FIRST TRUST First Trust Exchange-Traded Fund IV -------------------------------------------------------------------------------- First Trust Tactical High Yield ETF (HYLS) Semi-Annual Report For the Six Months Ended April 30, 2022 -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) SEMI-ANNUAL REPORT APRIL 30, 2022 Shareholder Letter........................................................... 1 Fund Performance Overview.................................................... 2 Portfolio Management......................................................... 5 Understanding Your Fund Expenses............................................. 6 Portfolio of Investments..................................................... 7 Statement of Assets and Liabilities.......................................... 24 Statement of Operations...................................................... 25 Statements of Changes in Net Assets.......................................... 26 Statement of Cash Flows...................................................... 27 Financial Highlights......................................................... 28 Notes to Financial Statements................................................ 29 Additional Information....................................................... 36 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. ("First Trust" or the "Advisor") and its representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as "anticipate," "estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or other words that convey uncertainty of future events or outcomes. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the series of First Trust Exchange-Traded Fund IV (the "Trust") described in this report (First Trust Tactical High Yield ETF; hereinafter referred to as the "Fund") to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. When evaluating the information included in this report, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of the Advisor and its representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof. PERFORMANCE AND RISK DISCLOSURE There is no assurance that the Fund will achieve its investment objectives. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund's shares may therefore be less than what you paid for them. Accordingly, you can lose money investing in the Fund. See "Risk Considerations" in the Additional Information section of this report for a discussion of certain other risks of investing in the Fund. Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost. The Advisor may also periodically provide additional information on Fund performance on the Fund's webpage at www.ftportfolios.com. HOW TO READ THIS REPORT This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund's performance and investment approach. The statistical information that follows may help you understand the Fund's performance compared to that of a relevant market benchmark. It is important to keep in mind that the opinions expressed by personnel of the Advisor are just that: informed opinions. They should not be considered to be promises or advice. The opinions, like the statistics, cover the period through the date on the cover of this report. The material risks of investing in the Fund are spelled out in the prospectus, the statement of additional information, and other Fund regulatory filings. -------------------------------------------------------------------------------- SHAREHOLDER LETTER -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO APRIL 30, 2022 Dear Shareholders: First Trust is pleased to provide you with the semi-annual report for the First Trust Tactical High Yield ETF (the "Fund"), which contains detailed information about the Fund for the six months ended April 30, 2022. A couple of famous financial industry quotes came to mind recently as I was sizing up the current business climate: "There's no such thing as a free lunch" and "Don't fight the Fed!" It seems that for some, the trillions of dollars of financial stimulus funneled into U.S. households and businesses by the Federal government and its agencies to help mitigate the fallout stemming from the coronavirus ("COVID-19") pandemic, which commenced sometime around February 2020, was for all intents and purposes "free money." It was not free. From the close of February 2020 through March 2022, the Federal Reserve (the "Fed") expanded the U.S. money supply, known as M2, by 41% to $21.81 trillion to boost liquidity in the financial system. Normally, M2 grows around 6.0% on a year-over-year basis. When you factor in that all this new capital was accompanied by a breakdown of the global supply chain, there is little wonder why inflation is rampant. One of the more common definitions of inflation is too many dollars chasing too few goods. The biggest downside to the supply chain bottlenecks, such as the severe backup of container ships at some U.S. ports, is that they have markedly reduced the flow of imported goods to retailers. The Fed has been signaling to Americans and the rest of the globe that, after many years of artificially low interest rates, tighter monetary policy will likely rule the day for the foreseeable future. Higher interest rates make borrowing capital more expensive and that should slow consumption over time, which, in turn, should bring down inflation. Don't fight the Fed is code for don't bet against the Fed, in my opinion. Stay tuned! The primary job of the Fed is price stability. Its standard inflation target rate is 2.0%. The most recent Consumer Price Index release showed that prices were up 8.3% on a year-over-year basis as of April 30, 2022, according to data from the U.S. Bureau of Labor Statistics. While down from 8.5% the prior month, it is clearly elevated and that means the Fed has some work to do to with respect to mitigating inflation. The war between Russia and Ukraine is making the Fed's job even tougher, particularly in the areas of food and energy. Rising costs and potential shortages could become even bigger if the COVID-19 outbreak in China grows. These are important events to monitor. Fed Chairman Jerome Powell has stated that the Fed is poised to raise the Federal Funds target rate (upper bound) by 50 basis points at each of its next two meetings (set for June and July), which would take the rate up to 2.00%. Data from CME Group indicates that current market pricing has the rate rising to 2.75% or 3.00% by year-end. Securities markets do not go up in a straight line and they do not just go up year in and year out. In fact, what we have witnessed over the past couple of decades are often referred to as boom and bust cycles. Thankfully, it has ended up more boom than bust. Simply put, investors, not traders of the market, need to be willing to take the bad with the good. As the various stages of an economic cycle come and go (expansion to contraction), the markets tend to reprice securities to reflect the current narrative. In other words, we believe the markets essentially heal themselves - if you let them. That is an accurate depiction of how the markets have behaved so far in 2022, in my opinion. In response to a softening economy, the stock and bond markets have experienced some serious downside through the first four months of this year, as measured by the broader market indices. As of today, Brian Wesbury, Chief Economist at First Trust, is not forecasting a recession for the U.S. in 2022 or 2023. Whether he is proven right or wrong, we encourage investors to 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 Fund again in six months. Sincerely, /s/ James A. Bowen James A. Bowen Chairman of the Board of Trustees Chief Executive Officer of First Trust Advisors L.P. Page 1 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) The First Trust Tactical High Yield ETF's (the "Fund") investment objective is to provide current income. The Fund's secondary investment objective is to provide capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets (including investment borrowings) in high yield debt securities that are rated below investment grade at the time of purchase or unrated securities deemed by the Fund's advisor to be of comparable quality. Below investment grade securities are those that, at the time of purchase, are rated lower than "BBB-" by S&P Global Ratings, or lower than "Baa3" by Moody's Investors Service, Inc., or comparably rated by another nationally recognized statistical rating organization. High yield debt securities that are rated below investment grade are commonly referred to as "junk" debt. Such securities may include U.S. and non-U.S. corporate debt obligations, bank loans and convertible bonds. For purposes of determining whether a security is below investment grade, the lowest available rating will be considered. The Fund may invest in non-income producing securities including Distressed Securities (defined below) and common stocks. Companies whose financial condition is troubled or uncertain and that may be involved in bankruptcy proceedings, reorganizations or financial restructurings are referred to herein as "Distressed Securities." The Fund invests no more than 15% of its net assets in Distressed Securities, as determined at the time of investment. The Fund may, under normal market conditions, invest up to 40% of its net assets (including investment borrowings) in bank loans; however the Fund invests no more than 15% of its net assets (including investment borrowings) in loans other than first lien senior secured floating rate bank loans. The Fund may invest in listed and over-the-counter derivatives to the extent permitted by the listing rules of the Nasdaq Stock Market LLC. The Fund may not be appropriate for all investors. ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE ------------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL CUMULATIVE TOTAL RETURNS TOTAL RETURNS 6 Months 1 Year 5 Years Inception 5 Years Inception Ended Ended Ended (2/25/13) Ended (2/25/13) 4/30/22 4/30/22 4/30/22 to 4/30/22 4/30/22 to 4/30/22 FUND PERFORMANCE NAV -5.55% -4.64% 3.22% 4.18% 17.16% 45.65% Market Price -6.25% -5.18% 3.11% 4.12% 16.55% 44.80% INDEX PERFORMANCE ICE BofA US High Yield Constrained Index -7.21% -4.97% 3.54% 4.52% 19.02% 49.99% ------------------------------------------------------------------------------------------------------------------------------------ Total returns for the period since inception are calculated from the inception date of the Fund. "Average Annual Total Returns" represent the average annual change in value of an investment over the periods indicated. "Cumulative Total Returns" represent the total change in value of an investment over the periods indicated. The Fund's per share net asset value ("NAV") is the value of one share of the Fund and is computed by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of outstanding shares. The price used to calculate market return ("Market Price") is determined by using the midpoint of the national best bid and offer price ("NBBO") as of the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists of the highest displayed buy and lowest sell prices among the various exchanges trading the Fund at the time the Fund's NAV is calculated. Prior to January 1, 2019, the price used was the midpoint between the highest bid and the lowest offer on the stock exchange on which shares of the Fund were listed for trading as of the time that the Fund's NAV was calculated. Since shares of the Fund did not trade in the secondary market until after the Fund's inception, for the period from inception to the first day of secondary market trading in shares of the Fund, the NAV of the Fund is used as a proxy for the secondary market trading price to calculate market returns. NAV and market returns assume that all distributions have been reinvested in the Fund at NAV and Market Price, respectively. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The total returns presented reflect the reinvestment of dividends on securities in the index. 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 the shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future performance. Page 2 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) ----------------------------------------------------------- % OF TOTAL LONG-TERM INDUSTRY CLASSIFICATION INVESTMENTS(1) ----------------------------------------------------------- Health Care Providers & Services 13.5% Media 13.5 Software 13.1 Pharmaceuticals 10.5 Insurance 8.7 Hotels, Restaurants & Leisure 6.4 Health Care Technology 4.3 Diversified Telecommunication Services 3.8 Containers & Packaging 2.2 Commercial Services & Supplies 2.1 Diversified Consumer Services 1.9 Electric Utilities 1.7 Entertainment 1.7 Health Care Equipment & Supplies 1.4 Building Products 1.3 Professional Services 1.3 Specialty Retail 1.2 Trading Companies & Distributors 1.1 Communications Equipment 0.9 IT Services 0.9 Aerospace & Defense 0.9 Internet & Direct Marketing Retail 0.8 Machinery 0.7 Food & Staples Retailing 0.6 Construction & Engineering 0.6 Road & Rail 0.6 Independent Power and Renewable Electricity Producers 0.5 Automobiles 0.5 Diversified Financial Services 0.4 Food Products 0.4 Electronic Equipment, Instruments & Components 0.4 Auto Components 0.4 Capital Markets 0.3 Construction Materials 0.3 Life Sciences Tools & Services 0.3 Consumer Finance 0.3 Airlines 0.2 Household Products 0.1 Semiconductors & Semiconductor Equipment 0.1 Chemicals 0.1 Beverages 0.0* Electrical Equipment 0.0* Personal Products 0.0* Real Estate Management & Development 0.0* Oil, Gas & Consumable Fuels 0.0* Technology Hardware, Storage, & Peripherals 0.0* Wireless Telecommunication Services 0.0* Interactive Media & Services 0.0* Metals & Mining 0.0* ------- Total 100.0% ======= * Amount is less than 0.1%. ----------------------------------------------------------- % OF TOTAL LONG-TERM ASSET CLASSIFICATION INVESTMENTS(1) ----------------------------------------------------------- Corporate Bonds 64.1% Senior Floating-Rate Loan Interests 25.3 Foreign Corporate Bonds 10.5 Common Stock 0.1 Warrants 0.0* Rights 0.0* ------- Total 100.0% ======= ----------------------------------------------------------- % OF SENIOR LOANS AND CREDIT QUALITY (S&P RATINGS)(2) OTHER DEBT SECURITIES(1) ----------------------------------------------------------- BBB- 0.2% BB+ 2.0 BB 5.6 BB- 7.7 B+ 16.6 B 22.0 B- 20.7 CCC+ 17.9 CCC 3.5 CCC- 1.0 D 2.1 NR 0.7 ------- Total 100.0% ======= ----------------------------------------------------------- % OF TOTAL LONG-TERM TOP 10 ISSUERS INVESTMENTS(1) ----------------------------------------------------------- Bausch Health Companies Inc. (Valeant) 3.6% Charter Communications Operating, LLC 2.6 Internet Brands, Inc. (Web MD/MH Sub I. LLC) 2.6 HUB International Ltd. 2.6 Assured Partners Inc. 2.4 Tenet Healthcare, Corp. 2.3 Cablevision (aka CSC Holdings, LLC) 2.2 Mallinckrodt International Finance S.A. 2.1 Verscend Technologies, Inc. (Cotiviti) 2.1 Golden Nugget, Inc. (Fertitta Entertainment LLC) 2.0 ------- Total 24.5% ======= (1) Percentages are based on the long positions only. Money market funds and short positions are excluded. (2) The ratings are by S&P Global Ratings. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO) of the creditworthiness of an issuer with respect to debt obligations except for those debt obligations that are only privately rated. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Investment grade is defined as those issuers that have a long-term credit rating of BBB- or higher. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change. Page 3 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PERFORMANCE OF A $10,000 INITIAL INVESTMENT FEBRUARY 25, 2013 - APRIL 30, 2022 First Trust Tactical ICE BofA US High High Yield ETF Yield Constrained Index 2/25/13 $10,000 $10,000 4/30/13 10,403 10,308 10/31/13 10,676 10,458 4/30/14 11,167 10,956 10/31/14 11,285 11,070 4/30/15 11,493 11,238 10/31/15 11,376 10,845 4/30/16 11,519 11,089 10/31/16 11,933 11,950 4/30/17 12,431 12,602 10/31/17 12,744 13,042 4/30/18 12,748 13,012 10/31/18 12,948 13,155 4/30/19 13,650 13,885 10/31/19 13,970 14,250 4/30/20 13,284 13,153 10/31/20 14,378 14,597 4/30/21 15,267 15,784 10/31/21 15,421 16,164 4/30/22 14,565 14,999 Performance figures assume reinvestment of all distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the index does not actually hold a portfolio of securities and therefore does not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance does not predict future performance. FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS Information showing the number of days the market price of the Fund's shares was greater (at a premium) and less (at a discount) than the Fund's net asset value for the most recently completed year, and the most recently completed calendar quarters since that year (or life of the Fund, if shorter) is available at https://www.ftportfolios.com/Retail/etf/home.aspx. Page 4 -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) SEMI-ANNUAL REPORT APRIL 30, 2022 (UNAUDITED) ADVISOR The First Trust Advisors L.P. ("First Trust") Leveraged Finance Team is comprised of 17 experienced investment professionals specializing in below investment grade securities. The team is comprised of portfolio management, research, trading and operations personnel. As of April 30, 2022, the First Trust Leveraged Finance Team managed or supervised approximately $7.4 billion in senior secured bank loans and high-yield bonds. These assets are managed across various strategies, including two closed-end funds, an open-end fund, four exchange-traded funds, and a series of unit investment trusts on behalf of retail and institutional clients. PORTFOLIO MANAGEMENT TEAM WILLIAM HOUSEY, CFA - MANAGING DIRECTOR OF FIXED INCOME AND SENIOR PORTFOLIO MANAGER JEFFREY SCOTT, CFA - SENIOR VICE PRESIDENT AND PORTFOLIO MANAGER The portfolio managers are primarily and jointly responsible for the day-to-day management of the Fund. Mr. Housey has served as a part of the portfolio management team of the Fund since 2013, while Mr. Scott has served as part of the portfolio management team of the Fund since 2020. Page 5 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) UNDERSTANDING YOUR FUND EXPENSES APRIL 30, 2022 (UNAUDITED) As a shareholder of First Trust Tactical High Yield ETF (the "Fund"), you incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, if any, and other Fund expenses. This Example is intended to help you understand your ongoing costs of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held through the six-month period ended April 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 the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as brokerage commissions. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. ---------------------------------------------------------------------------------------------------------------------------- ANNUALIZED EXPENSE RATIO BEGINNING ENDING BASED ON THE EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH DURING THE NOVEMBER 1, 2021 APRIL 30, 2022 PERIOD SIX-MONTH PERIOD (a) ---------------------------------------------------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) Actual $1,000.00 $ 944.50 1.20% $5.79 Hypothetical (5% return before expenses) $1,000.00 $1,018.84 1.20% $6.01 (a) Expenses are equal to the annualized expense ratio as indicated in the table multiplied by the average account value over the period (November 1, 2021 through April 30, 2022), multiplied by 181/365 (to reflect the six-month period). Page 6 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES -- 81.0% AEROSPACE & DEFENSE -- 0.7% $ 342,000 Booz Allen Hamilton, Inc. (a)................................... 3.88% 09/01/28 $ 315,480 3,802,000 Science Applications International Corp. (a).................... 4.88% 04/01/28 3,640,700 1,333,000 Spirit AeroSystems, Inc. (a).................................... 5.50% 01/15/25 1,330,987 3,000,000 Spirit AeroSystems, Inc. (a).................................... 7.50% 04/15/25 3,048,285 1,500,000 TransDigm, Inc. (a)............................................. 8.00% 12/15/25 1,560,938 3,412,000 TransDigm, Inc. (a)............................................. 6.25% 03/15/26 3,403,009 --------------- 13,299,399 --------------- AGRICULTURAL PRODUCTS -- 0.0% 500,000 Lamb Weston Holdings, Inc. (a).................................. 4.88% 05/15/28 487,000 --------------- AIRLINES -- 0.3% 5,469,000 Mileage Plus Holdings LLC / Mileage Plus Intellectual Property Assets Ltd. (a).............................................. 6.50% 06/20/27 5,584,451 --------------- ALTERNATIVE CARRIERS -- 0.5% 777,000 Level 3 Financing, Inc.......................................... 5.38% 05/01/25 771,219 2,000,000 Level 3 Financing, Inc.......................................... 5.25% 03/15/26 1,947,550 3,000,000 Level 3 Financing, Inc. (a)..................................... 4.63% 09/15/27 2,701,815 2,000,000 Level 3 Financing, Inc. (a)..................................... 4.25% 07/01/28 1,693,320 2,000,000 Level 3 Financing, Inc. (a)..................................... 3.63% 01/15/29 1,627,860 --------------- 8,741,764 --------------- APPAREL RETAIL -- 0.6% 10,080,000 Nordstrom, Inc. (b)............................................. 4.00% 03/15/27 9,354,013 2,854,000 Nordstrom, Inc.................................................. 4.38% 04/01/30 2,487,575 --------------- 11,841,588 --------------- APPLICATION SOFTWARE -- 1.7% 12,000,000 Condor Merger Sub, Inc. (a)..................................... 7.38% 02/15/30 10,750,260 1,362,000 Go Daddy Operating Co. LLC / GD Finance Co., Inc. (a) (b)....... 5.25% 12/01/27 1,349,022 11,510,000 LogMeIn, Inc. (a) (b)........................................... 5.50% 09/01/27 10,085,695 5,685,000 Open Text Holdings, Inc. (a).................................... 4.13% 02/15/30 5,053,453 5,216,000 Ziff Davis, Inc. (a) (b)........................................ 4.63% 10/15/30 4,659,688 --------------- 31,898,118 --------------- AUTO PARTS & EQUIPMENT -- 0.1% 2,000,000 Real Hero Merger Sub 2, Inc. (a)................................ 6.25% 02/01/29 1,624,520 --------------- AUTOMOBILE MANUFACTURERS -- 0.7% 7,957,000 Ford Motor Co. (b).............................................. 9.63% 04/22/30 9,737,936 2,000,000 Ford Motor Credit Co. LLC....................................... 3.66% 09/08/24 1,937,610 500,000 Ford Motor Credit Co. LLC....................................... 5.13% 06/16/25 499,325 667,000 Penske Automotive Group, Inc.................................... 3.50% 09/01/25 644,519 --------------- 12,819,390 --------------- AUTOMOTIVE RETAIL -- 0.4% 167,000 Group 1 Automotive, Inc. (a).................................... 4.00% 08/15/28 150,486 5,339,000 IAA, Inc. (a)................................................... 5.50% 06/15/27 5,225,039 250,000 Lithia Motors, Inc. (a)......................................... 3.88% 06/01/29 226,076 1,351,000 Lithia Motors, Inc. (a)......................................... 4.38% 01/15/31 1,241,630 100,000 Sonic Automotive, Inc. (a)...................................... 4.63% 11/15/29 86,178 100,000 Sonic Automotive, Inc. (a)...................................... 4.88% 11/15/31 85,494 --------------- 7,014,903 --------------- See Notes to Financial Statements Page 7 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) BROADCASTING -- 10.5% $ 15,031,000 Cumulus Media New Holdings, Inc. (a) (b)........................ 6.75% 07/01/26 $ 14,977,114 6,330,000 Diamond Sports Group LLC / Diamond Sports Finance Co. (a)....... 5.38% 08/15/26 2,318,299 21,673,000 Diamond Sports Group LLC / Diamond Sports Finance Co. (a) (b).................................................. 6.63% 08/15/27 4,551,330 28,294,000 Gray Television, Inc. (a) (b)................................... 5.88% 07/15/26 28,507,054 12,429,000 Gray Television, Inc. (a)....................................... 7.00% 05/15/27 12,863,891 3,591,000 Gray Television, Inc. (a)....................................... 4.75% 10/15/30 3,108,136 28,201,000 iHeartCommunications, Inc. (b).................................. 8.38% 05/01/27 27,968,060 11,927,000 iHeartCommunications, Inc. (a) (b).............................. 5.25% 08/15/27 11,167,966 34,528,000 Nexstar Media, Inc. (a) (b)..................................... 5.63% 07/15/27 33,637,178 13,255,000 Nexstar Media, Inc. (a) (b)..................................... 4.75% 11/01/28 12,046,608 1,389,000 Scripps Escrow II, Inc. (a)..................................... 3.88% 01/15/29 1,236,439 8,355,000 Scripps Escrow, Inc. (a) (b).................................... 5.88% 07/15/27 7,990,304 15,319,000 Sinclair Television Group, Inc. (a)............................. 5.13% 02/15/27 13,440,737 5,000,000 Sinclair Television Group, Inc. (a)............................. 5.50% 03/01/30 4,093,850 1,000,000 Sinclair Television Group, Inc. (a)............................. 4.13% 12/01/30 830,675 857,000 Sirius XM Radio, Inc. (a)....................................... 5.50% 07/01/29 825,038 2,000,000 Sirius XM Radio, Inc. (a)....................................... 4.13% 07/01/30 1,758,750 337,000 TEGNA, Inc. (a)................................................. 4.75% 03/15/26 334,437 9,676,000 Univision Communications, Inc. (a) (b).......................... 5.13% 02/15/25 9,519,249 4,500,000 Univision Communications, Inc. (a).............................. 9.50% 05/01/25 4,720,995 6,972,000 Univision Communications, Inc. (a) (b).......................... 6.63% 06/01/27 6,998,075 --------------- 202,894,185 --------------- BUILDING PRODUCTS -- 0.4% 1,000,000 American Builders & Contractors Supply Co., Inc. (a)............ 4.00% 01/15/28 933,910 500,000 American Builders & Contractors Supply Co., Inc. (a)............ 3.88% 11/15/29 442,412 100,000 Beacon Roofing Supply, Inc. (a)................................. 4.13% 05/15/29 87,828 100,000 Builders FirstSource, Inc. (a).................................. 4.25% 02/01/32 85,525 1,392,000 Standard Industries, Inc. (a)................................... 5.00% 02/15/27 1,320,556 2,492,000 Standard Industries, Inc. (a)................................... 4.38% 07/15/30 2,080,820 1,000,000 Standard Industries, Inc. (a)................................... 3.38% 01/15/31 800,085 1,426,000 Standard Industries, Inc. (a)................................... 4.75% 01/15/28 1,313,945 1,000,000 TopBuild Corp. (a).............................................. 3.63% 03/15/29 872,630 --------------- 7,937,711 --------------- CABLE & SATELLITE -- 6.5% 1,000,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)............... 5.50% 05/01/26 1,003,805 2,828,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)............... 5.13% 05/01/27 2,760,736 9,738,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)............... 5.00% 02/01/28 9,288,396 23,466,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)............... 5.38% 06/01/29 22,265,010 20,653,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)............... 4.75% 03/01/30 18,419,998 8,356,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)............... 4.50% 08/15/30 7,304,439 2,600,000 CCO Holdings LLC / CCO Holdings Capital Corp. (a)............... 4.25% 02/01/31 2,196,220 1,000,000 CCO Holdings LLC / CCO Holdings Capital Corp.................... 4.50% 05/01/32 849,170 819,000 CSC Holdings LLC (a)............................................ 5.50% 04/15/27 791,572 1,800,000 CSC Holdings LLC (a)............................................ 5.38% 02/01/28 1,656,000 11,819,000 CSC Holdings LLC (a)............................................ 7.50% 04/01/28 10,913,960 40,608,000 CSC Holdings LLC (a) (b)........................................ 5.75% 01/15/30 33,470,941 4,167,000 CSC Holdings LLC (a)............................................ 4.63% 12/01/30 3,195,131 2,000,000 CSC Holdings LLC (a)............................................ 4.50% 11/15/31 1,659,105 1,000,000 CSC Holdings LLC (a)............................................ 5.00% 11/15/31 774,750 357,000 DIRECTV Financing LLC / DIRECTV Financing Co., Inc. (a)......... 5.88% 08/15/27 336,696 Page 8 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) CABLE & SATELLITE (CONTINUED) $ 2,851,000 Radiate Holdco LLC / Radiate Finance, Inc. (a).................. 4.50% 09/15/26 $ 2,629,534 6,216,000 Radiate Holdco LLC / Radiate Finance, Inc. (a).................. 6.50% 09/15/28 5,434,400 --------------- 124,949,863 --------------- CASINOS & GAMING -- 4.6% 446,000 Boyd Gaming Corp. (a)........................................... 8.63% 06/01/25 466,072 500,000 Boyd Gaming Corp................................................ 4.75% 12/01/27 473,160 6,062,000 Boyd Gaming Corp. (a)........................................... 4.75% 06/15/31 5,491,566 15,340,000 Caesars Entertainment, Inc. (a) (b)............................. 6.25% 07/01/25 15,526,381 12,801,000 Caesars Entertainment, Inc. (a) (b)............................. 8.13% 07/01/27 13,392,278 8,662,000 Caesars Entertainment, Inc. (a)................................. 4.63% 10/15/29 7,437,497 4,229,000 Caesars Resort Collection LLC / CRC Finco, Inc. (a)............. 5.75% 07/01/25 4,323,497 179,000 CDI Escrow Issuer, Inc. (a)..................................... 5.75% 04/01/30 172,786 29,783,000 Fertitta Entertainment LLC / Fertitta Entertainment Finance Co., Inc. (a)..................................................... 6.75% 01/15/30 25,810,990 100,000 MGM Growth Properties Operating Partnership L.P. / MGP Finance Co-Issuer, Inc. (a).................................. 3.88% 02/15/29 94,955 430,000 MGM Resorts International....................................... 6.75% 05/01/25 440,720 2,440,000 MGM Resorts International....................................... 5.75% 06/15/25 2,426,434 716,000 Scientific Games Holdings LP / Scientific Games US FinCo, Inc.......................................................... 6.63% 03/01/30 681,174 1,250,000 Scientific Games International, Inc. (a)........................ 8.63% 07/01/25 1,311,031 3,903,000 Station Casinos LLC (a)......................................... 4.50% 02/15/28 3,548,217 8,165,000 Station Casinos LLC (a)......................................... 4.63% 12/01/31 6,854,354 --------------- 88,451,112 --------------- COMMUNICATIONS EQUIPMENT -- 1.2% 26,334,000 CommScope Technologies LLC (a) (b).............................. 6.00% 06/15/25 22,943,497 --------------- CONSTRUCTION & ENGINEERING -- 0.7% 1,500,000 Arcosa, Inc. (a)................................................ 4.38% 04/15/29 1,370,542 500,000 Atkore, Inc. (a)................................................ 4.25% 06/01/31 443,273 13,490,000 Pike Corp. (a) (b).............................................. 5.50% 09/01/28 12,395,894 --------------- 14,209,709 --------------- CONSTRUCTION MACHINERY & HEAVY TRUCKS -- 0.3% 5,565,000 Clark Equipment Co. (a)......................................... 5.88% 06/01/25 5,647,279 --------------- CONSTRUCTION MATERIALS -- 0.4% 176,000 GYP Holdings III Corp. (a)...................................... 4.63% 05/01/29 156,200 4,282,000 New Enterprise Stone & Lime Co., Inc. (a)....................... 5.25% 07/15/28 3,919,443 3,623,000 Summit Materials LLC / Summit Materials Finance Corp. (a)....... 5.25% 01/15/29 3,403,229 --------------- 7,478,872 --------------- CONSUMER FINANCE -- 0.3% 486,000 Black Knight InfoServ LLC (a)................................... 3.63% 09/01/28 451,360 3,000,000 FirstCash, Inc. (a)............................................. 4.63% 09/01/28 2,733,885 1,586,000 FirstCash, Inc. (a)............................................. 5.63% 01/01/30 1,477,740 2,144,000 PROG Holdings, Inc. (a)......................................... 6.00% 11/15/29 1,897,386 --------------- 6,560,371 --------------- DATA PROCESSING & OUTSOURCED SERVICES -- 0.0% 500,000 Block, Inc. (a)................................................. 2.75% 06/01/26 456,575 250,000 Block, Inc. (a)................................................. 3.50% 06/01/31 209,775 --------------- 666,350 --------------- See Notes to Financial Statements Page 9 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) DIVERSIFIED SUPPORT SERVICES -- 0.1% $ 1,000,000 Ritchie Bros Holdings, Inc. (a)................................. 4.75% 12/15/31 $ 1,001,540 --------------- ELECTRIC UTILITIES -- 2.2% 19,077,000 PG&E Corp. (b).................................................. 5.00% 07/01/28 17,552,939 13,327,000 PG&E Corp. (b).................................................. 5.25% 07/01/30 12,177,546 5,000,000 Vistra Operations Co. LLC (a)................................... 5.63% 02/15/27 4,930,875 3,189,000 Vistra Operations Co. LLC (a)................................... 5.00% 07/31/27 3,041,349 5,000,000 Vistra Operations Co. LLC (a)................................... 4.38% 05/01/29 4,543,700 --------------- 42,246,409 --------------- ELECTRICAL COMPONENTS & EQUIPMENT -- 0.0% 667,000 Sensata Technologies, Inc. (a).................................. 3.75% 02/15/31 565,046 --------------- ENVIRONMENTAL & FACILITIES SERVICES -- 0.7% 6,495,000 Allied Universal Holdco LLC / Allied Universal Finance Corp. (a).................................................... 9.75% 07/15/27 6,312,685 8,342,000 Allied Universal Holdco LLC / Allied Universal Finance Corp. (a) (b)................................................ 6.00% 06/01/29 6,850,993 500,000 Stericycle, Inc. (a)............................................ 3.88% 01/15/29 441,590 --------------- 13,605,268 --------------- FERTILIZERS & AGRICULTURAL CHEMICALS -- 0.1% 250,000 Scotts Miracle-Gro (The) Co..................................... 4.50% 10/15/29 219,822 1,000,000 Scotts Miracle-Gro (The) Co..................................... 4.00% 04/01/31 824,405 --------------- 1,044,227 --------------- FINANCIAL EXCHANGES & DATA -- 0.0% 750,000 MSCI, Inc. (a).................................................. 4.00% 11/15/29 691,800 --------------- FOOD DISTRIBUTORS -- 0.3% 3,488,000 US Foods, Inc. (a).............................................. 6.25% 04/15/25 3,588,280 1,397,000 US Foods, Inc. (a).............................................. 4.75% 02/15/29 1,292,421 --------------- 4,880,701 --------------- FOOD RETAIL -- 0.5% 1,000,000 Albertsons Cos., Inc. / Safeway, Inc. / New Albertsons L.P. / Albertsons LLC (a)........................................... 7.50% 03/15/26 1,052,350 3,700,000 Albertsons Cos., Inc. / Safeway, Inc. / New Albertsons L.P. / Albertsons LLC (a)........................................... 4.63% 01/15/27 3,469,601 3,000,000 Albertsons Cos., Inc. / Safeway, Inc. / New Albertsons L.P. / Albertsons LLC (a)........................................... 5.88% 02/15/28 2,919,180 2,210,000 Safeway, Inc.................................................... 7.25% 02/01/31 2,311,980 --------------- 9,753,111 --------------- HEALTH CARE DISTRIBUTORS -- 0.6% 1,421,000 AdaptHealth LLC (a)............................................. 6.13% 08/01/28 1,344,756 3,000,000 AdaptHealth LLC (a)............................................. 4.63% 08/01/29 2,546,340 7,533,000 AdaptHealth LLC (a) (b)......................................... 5.13% 03/01/30 6,487,457 691,000 RP Escrow Issuer LLC (a)........................................ 5.25% 12/15/25 643,584 --------------- 11,022,137 --------------- HEALTH CARE EQUIPMENT -- 0.1% 1,435,000 Embecta Corp. (a)............................................... 5.00% 02/15/30 1,297,541 300,000 Teleflex, Inc. (a).............................................. 4.25% 06/01/28 283,188 --------------- 1,580,729 --------------- Page 10 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) HEALTH CARE FACILITIES -- 5.1% $ 1,000,000 Acadia Healthcare Co., Inc. (a)................................. 5.50% 07/01/28 $ 975,300 1,290,000 Acadia Healthcare Co., Inc. (a)................................. 5.00% 04/15/29 1,224,094 3,652,000 CHS/Community Health Systems, Inc. (a).......................... 5.25% 05/15/30 3,207,643 2,284,000 Encompass Health Corp........................................... 5.75% 09/15/25 2,327,031 1,300,000 Encompass Health Corp........................................... 4.50% 02/01/28 1,204,079 6,080,000 Encompass Health Corp........................................... 4.75% 02/01/30 5,502,856 500,000 Encompass Health Corp........................................... 4.63% 04/01/31 441,970 28,017,000 Select Medical Corp. (a) (b).................................... 6.25% 08/15/26 27,852,540 1,168,000 Tenet Healthcare Corp. (a)...................................... 4.63% 09/01/24 1,159,304 7,492,000 Tenet Healthcare Corp. (a)...................................... 4.88% 01/01/26 7,301,478 9,689,000 Tenet Healthcare Corp. (a) (b).................................. 5.13% 11/01/27 9,419,646 4,850,000 Tenet Healthcare Corp. (a)...................................... 4.63% 06/15/28 4,578,570 33,935,000 Tenet Healthcare Corp. (a) (b).................................. 6.13% 10/01/28 32,624,770 --------------- 97,819,281 --------------- HEALTH CARE SERVICES -- 4.4% 23,318,000 DaVita, Inc. (a) (b)............................................ 4.63% 06/01/30 20,327,816 250,000 DaVita, Inc. (a)................................................ 3.75% 02/15/31 204,235 26,355,000 Global Medical Response, Inc. (a) (b)........................... 6.50% 10/01/25 25,566,195 5,022,000 MEDNAX, Inc. (a)................................................ 5.38% 02/15/30 4,687,660 23,290,000 Minerva Merger Sub, Inc. (a).................................... 6.50% 02/15/30 21,470,469 718,000 ModivCare Escrow Issuer, Inc. (a)............................... 5.00% 10/01/29 629,158 1,951,000 ModivCare, Inc. (a)............................................. 5.88% 11/15/25 1,914,341 100,000 Service Corp. International..................................... 3.38% 08/15/30 86,162 1,022,000 Team Health Holdings, Inc. (a).................................. 6.38% 02/01/25 872,533 11,462,000 US Renal Care, Inc. (a) (b)..................................... 10.63% 07/15/27 9,911,994 --------------- 85,670,563 --------------- HEALTH CARE SUPPLIES -- 1.7% 200,000 180 Medical, Inc. (a)........................................... 3.88% 10/15/29 178,281 35,501,000 Mozart Debt Merger Sub, Inc. (a) (b)............................ 5.25% 10/01/29 30,944,092 770,000 Owens & Minor, Inc. (a)......................................... 4.50% 03/31/29 693,695 --------------- 31,816,068 --------------- HEALTH CARE TECHNOLOGY -- 3.3% 36,063,000 Change Healthcare Holdings LLC / Change Healthcare Finance, Inc. (a) (b)................................................. 5.75% 03/01/25 36,018,462 4,503,000 HealthEquity, Inc. (a).......................................... 4.50% 10/01/29 4,120,245 22,267,000 Verscend Escrow Corp. (a) (b)................................... 9.75% 08/15/26 22,961,953 --------------- 63,100,660 --------------- HOTELS, RESORTS & CRUISE LINES -- 0.5% 706,000 Boyne USA, Inc. (a)............................................. 4.75% 05/15/29 655,786 1,100,000 Hilton Domestic Operating Co., Inc. (a)......................... 5.38% 05/01/25 1,125,091 4,898,000 Midwest Gaming Borrower LLC / Midwest Gaming Finance Corp. (a).................................................... 4.88% 05/01/29 4,304,191 1,100,000 Vail Resorts, Inc. (a).......................................... 6.25% 05/15/25 1,126,191 711,000 Wyndham Hotels & Resorts, Inc. (a).............................. 4.38% 08/15/28 663,733 1,425,000 XHR L.P. (a).................................................... 4.88% 06/01/29 1,314,284 --------------- 9,189,276 --------------- HOUSEHOLD PRODUCTS -- 0.2% 200,000 Central Garden & Pet Co......................................... 4.13% 10/15/30 173,200 2,154,000 Energizer Holdings, Inc. (a).................................... 6.50% 12/31/27 2,070,856 See Notes to Financial Statements Page 11 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) HOUSEHOLD PRODUCTS (CONTINUED) $ 1,350,000 Energizer Holdings, Inc. (a).................................... 4.38% 03/31/29 $ 1,123,875 --------------- 3,367,931 --------------- HUMAN RESOURCE & EMPLOYMENT SERVICES -- 0.2% 3,000,000 Tempo Acquisition LLC / Tempo Acquisition Finance Corp. (a).................................................... 5.75% 06/01/25 3,034,035 --------------- INDEPENDENT POWER PRODUCERS & ENERGY TRADERS -- 0.7% 13,427,000 Calpine Corp. (a) (b)........................................... 5.13% 03/15/28 12,193,931 667,000 Calpine Corp. (a)............................................... 4.63% 02/01/29 582,848 167,000 Calpine Corp. (a)............................................... 5.00% 02/01/31 142,621 --------------- 12,919,400 --------------- INDUSTRIAL MACHINERY -- 0.5% 5,573,000 Gates Global LLC / Gates Corp. (a).............................. 6.25% 01/15/26 5,500,467 250,000 Roller Bearing Co. of America, Inc. (a)......................... 4.38% 10/15/29 225,863 4,667,000 TK Elevator US Newco, Inc. (a).................................. 5.25% 07/15/27 4,378,159 --------------- 10,104,489 --------------- INSURANCE BROKERS -- 10.6% 38,556,000 Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (a) (b)............................................ 6.75% 10/15/27 36,503,664 1,790,000 Alliant Holdings Intermediate LLC / Alliant Holdings Co-Issuer (a)................................................ 5.88% 11/01/29 1,671,529 49,948,000 AmWINS Group, Inc. (a) (b)...................................... 4.88% 06/30/29 45,790,578 25,001,000 AssuredPartners, Inc. (a) (b)................................... 7.00% 08/15/25 24,690,988 34,582,000 AssuredPartners, Inc. (a) (b)................................... 5.63% 01/15/29 30,456,713 8,120,000 BroadStreet Partners, Inc. (a) (b).............................. 5.88% 04/15/29 7,054,656 2,996,000 GTCR AP Finance, Inc. (a)....................................... 8.00% 05/15/27 2,988,720 42,671,000 HUB International Ltd. (a) (b).................................. 7.00% 05/01/26 42,283,974 14,730,000 HUB International Ltd. (a)...................................... 5.63% 12/01/29 13,533,040 --------------- 204,973,862 --------------- INTEGRATED TELECOMMUNICATION SERVICES -- 2.9% 500,000 Ciena Corp. (a)................................................. 4.00% 01/31/30 456,635 1,930,000 Frontier Communications Holdings LLC (a)........................ 5.88% 10/15/27 1,851,276 4,890,000 Frontier Communications Holdings LLC (a)........................ 5.00% 05/01/28 4,470,927 24,717,000 Frontier Communications Holdings LLC (a) (b).................... 6.75% 05/01/29 22,302,767 1,429,000 Frontier Communications Holdings LLC (a)........................ 6.00% 01/15/30 1,244,223 3,804,000 Zayo Group Holdings, Inc. (a)................................... 4.00% 03/01/27 3,316,042 25,891,000 Zayo Group Holdings, Inc. (a) (b)............................... 6.13% 03/01/28 21,717,759 --------------- 55,359,629 --------------- INTERACTIVE HOME ENTERTAINMENT -- 0.2% 4,601,000 Playtika Holding Corp. (a)...................................... 4.25% 03/15/29 4,151,574 --------------- INTERACTIVE MEDIA & SERVICES -- 0.0% 500,000 Match Group Holdings II LLC (a)................................. 4.63% 06/01/28 466,805 --------------- INTERNET & DIRECT MARKETING RETAIL -- 1.0% 20,909,000 Cars.com, Inc. (a) (b).......................................... 6.38% 11/01/28 19,704,328 --------------- IT CONSULTING & OTHER SERVICES -- 0.5% 4,071,000 CDK Global, Inc. (b)............................................ 4.88% 06/01/27 4,096,159 4,448,000 CDK Global, Inc. (a)............................................ 5.25% 05/15/29 4,487,810 250,000 Gartner, Inc. (a)............................................... 4.50% 07/01/28 239,950 250,000 Gartner, Inc. (a)............................................... 3.75% 10/01/30 223,331 --------------- 9,047,250 --------------- Page 12 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) LEISURE FACILITIES -- 0.2% $ 250,000 Cedar Fair L.P.................................................. 5.25% 07/15/29 $ 236,927 1,850,000 Cedar Fair L.P. / Canada's Wonderland Co. / Magnum Management Corp. / Millennium Op............................. 5.38% 04/15/27 1,801,373 717,000 SeaWorld Parks & Entertainment, Inc. (a)........................ 5.25% 08/15/29 653,338 1,000,000 Six Flags Entertainment Corp. (a)............................... 5.50% 04/15/27 973,745 1,000,000 Six Flags Theme Parks, Inc. (a)................................. 7.00% 07/01/25 1,040,065 --------------- 4,705,448 --------------- MANAGED HEALTH CARE -- 2.0% 2,000,000 Centene Corp.................................................... 4.25% 12/15/27 1,934,680 1,000,000 Molina Healthcare, Inc. (a)..................................... 4.38% 06/15/28 936,075 100,000 Molina Healthcare, Inc. (a)..................................... 3.88% 11/15/30 90,349 7,168,000 MPH Acquisition Holdings LLC (a) (b)............................ 5.50% 09/01/28 6,651,474 32,472,000 MPH Acquisition Holdings LLC (a) (b)............................ 5.75% 11/01/28 28,273,874 --------------- 37,886,452 --------------- METAL & GLASS CONTAINERS -- 0.8% 1,000,000 Ball Corp....................................................... 2.88% 08/15/30 842,490 3,864,000 Berry Global, Inc. (a).......................................... 4.50% 02/15/26 3,805,828 1,325,000 Owens-Brockway Glass Container, Inc. (a)........................ 5.88% 08/15/23 1,343,331 6,550,000 Owens-Brockway Glass Container, Inc. (a) (b).................... 6.38% 08/15/25 6,543,090 512,000 Owens-Brockway Glass Container, Inc. (a)........................ 6.63% 05/13/27 504,998 2,200,000 Silgan Holdings, Inc............................................ 4.13% 02/01/28 2,054,822 1,000,000 TriMas Corp. (a)................................................ 4.13% 04/15/29 896,330 --------------- 15,990,889 --------------- MOVIES & ENTERTAINMENT -- 0.6% 5,494,000 Live Nation Entertainment, Inc. (a)............................. 5.63% 03/15/26 5,432,303 523,000 Live Nation Entertainment, Inc. (a)............................. 6.50% 05/15/27 539,286 5,895,000 Live Nation Entertainment, Inc. (a)............................. 4.75% 10/15/27 5,545,721 1,000,000 WMG Acquisition Corp. (a)....................................... 3.00% 02/15/31 834,105 --------------- 12,351,415 --------------- OIL & GAS EXPLORATION & PRODUCTION -- 0.0% 175,000 Chesapeake Energy Corp. (a)..................................... 5.50% 02/01/26 173,722 100,000 Chesapeake Energy Corp. (a)..................................... 5.88% 02/01/29 98,999 --------------- 272,721 --------------- OIL & GAS REFINING & MARKETING -- 0.0% 415,000 Murphy Oil USA, Inc............................................. 5.63% 05/01/27 409,821 --------------- PACKAGED FOODS & MEATS -- 0.5% 2,190,000 B&G Foods, Inc.................................................. 5.25% 04/01/25 2,088,631 750,000 Performance Food Group, Inc. (a)................................ 5.50% 10/15/27 727,414 2,116,000 Post Holdings, Inc. (a)......................................... 5.75% 03/01/27 2,089,233 4,434,000 Post Holdings, Inc. (a)......................................... 5.63% 01/15/28 4,199,552 --------------- 9,104,830 --------------- PAPER PACKAGING -- 1.9% 30,696,000 Graham Packaging Co., Inc. (a) (b).............................. 7.13% 08/15/28 27,722,171 2,000,000 Graphic Packaging International LLC (a)......................... 3.50% 03/15/28 1,803,290 1,000,000 Graphic Packaging International LLC (a)......................... 3.50% 03/01/29 885,770 4,962,000 Pactiv Evergreen Group Issuer, Inc. / Pactiv Evergreen Group Issuer LLC / Reynolds Gro (a)................................ 4.00% 10/15/27 4,336,317 376,000 Sealed Air Corp. (a)............................................ 5.50% 09/15/25 384,930 See Notes to Financial Statements Page 13 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) PAPER PACKAGING (CONTINUED) $ 1,434,000 Sealed Air Corp. (a)............................................ 5.00% 04/15/29 $ 1,425,152 --------------- 36,557,630 --------------- PERSONAL PRODUCTS -- 0.0% 250,000 Prestige Brands, Inc. (a)....................................... 5.13% 01/15/28 237,804 750,000 Prestige Brands, Inc. (a)....................................... 3.75% 04/01/31 636,926 --------------- 874,730 --------------- PHARMACEUTICALS -- 2.3% 2,652,000 Bausch Health Americas, Inc. (a)................................ 9.25% 04/01/26 2,635,690 8,046,000 Bausch Health Americas, Inc. (a)................................ 8.50% 01/31/27 7,615,459 500,000 Catalent Pharma Solutions, Inc. (a)............................. 5.00% 07/15/27 485,030 250,000 Catalent Pharma Solutions, Inc. (a)............................. 3.13% 02/15/29 217,265 950,000 Charles River Laboratories International, Inc. (a).............. 4.25% 05/01/28 908,214 1,000,000 Charles River Laboratories International, Inc. (a).............. 3.75% 03/15/29 906,450 1,000,000 Charles River Laboratories International, Inc. (a).............. 4.00% 03/15/31 894,329 1,333,000 Emergent BioSolutions, Inc. (a)................................. 3.88% 08/15/28 1,133,723 14,914,000 Horizon Therapeutics USA, Inc. (a) (b).......................... 5.50% 08/01/27 14,932,121 800,000 IQVIA, Inc. (a)................................................. 5.00% 10/15/26 796,968 1,278,000 IQVIA, Inc. (a)................................................. 5.00% 05/15/27 1,267,757 2,804,000 Organon & Co. / Organon Foreign Debt Co-Issuer B.V. (a)......... 5.13% 04/30/31 2,538,027 10,000,000 Par Pharmaceutical, Inc. (a) (b)................................ 7.50% 04/01/27 9,135,600 --------------- 43,466,633 --------------- REAL ESTATE SERVICES -- 0.0% 290,000 Tri Pointe Homes, Inc........................................... 5.25% 06/01/27 280,560 500,000 Tri Pointe Homes, Inc........................................... 5.70% 06/15/28 480,060 --------------- 760,620 --------------- RESEARCH & CONSULTING SERVICES -- 1.2% 5,832,000 Clarivate Science Holdings Corp. (a)............................ 4.88% 07/01/29 5,146,828 12,324,000 CoreLogic, Inc. (a) (b)......................................... 4.50% 05/01/28 10,936,687 4,254,000 Nielsen Finance LLC / Nielsen Finance Co. (a)................... 5.63% 10/01/28 4,128,358 2,666,000 Nielsen Finance LLC / Nielsen Finance Co. (a)................... 5.88% 10/01/30 2,570,637 --------------- 22,782,510 --------------- RESTAURANTS -- 0.5% 661,000 Brinker International, Inc. (a)................................. 5.00% 10/01/24 660,355 9,310,000 IRB Holding Corp. (a) (b)....................................... 7.00% 06/15/25 9,542,564 --------------- 10,202,919 --------------- SECURITY & ALARM SERVICES -- 0.2% 1,200,000 Brink's (The) Co. (a)........................................... 5.50% 07/15/25 1,205,160 2,061,000 Brink's (The) Co. (a)........................................... 4.63% 10/15/27 1,955,374 --------------- 3,160,534 --------------- SEMICONDUCTORS -- 0.1% 1,550,000 Qorvo, Inc...................................................... 4.38% 10/15/29 1,442,089 1,000,000 Qorvo, Inc. (a)................................................. 3.38% 04/01/31 839,130 --------------- 2,281,219 --------------- SPECIALIZED CONSUMER SERVICES -- 0.3% 4,000,000 Aramark Services, Inc. (a)...................................... 6.38% 05/01/25 4,079,220 1,055,000 Aramark Services, Inc. (a)...................................... 5.00% 02/01/28 983,714 775,000 Carriage Services, Inc. (a)..................................... 4.25% 05/15/29 675,288 --------------- 5,738,222 --------------- Page 14 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- CORPORATE BONDS AND NOTES (CONTINUED) SPECIALIZED FINANCE -- 0.2% $ 3,552,000 Park Intermediate Holdings LLC / PK Domestic Property LLC / PK Finance Co-Issuer (a)..................................... 4.88% 05/15/29 $ 3,257,951 --------------- SPECIALTY CHEMICALS -- 0.3% 4,820,000 Avantor Funding, Inc. (a)....................................... 4.63% 07/15/28 4,592,159 500,000 Axalta Coating Systems LLC (a).................................. 3.38% 02/15/29 433,315 250,000 HB Fuller Co.................................................... 4.25% 10/15/28 224,087 --------------- 5,249,561 --------------- SPECIALTY STORES -- 0.0% 350,000 PetSmart, Inc. / PetSmart Finance Corp. (a)..................... 4.75% 02/15/28 326,751 350,000 PetSmart, Inc. / PetSmart Finance Corp. (a)..................... 7.75% 02/15/29 348,640 --------------- 675,391 --------------- STEEL -- 0.0% 350,000 United States Steel Corp........................................ 6.88% 03/01/29 356,568 --------------- SYSTEMS SOFTWARE -- 2.1% 8,407,000 Boxer Parent Co., Inc. (a) (b).................................. 9.13% 03/01/26 8,521,293 2,500,000 Crowdstrike Holdings, Inc....................................... 3.00% 02/15/29 2,222,500 250,000 PTC, Inc. (a)................................................... 3.63% 02/15/25 242,506 29,450,000 SS&C Technologies, Inc. (a) (b)................................. 5.50% 09/30/27 28,898,402 --------------- 39,884,701 --------------- TECHNOLOGY DISTRIBUTORS -- 0.1% 1,000,000 CDW LLC / CDW Finance Corp...................................... 4.25% 04/01/28 937,360 750,000 CDW LLC / CDW Finance Corp...................................... 3.25% 02/15/29 661,027 --------------- 1,598,387 --------------- TECHNOLOGY HARDWARE, STORAGE & PERIPHERALS -- 0.0% 667,000 Xerox Holdings Corp. (a)........................................ 5.00% 08/15/25 639,653 --------------- TIRES & RUBBER -- 0.1% 2,845,000 Goodyear Tire & Rubber (The) Co................................. 5.25% 07/15/31 2,457,824 --------------- TRADING COMPANIES & DISTRIBUTORS -- 0.6% 2,715,000 SRS Distribution, Inc. (a)...................................... 6.13% 07/01/29 2,399,354 9,816,000 SRS Distribution, Inc. (a) (b).................................. 6.00% 12/01/29 8,625,221 257,000 United Rentals North America, Inc............................... 5.50% 05/15/27 261,792 --------------- 11,286,367 --------------- TRUCKING -- 0.7% 6,481,000 Hertz (The) Corp. (a)........................................... 4.63% 12/01/26 5,916,213 7,994,000 Hertz (The) Corp. (a)........................................... 5.00% 12/01/29 6,985,077 1,064,000 XPO Logistics, Inc. (a)......................................... 6.25% 05/01/25 1,089,228 --------------- 13,990,518 --------------- WIRELESS TELECOMMUNICATION SERVICES -- 0.0% 500,000 SBA Communications Corp......................................... 3.88% 02/15/27 475,100 --------------- TOTAL CORPORATE BONDS AND NOTES.............................................................. 1,558,584,815 (Cost $1,683,288,705) --------------- FOREIGN CORPORATE BONDS AND NOTES -- 13.3% APPLICATION SOFTWARE -- 0.3% 4,318,000 ION Trading Technologies S.A.R.L. (a)........................... 5.75% 05/15/28 4,048,384 2,336,000 Open Text Corp. (a)............................................. 3.88% 02/15/28 2,131,340 --------------- 6,179,724 --------------- See Notes to Financial Statements Page 15 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- FOREIGN CORPORATE BONDS AND NOTES (CONTINUED) AUTO PARTS & EQUIPMENT -- 0.2% $ 4,432,000 Clarios Global L.P. / Clarios US Finance Co. (a)................ 8.50% 05/15/27 $ 4,434,836 --------------- BUILDING PRODUCTS -- 1.2% 15,634,000 Cemex SAB de C.V. (a) (b)....................................... 7.38% 06/05/27 16,476,438 4,700,000 Cemex SAB de C.V. (a)........................................... 5.45% 11/19/29 4,519,050 2,000,000 Cemex SAB de C.V. (a)........................................... 5.20% 09/17/30 1,887,780 1,000,000 Masonite International Corp. (a)................................ 5.38% 02/01/28 959,325 --------------- 23,842,593 --------------- CABLE & SATELLITE -- 0.0% 250,000 Virgin Media Finance PLC (a).................................... 5.00% 07/15/30 217,825 --------------- CASINOS & GAMING -- 0.2% 3,000,000 International Game Technology PLC (a)........................... 4.13% 04/15/26 2,821,770 500,000 International Game Technology PLC (a)........................... 5.25% 01/15/29 474,905 --------------- 3,296,675 --------------- DATA PROCESSING & OUTSOURCED SERVICES -- 0.6% 15,159,000 Paysafe Finance PLC / Paysafe Holdings US Corp. (a) (b)......... 4.00% 06/15/29 12,374,746 --------------- DIVERSIFIED SUPPORT SERVICES -- 0.1% 950,000 Ritchie Bros Auctioneers, Inc. (a).............................. 5.38% 01/15/25 953,710 --------------- ELECTRICAL COMPONENTS & EQUIPMENT -- 0.0% 500,000 Sensata Technologies B.V. (a)................................... 4.00% 04/15/29 446,350 --------------- ENVIRONMENTAL & FACILITIES SERVICES -- 0.7% 1,743,000 Allied Universal Holdco LLC / Allied Universal Finance Corp. / Atlas Luxco 4 S.A.R.L. (a)................................... 4.63% 06/01/28 1,544,577 1,162,000 Allied Universal Holdco LLC / Allied Universal Finance Corp. / Atlas Luxco 4 S.A.R.L. (a)................................... 4.63% 06/01/28 1,021,200 1,027,000 GFL Environmental, Inc. (a)..................................... 3.75% 08/01/25 974,351 500,000 GFL Environmental, Inc. (a)..................................... 5.13% 12/15/26 492,070 7,430,000 GFL Environmental, Inc. (a) (b)................................. 4.00% 08/01/28 6,548,431 1,784,000 GFL Environmental, Inc. (a)..................................... 4.75% 06/15/29 1,621,344 1,000,000 GFL Environmental, Inc. (a)..................................... 4.38% 08/15/29 888,420 --------------- 13,090,393 --------------- INTEGRATED TELECOMMUNICATION SERVICES -- 0.9% 2,989,000 Altice France S.A. (a).......................................... 5.50% 01/15/28 2,637,673 500,000 Altice France S.A. (a).......................................... 5.13% 07/15/29 424,105 17,387,000 Altice France S.A. (a) (b)...................................... 5.50% 10/15/29 14,842,152 --------------- 17,903,930 --------------- LIFE SCIENCES TOOLS & SERVICES -- 0.1% 2,604,000 Grifols Escrow Issuer S.A. (a).................................. 4.75% 10/15/28 2,379,639 --------------- METAL & GLASS CONTAINERS -- 0.0% 200,000 Ardagh Packaging Finance PLC / Ardagh Holdings USA, Inc. (a)..................................................... 4.13% 08/15/26 185,203 --------------- PHARMACEUTICALS -- 7.2% 49,183,000 Bausch Health Cos., Inc. (a) (b)................................ 6.13% 04/15/25 49,398,176 300,000 Bausch Health Cos., Inc. (a).................................... 9.00% 12/15/25 301,500 11,786,000 Bausch Health Cos., Inc. (a).................................... 6.13% 02/01/27 11,337,307 4,349,000 Bausch Health Cos., Inc. (a).................................... 5.00% 01/30/28 3,215,542 1,815,000 Bausch Health Cos., Inc. (a).................................... 4.88% 06/01/28 1,612,555 1,384,000 Bausch Health Cos., Inc. (a).................................... 5.00% 02/15/29 973,512 3,818,000 Bausch Health Cos., Inc. (a).................................... 6.25% 02/15/29 2,782,864 Page 16 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- FOREIGN CORPORATE BONDS AND NOTES (CONTINUED) PHARMACEUTICALS (CONTINUED) $ 3,000,000 Bausch Health Cos., Inc. (a).................................... 7.25% 05/30/29 $ 2,268,795 5,000,000 Bausch Health Cos., Inc. (a).................................... 5.25% 01/30/30 3,476,400 1,730,000 Bausch Health Cos., Inc. (a).................................... 5.25% 02/15/31 1,204,556 169,000 Cheplapharm Arzneimittel GmbH (a)............................... 5.50% 01/15/28 162,045 16,083,000 Endo Dac / Endo Finance LLC / Endo Finco, Inc. (a) (b).......... 9.50% 07/31/27 12,652,657 16,658,000 Endo Dac / Endo Finance LLC / Endo Finco, Inc. (a) (b).......... 6.00% 06/30/28 7,287,875 10,000,000 Endo Luxembourg Finance Co. I S.A.R.L / Endo U.S., Inc. (a) (b)................................................. 6.13% 04/01/29 8,760,550 286,000 Jazz Securities DAC (a)......................................... 4.38% 01/15/29 263,842 1,000,000 Mallinckrodt International Finance S.A. / Mallinckrodt CB LLC (a) (c) (d).............................................. 5.63% 10/15/23 526,365 1,750,000 Mallinckrodt International Finance S.A. / Mallinckrodt CB LLC (a) (c) (d).............................................. 5.50% 04/15/25 921,139 8,470,000 Mallinckrodt International Finance S.A. / Mallinckrodt CB LLC (a) (d).................................................. 10.00% 04/15/25 8,883,886 22,400,000 Mallinckrodt International Finance S.A. / Mallinckrodt CB LLC (a) (d).................................................. 10.00% 04/15/25 21,498,512 --------------- 137,528,078 --------------- RESEARCH & CONSULTING SERVICES -- 0.2% 3,774,000 Camelot Finance S.A. (a)........................................ 4.50% 11/01/26 3,552,428 --------------- RESTAURANTS -- 0.7% 431,000 1011778 BC ULC / New Red Finance, Inc. (a)...................... 4.38% 01/15/28 393,846 16,243,000 1011778 BC ULC / New Red Finance, Inc. (a)...................... 4.00% 10/15/30 13,905,632 --------------- 14,299,478 --------------- SPECIALTY CHEMICALS -- 0.1% 1,000,000 Axalta Coating Systems LLC / Axalta Coating Systems Dutch Holding B B.V. (a)........................................... 4.75% 06/15/27 951,275 --------------- TRADING COMPANIES & DISTRIBUTORS -- 0.8% 6,779,000 VistaJet Malta Finance PLC / XO Management Holding, Inc. (a)..................................................... 7.88% 05/01/27 6,388,936 9,742,000 VistaJet Malta Finance PLC / XO Management Holding, Inc. (a)..................................................... 6.38% 02/01/30 8,535,551 --------------- 14,924,487 --------------- TOTAL FOREIGN CORPORATE BONDS AND NOTES...................................................... 256,561,370 (Cost $283,584,776) --------------- PRINCIPAL STATED VALUE DESCRIPTION RATE (e) MATURITY (f) VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- FOREIGN CORPORATE BONDS AND NOTES (CONTINUED) SENIOR FLOATING-RATE LOAN INTERESTS -- 32.0% AEROSPACE & DEFENSE -- 0.4% 536,060 Atlantic Aviation FBO, Inc. (KKR Apple Bidco, LLC), Term Loan (Second Lien), 1 Mo. LIBOR + 5.75%, 0.50% Floor......... 6.51% 07/31/29 534,721 6,861,970 Peraton Corp., Term Loan B, 1 Mo. LIBOR + 3.75%, 0.75% Floor........................................................ 4.51% 02/01/28 6,800,830 --------------- 7,335,551 --------------- APPLICATION SOFTWARE -- 11.6% 2,657 Epicor Software Corp., First Lien Term Loan C, 1 Mo. LIBOR + 3.25%, 0.75% Floor........................................... 4.01% 07/30/27 2,638 See Notes to Financial Statements Page 17 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED VALUE DESCRIPTION RATE (e) MATURITY (f) VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- SENIOR FLOATING-RATE LOAN INTERESTS (CONTINUED) APPLICATION SOFTWARE (CONTINUED) $ 3,000,000 Epicor Software Corp., Term Loan (Second Lien), 1 Mo. LIBOR + 7.75%, 1.00% Floor......................................... 8.75% 07/30/28 $ 3,054,390 441,454 Flexera Software LLC, 2020 Term Loan B, 6 Mo. LIBOR + 3.75%, 0.75% Floor........................................... 4.50% 01/26/28 438,143 21,449,016 Gainwell Acquisition Corp. (fka Milano), Term Loan B, 3 Mo. LIBOR + 4.00%, 0.75% Floor................................... 5.01% 10/01/27 21,355,284 24,153,456 Greeneden U.S. Holdings II LLC (Genesys Telecommunications Lboratories, Inc.), Initial Dollar Term Loan, 1 Mo. LIBOR + 4.00%, 0.75% Floor........................................... 4.76% 12/01/27 24,062,881 14,236,506 Hyland Software, Inc., Term Loan (Second Lien), 1 Mo. LIBOR + 6.25%, 0.75% Floor......................................... 7.01% 07/10/25 14,165,323 19,885,011 Hyland Software, Inc., Term Loan B, 1 Mo. LIBOR + 3.50%, 0.75% Floor.................................................. 4.26% 07/01/24 19,799,108 21,193,080 Internet Brands, Inc. (WebMD/MH Sub I LLC), 2020 June New Term Loan, 1 Mo. LIBOR + 3.75%, 1.00% Floor.................. 4.75% 09/15/24 21,075,246 24,295,853 Internet Brands, Inc. (WebMD/MH Sub I LLC), Initial Term Loan, 1 Mo. LIBOR + 3.50%, 0.00% Floor....................... 4.26% 09/13/24 24,125,783 19,021,355 Internet Brands, Inc. (WebMD/MH Sub I LLC), Term Loan (Second Lien), 1 Mo. LIBOR + 6.25%, 0.00% Floor.............. 6.71% 02/23/29 18,778,833 1,053,955 ION Trading Technologies, Term Loan B, 1 Mo. LIBOR + 4.75%, 0.00% Floor.................................................. 5.51% 04/01/28 1,046,640 16,767,346 LogMeIn, Inc. (GoTo Group, Inc.), Term Loan B, 1 Mo. LIBOR + 4.75%, 0.00% Floor......................................... 5.30% 08/31/27 16,086,257 5,022,236 Micro Focus International (MA Financeco LLC), Term Loan B-4, 3 Mo. LIBOR + 4.25%, 1.00% Floor............................. 5.25% 06/05/25 4,983,515 8,944,728 RealPage, Inc., Term Loan (Second Lien), 1 Mo. LIBOR + 6.50%, 0.75% Floor........................................... 7.26% 04/22/29 8,976,392 42,552,806 SolarWinds Holdings, Inc., Initial Term Loan, 1 Mo. LIBOR + 2.75%, 0.00% Floor........................................... 3.51% 02/05/24 42,114,086 4,061,120 Solera Holdings, Inc. (Polaris Newco), Term Loan B, 1 Mo. LIBOR + 4.00%, 0.50% Floor................................... 4.76% 06/04/28 4,013,727 --------------- 224,078,246 --------------- ASSET MANAGEMENT & CUSTODY BANKS -- 0.4% 7,000,000 Edelman Financial Engines Center, LLC, Term Loan (Second Lien), 1 Mo. LIBOR + 6.75%, 0.00% Floor...................... 7.51% 07/20/26 6,839,000 --------------- BROADCASTING -- 0.0% 640,489 Diamond Sports Group, LLC, Priority Term Loan, 3 Mo. LIBOR + 8.00%, 1.00% Floor......................................... 9.00% 05/25/26 649,994 --------------- CASINOS & GAMING -- 1.2% 23,070,098 Golden Nugget, Inc. (Fertitta Entertainment LLC), Initial Term Loan B, 1 Mo. SOFR + 4.00%, 0.50% Floor...................... 4.70% 01/27/29 22,948,057 --------------- EDUCATION SERVICES -- 0.0% 357,709 Ascensus Holdings, Inc. (Mercury), Incremental Term Loan (Second Lien), 1 Mo. LIBOR + 6.50%, 0.50% Floor.............. 7.50% 08/02/29 352,343 --------------- ELECTRONIC EQUIPMENT & INSTRUMENTS -- 0.4% 7,496,753 Verifone Systems, Inc., Initial Term Loan, 3 Mo. LIBOR + 4.00%, 0.00% Floor........................................... 4.50% 08/20/25 7,351,541 --------------- ENVIRONMENTAL & FACILITIES SERVICES -- 0.9% 18,551,308 Packers Holdings LLC (PSSI), Term Loan B, 6 Mo. LIBOR + 3.25%, 0.75% Floor........................................... 4.00% 03/15/28 18,194,195 --------------- Page 18 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED VALUE DESCRIPTION RATE (e) MATURITY (f) VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- SENIOR FLOATING-RATE LOAN INTERESTS (CONTINUED) HEALTH CARE DISTRIBUTORS -- 0.2% $ 4,717,579 Radiology Partners, Inc., Term Loan B, 1 Mo. LIBOR + 4.25%, 0.00% Floor.................................................. 4.80% - 4.88% 07/09/25 $ 4,637,993 --------------- HEALTH CARE SERVICES -- 5.4% 4,975,279 AccentCare (Pluto Acquisition I, Inc.), New Term Loan B, 3 Mo. LIBOR + 4.00%, 0.00% Floor................................... 4.21% 06/20/26 4,875,773 5,940,954 ADMI Corp. (Aspen Dental), 2021 Incremental Term Loan B-3, 1 Mo. LIBOR + 3.50%, 0.50% Floor............................. 4.26% 12/23/27 5,866,692 2,088,649 Air Methods Corp., Term Loan B, 3 Mo. LIBOR + 3.50%, 1.00% Floor........................................................ 4.51% 04/21/24 1,991,277 6,084 CHG Healthcare Services, Inc., Term Loan B, 3 Mo. LIBOR + 3.50%, 0.50% Floor........................................... 4.51% 09/30/28 6,040 2,415,232 CHG Healthcare Services, Inc., Term Loan B, 6 Mo. LIBOR + 3.50%, 0.50% Floor........................................... 5.00% 09/30/28 2,397,674 6,294,842 Civitas Solutions (National Mentor Holdings, Inc.), Term Loan B, 1 Mo. LIBOR + 3.75%, 0.75% Floor............................. 4.52% 03/01/28 6,037,823 7,849,150 Civitas Solutions (National Mentor Holdings, Inc.), Term Loan B, 3 Mo. LIBOR + 3.75%, 0.75% Floor............................. 4.76% 03/01/28 7,528,669 444,423 Civitas Solutions (National Mentor Holdings, Inc.), Term Loan C, 3 Mo. LIBOR + 3.75%, 0.75% Floor............................. 4.76% 03/01/28 426,277 12,532,029 Envision Healthcare Corp., Initial Term Loan, 1 Mo. LIBOR + 3.75%, 0.00% Floor........................................... 4.51% 10/10/25 7,613,207 870,769 Help at Home (HAH Group Holding Co. LLC), Delayed Draw Term Loan, 3 Mo. LIBOR + 5.00%, 1.00% Floor.................. 6.00% 10/29/27 855,531 6,915,860 Help at Home (HAH Group Holding Co. LLC), Initial Term Loan B, 3 Mo. LIBOR + 5.00%, 1.00% Floor..................... 6.00% 10/29/27 6,794,833 16,429,090 Packaging Coordinators, Inc. (PCI Pharma), Term Loan B, 3 Mo. LIBOR + 3.75%, 0.75% Floor................................... 4.76% 11/30/27 16,326,408 1,044,177 SCP Health (Onex TSG Intermediate Corp.), Initial Term Loan, 1 Mo. LIBOR + 4.75%, 0.75% Floor............................. 5.51% 02/28/28 1,030,937 3,233,143 Surgery Centers Holdings, Inc., 2021 Term Loan B, 1 Mo. LIBOR + 3.75%, 0.75% Floor................................... 4.50% 08/31/26 3,200,359 21,675,450 Team Health, Inc., Term Loan B, 1 Mo. LIBOR + 2.75%, 1.00% Floor........................................................ 3.75% 02/06/24 20,140,178 3,573,126 U.S. Anesthesia Partners Intermediate Holdings, Inc., New Term Loan B, 3 Mo. LIBOR + 4.25%, 0.50% Floor..................... 4.75% 09/30/28 3,527,569 17,009,243 U.S. Renal Care, Inc., Term Loan B, 1 Mo. LIBOR + 5.00%, 0.00% Floor.................................................. 5.76% 06/28/26 15,010,657 --------------- 103,629,904 --------------- HEALTH CARE TECHNOLOGY -- 2.1% 8,102,655 Ciox Health (Healthport/CT Technologies Intermediate Holdings, Inc.), New Term Loan B, 1 Mo. LIBOR + 4.25%, 0.75% Floor..... 5.01% 12/16/25 8,007,692 887,571 Clario (fka eResearch Technology, Inc.), Incremental Term Loan B, 1 Mo. LIBOR + 4.50%, 1.00% Floor..................... 5.50% 02/04/27 883,630 2,261,209 Navicure, Inc. (Waystar Technologies, Inc.), Term Loan B, 1 Mo. LIBOR + 4.00%, 0.00% Floor................................... 4.76% 10/23/26 2,256,981 1,336,584 Press Ganey (Azalea TopCo, Inc.), 2021 Term Loan, 3 Mo. LIBOR + 3.75%, 0.75% Floor . ................................ 4.99% 07/25/26 1,324,060 3,375 Press Ganey (Azalea TopCo, Inc.), 2021 Term Loan, 1 Mo. LIBOR + 3.75%, 0.75% Floor . ................................ 4.51% 07/25/26 3,344 28,125,605 Verscend Technologies, Inc. (Cotiviti), New Term Loan B-1, 1 Mo. LIBOR + 4.00%, 0.00% Floor............................. 4.46% 08/27/25 28,002,696 --------------- 40,478,403 --------------- See Notes to Financial Statements Page 19 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED VALUE DESCRIPTION RATE (e) MATURITY (f) VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- SENIOR FLOATING-RATE LOAN INTERESTS (CONTINUED) INSURANCE BROKERS -- 0.4% $ 19,441 HUB International Ltd., New Term Loan B-3, 2 Mo. LIBOR + 3.25%, 0.75% Floor........................................... 4.18% 4/25/25 $ 19,325 7,659,656 HUB International Ltd., New Term Loan B-3, 3 Mo. LIBOR + 3.25%, 0.75% Floor........................................... 4.35% 4/25/25 7,613,851 --------------- 7,633,176 --------------- INTEGRATED TELECOMMUNICATION SERVICES -- 0.6% 8,425,895 Frontier Communications Corp., Term Loan B, 3 Mo. LIBOR + 3.75%, 0.75% Floor........................................... 4.81% 05/01/28 8,271,448 3,275,286 Numericable (Altice France S.A. or SFR), Term Loan B-13, 1 Mo. LIBOR + 4.00%, 0.00% Floor............................. 4.51% 08/14/26 3,248,003 --------------- 11,519,451 --------------- MANAGED HEALTH CARE -- 0.3% 4,975,000 Multiplan, Inc. (MPH), Term Loan B, 3 Mo. LIBOR + 4.25%, 0.50% Floor.................................................. 4.75% 08/31/28 4,770,577 --------------- MOVIES & ENTERTAINMENT -- 1.2% 1,572,827 Cineworld Group PLC (Crown), New Priority Term Loan, 6 Mo. LIBOR + 8.25%, 1.00% Floor................................... 9.25% 05/23/24 1,672,119 2,889,938 Cineworld Group PLC (Crown), Priority Term Loan B-1, Fixed Rate at 15.25% (g)........................................... 15.25% 05/23/24 3,340,594 19,324,050 Cineworld Group PLC (Crown), Term Loan B, 3 Mo. LIBOR + 2.50%, 1.00% Floor........................................... 4.00% 02/28/25 14,708,501 2,305,510 PUG LLC (Stubhub/Viagogo), Incremental Term Loan B-2, 1 Mo. LIBOR + 4.25%, 0.50% Floor............................. 4.75% 02/13/27 2,276,691 1,417,155 PUG LLC (Stubhub/Viagogo), Term Loan B, 1 Mo. LIBOR + 3.50%, 0.00% Floor........................................... 4.26% 02/12/27 1,379,955 --------------- 23,377,860 --------------- PHARMACEUTICALS -- 2.8% 2,228,196 Akorn, Inc., Exit Take Back Term Loan, 3 Mo. LIBOR + 7.50%, 1.00% Floor (h).............................................. 8.50% 09/30/25 2,217,056 5,544,000 Endo LLC, 2021 Term Loan B, 3 Mo. LIBOR + 5.00%, 0.75% Floor........................................................ 5.81% 03/27/28 5,129,586 20,240,426 Mallinckrodt International Finance S.A., 2017 Term Loan B, 3 Mo. LIBOR + 5.25%, 0.75% Floor (d)......................... 6.25% 09/24/24 18,772,995 1,163,800 Mallinckrodt International Finance S.A., 2018 Incremental Term Loan, 3 Mo. LIBOR + 5.50%, 0.75% Floor (d)................... 6.25% 02/24/25 1,077,678 26,145,242 Nestle Skin Health (Sunshine Lux VII S.A.R.L./Galderma), 2021 Term Loan B-3, 3 Mo. LIBOR + 3.75%, 0.75% Floor.............. 4.76% 10/02/26 25,888,496 1,503,879 Padagis LLC, Term Loan B, 3 Mo. LIBOR + 4.75%, 0.50% Floor........................................................ 5.72% 07/06/28 1,500,119 --------------- 54,585,930 --------------- RESEARCH & CONSULTING SERVICES -- 0.1% 1,960,064 Veritext Corp. (VT TopCo, Inc.), Non-Fungible Term Loan (First Lien), 3 Mo. LIBOR + 3.75%, 0.75% Floor...................... 4.76% 08/10/25 1,939,248 --------------- RESTAURANTS -- 0.1% 1,892,363 Portillo's Holdings LLC, Term Loan B-3, 1 Mo. LIBOR + 5.50%, 1.00% Floor.................................................. 6.50% 08/30/24 1,880,536 --------------- Page 20 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED VALUE DESCRIPTION RATE (e) MATURITY (f) VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- SENIOR FLOATING-RATE LOAN INTERESTS (CONTINUED) SOFT DRINKS -- 0.1% $ 1,033,595 Tropicana (Naked Juice LLC/Bengal Debt Merger Sub, LLC), Term Loan (Second Lien), 3 Mo. SOFR + 6.00%, 0.50% Floor..... 6.75% 01/24/30 $ 1,025,843 --------------- SPECIALIZED CONSUMER SERVICES -- 2.1% 31,741,493 Asurion LLC, Term Loan B-3 (Second Lien), 1 Mo. LIBOR + 5.25%, 0.00% Floor........................................... 6.01% 01/31/28 30,759,412 9,717,375 Asurion LLC, Term Loan B-4 (Second Lien), 1 Mo. LIBOR + 5.25%, 0.00% Floor........................................... 6.01% 01/20/29 9,416,136 --------------- 40,175,548 --------------- SPECIALIZED FINANCE -- 0.4% 6,933,522 WCG Purchaser Corp. (WIRB-Copernicus Group), Term Loan B, 3 Mo. LIBOR + 4.00%, 1.00% Floor............................. 5.00% 01/08/27 6,911,890 --------------- SPECIALTY STORES -- 0.5% 7,335,966 Bass Pro Group, LLC (Great Outdoors Group, LLC), Term Loan B, 1 Mo. LIBOR + 3.75%, 0.75% Floor..................... 4.51% 03/05/28 7,253,436 2,154,532 Petsmart, Inc., Initial Term Loan B, 3 Mo. LIBOR + 3.75%, 0.75% Floor.................................................. 4.50% 02/12/28 2,131,909 --------------- 9,385,345 --------------- SYSTEMS SOFTWARE -- 0.8% 1,221,902 Applied Systems, Inc., Term Loan (Second Lien), 3 Mo. LIBOR + 5.50%, 0.75% Floor......................................... 6.51% 09/19/25 1,218,188 5,983,512 BMC Software Finance, Inc. (Boxer Parent), 2021 Replacement Dollar Term Loan, 1 Mo. LIBOR + 3.75%, 0.00% Floor........... 4.51% 10/02/25 5,903,513 9,220,698 Misys Financial Software Ltd. (Almonde, Inc.) (Finastra), Term Loan B, 3 Mo. LIBOR + 3.50%, 1.00% Floor..................... 4.50% - 4.74% 06/13/24 8,934,026 --------------- 16,055,727 --------------- TOTAL SENIOR FLOATING-RATE LOAN INTERESTS.................................................... 615,756,358 (Cost $628,041,820) --------------- SHARES DESCRIPTION VALUE ---------------- --------------------------------------------------------------------------------------------- --------------- COMMON STOCKS -- 0.1% PHARMACEUTICALS -- 0.1% 259,956 Akorn, Inc. (i) (j).......................................................................... 2,234,062 (Cost $2,979,179) --------------- WARRANTS -- 0.0% MOVIES & ENTERTAINMENT -- 0.0% 828,940 Cineworld Group PLC, expiring 11/23/25 (i) (k)............................................... 171,988 (Cost $0) --------------- RIGHTS -- 0.0% ELECTRIC UTILITIES -- 0.0% 1,629 Vistra Energy Corp., no expiration date (i) (k).............................................. 2,158 (Cost $2,830) --------------- MONEY MARKET FUNDS -- 0.1% 2,286,168 Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 0.23% (l)................................................................................. 2,286,168 (Cost $2,286,168) --------------- TOTAL INVESTMENTS -- 126.6%.................................................................. 2,435,596,919 (Cost $2,600,183,478) --------------- See Notes to Financial Statements Page 21 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) PRINCIPAL STATED STATED VALUE DESCRIPTION COUPON MATURITY VALUE ---------------- ---------------------------------------------------------------- ------------- ------------ --------------- U.S. TREASURY BILLS SOLD SHORT -- (28.3)% $ (26,000,000) U.S. Treasury Bill.............................................. (m) 05/05/22 $ (25,999,807) (90,000,000) U.S. Treasury Bill.............................................. (m) 05/10/22 (89,997,775) (140,000,000) U.S. Treasury Bill.............................................. (m) 05/12/22 (139,994,523) (78,000,000) U.S. Treasury Bill.............................................. (m) 05/19/22 (77,992,265) (94,000,000) U.S. Treasury Bill.............................................. (m) 05/26/22 (93,980,714) (75,000,000) U.S. Treasury Bill.............................................. (m) 05/31/22 (74,980,516) (43,000,000) U.S. Treasury Bill.............................................. (m) 06/02/22 (42,988,049) --------------- TOTAL U.S. TREASURY BILLS SOLD SHORT......................................................... (545,933,649) (Proceeds $545,909,105) --------------- BORROWINGS -- (0.4)%......................................................................... (6,949,871) NET OTHER ASSETS AND LIABILITIES -- 2.2%..................................................... 42,358,276 --------------- NET ASSETS -- 100.0%......................................................................... $ 1,925,071,675 =============== (a) This security, sold within the terms of a private placement memorandum, is exempt from registration upon resale under Rule 144A of the Securities Act of 1933, as amended (the "1933 Act"), and may be resold in transactions exempt from registration, normally to qualified institutional buyers. Pursuant to procedures adopted by the Trust's Board of Trustees, this security has been determined to be liquid by First Trust Advisors L.P. ("First Trust" or the "Advisor"). Although market instability can result in periods of increased overall market illiquidity, liquidity for each security is determined based on security-specific factors and assumptions, which require subjective judgment. At April 30, 2022, securities noted as such amounted to $1,689,523,034 or 87.8% of net assets. (b) This security or a portion of this security is segregated as collateral for investments sold short. (c) This issuer is in default and interest is not being accrued by the Fund nor paid by the issuer. (d) The issuer has filed for protection in bankruptcy court. (e) Senior Floating-Rate Loan Interests ("Senior Loans") in which the Fund invests generally pay interest at rates which are periodically predetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as the LIBOR, (ii) the Secured Overnight Financing Rate ("SOFR") obtained from the U.S. Department of the Treasury's Office of Financial Research, (iii) the prime rate offered by one or more United States banks or (iv) the certificate of deposit rate. Certain Senior Loans are subject to a LIBOR or SOFR floor that establishes a minimum LIBOR or SOFR rate. When a range of rates is disclosed, the Fund holds more than one contract within the same tranche with identical LIBOR or SOFR period, spread and floor, but different LIBOR or SOFR reset dates. (f) Senior Loans generally are subject to mandatory and/or optional prepayment. As a result, the actual remaining maturity of Senior Loans may be substantially less than the stated maturities shown. (g) The issuer may pay interest on the loans in cash and in Payment-In-Kind ("PIK") interest. Interest paid in cash will accrue at the rate of 7.00% per annum ("Cash Interest Rate") and PIK interest will accrue on the loan at the rate of 8.25% per annum. For the fiscal year-to-date period (November 1, 2021 through April 30, 2022), the Fund received a portion of the interest in cash and PIK interest with a principal value of $116,867 for Cineworld Group PLC. (h) The issuer may pay interest on the loans (1) entirely in cash or (2) in the event that both the PIK Toggle Condition has been satisfied and the issuer elects to exercise the PIK interest, 2.50% payable in cash and 7.00% payable as PIK interest. For the fiscal year-to-date period (November 1, 2021 through April 30, 2022), this security paid all of its interest in cash. (i) Non-income producing security. (j) Security received in a transaction exempt from registration under the 1933 Act. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. Pursuant to procedures adopted by the Trust's Board of Trustees, this security has been determined to be illiquid by the Advisor. Although market instability can result in periods of increased overall market illiquidity, liquidity for the security is determined based on security-specific factors and assumptions, which require subjective judgment. At April 30, 2022, securities noted as such amounted to $2,234,062 or 0.1% of net assets. (k) Pursuant to procedures adopted by the Trust's Board of Trustees, this security has been determined to be illiquid by the Advisor. (l) Rate shown reflects yield as of April 30, 2022. (m) Zero coupon security. LIBOR - London Interbank Offered Rate SOFR - Secured Overnight Financing Rate Page 22 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2022 (UNAUDITED) ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of April 30, 2022 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements): ASSETS TABLE LEVEL 2 LEVEL 3 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT VALUE AT QUOTED OBSERVABLE UNOBSERVABLE 4/30/2022 PRICES INPUTS INPUTS --------------- --------------- --------------- --------------- Corporate Bonds and Notes*........................ $ 1,558,584,815 $ -- $ 1,558,584,815 $ -- Foreign Corporate Bonds and Notes*................ 256,561,370 -- 256,561,370 -- Senior Floating-Rate Loan Interests*.............. 615,756,358 -- 615,756,358 -- Common Stocks*.................................... 2,234,062 -- 2,234,062 -- Warrants*......................................... 171,988 -- 171,988 -- Rights*........................................... 2,158 -- 2,158 -- Money Market Funds................................ 2,286,168 2,286,168 -- -- --------------- --------------- --------------- --------------- Total Investments................................. $ 2,435,596,919 $ 2,286,168 $ 2,433,310,751 $ -- =============== =============== =============== =============== LIABILITIES TABLE LEVEL 2 LEVEL 3 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT VALUE AT QUOTED OBSERVABLE UNOBSERVABLE 4/30/2022 PRICES INPUTS INPUTS --------------- --------------- --------------- --------------- U.S. Treasury Bills Sold Short.................... $ (545,933,649) $ -- $ (545,933,649) $ -- =============== =============== =============== =============== * See Portfolio of Investments for industry breakout. See Notes to Financial Statements Page 23 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 2022 (UNAUDITED) ASSETS: Investments, at value................................................... $ 2,435,596,919 Cash.................................................................... 428,668 Receivables: Interest............................................................. 33,504,417 Investment securities sold........................................... 32,719,323 Dividends............................................................ 620 --------------- Total Assets...................................................... 2,502,249,947 --------------- LIABILITIES: Investments sold short, at value (proceeds $545,909,105)................ 545,933,649 Borrowings.............................................................. 6,949,871 Payables: Investment securities purchased...................................... 22,540,561 Investment advisory fees............................................. 1,554,856 Margin interest expense.............................................. 197,392 Unrealized depreciation on unfunded loan commitments.................... 1,943 --------------- Total Liabilities................................................. 577,178,272 --------------- NET ASSETS.............................................................. $ 1,925,071,675 =============== NET ASSETS CONSIST OF: Paid-in capital......................................................... $ 2,132,765,534 Par value............................................................... 440,500 Accumulated distributable earnings (loss)............................... (208,134,359) --------------- NET ASSETS.............................................................. $ 1,925,071,675 =============== NET ASSET VALUE, per share.............................................. $ 43.70 =============== Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share)............................... 44,050,002 =============== Investments, at cost.................................................... $ 2,600,183,478 =============== Page 24 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) INVESTMENT INCOME: Interest................................................................ $ 75,096,642 Dividends............................................................... 1,470 --------------- Total investment income.............................................. 75,098,112 --------------- EXPENSES: Investment advisory fees................................................ 10,095,596 Margin interest expense................................................. 2,679,933 --------------- Total expenses....................................................... 12,775,529 --------------- NET INVESTMENT INCOME (LOSS)............................................ 62,322,583 --------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments.......................................................... 6,175,658 Investments sold short............................................... (1,550) --------------- Net realized gain (loss)................................................ 6,174,108 --------------- Net change in unrealized appreciation (depreciation) on: Investments.......................................................... (185,586,481) Investments sold short............................................... (34,631) Unfunded loan commitments............................................ 954 --------------- Net change in unrealized appreciation (depreciation).................... (185,620,158) --------------- NET REALIZED AND UNREALIZED GAIN (LOSS)................................. (179,446,050) --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................................................... $ (117,123,467) =============== See Notes to Financial Statements Page 25 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) STATEMENTS OF CHANGES IN NET ASSETS SIX MONTHS ENDED YEAR 4/30/2022 ENDED (UNAUDITED) 10/31/2021 --------------- --------------- OPERATIONS: Net investment income (loss).............................................. $ 62,322,583 $ 116,232,335 Net realized gain (loss).................................................. 6,174,108 16,759,767 Net change in unrealized appreciation (depreciation)...................... (185,620,158) 18,501,627 --------------- --------------- Net increase (decrease) in net assets resulting from operations........... (117,123,467) 151,493,729 --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment operations..................................................... (66,500,503) (123,580,505) --------------- --------------- SHAREHOLDER TRANSACTIONS: Proceeds from shares sold................................................. 139,093,372 406,718,627 Cost of shares redeemed................................................... (336,837,829) (102,317,490) --------------- --------------- Net increase (decrease) in net assets resulting from shareholder transactions.......................................... (197,744,457) 304,401,137 --------------- --------------- Total increase (decrease) in net assets................................... (381,368,427) 332,314,361 NET ASSETS: Beginning of period....................................................... 2,306,440,102 1,974,125,741 --------------- --------------- End of period............................................................. $ 1,925,071,675 $ 2,306,440,102 =============== =============== CHANGES IN SHARES OUTSTANDING: Shares outstanding, beginning of period................................... 48,300,002 42,000,002 Shares sold............................................................... 3,000,000 8,400,000 Shares redeemed........................................................... (7,250,000) (2,100,000) --------------- --------------- Shares outstanding, end of period......................................... 44,050,002 48,300,002 =============== =============== Page 26 See Notes to Financial Statements FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED APRIL 30, 2022 (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net increase (decrease) in net assets resulting from operations .......... $ (117,123,467) Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities: Purchases of investments............................................ (1,153,734,452) Borrowed investments sold short..................................... 2,182,675,517 Cost to cover short positions....................................... (1,931,972,461) Sales, maturities and paydowns of investments....................... 1,108,864,019 Net amortization/accretion of premiums/discounts on investments..... (247,118) Net realized gain/loss on investments............................... (6,175,658) Net realized gain/loss on investments sold short.................... 1,550 Net change in unrealized appreciation/depreciation on investments and unfunded loan commitments.................................... 185,585,527 Net change in unrealized appreciation/depreciation on investments sold short....................................................... 34,631 CHANGES IN ASSETS AND LIABILITIES Increase in interest receivable..................................... (6,410,351) Increase in dividends receivable.................................... (546) Increase in margin interest expense payable......................... 69,182 Decrease in investment advisory fees payable........................ (314,233) --------------- CASH PROVIDED BY OPERATING ACTIVITIES..................................... $ 261,252,140 --------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from shares sold........................................... 139,093,372 Cost of shares redeemed............................................. (336,837,829) Distributions to shareholders from investment operations............ (66,500,503) Net proceeds from borrowings........................................ 3,296,944 --------------- CASH USED IN FINANCING ACTIVITIES......................................... (260,948,016) --------------- Decrease in cash and restricted cash...................................... 304,124 Cash and restricted cash at beginning of period........................... 124,544 --------------- CASH AND RESTRICTED CASH AT END OF PERIOD................................. $ 428,668 =============== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest.................................. $ 2,610,751 =============== CASH AND RESTRICTED CASH RECONCILIATION: Cash................................................................ $ 428,668 Restricted Cash..................................................... -- --------------- CASH AND RESTRICTED CASH AT END OF PERIOD:................................ $ 428,668 =============== See Notes to Financial Statements Page 27 FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD SIX MONTHS ENDED YEAR ENDED OCTOBER 31, 4/30/2022 ------------------------------------------------------------------------ (UNAUDITED) 2021 2020 2019 2018 2017 ------------ ------------ ------------ ------------ ------------ ------------ Net asset value, beginning of period $ 47.75 $ 47.00 $ 48.06 $ 47.02 $ 48.95 $ 48.31 ---------- ---------- ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) 1.34 2.47 2.33 2.49 2.52 2.56 Net realized and unrealized gain (loss) (3.94) 0.91 (1.00) 1.13 (1.76) 0.66 ---------- ---------- ---------- ---------- ---------- ---------- Total from investment operations (2.60) 3.38 1.33 3.62 0.76 3.22 ---------- ---------- ---------- ---------- ---------- ---------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income (1.45) (2.63) (2.39) (2.56) (2.69) (2.58) Return of capital -- -- -- (0.02) (0.00)(a) -- ---------- ---------- ---------- ---------- ---------- ---------- Total distributions (1.45) (2.63) (2.39) (2.58) (2.69) (2.58) ---------- ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 43.70 $ 47.75 $ 47.00 $ 48.06 $ 47.02 $ 48.95 ========== ========== ========== ========== ========== ========== TOTAL RETURN (b) (5.55)% 7.25% 2.92% 7.90% 1.60% 6.79% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's) $1,925,072 $2,306,440 $1,974,126 $1,432,088 $1,253,035 $1,250,565 RATIOS TO AVERAGE NET ASSETS: Ratio of total expenses to average net assets 1.20% (c) 1.05% 1.01% 1.23% 1.16% 1.10% Ratio of net expenses to average net assets excluding interest expense 0.95% (c) 0.95% 0.95% 0.95% 0.95% 0.95% Ratio of net investment income (loss) to average net assets 5.86% (c) 5.11% 5.02% 5.22% 5.26% 5.25% Portfolio turnover rate (d) 26% 50% 68% 50% 52% 75% (a) Amount represents less than $0.01 per share. (b) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all distributions at net asset value during the period, and redemption at net asset value on the last day of the period. The returns presented do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Total return is calculated for the time period presented and is not annualized for periods of less than a year. (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 28 See Notes to Financial Statements -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) 1. ORGANIZATION First Trust Exchange-Traded Fund IV (the "Trust") is an open-end management investment company organized as a Massachusetts business trust on September 15, 2010, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently consists of eleven funds that are offering shares. This report covers the First Trust Tactical High Yield ETF (the "Fund"), a diversified series of the Trust which trades under the ticker "HYLS" on The Nasdaq Stock Market LLC ("Nasdaq"). The Fund represents a separate series of beneficial interest in the Trust. Unlike conventional mutual funds, the Fund issues and redeems shares on a continuous basis, at net asset value ("NAV"), only in large blocks of shares known as "Creation Units." The primary investment objective of the Fund is to provide current income. The Fund's secondary investment objective is to provide capital appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets (including investment borrowings) in high yield debt securities that are rated below investment grade at the time of purchase or unrated securities deemed by the Fund's advisor to be of comparable quality. Below investment grade securities are those that, at the time of purchase, are rated lower than "BBB-" by S&P Global Ratings, or lower than "Baa3" by Moody's Investors Service, Inc., or comparably rated by another nationally recognized statistical rating organization. High yield debt securities that are rated below investment grade are commonly referred to as "junk" debt. Such securities may include U.S. and non-U.S. corporate debt obligations, bank loans and convertible bonds. For purposes of determining whether a security is below investment grade, the lowest available rating will be considered. 2. SIGNIFICANT ACCOUNTING POLICIES The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946, "Financial Services-Investment Companies." The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. A. PORTFOLIO VALUATION The Fund's NAV is determined daily as of the close of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. Domestic debt securities and foreign securities are priced using data reflecting the earlier closing of the principal markets for those securities. The Fund's NAV is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding. The Fund's investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Advisor's Pricing Committee of the Fund's investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"), in accordance with valuation procedures adopted by the Trust's Board of Trustees, and in accordance with provisions of the 1940 Act. Investments valued by the Advisor's Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. The Fund's investments are valued as follows: Corporate bonds, corporate notes, U.S. government securities and other debt securities are fair valued on the basis of valuations provided by dealers who make markets in such securities or by a third-party pricing service approved by the Trust's Board of Trustees, which may use the following valuation inputs when available: 1) benchmark yields; 2) reported trades; 3) broker/dealer quotes; 4) issuer spreads; 5) benchmark securities; 6) bids and offers; and 7) reference data including market research publications. Page 29 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) Common stocks and other equity securities listed on any national or foreign exchange (excluding Nasdaq and the London Stock Exchange Alternative Investment Market ("AIM")) are valued at the last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price. Securities traded on more than one securities exchange are valued at the last sale price or official closing price, as applicable, at the close of the securities exchange representing the principal market for such securities. Shares of open-end funds are valued at fair value which is based on NAV per share. 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. Senior Floating-Rate Loan Interests ("Senior Loans")(1) are not listed on any securities exchange or board of trade. Senior Loans are typically bought and sold by institutional investors in individually negotiated private transactions that function in many respects like an over-the-counter secondary market, although typically no formal market-makers exist. This market, while having grown substantially since its inception, generally has fewer trades and less liquidity than the secondary market for other types of securities. Some Senior Loans have few or no trades, or trade infrequently, and information regarding a specific Senior Loan may not be widely available or may be incomplete. Accordingly, determinations of the market value of Senior Loans may be based on infrequent and dated information. Because there is less reliable, objective data available, elements of judgment may play a greater role in valuation of Senior Loans than for other types of securities. Typically, Senior Loans are fair valued using information provided by a third-party pricing service. The third-party pricing service primarily uses over-the-counter pricing from dealer runs and broker quotes from indicative sheets to value the Senior Loans. Fixed income and other debt securities having a remaining maturity of sixty days or less when purchased are fair valued at cost adjusted for amortization of premiums and accretion of discounts (amortized cost), provided the Advisor's Pricing Committee has determined that the use of amortized cost is an appropriate reflection of fair value given market and issuer-specific conditions existing at the time of the determination. Factors that may be considered in determining the appropriateness of the use of amortized cost include, but are not limited to, the following: 1) the credit conditions in the relevant market and changes thereto; 2) the liquidity conditions in the relevant market and changes thereto; 3) the interest rate conditions in the relevant market and changes thereto (such as significant changes in interest rates); 4) issuer-specific conditions (such as significant credit deterioration); and 5) any other market-based data the Advisor's Pricing Committee considers relevant. In this regard, the Advisor's Pricing Committee may use last-obtained market-based data to assist it when valuing portfolio securities using amortized cost. 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 the Fund's NAV or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the third-party pricing service, does not reflect the security's fair value. As a general principle, the current fair value of a security would appear to be the amount which the owner might reasonably expect to receive for the security upon its current sale. When fair value prices are used, generally they will differ from market quotations or official closing prices on the applicable exchanges. A variety of factors may be considered in determining the fair value of such securities, including, but not limited to, the following: 1) the fundamental business data relating to the borrower/issuer; 2) an evaluation of the forces which influence the market in which these securities are purchased and sold; 3) the type, size and cost of a security; 4) the financial statements of the borrower/issuer; 5) the credit quality and cash flow of the borrower/issuer, based on the Advisor's or external analysis; 6) the information as to any transactions in or offers for the security; 7) the price and extent of public trading in similar securities of the issuer/borrower, or comparable companies; 8) the coupon payments; ----------------------------- (1) The terms "security" and "securities" used throughout the Notes to Financial Statements include Senior Loans. Page 30 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) 9) the quality, value and salability of collateral, if any, securing the security; 10) the business prospects of the borrower/issuer, including any ability to obtain money or resources from a parent or affiliate and an assessment of the issuer's management; 11) the prospects for the borrower's/issuer's industry, and multiples (of earnings and/or cash flows) being paid for similar businesses in that industry; 12) borrower's/issuer's competitive position within the industry; 13) borrower's/issuer's ability to access additional liquidity through public and/or private markets; and 14) other relevant factors. The Fund is subject to fair value accounting standards that define fair value, establish the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation as of the measurement date. The three levels of the fair value hierarchy are as follows: o Level 1 - Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis. o Level 2 - Level 2 inputs are observable inputs, either directly or indirectly, and include the following: o Quoted prices for similar investments in active markets. o Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly. o Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates). o Inputs that are derived principally from or corroborated by observable market data by correlation or other means. o Level 3 - Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the investment. The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value the Fund's investments as of April 30, 2022, is included with the Fund's Portfolio of Investments. B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income is recorded daily on the accrual basis. Amortization of premiums and accretion of discounts are recorded using the effective interest method. The United Kingdom's Financial Conduct Authority (the "FCA"), which regulates the London Interbank Offered Rates ("LIBOR") announced on March 5, 2021 that it intended to phase-out all LIBOR reference rates, beginning December 31, 2021. Since that announcement, the FCA has ceased publication of all non-USD LIBOR reference rates and the 1-week and 2-month USD LIBOR reference rates as of December 31, 2021. The remaining USD LIBOR settings will cease to be published or no longer be representative immediately after June 30, 2023. The International Swaps and Derivatives Association, Inc. ("ISDA") confirmed that the FCA's March 5, 2021 announcement of its intention to cease providing LIBOR reference rates, constituted an index cessation event under the Interbank Offered Rates ("IBOR") Fallbacks Supplement and the ISDA 2020 IBOR Fallbacks Protocol for all 35 LIBOR settings and confirmed that the spread adjustment to be used in ISDA fallbacks was fixed as of the date of the announcement. In the United States, the Alternative Reference Rates Committee (the "ARRC"), a group of market participants convened by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York in cooperation with other federal and state government agencies, has since 2014 undertaken efforts to identify U.S. dollar reference interest rates as alternatives to LIBOR and to facilitate the mitigation of LIBOR-related risks. In June 2017, the ARRC identified the Secured Overnight Financing Rate ("SOFR"), a broad measure of the cost of cash overnight borrowing collateralized by U.S. Treasury securities, as the preferred alternative for U.S. dollar LIBOR. The Federal Reserve Bank of New York began daily publishing of SOFR in April 2018. There is no assurance that any alternative reference rate, including 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. At this time, it is not possible to predict the full impact of the elimination of LIBOR and the establishment of an alternative reference rate on the Fund or its investments. Page 31 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) Securities purchased or sold on a when-issued, delayed-delivery or forward purchase commitment basis may have extended settlement periods. The value of the security so purchased is subject to market fluctuations during this period. Due to the nature of the Senior Loan market, the actual settlement date may not be certain at the time of the purchase or sale for some of the Senior Loans. Interest income on such Senior Loans is not accrued until settlement date. The Fund maintains liquid assets with current value at least equal to the amount of its when-issued, delayed-delivery or forward purchase commitments. The Fund had no when-issued, delayed-delivery, or forward purchase commitments (other than unfunded loan commitments discussed below) as of April 30, 2022. C. SHORT SALES Short sales are utilized for investment and risk management purposes and are transactions in which securities or other instruments (such as options, forwards, futures or other derivative contracts) are sold that are not currently owned in the Fund's portfolio. When the Fund engages in a short sale, the Fund must borrow the security sold short and deliver the security to the counterparty. Short selling allows the Fund to profit from a decline in a market price to the extent such decline exceeds the transaction costs and the costs of borrowing the securities. The Fund is charged a fee or premium to borrow the securities sold short and is obligated to repay the lenders of the securities. Any dividends or interest that accrues on the securities during the period of the loan are due to the lenders. A gain, limited to the price at which the security was sold short, or a loss, unlimited in size, will be recognized upon the termination of the short sale; which is effected by the Fund purchasing the security sold short and delivering the security to the lender. Any such gain or loss may be offset, completely or in part, by the change in the value of the long portion of the Fund's portfolio. The Fund is subject to the risk it may be unable to reacquire a security to terminate a short position except at a price substantially in excess of the last quoted price. Also, there is the risk that the counterparty to a short sale may fail to honor its contractual terms, causing a loss to the Fund. The Fund has established an account with Pershing, LLC for the purpose of purchasing or borrowing securities on margin. The Fund pays interest on any margin balance, which is calculated as the daily margin account balance times the broker's margin interest rate. At April 30, 2022, the Fund had $6,949,871 in borrowings, which approximates fair value, associated with investments sold short as shown in "Borrowings" on the Statement of Assets and Liabilities. The borrowings are categorized as Level 2 within the fair value hierarchy. The Fund is charged interest on debit margin balance at a rate equal to the Overnight Bank Funding Rate plus 75 basis points. With regard to securities held short, the Fund is credited a rebate equal to the market value of its short positions at a rate equal to the Overnight Bank Funding Rate less 35 basis points. This rebate rate applies to easy to borrow securities. Securities that are hard to borrow may earn a rebate that is less than the foregoing or may be subject to a premium charge on a security by security basis. The different rebate rate is determined at the time of a short sale request. At April 30, 2022, the Fund had a debit margin balance of $552,883,480 with an interest rate of 1.07%. For the six months ended April 30, 2022, the Fund had margin interest expense of $2,679,933, as shown on the Statement of Operations. For the six months ended April 30, 2022, the average margin balance and interest rates were $434,661,191 and 0.88%, respectively. D. RESTRICTED CASH Restricted cash includes cash on deposit with other banks or brokers that is legally restricted as to the withdrawal and primarily serves as collateral for investments sold short. The Fund presents restricted cash activity within "Increase in cash and restricted cash" and as part of "Cash and restricted cash at beginning of period" and "Cash and restricted cash at end of period" in the Statement of Cash Flows, along with a reconciliation of those balances in the Statement of Assets and Liabilities. E. UNFUNDED LOAN COMMITMENTS The Fund may enter into certain credit agreements, all or a portion of which may be unfunded. The Fund is obligated to fund these loan commitments at the borrower's discretion. Unfunded loan commitments are marked-to-market daily, and any unrealized appreciation (depreciation) is included in the Statement of Assets and Liabilities and Statement of Operations. In connection with these commitments, the Fund earns a commitment fee typically set as a percentage of the commitment amount. The commitment fees are included in "Interest" on the Statement of Operations. As of April 30, 2022, the Fund had the following unfunded loan commitment: UNREALIZED PRINCIPAL COMMITMENT APPRECIATION BORROWER VALUE AMOUNT VALUE (DEPRECIATION) ------------------------------------------------------------- -------------- -------------- -------------- -------------- Veritext Corp. (VT TopCo, Inc.), Delayed Draw Term Loan $ 345,822 $ 344,093 $ 342,150 $ (1,943) F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income, if any, are declared and paid monthly by the Fund, or as the Board of Trustees may determine from time to time. Distributions of net realized gains earned by the Fund, if any, are distributed at least annually. Page 32 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) Distributions in cash may be reinvested automatically in additional whole shares only if the broker through whom the shares were purchased makes such option available. Such shares will generally be reinvested by the broker based upon the market price of those shares and investors may be subject to customary brokerage commissions charged by the broker. Distributions from net investment income and realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These permanent differences are primarily due to the varying treatment of income and gain/loss on significantly modified portfolio securities held by the Fund and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for financial statement and tax purposes, will reverse at some time in the future. The tax character of distributions paid during the fiscal year ended October 31, 2021 was as follows: Distributions paid from: Ordinary income................................. $ 123,580,505 Capital gains................................... -- Return of capital............................... -- As of October 31, 2021, the components of distributable earnings on a tax basis for the Fund were as follows: Undistributed ordinary income................... $ 127,336 Accumulated capital and other gain (loss)....... (37,756,827) Net unrealized appreciation (depreciation)...... 13,119,102 G. INCOME TAXES The Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net realized gains to shareholders. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund's taxable income exceeds the distributions from such taxable income for the calendar year. The Fund is subject to accounting standards that establish a minimum threshold for recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. The taxable years ended 2018, 2019, 2020, and 2021 remain open to federal and state audit. As of April 30, 2022, management has evaluated the application of these standards to the Fund and has determined that no provision for income tax is required in the Fund's financial statements for uncertain tax positions. The Fund intends to utilize provisions of the federal income tax laws, which allow it to carry a realized capital loss forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. As of October 31, 2021, the Fund had non-expiring capital loss carryforwards available for federal income tax purposes of $37,756,827. During the taxable year ended October 31, 2021, the Fund utilized non-expiring capital loss carryforwards in the amount of $15,017,248. Certain losses realized during the current fiscal year may be deferred and treated as occurring on the first day of the following fiscal year for federal income tax purposes. For the fiscal year ended October 31, 2021, the Fund had no net late year ordinary or capital losses. As of April 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) -------------- -------------- -------------- -------------- $2,054,274,373 $ 8,715,786 $ (173,326,889) $ (164,611,103) H. EXPENSES Expenses, other than the investment advisory fee and other excluded expenses, are paid by the Advisor (see Note 3). The Fund is subject to an interest expense due to the costs associated with the Fund's short positions in securities. Page 33 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) 3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS First Trust, the investment advisor to the Fund, is a limited partnership with one limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust is responsible for the selection and ongoing monitoring of the securities in the Fund's portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund. Pursuant to the Investment Management Agreement between the Trust and the Advisor, First Trust manages the investment of the Fund's assets and is responsible for the Fund's expenses, including the cost of transfer agency, custody, fund administration, legal, audit and other services, but excluding fee payments under the Investment Management Agreement, interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, expenses associated with short sale transactions, distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses. The Fund has agreed to pay First Trust an annual unitary management fee equal to 0.95% of its average daily net assets. The Trust has multiple service agreements with The Bank of New York Mellon ("BNYM"). Under the service agreements, BNYM performs custodial, fund accounting, certain administrative services, and transfer agency services for the Fund. As custodian, BNYM is responsible for custody of the Fund's assets. As fund accountant and administrator, BNYM is responsible for maintaining the books and records of the Fund's securities and cash. As transfer agent, BNYM is responsible for maintaining shareholder records for the Fund. BNYM is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company. Each Trustee who is not an officer or employee of First Trust, any sub-advisor or any of their affiliates ("Independent Trustees") is paid a fixed annual retainer that is allocated equally among each fund in the First Trust Fund Complex. Each Independent Trustee is also paid an annual per fund fee that varies based on whether the fund is a closed-end or other actively managed fund, defined-outcome fund or an index fund. Additionally, the Lead Independent Trustee and the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Lead Independent Trustee and Committee Chairs rotate every three years. The officers and "Interested" Trustee receive no compensation from the Trust for acting in such capacities. 4. PURCHASES AND SALES OF SECURITIES For the six months ended April 30, 2022, the cost of purchases and proceeds from sales of investments, excluding short-term investments, investments sold short and in-kind transactions, were $688,400,099 and $647,395,161, respectively. The cost of purchases to cover short sales and the proceeds of short sales were $1,931,972,461 and $2,182,675,517, respectively. For the six months ended April 30, 2022, there were no in-kind transactions. 5. BORROWINGS The Trust, on behalf of the Fund, along with the First Trust Series Fund and First Trust Variable Insurance Trust, has a $200 million Credit Agreement with BNYM ("Line of Credit"), to be a liquidity backstop during periods of high redemption volume. A commitment fee of 0.25% of the daily amount of the excess of the commitment amount over the outstanding principal balance of the loans will be charged by BNYM, which First Trust allocates amongst the funds that have access to the Line of Credit. To the extent that the Fund accesses the Line of Credit, there would also be an interest fee charged. The Fund did not have any borrowings outstanding during the six months ended April 30, 2022. 6. CREATIONS, REDEMPTIONS AND TRANSACTION FEES The Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as "Authorized Participants" have contractual arrangements with the Fund's service providers to purchase and redeem Fund shares directly with the Fund in large blocks of shares known as "Creation Units." Prior to the start of trading on every business day, the Fund publishes through the National Securities Clearing Corporation ("NSCC") the "basket" of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund's shares. An Authorized Participant that wishes to effectuate a creation of the Fund's shares deposits with the Fund the "basket" of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund's shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may Page 34 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) continue to hold the Fund's shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of the Fund's shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in the Fund's shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of the Fund's shares at or close to the NAV per share of the Fund. The Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, plus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket. The Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by the Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed. 7. DISTRIBUTION PLAN The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the Fund, for amounts expended to finance activities primarily intended to result in the sale of Creation Units or the provision of investor services. FTP may also use this amount to compensate securities dealers or other persons that are Authorized Participants for providing distribution assistance, including broker-dealer and shareholder support and educational and promotional services. No 12b-1 fees are currently paid by the Fund, and pursuant to a contractual arrangement, no 12b-1 fees will be paid any time before March 31, 2023. 8. INDEMNIFICATION The Trust, on behalf of the Fund, has a variety of indemnification obligations under contracts with its service providers. The Trust's maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 9. SUBSEQUENT EVENTS Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were issued, and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements that have not already been disclosed. Page 35 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 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 the Fund voted proxies relating to its portfolio securities during the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (800) 988-5891; (2) on 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 The Fund files portfolio holdings information for each month in a fiscal quarter within 60 days after the end of the relevant fiscal quarter on Form N-PORT. Portfolio holdings information for the third month of each fiscal quarter will be publicly available on the SEC's website at www.sec.gov. The Fund's complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the semi-annual and annual reports to shareholders, respectively, and is filed with the SEC on Form N-CSR. The semi-annual and annual report for the Fund is available to investors within 60 days after the period to which it relates. The Fund's Forms N-PORT and Forms N-CSR are available on the SEC's website listed above. 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. Page 36 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 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 Page 37 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) same volume or liquidity. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on the fund or on certain instruments in which the fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to the fund. MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to management risk. In managing an actively-managed fund's investment portfolio, the fund's portfolio managers will apply investment techniques and risk analyses that may not have the desired result. There can be no guarantee that a fund will meet its investment objective. MARKET RISK. 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 LIQUIDITY RISK MANAGEMENT PROGRAM In accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "1940 Act"), the Fund 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, Page 38 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FIRST TRUST TACTICAL HIGH YIELD ETF (HYLS) APRIL 30, 2022 (UNAUDITED) including reasonably anticipated trade sizes and significant investor dilution thresholds. The Liquidity Committee also determines and periodically reviews a highly liquid investment minimum for certain funds, monitors the funds' holdings of assets classified as illiquid investments to seek to ensure they do not exceed 15% of a fund's net assets and establishes policies and procedures regarding redemptions in kind. At the April 18, 2022 meeting of the Board of Trustees, as required by Rule 22e-4 and the Program, the Advisor provided the Board with a written report prepared by the Advisor that addressed the operation of the Program during the period from March 16, 2021 through the Liquidity Committee's annual meeting held on March 17, 2022 and assessed the Program's adequacy and effectiveness of implementation during this period, including the operation of the highly liquid investment minimum for each fund that is required under the Program to have one, and any material changes to the Program. Note that because the Fund primarily holds assets that are highly liquid investments, the Fund has not adopted any highly liquid investment minimum. 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 39 This page intentionally left blank. FIRST TRUST First Trust Exchange-Traded Fund IV INVESTMENT ADVISOR First Trust Advisors L.P. 120 East Liberty Drive, Suite 400 Wheaton, IL 60187 ADMINISTRATOR, CUSTODIAN, FUND ACCOUNTANT & TRANSFER AGENT The Bank of New York Mellon 240 Greenwich Street New York, NY 10286 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 111 S. Wacker Drive Chicago, IL 60606 LEGAL COUNSEL Chapman and Cutler LLP 320 South Canal Street Chicago, IL 60603 [BLANK BACK COVER]