
year or claimed as a refund in the annual tax return.
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
Please note that the above description is based on current provisions of Indian
law, and any change or modification made by subsequent legislation, regulation,
or administrative or judicial decision could increase the Indian tax liability
of a Fund and thus reduce the return to a Fund's shareholders. There can be no
assurance that the Indian tax authorities and/or regulators will not take a
position contrary to the views expressed herein. If the Indian tax authorities
and/or regulators take a position contrary to the views expressed herein,
adverse unpredictable consequences may follow.
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. The taxable years ended 2018,
2019, 2020, and 2021 remain open to federal and state audit. As of June 30,
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 December 31, 2021, for
federal income tax purposes, each applicable Fund had a capital loss
carryforward available that is shown in the table below, to the extent provided
by regulations, to offset future capital gains. To the extent that these loss
carryforwards are used to offset future capital gains, it is probable that the
capital gains so offset will not be distributed to each applicable Fund's
shareholders.
Non-Expiring
Capital Loss
Carryforward
------------------
First Trust NASDAQ-100 Equal Weighted Index Fund $ 41,657,511
First Trust NASDAQ-100-Technology Sector Index Fund 87,032,982
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 12,461,720
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund 102,551,191
First Trust S&P REIT Index Fund 917,724
First Trust Water ETF 7,085,901
First Trust Natural Gas ETF 514,196,506
First Trust Chindia ETF 84,735,549
First Trust NASDAQ(R) ABA Community Bank Index Fund 11,584,896
During the taxable year ended December 31, 2021, the following Funds utilized
non-expiring capital loss carryforwards in the following amount:
Capital Loss
Carryforward
Utilized
------------------
First Trust NASDAQ-100-Technology Sector Index Fund $ 647,941
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 1,583,963
First Trust S&P REIT Index Fund 1,201,443
First Trust Water ETF 5,562,787
First Trust Natural Gas ETF 3,639,247
First Trust NASDAQ(R) ABA Community Bank Index Fund 1,628,972
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 December 31, 2021, the Funds had
no net late year ordinary or capital losses.
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
As of June 30, 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 NASDAQ-100 Equal Weighted
Index Fund $ 1,067,925,844 $ 90,363,660 $ (164,547,110) $ (74,183,450)
First Trust NASDAQ-100-Technology Sector
Index Fund 2,076,718,059 59,443,421 (522,852,784) (463,409,363)
First Trust NASDAQ-100 Ex-Technology Sector
Index Fund 107,649,277 15,204,097 (10,041,053) 5,163,044
First Trust NASDAQ(R) Clean Edge(R) Green
Energy Index Fund 2,466,944,848 149,761,646 (611,824,119) (462,062,473)
First Trust S&P REIT Index Fund 232,060,197 1,429,356 (38,479,616) (37,050,260)
First Trust Water ETF 1,188,721,635 48,006,208 (91,446,739) (43,440,531)
First Trust Natural Gas ETF 680,376,632 53,434,210 (25,536,101) 27,898,109
First Trust Chindia ETF 160,081,829 9,651,743 (32,780,884) (23,129,141)
First Trust NASDAQ(R) ABA Community Bank
Index Fund 111,152,491 1,048,968 (17,096,577) (16,047,609)
H. EXPENSES
Expenses that are directly related to one of the Funds are charged directly to
the respective Fund. General expenses of the Trust are allocated to all the
Funds based upon the net assets of each Fund.
First Trust has entered into licensing agreements with each of the following
"Licensors" for the respective Funds:
FUND LICENSOR
First Trust NASDAQ-100 Equal Weighted Index Fund Nasdaq, Inc.
First Trust NASDAQ-100-Technology Sector Index Fund Nasdaq, Inc.
First Trust NASDAQ-100 Ex-Technology Sector Index Fund Nasdaq, Inc.
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund Nasdaq, Inc. and Clean Edge(R)
First Trust S&P REIT Index Fund S&P Dow Jones Indices LLC
First Trust Water ETF International Securities Exchange, LLC
First Trust Natural Gas ETF International Securities Exchange, LLC
First Trust Chindia ETF International Securities Exchange, LLC
First Trust NASDAQ(R) ABA Community Bank Index Fund Nasdaq, Inc. and American Bankers Association
The respective license agreements allow for the use by First Trust of certain
trademarks and trade names of the respective Licensors. The Funds are
sub-licensees to the applicable license agreement. The respective Funds are
required to pay licensing fees, which are shown on the Statements of Operations.
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.
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
For these services, First Trust is entitled to receive monthly fees from each
Fund calculated at the following annual rates:
% of Average
Daily Net Assets
----------------
First Trust NASDAQ-100 Equal Weighted Index Fund 0.40%
First Trust NASDAQ-100-Technology Sector Index Fund 0.40%
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 0.40%
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund 0.40%
First Trust S&P REIT Index Fund 0.30%
First Trust Water ETF 0.40%
First Trust Natural Gas ETF 0.40%
First Trust Chindia ETF 0.40%
First Trust NASDAQ(R) ABA Community Bank Index Fund 0.40%
The Trust and the Advisor have entered into an Expense Reimbursement, Fee Waiver
and Recovery Agreement ("Recovery Agreement") in which First Trust has agreed to
waive fees and/or reimburse Fund expenses to the extent that the operating
expenses of each Fund (excluding interest expense, brokerage commissions and
other trading expenses, acquired fund fees and expenses, taxes and extraordinary
expenses) exceed the below amount as a percentage of average daily net assets
per year (the "Expense Cap"). The Expense Cap will be in effect until at least
April 30, 2024.
Expense Cap
----------------
First Trust NASDAQ-100 Equal Weighted Index Fund 0.60%
First Trust NASDAQ-100-Technology Sector Index Fund 0.60%
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 0.60%
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund 0.60%
First Trust S&P REIT Index Fund 0.50%
First Trust Water ETF 0.60%
First Trust Natural Gas ETF 0.60%
First Trust Chindia ETF 0.60%
First Trust NASDAQ(R) ABA Community Bank Index Fund 0.60%
Expenses reimbursed and fees waived by First Trust under the Recovery Agreement
are subject to recovery by First Trust for up to three years from the date the
fee or expense was incurred, but no reimbursement payment will be made by a Fund
if it results in the Fund exceeding (i) the applicable expense limitation in
place for the most recent fiscal year for which such expense limitation was in
place, (ii) the applicable expense limitation in place at the time the fees were
waived, or (iii) the current expense limitation. These amounts would be included
in "Expenses previously waived or reimbursed" on the Statements of Operations.
The advisory fee waivers and expense reimbursements for the six months ended
June 30, 2022 and the fees waived or expenses borne by First Trust subject to
recovery from the applicable Fund for the periods indicated were as follows:
Fees Waived or Expenses Borne by First Trust
Subject to Recovery
--------------------------------------------------------------
Advisory Six Months Year Year Six Months
Fee Expense Ended Ended Ended Ended
Waivers Reimbursement 12/31/2019 12/31/2020 12/31/2021 6/30/2022 Total
--------- ------------- ---------- ---------- ---------- ---------- ----------
First Trust NASDAQ-100 Ex-Technology
First Trust NASDAQ-100 Ex-Technology
Sector Index Fund $ 17,692 $ -- $ 16,203 $ 24,666 $ 23,534 $ 17,692 $ 82,095
First Trust S&P REIT Index Fund -- -- 5,815 24,447 14,335 -- 44,597
First Trust Natural Gas ETF -- -- -- 28,003 9,649 -- 37,652
First Trust Chindia ETF 20,700 -- -- -- -- 20,700 20,700
First Trust NASDAQ(R) ABA Community
Bank Index Fund 19,403 -- -- 31,508 32,356 19,403 83,267
During the six months ended June 30, 2022, First Trust recovered fees that were
previously waived from First Trust S&P REIT Index Fund and First Trust Natural
Gas ETF of $16,550 and $72,860, respectively.
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
The Trust has multiple service agreements with 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 is an index fund.
Additionally, the Lead Independent Trustee and the Chairs of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee Chairs
rotate every three years. The officers and "Interested" Trustee receive no
compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the six months ended June 30, 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 NASDAQ-100 Equal Weighted Index Fund $ 164,816,994 $ 165,134,087
First Trust NASDAQ-100-Technology Sector Index Fund 252,374,717 253,455,590
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 19,377,340 19,481,292
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund 226,214,926 225,554,889
First Trust S&P REIT Index Fund 11,294,667 10,016,985
First Trust Water ETF 123,254,759 123,567,420
First Trust Natural Gas ETF 149,889,528 148,670,170
First Trust Chindia ETF 13,650,232 13,540,413
First Trust NASDAQ(R) ABA Community Bank Index Fund 9,356,711 9,348,501
For the six months ended June 30, 2022, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
Purchases Sales
--------------- ---------------
First Trust NASDAQ-100 Equal Weighted Index Fund $ 66,564,109 $ 123,142,542
First Trust NASDAQ-100-Technology Sector Index Fund 316,340,687 1,553,565,542
First Trust NASDAQ-100 Ex-Technology Sector Index Fund 3,669,409 3,782,113
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund 114,166,194 422,124,011
First Trust S&P REIT Index Fund 61,186,861 46,870,599
First Trust Water ETF 25,783,980 143,700,119
First Trust Natural Gas ETF 455,775,959 276,836,430
First Trust Chindia ETF 48,284,277 8,432,093
First Trust NASDAQ(R) ABA Community Bank Index Fund 29,918,500 33,160,591
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
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
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 April 30, 2024.
7. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued and has determined that
there were no subsequent events requiring recognition or disclosure in the
financial statements that have not already been disclosed.
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies and information on how each Fund voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
RISK CONSIDERATIONS
RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE
APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS
RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW
APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT
IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY
FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE,
RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT
WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO
REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND.
CONCENTRATION RISK. To the extent that a fund is able to invest a significant
percentage of its assets in a single asset class or the securities of issuers
within the same country, state, region, industry or sector, an adverse economic,
business or political development may affect the value of the fund's investments
more than if the fund were more broadly diversified. A fund that tracks an index
will be concentrated to the extent the fund's corresponding index is
concentrated. A concentration makes a fund more susceptible to any single
occurrence and may subject the fund to greater market risk than a fund that is
more broadly diversified.
CREDIT RISK. Credit risk is the risk that an issuer of a security will be unable
or unwilling to make dividend, interest and/or principal payments when due and
the related risk that the value of a security may decline because of concerns
about the issuer's ability to make such payments.
CYBER SECURITY RISK. The funds are susceptible to potential operational risks
through breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional events that may cause a fund to lose proprietary
information, suffer data corruption or lose operational capacity. Such events
could cause a fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial
loss. In addition, cyber security breaches of a fund's third-party service
providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the fund invests, can also subject a fund to
many of the same risks associated with direct cyber security breaches.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
DERIVATIVES RISK. To the extent a fund uses derivative instruments such as
futures contracts, options contracts and swaps, the fund may experience losses
because of adverse movements in the price or value of the underlying asset,
index or rate, which may be magnified by certain features of the derivative.
These risks are heightened when a fund's portfolio managers use derivatives to
enhance the fund's return or as a substitute for a position or security, rather
than solely to hedge (or offset) the risk of a position or security held by the
fund.
EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the
value of the fund's shares will fluctuate with changes in the value of the
equity securities. Equity securities prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, such as market
volatility, or when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase. Equity
securities may decline significantly in price over short or extended periods of
time, and such declines may occur in the equity market as a whole, or they may
occur in only a particular country, company, industry or sector of the market.
ETF RISK. The shares of an ETF trade like common stock and represent an interest
in a portfolio of securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities, although lack of liquidity in an ETF
could result in it being more volatile and ETFs have management fees that
increase their costs. Shares of an ETF trade on an exchange at market prices
rather than net asset value, which may cause the shares to trade at a price
greater than net asset value (premium) or less than net asset value (discount).
In times of market stress, decisions by market makers to reduce or step away
from their role of providing a market for an ETF's shares, or decisions by an
ETF's authorized participants that they are unable or unwilling to proceed with
creation and/or redemption orders of an ETF's shares, could result in shares of
the ETF trading at a discount to net asset value and in greater than normal
intraday bid-ask spreads.
FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income
securities, the fund will be subject to credit risk, income risk, interest rate
risk, liquidity risk and prepayment risk. Income risk is the risk that income
from a fund's fixed income investments could decline during periods of falling
interest rates. Interest rate risk is the risk that the value of a fund's fixed
income securities will decline because of rising interest rates. Liquidity risk
is the risk that a security cannot be purchased or sold at the time desired, or
cannot be purchased or sold without adversely affecting the price. Prepayment
risk is the risk that the securities will be redeemed or prepaid by the issuer,
resulting in lower interest payments received by the fund. In addition to these
risks, high yield securities, or "junk" bonds, are subject to greater market
fluctuations and risk of loss than securities with higher ratings, and the
market for high yield securities is generally smaller and less liquid than that
for investment grade securities.
INDEX OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. As a result, such a fund may be included in one or
more index-tracking exchange-traded funds or mutual funds. Being a component
security of such a vehicle could greatly affect the trading activity involving a
fund, the size of the fund and the market volatility of the fund. Inclusion in
an index could increase demand for the fund and removal from an index could
result in outsized selling activity in a relatively short period of time. As a
result, a fund's net asset value could be negatively impacted and the fund's
market price may be significantly below its net asset value during certain
periods. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject
to Index Provider Risk. There is no assurance that the Index Provider will
compile the Index accurately, or that the Index will be determined, maintained,
constructed, reconstituted, rebalanced, composed, calculated or disseminated
accurately. To correct any such error, the Index Provider may carry out an
unscheduled rebalance or other modification of the Index constituents or
weightings, which may increase the fund's costs. The Index Provider does not
provide any representation or warranty in relation to the quality, accuracy or
completeness of data in the Index, and it does not guarantee that the Index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any Index Provider errors generally will be borne by the fund
and its shareholders.
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.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to
management risk. In managing an actively-managed fund's investment portfolio,
the fund's portfolio managers will apply investment techniques and risk analyses
that may not have the desired result. There can be no guarantee that a fund will
meet its investment objective.
MARKET RISK. Securities held by a fund, as well as shares of a fund itself, are
subject to market fluctuations caused by factors such as general economic
conditions, political events, regulatory or market developments, changes in
interest rates and perceived trends in securities prices. Shares of a fund could
decline in value or underperform other investments as a result of the risk of
loss associated with these market fluctuations. In addition, local, regional or
global events such as war, acts of terrorism, spread of infectious diseases or
other public health issues, recessions, or other events could have a significant
negative impact on a fund and its investments. Such events may affect certain
geographic regions, countries, sectors and industries more significantly than
others. In February 2022, Russia invaded Ukraine which has caused and could
continue to cause significant market disruptions and volatility within the
markets in Russia, Europe, and the United States. The hostilities and sanctions
resulting from those hostilities could have a significant impact on certain fund
investments as well as fund performance. The outbreak of the respiratory disease
designated as COVID-19 in December 2019 has caused significant volatility and
declines in global financial markets, which have caused losses for investors.
While the development of vaccines has slowed the spread of the virus and allowed
for the resumption of "reasonably" normal business activity in the United
States, many countries continue to impose lockdown measures in an attempt to
slow the spread. Additionally, there is no guarantee that vaccines will be
effective against emerging variants of the disease.
NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities,
it is subject to additional risks not associated with securities of domestic
issuers. Non-U.S. securities are subject to higher volatility than securities of
domestic issuers due to: possible adverse political, social or economic
developments; restrictions on foreign investment or exchange of securities;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
OPERATIONAL RISK. Each fund is subject to risks arising from various operational
factors, including, but not limited to, human error, processing and
communication errors, errors of a fund's service providers, counterparties or
other third-parties, failed or inadequate processes and technology or systems
failures. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment advisor seek to reduce these operational
risks through controls and procedures, there is no way to completely protect
against such risks.
PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund
will invest in the securities included in, or representative of, the index
regardless of their investment merit. A fund generally will not attempt to take
defensive positions in declining markets.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
ADVISORY AGREEMENT
BOARD CONSIDERATIONS REGARDING APPROVAL OF CONTINUATION OF INVESTMENT MANAGEMENT
AGREEMENT
The Board of Trustees of First Trust Exchange-Traded Fund (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 nine series of the Trust (each a
"Fund" and collectively, the "Funds"):
First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW)
First Trust NASDAQ-100-Technology Sector Index Fund (QTEC)
First Trust NASDAQ-100 Ex-Technology Sector Index Fund (QQXT)
First Trust NASDAQ(R) Clean Edge(R) Green Energy Index Fund (QCLN)
First Trust S&P REIT Index Fund (FRI)
First Trust Chindia ETF (FNI)
First Trust Natural Gas ETF (FCG)
First Trust Water ETF (FIW)
First Trust NASDAQ(R) ABA Community Bank Index Fund (QABA)
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
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
advisory 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, including comparisons of each Fund's performance to
that of one or more relevant benchmark indexes and to that of a performance
group of funds and a broad performance universe of funds (the "Performance
Universe"), each assembled by Broadridge; the nature of expenses incurred in
providing services to each Fund and the potential for the Advisor 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 advisory 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. 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 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 advisory fee rate payable by each Fund under the
Agreement for the services provided. The Board considered that the Advisor
agreed to extend the current expense cap for each Fund through April 30, 2024.
For each Fund, the Board noted that expenses reimbursed and fees waived are
subject to recovery by the Advisor for up to three years from the date the fee
was waived or expense was incurred, but no reimbursement payment would be made
by the Fund if it results in the Fund exceeding (i) the applicable expense
limitation in place for the most recent fiscal year for which such expense
limitation was in place, (ii) the applicable expense limitation in place at the
time the fees were waived, or (iii) the current expense limitation. 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's Expense Group included peer funds that pay 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 total (net) expense ratio of QCLN was below the median total (net) expense
ratio of the peer funds in its Expense Group, that the total (net) expense ratio
of FNI was equal to the median total (net) expense ratio of the peer funds in
its Expense Group and that the total (net) expense ratio of each other Fund was
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
above the median total (net) expense ratio of the peer funds in its respective
Expense Group. With respect to the Expense Groups, the Board, at the April 18,
2022 meeting, discussed with Broadridge its methodology for assembling peer
groups and discussed with the Advisor limitations in creating peer groups for
index ETFs, including differences in underlying indexes and index-tracking
methodologies that can result in greater management complexities across
seemingly comparable ETFs, and different business models that may affect the
pricing of services among ETF sponsors. The Board took these limitations and
differences into account in considering the peer data. With respect to fees
charged to other non-ETF clients, the Board considered differences between the
Funds and other non-ETF clients that limited their comparability. In considering
the advisory fee rates overall, the Board also considered the Advisor's
statement that it seeks to meet investor needs through innovative and
value-added investment solutions and the Advisor's 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. The Board received and
reviewed information for periods ended December 31, 2021 regarding the
performance of each Fund's underlying index, the correlation between each Fund's
performance and that of its underlying index, each Fund's tracking difference
and each Fund's excess return as compared to its benchmark index. Based on the
information provided and its ongoing review of performance, the Board concluded
that each Fund was correlated to its underlying index and that the tracking
difference for each Fund was within a reasonable range. In addition, the Board
reviewed data prepared by Broadridge comparing each Fund's performance to that
of its respective Performance Universe and to that of a broad-based benchmark
index, but given each Fund's objective of seeking investment results that
correspond generally to the performance of its underlying index, the Board
placed more emphasis on its review of correlation and tracking difference.
On the basis of all the information provided on the fees, expenses and
performance of each Fund and the ongoing oversight by the Board, the Board
concluded that the advisory 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 considered the revenues and allocated costs (including the
allocation methodology) of the Advisor in serving as investment advisor to each
Fund for the twelve months ended December 31, 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 same
period. The Board noted the inherent limitations in the profitability analysis
and concluded that, based on the information provided, the Advisor's
profitability level for each Fund was not unreasonable. In addition, the Board
considered 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
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.
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FIRST TRUST EXCHANGE-TRADED FUND
JUNE 30, 2022 (UNAUDITED)
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 76
FIRST TRUST
First Trust Exchange-Traded Fund
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
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