FIRST TRUST First Trust Exchange-Traded Fund IV -------------------------------------------------------------------------------- FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) (KNG) ------------------ Annual Report For the Year Ended October 31, 2021 ------------------ -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) ANNUAL REPORT OCTOBER 31, 2021 Shareholder Letter........................................................... 1 Fund Performance Overview.................................................... 2 Portfolio Commentary......................................................... 5 Understanding Your Fund Expenses............................................. 7 Portfolio of Investments..................................................... 8 Statement of Assets and Liabilities.......................................... 13 Statement of Operations...................................................... 14 Statements of Changes in Net Assets.......................................... 15 Financial Highlights......................................................... 16 Notes to Financial Statements................................................ 17 Report of Independent Registered Public Accounting Firm...................... 24 Additional Information....................................................... 25 Board of Trustees and Officers............................................... 29 Privacy Policy............................................................... 31 CAUTION REGARDING FORWARD-LOOKING STATEMENTS This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. ("First Trust" or the "Advisor") and/or Cboe Vest(SM) Financial LLC ("Cboe Vest" or the "Sub-Advisor") and their respective representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as "anticipate," "estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or other words that convey uncertainty of future events or outcomes. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the series of First Trust Exchange-Traded Fund IV (the "Trust") described in this report (FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R); 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/or Sub-Advisors and their respective representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof. PERFORMANCE AND RISK DISCLOSURE There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund's shares may therefore be less than what you paid for them. Accordingly, you can lose money investing in the Fund. See "Risk Considerations" in the Additional Information section of this report for a discussion of certain other risks of investing in the Fund. Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost. The Advisor may also periodically provide additional information on Fund performance on the Fund's webpage at www.ftportfolios.com. HOW TO READ THIS REPORT This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund's performance and investment approach. By reading the portfolio commentary from the portfolio management team of the Fund, you may obtain an understanding of how the market environment affected the Fund's performance. The statistical information that follows may help you understand the Fund's performance compared to that of relevant market benchmarks. It is important to keep in mind that the opinions expressed by personnel of the Advisor and/or Sub-Advisor are just that: informed opinions. They should not be considered to be promises or advice. The opinions, like the statistics, cover the period through the date on the cover of this report. The material risks of investing in the Fund are spelled out in the prospectus, the statement of additional information, and other Fund regulatory filings. -------------------------------------------------------------------------------- SHAREHOLDER LETTER -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) ANNUAL LETTER FROM THE CHAIRMAN AND CEO OCTOBER 31, 2021 Dear Shareholders: First Trust is pleased to provide you with the annual report for the FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) (the "Fund"), which contains detailed information about the Fund for the twelve months ended October 31, 2021. Inflation has arrived, and its entrance was grand, to say the least. The Consumer Price Index came in at 6.2% year-over-year in October 2021, according to data from the U.S. Bureau of Labor Statistics. The last time it topped the 6.0% mark was in December 1990 (6.1%), over 30 years ago. As is often the case with major shifts in the economy and markets, there is debate over what is truly behind them. For many months, as inflation was trending higher, Federal Reserve (the "Fed") Chairman Jerome Powell held the view that the rising inflationary pressures largely stemmed from global supply chain bottlenecks induced by the coronavirus ("COVID-19") pandemic. Perhaps the best example of this is the unprecedented backlog of container ships that have dropped anchor outside the California ports of Los Angeles and Long Beach. Together, these ports service 40% of all the container ships bound for the U.S. In normal times, no ships are anchored waiting to unload their goods. Shortages of trucks and drivers have also contributed to the slowdown at the ports. The takeaway is that goods are not being delivered to warehouses and store shelves in a timely fashion and that is helping to drive prices higher for consumers. Simply put, inflation is the byproduct of too much money chasing too few goods. We'll return to this axiom shortly. Chairman Powell originally believed the bottlenecks would be remedied relatively quickly as the global economy reopened and people went back to work. That, in turn, would allow inflationary pressures to dissipate, which has not happened. Around the end of October, Chairman Powell finally acknowledged that inflation will likely remain elevated through mid-2022. This realization is what motivated the Fed to announce that it would begin to taper its monthly bond buying program (quantitative easing) starting in November 2021. It has been purchasing roughly $80 billion of Treasuries and $40 billion of mortgage-backed securities in the open market every month since June 2020. The Fed will shave $15 billion off that combined total every month until the buying has ceased, which should be around mid-2022. If all goes to plan, the next stage in the evolution of the Fed's monetary policy would involve initiating interest rate hikes. While the supply chain bottlenecks have clearly played a role in the spike in inflation by limiting the amount of goods available to consume, the biggest contributing factor is likely the surge in the U.S. money supply, according to Brian Wesbury, Chief Economist at First Trust. M2 is a measure of the money supply that includes cash, checking deposits and liquid assets easily convertible to cash. The M2 measure of money has exploded by 36% since February 2020, well above the 6% pre-COVID-19 annualized norm. The trillions of dollars of stimulus distributed by the U.S. government to help backstop the economy during the pandemic has contributed to higher inflation. On Wednesday, November 10, 2021, President Joe Biden admitted that his $1.9 trillion COVID-19 stimulus package has done just that. Remember, too much money chasing too few goods leads to inflation. Keep in mind, President Biden has recently successfully navigated a $1.2 trillion bipartisan infrastructure bill through Congress and has another roughly $1.75 trillion Build Back Better Act (social spending) piece of legislation pending. That means there is at least another $1.2 trillion dollars flowing into the economy over the next few years, and maybe more. Data from FactSet indicates that the number of S&P 500(R) Index companies mentioning inflation on their 2021 third quarter earnings call hit a 10-year high, according to Business Insider. To date, 285 of the 461 companies that have reported their results have cited concerns over rising inflation. The Materials, Consumer Staples and Energy sectors had the highest percentage of companies mentioned on these earnings calls at 90%, 88% and 86%, respectively. Suffice it to say, investors should add inflation to the list of criteria to assist them in positioning their portfolios moving forward. Thank you for giving First Trust the opportunity to play a role in your financial future. We value our relationship with you and will report on the Fund again in six months. Sincerely, /s/ James A. Bowen James A. Bowen Chairman of the Board of Trustees Chief Executive Officer of First Trust Advisors L.P. Page 1 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) The FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) (the "Fund") seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Cboe S&P 500(R) Dividend Aristocrats Target Income Index Monthly Series (the "Index"). The Fund will normally invest at least 80% of its total assets (including investment borrowings) in the common stocks and call options that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Index is owned, developed, maintained and calculated by S&P Opco, LLC (the "Index Provider"). The Index is a rules-based buy-write index designed with the primary goal of generating an annualized level of income from stock dividends and option premiums that is approximately 3% over the annual dividend yield of the S&P 500(R) Index and a secondary goal of generating capital appreciation based on the price returns of the equity securities contained in the Index. The Index's objective to deliver a target level of income could result in the Fund selling securities to meet the target, which could make the Fund less tax-efficient than other ETFs. The Index is composed of two parts: (1) an equal-weighted portfolio of the stocks contained in the S&P 500 Dividend Aristocrats Index (the "Aristocrat Stocks") that have options that trade on a national securities exchange and (2) a rolling series of short (written) call options on each of the Aristocrat Stocks (the "Covered Calls"). The S&P 500 Dividend Aristocrats Index includes companies in the S&P 500(R) Index that have increased dividend payments each year for at least 25 consecutive years and have a float adjusted market-cap of at least $3 billion as of the rebalancing reference date and have an average daily value traded of at least $5 million. ------------------------------------------------------------------------------------------------------------------------------------ PERFORMANCE ------------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL CUMULATIVE TOTAL RETURNS TOTAL RETURNS 1 Year Ended Inception (3/26/18) Inception (3/26/18) 10/31/21 to 10/31/21 to 10/31/21 FUND PERFORMANCE NAV 34.14% 13.63% 58.43% Market Price 34.14% 13.64% 58.45% INDEX PERFORMANCE Cboe S&P 500(R) Dividend Aristocrats Target Income Index Monthly Series 35.23% 14.50% 62.82% S&P 500 Dividend Aristocrats Index 35.98% 15.16% 66.21% S&P 500(R) Index 42.91% 18.61% 84.86% ------------------------------------------------------------------------------------------------------------------------------------ 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 is 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 indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. Also, market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included, market returns would be lower. The total returns presented reflect the reinvestment of dividends on securities in the indices. The returns presented do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. The investment return and principal value of shares of the Fund will vary with changes in market conditions. Shares of the Fund may be worth more or less than their original cost when they are redeemed or sold in the market. The Fund's past performance is no guarantee of future performance. Page 2 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) --------------------------------------------------------------- % OF TOTAL LONG-TERM SECTOR CLASSIFICATION INVESTMENTS --------------------------------------------------------------- Industrials 20.0% Consumer Staples 19.8 Materials 12.6 Financials 10.7 Health Care 10.7 Consumer Discretionary 9.3 Real Estate 4.6 Utilities 4.6 Energy 3.1 Information Technology 3.1 Communication Services 1.5 ------- Total 100.0% ======= --------------------------------------------------------------- % OF NET FUND ALLOCATION ASSETS --------------------------------------------------------------- Common Stocks 99.9% Money Market Funds 0.2 Call Options Written (0.2) Net Other Assets and Liabilities 0.1 ------- Total 100.0% ======= --------------------------------------------------------------- % OF TOTAL LONG-TERM TOP TEN HOLDINGS INVESTMENTS --------------------------------------------------------------- A.O. Smith Corp. 1.7% Nucor Corp. 1.7 Albemarle Corp. 1.7 W.W. Grainger, Inc. 1.6 S&P Global, Inc. 1.6 AbbVie, Inc. 1.6 T. Rowe Price Group, Inc. 1.6 Chubb Ltd. 1.6 Coca-Cola (The) Co. 1.6 Sherwin-Williams (The) Co. 1.6 ------- Total 16.3% ======= Page 3 -------------------------------------------------------------------------------- FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) PERFORMANCE OF A $10,000 INITIAL INVESTMENT MARCH 26, 2018 - OCTOBER 31, 2021 FT Cboe Vest S&P 500(R) Cboe S&P 500(R) Dividend Dividend Aristocrats Target Aristocrats Target Income S&P 500 Dividend S&P 500(R) Income ETF(R) Index Monthly Series Aristocrats Index Index 3/26/18 $10,000 $10,000 $10,000 $10,000 4/30/18 9,957 9,962 9,958 9,974 10/31/18 10,285 10,331 10,349 10,313 4/30/19 11,264 11,355 11,449 11,320 10/31/19 11,929 12,076 12,181 11,791 4/30/20 10,550 10,720 10,856 11,418 10/31/20 11,814 12,042 12,225 12,935 4/30/21 15,084 15,444 15,753 16,667 10/31/21 15,843 16,282 16,621 18,486 Performance figures assume reinvestment of all distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance does not predict future performance. FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS Information showing the number of days the market price of the Fund's shares was greater (at a premium) and less (at a discount) than the Fund's net asset value for the most recently completed year, and the most recently completed calendar quarters since that year (or life of the Fund, if shorter) is available at https://www.ftportfolios.com/Retail/etf/home.aspx. Page 4 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) ANNUAL REPORT OCTOBER 31, 2021 (UNAUDITED) ADVISOR First Trust Advisors L.P. ("First Trust" or the "Advisor") is the investment advisor to the FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) ("KNG" or the "Fund"). First Trust is responsible for the ongoing monitoring of the Fund's investment portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund. SUB-ADVISOR Cboe Vest(SM) Financial LLC ("Cboe Vest" or the "Sub-Advisor") serves as the investment sub-advisor to the Fund. In this capacity, Cboe Vest is responsible for the selection and ongoing monitoring of the securities in the Fund's investment portfolio. Cboe Vest, with principal offices at 1765 Greensboro Station Pl., 9th Floor, McLean, Virginia 22102, was founded in 2012. Cboe Vest had approximately $4.5 billion under management or committed to management as of October 31, 2021. PORTFOLIO MANAGEMENT TEAM KARAN SOOD, MANAGING DIRECTOR OF CBOE VEST HOWARD RUBIN, MANAGING DIRECTOR OF CBOE VEST COMMENTARY DISCUSSION OF FUND PERFORMANCE This discussion is for the Fund for the 12-month period ended October 31, 2021 (the "current fiscal period"). The Fund seeks to track the Cboe S&P 500(R) Dividend Aristocrats Target Income Index Monthly Series (the "SPATI Index" or the "Benchmark"). MARKET RECAP The strong global equity market rally that began in late-March of 2020 continued into the current fiscal period. U.S. equities, as measured by the S&P 500(R) Index, returned 42.91%. The period was marked by extreme variations in returns across the eleven primary sectors within the S&P 500(R) Index. The top three performing sectors were Energy, Financials, and Information Technology which returned 111.1%, 72.0%, and 46.9%, respectively. The bottom three sectors were Utilities, Consumer Staples, and Health Care. These bottom performing sectors returned 10.7%, 19.0%, and 33.8%, respectively. PERFORMANCE ANALYSIS During the current fiscal period, the Fund generally held approximately equal weights in 65 stocks, as well as written call options on almost all of these stocks. The premiums received from the written call options, plus the dividends received from the equities, sum to approximately 3.0% in excess of the dividend yield of the S&P 500(R) Index annually. For the current fiscal period, the Fund's net asset value ("NAV") performance was 34.14%, while the performance of the SPATI Index was 35.23%. The underperformance of 1.09% can be explained by the following factors: 1. Fees and Expenses: Fees and expenses reduced the Fund's performance by approximately 1.01%. 2. Execution Costs: Commissions, plus slippage due to trading securities at prices other than mid-market, reduced the Fund's performance by approximately 0.06%. 3. Fund versus Index Holdings: While the Fund attempts to hold securities in the same proportion (i.e., weighting) as the Index, at times the Fund weights may deviate from the Index weights. The options positions may be "optimized" such that the Fund's option weights are set to account for any liquidity concerns. That is, options that trade with wider bid-ask spreads may be excluded from the Fund holdings to minimize execution costs. For the current fiscal period we estimate that the difference in weights between the Fund and the Index had a net -0.02% impact to the Fund's performance. Using market prices for the Fund, the Fund's performance for the current fiscal period was 34.14%. IMPACT OF FUND HOLDINGS ON PERFORMANCE The top five performing holdings in the Fund for the current fiscal period were Albemarle Corp., Nucor Corp., Exxon Mobil Corp., Federal Realty Investment Trust, and T. Rowe Price Group, Inc., with returns of 171.2%, 138.7%, 111.9%, 82.1%, and 77.9%, respectively. The bottom five performing holdings in the Fund for the current fiscal period were The Clorox Co, Hormel Foods Corp., McCormick & Co., Inc., Brown-Forman Corp., and Colgate-Palmolive Co., with returns of -19.0%, -11.2%, -9.7%, -1.7%, and -1.2%, respectively. Page 5 -------------------------------------------------------------------------------- PORTFOLIO COMMENTARY (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) ANNUAL REPORT OCTOBER 31, 2021 (UNAUDITED) IMPACT OF SECTOR WEIGHTINGS ON PERFORMANCE For the current fiscal period, the Fund had sector weightings that were in line with the Benchmark, as the Fund seeks to track the SPATI Index. However, the Fund's sector weightings were substantially different than the sector weightings of the S&P 500(R) Index. Relative to the S&P 500(R) Index, the Fund was significantly overweight the Consumer Staples, Industrials, and Materials sectors, and was significantly underweight the Information Technology, Communication Services, and Consumer Discretionary sectors. The net effect of the Fund's sector weightings relative to those of the S&P 500(R) Index's sector weightings negatively impacted the Fund's performance relative to that of the S&P 500(R) Index. Strong performances from the Fund's holdings within the Materials sector, coupled with the Fund's relative overweight in this sector, contributed to relative overperformance for the Fund, versus the S&P 500(R) Index. Strong performances in the Information Technology and Communication Services sectors, coupled with the Fund's relative underweights in these sectors, contributed to relative underperformance for the Fund, versus the S&P 500(R) Index. MARKET AND FUND OUTLOOK The broad U.S. equity market faces a number of challenges going forward. Important factors that, in our view, will impact performance include how quickly the U.S. and the world can overcome the coronavirus ("COVID-19") pandemic and its impacts on the global economy. Supply chain bottlenecks and increasing levels of inflation need to be monitored carefully. On the other hand, corporate earnings have been handily outpacing most forecasts and, we believe, this tailwind should help equity prices going into the next year. The Fund generally holds equal weights in stocks within the S&P 500(R) Index that have increased their dividends for at least 25 consecutive years. These stocks are considered, in our view, to have management teams that are extremely prudent and keenly focused on long-term performance, in our opinion. We believe that the Fund is properly positioned to achieve its investment objective. Page 6 FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) UNDERSTANDING YOUR FUND EXPENSES OCTOBER 31, 2021 (UNAUDITED) As a shareholder of FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) (the "Fund"), you incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, if any, and other Fund expenses. This Example is intended to help you understand your ongoing costs of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held through the six-month period ended October 31, 2021. ACTUAL EXPENSES The first line in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Six-Month Period" to estimate the expenses you paid on your account during this six-month period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line in the following table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as brokerage commissions. Therefore, the second line in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. ----------------------------------------------------------------------------------------------------------------------- ANNUALIZED EXPENSE RATIO EXPENSES PAID BEGINNING ENDING BASED ON THE DURING THE ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH MAY 1, 2021 OCTOBER 31, 2021 PERIOD PERIOD (a) ----------------------------------------------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) Actual $1,000.00 $1,050.30 0.75% $3.88 Hypothetical (5% return before expenses) $1,000.00 $1,021.42 0.75% $3.82 (a) Expenses are equal to the annualized expense ratio as indicated in the table multiplied by the average account value over the period (May 1, 2021 through October 31, 2021), multiplied by 184/365 (to reflect the six-month period). Page 7 FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) PORTFOLIO OF INVESTMENTS OCTOBER 31, 2021 SHARES DESCRIPTION VALUE ---------------- -------------------------------------------------------------------------------------------- ---------------- COMMON STOCKS -- 99.9% AEROSPACE & DEFENSE -- 1.5% 21,465 General Dynamics Corp. (a).................................................................. $ 4,352,029 ---------------- AIR FREIGHT & LOGISTICS -- 1.5% 36,555 Expeditors International of Washington, Inc. (a)............................................ 4,505,769 ---------------- BANKS -- 1.4% 240,245 People's United Financial, Inc. (a)......................................................... 4,117,799 ---------------- BEVERAGES -- 4.6% 64,720 Brown-Forman Corp., Class B (a)............................................................. 4,393,841 82,597 Coca-Cola (The) Co. (a)..................................................................... 4,655,993 28,114 PepsiCo, Inc. (a)........................................................................... 4,543,222 ---------------- 13,593,056 ---------------- BIOTECHNOLOGY -- 1.6% 41,208 AbbVie, Inc. (a)............................................................................ 4,725,321 ---------------- BUILDING PRODUCTS -- 1.7% 67,367 A.O. Smith Corp. (a)........................................................................ 4,922,507 ---------------- CAPITAL MARKETS -- 4.8% 146,352 Franklin Resources, Inc. (a)................................................................ 4,608,625 9,983 S&P Global, Inc. (a)........................................................................ 4,733,539 21,749 T. Rowe Price Group, Inc. (a)............................................................... 4,716,923 ---------------- 14,059,087 ---------------- CHEMICALS -- 9.4% 15,443 Air Products and Chemicals, Inc. (a)........................................................ 4,629,966 19,426 Albemarle Corp. (a)......................................................................... 4,865,630 20,309 Ecolab, Inc. (a)............................................................................ 4,513,066 14,316 Linde PLC (a)............................................................................... 4,569,667 27,810 PPG Industries, Inc. (a).................................................................... 4,465,452 14,668 Sherwin-Williams (The) Co. (a).............................................................. 4,644,035 ---------------- 27,687,816 ---------------- COMMERCIAL SERVICES & SUPPLIES -- 1.6% 10,537 Cintas Corp. (a)............................................................................ 4,563,575 ---------------- CONTAINERS & PACKAGING -- 1.5% 369,851 Amcor PLC (a)............................................................................... 4,464,102 ---------------- DISTRIBUTORS -- 1.5% 33,807 Genuine Parts Co. (a)....................................................................... 4,432,436 ---------------- DIVERSIFIED TELECOMMUNICATION SERVICES -- 1.5% 176,437 AT&T, Inc. (a).............................................................................. 4,456,799 ---------------- ELECTRIC UTILITIES -- 1.5% 53,274 NextEra Energy, Inc. (a).................................................................... 4,545,870 ---------------- ELECTRICAL EQUIPMENT -- 1.5% 46,538 Emerson Electric Co. (a).................................................................... 4,514,651 ---------------- EQUITY REAL ESTATE INVESTMENT TRUSTS -- 4.6% 13,411 Essex Property Trust, Inc. (a).............................................................. 4,558,801 37,258 Federal Realty Investment Trust (a)......................................................... 4,484,000 62,681 Realty Income Corp. (a)..................................................................... 4,477,304 ---------------- 13,520,105 ---------------- Page 8 See Notes to Financial Statements FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 SHARES DESCRIPTION VALUE ---------------- -------------------------------------------------------------------------------------------- ---------------- COMMON STOCKS (CONTINUED) FOOD & STAPLES RETAILING -- 4.5% 57,161 Sysco Corp. (a)............................................................................. $ 4,395,681 91,783 Walgreens Boots Alliance, Inc. (a).......................................................... 4,315,637 30,318 Walmart, Inc. (a)........................................................................... 4,530,115 ---------------- 13,241,433 ---------------- FOOD PRODUCTS -- 4.5% 67,916 Archer-Daniels-Midland Co. (a).............................................................. 4,362,924 107,055 Hormel Foods Corp. (a)...................................................................... 4,530,568 55,709 McCormick & Co., Inc. (a)................................................................... 4,469,533 ---------------- 13,363,025 ---------------- GAS UTILITIES -- 1.5% 47,824 Atmos Energy Corp. (a)...................................................................... 4,405,547 ---------------- HEALTH CARE EQUIPMENT & SUPPLIES -- 6.1% 35,491 Abbott Laboratories (a)..................................................................... 4,574,435 18,201 Becton, Dickinson and Co. (a)............................................................... 4,360,777 36,537 Medtronic PLC (a)........................................................................... 4,379,325 10,678 West Pharmaceutical Services, Inc. (a)...................................................... 4,590,259 ---------------- 17,904,796 ---------------- HEALTH CARE PROVIDERS & SERVICES -- 1.5% 90,728 Cardinal Health, Inc. (a)................................................................... 4,337,706 ---------------- HOTELS, RESTAURANTS & LEISURE -- 1.6% 18,862 McDonald's Corp. (a)........................................................................ 4,631,564 ---------------- HOUSEHOLD DURABLES -- 1.5% 94,902 Leggett & Platt, Inc. (a)................................................................... 4,446,159 ---------------- HOUSEHOLD PRODUCTS -- 6.1% 27,858 Clorox (The) Co. (a)........................................................................ 4,541,133 59,568 Colgate-Palmolive Co. (a)................................................................... 4,538,486 33,805 Kimberly-Clark Corp. (a).................................................................... 4,377,409 31,935 Procter & Gamble (The) Co. (a).............................................................. 4,566,386 ---------------- 18,023,414 ---------------- INDUSTRIAL CONGLOMERATES -- 3.0% 24,875 3M Co. (a).................................................................................. 4,444,665 9,231 Roper Technologies, Inc. (a)................................................................ 4,503,528 ---------------- 8,948,193 ---------------- INSURANCE -- 4.6% 79,544 Aflac, Inc. (a)............................................................................. 4,269,127 23,908 Chubb Ltd. (a).............................................................................. 4,671,145 36,807 Cincinnati Financial Corp. (a).............................................................. 4,469,842 ---------------- 13,410,114 ---------------- IT SERVICES -- 3.1% 20,654 Automatic Data Processing, Inc. (a)......................................................... 4,636,616 35,169 International Business Machines Corp. (a)................................................... 4,399,642 ---------------- 9,036,258 ---------------- MACHINERY -- 7.6% 22,414 Caterpillar, Inc. (a)....................................................................... 4,572,680 26,579 Dover Corp. (a)............................................................................. 4,493,977 20,027 Illinois Tool Works, Inc. (a)............................................................... 4,563,553 See Notes to Financial Statements Page 9 FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 SHARES DESCRIPTION VALUE ---------------- -------------------------------------------------------------------------------------------- ---------------- COMMON STOCKS (CONTINUED) MACHINERY (CONTINUED) 59,356 Pentair PLC (a)............................................................................. $ 4,390,563 23,911 Stanley Black & Decker, Inc. (a)............................................................ 4,297,524 ---------------- 22,318,297 ---------------- METALS & MINING -- 1.7% 43,950 Nucor Corp. (a)............................................................................. 4,907,017 ---------------- MULTILINE RETAIL -- 1.5% 17,573 Target Corp. (a)............................................................................ 4,562,302 ---------------- MULTI-UTILITIES -- 1.5% 59,106 Consolidated Edison, Inc. (a)............................................................... 4,456,592 ---------------- OIL, GAS & CONSUMABLE FUELS -- 3.1% 39,870 Chevron Corp................................................................................ 4,564,716 71,251 Exxon Mobil Corp. (a)....................................................................... 4,593,552 ---------------- 9,158,268 ---------------- PHARMACEUTICALS -- 1.5% 27,470 Johnson & Johnson (a)....................................................................... 4,474,314 ---------------- SPECIALTY RETAIL -- 1.6% 19,659 Lowe's Cos., Inc. (a)....................................................................... 4,596,667 ---------------- TEXTILES, APPAREL & LUXURY GOODS -- 1.6% 63,576 VF Corp. (a)................................................................................ 4,633,419 ---------------- TRADING COMPANIES & DISTRIBUTORS -- 1.6% 10,291 W.W. Grainger, Inc. (a)..................................................................... 4,765,865 ---------------- TOTAL COMMON STOCKS......................................................................... 294,081,872 (Cost $259,738,130) ---------------- MONEY MARKET FUNDS -- 0.2% 762,197 Dreyfus Government Cash Management Fund, Institutional Shares - 0.03% (b)................... 762,197 (Cost $762,197) ---------------- TOTAL INVESTMENTS -- 100.1%................................................................. 294,844,069 (Cost $260,500,327) (c) ---------------- NUMBER OF NOTIONAL EXERCISE EXPIRATION CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE ---------------- -------------------------------------------------- ------------ ------------ ------------ ---------------- CALL OPTIONS WRITTEN -- (0.2)% (15) 3M Co............................................. $ (268,020) $ 180.00 11/22/21 (3,105) (41) A.O. Smith Corp................................... (299,587) 65.00 11/22/21 (36,080) (23) Abbott Laboratories............................... (296,447) 115.00 11/22/21 (30,130) (24) AbbVie, Inc....................................... (275,208) 110.00 11/22/21 (12,960) (48) Aflac, Inc........................................ (257,616) 55.00 11/22/21 (1,920) (9) Air Products and Chemicals, Inc................... (269,829) 290.00 11/22/21 (12,375) (12) Albemarle Corp.................................... (300,564) 230.00 11/22/21 (29,160) (223) Amcor PLC......................................... (269,161) 12.00 11/22/21 (6,690) (42) Archer-Daniels-Midland Co......................... (269,808) 65.00 11/22/21 (4,200) (104) AT&T, Inc......................................... (262,704) 26.00 11/22/21 (1,872) (29) Atmos Energy Corp................................. (267,148) 95.00 11/22/21 (3,190) (13) Automatic Data Processing, Inc.................... (291,837) 210.00 11/22/21 (19,890) (11) Becton, Dickinson and Co.......................... (263,549) 240.00 11/22/21 (7,480) (39) Brown-Forman Corp................................. (264,771) 70.00 11/22/21 (4,972) (55) Cardinal Health, Inc.............................. (262,955) 47.50 11/22/21 (11,275) Page 10 See Notes to Financial Statements FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 NUMBER OF NOTIONAL EXERCISE EXPIRATION CONTRACTS DESCRIPTION AMOUNT PRICE DATE VALUE ---------------- -------------------------------------------------- ------------ ------------ ------------ ---------------- CALL OPTIONS WRITTEN (CONTINUED) (13) Caterpillar, Inc.................................. $ (265,213) $ 200.00 11/22/21 $ (9,594) (15) Chubb Ltd......................................... (293,070) 180.00 11/22/21 (25,350) (22) Cincinnati Financial Corp......................... (267,168) 120.00 11/22/21 (8,360) (6) Cintas Corp....................................... (259,860) 410.00 11/22/21 (15,450) (16) Clorox (The) Co................................... (260,816) 165.00 11/22/21 (6,240) (49) Coca-Cola (The) Co................................ (276,213) 55.00 11/22/21 (7,791) (35) Colgate-Palmolive Co.............................. (266,665) 75.00 11/22/21 (7,875) (36) Consolidated Edison, Inc.......................... (271,440) 75.00 11/22/21 (4,752) (16) Dover Corp........................................ (270,528) 165.00 11/22/21 (9,440) (12) Ecolab, Inc....................................... (266,664) 220.00 11/22/21 (6,000) (28) Emerson Electric Co............................... (271,628) 95.00 11/22/21 (10,248) (8) Essex Property Trust, Inc......................... (271,944) 330.00 11/22/21 (10,640) (23) Expeditors International of Washington, Inc....... (283,498) 115.00 11/22/21 (20,240) (43) Exxon Mobil Corp.................................. (277,221) 62.50 11/22/21 (10,664) (22) Federal Realty Investment Trust................... (264,770) 125.00 11/22/21 (2,750) (88) Franklin Resources, Inc........................... (277,112) 30.00 11/22/21 (18,920) (13) General Dynamics Corp............................. (263,575) 210.00 11/22/21 (1,690) (21) Genuine Parts Co.................................. (275,331) 130.00 11/22/21 (6,720) (63) Hormel Foods Corp................................. (266,616) 43.00 11/22/21 (2,520) (12) Illinois Tool Works, Inc.......................... (273,444) 220.00 11/22/21 (10,332) (18) International Business Machines Corp.............. (225,180) 145.00 11/22/21 (72) (17) Johnson & Johnson................................. (276,896) 160.00 11/22/21 (7,650) (20) Kimberly-Clark Corp............................... (258,980) 135.00 11/22/21 (800) (58) Leggett & Platt, Inc.............................. (271,730) 45.00 11/22/21 (14,616) (9) Linde PLC......................................... (287,280) 310.00 11/22/21 (10,890) (12) Lowe's Cos., Inc.................................. (280,584) 220.00 11/22/21 (19,656) (34) McCormick & Co., Inc.............................. (272,782) 80.00 11/22/21 (4,930) (11) McDonald's Corp................................... (270,105) 240.00 11/22/21 (7,590) (21) Medtronic PLC..................................... (251,706) 130.00 11/22/21 (1,575) (33) NextEra Energy, Inc............................... (281,589) 82.50 11/22/21 (10,758) (26) Nucor Corp........................................ (290,290) 100.00 11/22/21 (34,008) (37) Pentair PLC....................................... (273,689) 70.00 11/22/21 (17,020) (150) People's United Financial, Inc.................... (257,100) 18.00 11/22/21 (3,000) (17) PepsiCo, Inc...................................... (274,720) 160.00 11/22/21 (4,760) (17) PPG Industries, Inc............................... (272,969) 160.00 11/22/21 (5,653) (19) Procter & Gamble (The) Co......................... (271,681) 145.00 11/22/21 (1,805) (38) Realty Income Corp................................ (271,434) 70.00 11/22/21 (7,448) (6) Roper Technologies, Inc........................... (292,722) 470.00 11/22/21 (12,600) (6) S&P Global, Inc................................... (284,496) 440.00 11/22/21 (22,830) (9) Sherwin-Williams (The) Co......................... (284,949) 300.00 11/22/21 (16,299) (15) Stanley Black & Decker, Inc....................... (269,595) 180.00 11/22/21 (6,540) (32) Sysco Corp........................................ (246,080) 80.00 11/22/21 (2,560) (13) T. Rowe Price Group, Inc.......................... (281,944) 200.00 11/22/21 (27,300) (11) Target Corp....................................... (285,582) 250.00 11/22/21 (14,487) (36) VF Corp........................................... (262,368) 72.50 11/22/21 (7,740) (6) W.W. Grainger, Inc................................ (277,866) 430.00 11/22/21 (20,760) (55) Walgreens Boots Alliance, Inc..................... (258,610) 50.00 11/22/21 (990) (19) Walmart, Inc...................................... (283,898) 140.00 11/22/21 (19,095) (7) West Pharmaceutical Services, Inc................. (300,916) 400.00 11/22/21 (22,435) ---------------- TOTAL CALL OPTIONS WRITTEN.................................................................. (706,742) (Premiums received $473,143) (c) ---------------- NET OTHER ASSETS AND LIABILITIES -- 0.1%.................................................... 277,701 ---------------- NET ASSETS -- 100.0%........................................................................ $ 294,415,028 ================ See Notes to Financial Statements Page 11 FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) PORTFOLIO OF INVESTMENTS (CONTINUED) OCTOBER 31, 2021 (a) All or a portion of this security is held as collateral for the options written. At October 31, 2021, the value of these securities amount to $17,459,721 or 5.9% of net assets. (b) Rate shown reflects yield as of October 31, 2021. (c) Aggregate cost for federal income tax purposes is $269,550,343. As of October 31, 2021, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost was $31,034,514 and the aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value was $6,447,530. The net unrealized appreciation was $24,586,984. The amounts presented are inclusive of derivative contracts. ----------------------------- VALUATION INPUTS A summary of the inputs used to value the Fund's investments as of October 31, 2021 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements): ASSETS TABLE LEVEL 2 LEVEL 3 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT VALUE AT QUOTED OBSERVABLE UNOBSERVABLE 10/31/2021 PRICES INPUTS INPUTS --------------- --------------- --------------- --------------- Common Stocks*........................................ $ 294,081,872 $ 294,081,872 $ -- $ -- Money Market Funds.................................... 762,197 762,197 -- -- --------------- --------------- --------------- --------------- Total Investments..................................... $ 294,844,069 $ 294,844,069 $ -- $ -- =============== =============== =============== =============== LIABILITIES TABLE LEVEL 2 LEVEL 3 TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT VALUE AT QUOTED OBSERVABLE UNOBSERVABLE 10/31/2021 PRICES INPUTS INPUTS --------------- --------------- --------------- --------------- Call Options Written.................................. $ (706,742) $ (706,742) $ -- $ -- =============== =============== =============== =============== * See Portfolio of Investments for industry breakout. Page 12 See Notes to Financial Statements FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 2021 ASSETS: Investments, at value.................................................. $ 294,844,069 Cash segregated as collateral for open options contracts............... 566 Receivables: Investment securities sold.......................................... 9,375,927 Dividends........................................................... 451,883 -------------- Total Assets..................................................... 304,672,445 -------------- LIABILITIES: Options contracts written, at value.................................... 706,742 Payables: Investment securities purchased..................................... 9,374,011 Investment advisory fees............................................ 176,664 -------------- Total Liabilities................................................ 10,257,417 -------------- NET ASSETS............................................................. $ 294,415,028 ============== NET ASSETS CONSIST OF: Paid-in capital........................................................ $ 268,990,048 Par value.............................................................. 53,750 Accumulated distributable earnings (loss).............................. 25,371,230 -------------- NET ASSETS............................................................. $ 294,415,028 ============== NET ASSET VALUE, per share............................................. $ 54.77 ============== Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share).......................................... 5,375,000 ============== Investments, at cost................................................... $ 260,500,327 ============== Premiums received on options contracts written......................... $ 473,143 ============== See Notes to Financial Statements Page 13 FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2021 INVESTMENT INCOME: Dividends.............................................................. $ 3,804,485 -------------- Total investment income............................................. 3,804,485 -------------- EXPENSES: Investment advisory fees............................................... 1,191,261 -------------- Total expenses...................................................... 1,191,261 -------------- NET INVESTMENT INCOME (LOSS)........................................... 2,613,224 -------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments......................................................... (2,606,393) Written options contracts........................................... 1,128,524 -------------- Net realized gain (loss)............................................... (1,477,869) -------------- Net change in unrealized appreciation (depreciation) on: Investments......................................................... 31,146,981 Written options contracts........................................... (301,922) -------------- Net change in unrealized appreciation (depreciation)................... 30,845,059 -------------- NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 29,367,190 -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................................................... $ 31,980,414 ============== Page 14 See Notes to Financial Statements FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) STATEMENTS OF CHANGES IN NET ASSETS YEAR YEAR ENDED ENDED 10/31/2021 10/31/2020 -------------- --------------- OPERATIONS: Net investment income (loss)........................................... $ 2,613,224 $ 1,029,038 Net realized gain (loss)............................................... (1,477,869) (648,972) Net change in unrealized appreciation (depreciation)................... 30,845,059 (419,026) -------------- --------------- Net increase (decrease) in net assets resulting from operations........ 31,980,414 (38,960) -------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment operations.................................................. (6,058,854) (2,257,817) -------------- --------------- SHAREHOLDER TRANSACTIONS: Proceeds from shares sold.............................................. 201,715,231 30,068,687 Cost of shares redeemed................................................ -- (4,573,665) Transaction fees (Note 8).............................................. -- 6,236 -------------- --------------- Net increase (decrease) in net assets resulting from shareholder transactions............................................ 201,715,231 25,501,258 -------------- --------------- Total increase (decrease) in net assets................................ 227,636,791 23,204,481 NET ASSETS: Beginning of period.................................................... 66,778,237 43,573,756 -------------- --------------- End of period.......................................................... $ 294,415,028 $ 66,778,237 ============== =============== CHANGES IN SHARES OUTSTANDING: Shares outstanding, beginning of period................................ 1,575,000 975,000 Shares sold............................................................ 3,800,000 700,000 Shares redeemed........................................................ -- (100,000) -------------- --------------- Shares outstanding, end of period...................................... 5,375,000 1,575,000 ============== =============== See Notes to Financial Statements Page 15 FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD YEAR ENDED OCTOBER 31, PERIOD ------------------------------------------------ ENDED 2021 2020 2019 10/31/2018 (a) -------------- -------------- -------------- -------------- Net asset value, beginning of period....... $ 42.40 $ 44.69 $ 40.28 $ 40.00 ---------- ---------- ---------- ---------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)............... 0.73 0.81 (b) 0.74 (b) 0.43 (b) Net realized and unrealized gain (loss).... 13.57 (1.35) (c) 5.52 0.70 (c) ---------- ---------- ---------- ---------- Total from investment operations........... 14.30 (0.54) 6.26 1.13 ---------- ---------- ---------- ---------- DISTRIBUTIONS PAID TO SHAREHOLDERS FROM: Net investment income...................... (0.58) (1.75) (1.57) (0.40) Net realized gain.......................... (1.35) -- (0.29) (0.46) ---------- ---------- ---------- ---------- Total distributions........................ (1.93) (1.75) (1.86) (0.86) ---------- ---------- ---------- ---------- CAPITAL SHARE TRANSACTIONS: Transaction fees (Note 8).................. -- 0.00 (b)(d) 0.01 (b) 0.01 (b) ---------- ---------- ---------- ---------- Net asset value, end of period............. $ 54.77 $ 42.40 $ 44.69 $ 40.28 ========== ========== ========== ========== TOTAL RETURN (e)........................... 34.14% (0.93)% 15.98% 2.84% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in 000's)....... $ 294,415 $ 66,778 $ 43,574 $ 19,134 RATIOS TO AVERAGE NET ASSETS: Ratio of total expenses to average net assets.................................. 0.75% 0.75% 0.75% 0.75% (f) Ratio of net investment income (loss) to average net assets...................... 1.65% 1.89% 1.75% 1.73% (f) Portfolio turnover rate (g)................ 62% 86% 83% 50% (a) Inception date is March 26, 2018, which is consistent with the commencement of investment operations and is the date the initial creation units were established. (b) Based on average shares outstanding. (c) Realized and unrealized gains (losses) per share are balancing amounts necessary to reconcile the change in net asset value per share for the period and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the period. (d) Amount is less than $0.01. (e) 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. (f) Annualized. (g) 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 16 See Notes to Financial Statements -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 1. ORGANIZATION First Trust Exchange-Traded Fund IV (the "Trust") is an open-end management investment company organized as a Massachusetts business trust on September 15, 2010, and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust currently consists of ten funds that are offering shares. This report covers the FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) (the "Fund"), which trades under the ticker "KNG" on the Cboe BZX Exchange, Inc. ("Cboe BZX"). The Fund represents a separate series of shares of beneficial interest in the Trust. Unlike conventional mutual funds, the Fund issues and redeems shares on a continuous basis, at net asset value ("NAV"), only in large blocks of shares known as "Creation Units." The Fund's investment objective seeks investment results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Cboe S&P 500(R) Dividend Aristocrats Target Income Index Monthly Series (the "Index"). The Fund will normally invest at least 80% of its total assets (including investment borrowings) in the common stocks and call options that comprise the Index. The Index's primary goal is to generate an annualized level of income from stock dividends and option premiums that is approximately 3% over the annual dividend yield of the S&P 500(R) Index and the Index's secondary goal is to generate capital appreciation based on the price returns of the equity securities contained in the Index. 2. SIGNIFICANT ACCOUNTING POLICIES The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, "Financial Services-Investment Companies." The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. A. PORTFOLIO VALUATION The Fund's NAV is determined daily as of the close of regular trading on the New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. The Fund's NAV is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding. The Fund's investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Pricing Committee of the Fund's investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor") in accordance with valuation procedures adopted by the Trust's Board of Trustees, and in accordance with provisions of the 1940 Act. Investments valued by the Advisor's Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. The Fund's investments are valued as follows: Common stocks and other equity securities listed on any national or foreign exchange (excluding The Nasdaq Stock Market LLC ("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. Exchange-traded options contracts are valued at the closing price in the market where such contracts are principally traded. If no closing price is available, exchange-traded options contracts are fair valued at the mean of their most recent bid and asked price, if available, and otherwise at their closing bid price. Securities traded in an over-the-counter market are fair valued at the mean of their most recent bid and asked price, if available, and otherwise at their closing bid price. Shares of open-end funds are valued at fair value which is based on NAV per share. Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Trust's Board of Trustees or its delegate, the Advisor's Pricing Committee, at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of Page 17 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 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 type of security; 2) the size of the holding; 3) the initial cost of the security; 4) transactions in comparable securities; 5) price quotes from dealers and/or third-party pricing services; 6) relationships among various securities; 7) information obtained by contacting the issuer, analysts, or the appropriate stock exchange; 8) an analysis of the issuer's financial statements; and 9) the existence of merger proposals or tender offers that might affect the value of the security. The Fund is subject to fair value accounting standards that define fair value, establish the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation as of the measurement date. The three levels of the fair value hierarchy are as follows: o Level 1 - Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis. o Level 2 - Level 2 inputs are observable inputs, either directly or indirectly, and include the following: o Quoted prices for similar investments in active markets. o Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly. o Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates). o Inputs that are derived principally from or corroborated by observable market data by correlation or other means. o Level 3 - Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the investment. The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value the Fund's investments as of October 31, 2021, is included with the Fund's Portfolio of Investments. B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income is recorded daily on the accrual basis. Amortization of premiums and accretion of discounts are recorded using the effective interest method. Distributions received from the Fund's investments in real estate investment trusts ("REITs") may be comprised of return of capital, capital gains and income. The actual character of the amounts received during the year is not known until after the REITs' fiscal year end. The Fund records the character of distributions received from the REITs during the year based on estimates available. The characterization of distributions received by the Fund may be subsequently revised based on information received by the REITs after their tax reporting periods conclude. C. OPTIONS CONTRACTS The Fund will employ a "partial covered call strategy," meaning that covered calls will be written on a notional value of no more than 20% of the value of each underlying stock contained in the S&P 500 Dividend Aristocrats Index (the "Aristocrat Stocks"), such that the short position in each call option is "covered" by a portion of the corresponding Aristocrat Stock held by the Fund to generate income. A written (sold) call option gives the seller the obligation to sell shares of the underlying asset at a specified price ("strike price") at a specified date ("expiration date"). The writer (seller) of the call option receives an amount (premium) for writing (selling) the option. In the event Page 18 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 the underlying asset appreciates above the strike price as of the expiration date, the writer (seller) of the call option will have to pay the difference between the value of the underlying asset and the strike price (which loss is offset by the premium initially received), and in the event the underlying asset declines in value, the call option may end up worthless and the writer (seller) of the call option retains the premium. When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is included in "Options contracts written, at value" on the Statement of Assets and Liabilities. Options are marked-to-market daily and their value is affected by changes in the value of the underlying security, changes in interest rates, changes in the actual or perceived volatility of the securities markets and the underlying securities, and the remaining time to the option's expiration. The value of options may also be adversely affected if the market for the options becomes less liquid or the trading volume diminishes. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from options written. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain or loss. Any gain or loss on written options would be included in "Net realized gain (loss) on written options contracts" on the Statement of Operations. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income, if any, are declared and paid quarterly by the Fund, or as the Board of Trustees may determine from time to time. Distributions of net realized gains earned by the Fund, if any, are distributed at least annually. Distributions 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 years ended October 31, 2021 and 2020 was as follows: Distributions paid from: 2021 2020 Ordinary income................................. $ 5,267,572 $ 1,542,140 Capital gains................................... 791,282 715,677 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................... $ 784,246 Accumulated capital and other gain (loss)....... -- Net unrealized appreciation (depreciation)...... 24,586,984 E. INCOME TAXES The Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net realized gains to shareholders. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund's taxable income exceeds the distributions from such taxable income for the calendar year. The Fund is subject to accounting standards that establish a minimum threshold for recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. The taxable years ended 2018, 2019, 2020, and 2021 remain open to federal and state audit. As of October 31, 2021, management has evaluated the application of these standards to the Fund and has determined that no provision for income tax is required in the Fund's financial statements for uncertain tax positions. The Fund intends to utilize provisions of the federal income tax laws, which allow it to carry a realized capital loss forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At October 31, 2021, the Fund had no capital loss carryforwards for federal income tax purposes. Page 19 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 Certain losses realized during the current fiscal year may be deferred and treated as occurring on the first day of the following fiscal year for federal income tax purposes. For the fiscal year ended October 31, 2021, the Fund had no net late year ordinary or capital losses. In order to present paid-in capital and accumulated distributable earnings (loss) (which consists of accumulated net investment income (loss), accumulated net realized gain (loss) on investments and net unrealized appreciation (depreciation) on investments) on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to paid-in capital, accumulated net investment income (loss) and accumulated net realized gain (loss) on investments. These adjustments are primarily due to the difference between book and tax treatments of income and gains on various investment securities held by the Fund and in-kind transactions. The results of operations and net assets were not affected by these adjustments. For the fiscal year ended October 31, 2021, there were no tax adjustments made to accumulated distributable earnings (loss) accounts due to differences between book and tax treatments. F. EXPENSES Expenses, other than the investment advisory fee and other excluded expenses, are paid by the Advisor (see Note 3). 3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS First Trust, the investment advisor to the Fund, is a limited partnership with one limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust is responsible for the selection and ongoing monitoring of the securities in the Fund's portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund. First Trust is responsible for the expenses of the Fund including the cost of transfer agency, sub-advisory, custody, fund administration, legal, audit and other services and license fees (if any), but excluding fee payments under the Investment Management Agreement, interest, taxes, acquired fund fees and expenses, if any, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses. The Fund has agreed to pay First Trust an annual management fee equal to 0.75% of its average daily net assets. Cboe Vest(SM) Financial LLC ("Cboe Vest"), an affiliate of First Trust, serves as the Fund's sub-advisor and manages the Fund's portfolio subject to First Trust's supervision. Pursuant to the Investment Management Agreement, between the Trust, on behalf of the Fund, and the Advisor, and the Investment Sub-Advisory Agreement among the Trust, on behalf of the Fund, the Advisor and Cboe Vest, First Trust will supervise Cboe Vest and its management of the investment of the Fund's assets and will pay Cboe Vest for its services as the Fund's sub-advisory fee equal to 0.20% of the average daily net assets of the Fund, less Cboe Vest's share of the Fund's expenses. Cboe Vest's fee is paid by the Advisor out of its management fee. 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 is an index fund. Additionally, the Lead Independent Trustee and the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Lead Independent Trustee and Committee Chairs rotate every three years. The officers and "Interested" Trustee receive no compensation from the Trust for acting in such capacities. 4. REORGANIZATION On March 1, 2021, the Board of Trustees of Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) ("Target Fund"), an index based exchange-traded fund ("ETF") managed by Cboe VestSM Financial LLC, approved a reorganization into FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) (the "Acquiring Fund" or "KNG"), an index based ETF managed by First Trust. Page 20 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 The reorganization resulted in a shift in the management responsibility for the Target Fund. Other than the management responsibility, the primary characteristics of Target Fund and the Acquiring Fund are materially the same. The Acquiring Fund's investment objective, investment strategies, policies and risks are identical in all material respects to those of the Target Fund. Under the terms of the Reorganization, which was tax-free, the assets of Target Fund were transferred to, and the liabilities of Target Fund were assumed by KNG. The shareholders of the Target Fund received shares of KNG with a value equal to the aggregate net asset value of the shares of the Target Fund held by them. 5. PURCHASES AND SALES OF SECURITIES For the fiscal year ended October 31, 2021, the cost of purchases and proceeds from sales of investments, excluding short-term investments and in-kind transactions, were $100,389,927 and $98,842,871, respectively. For the fiscal year ended October 31, 2021, the cost of in-kind purchases and proceeds from in-kind sales were $199,069,547 and $0, respectively. 6. DERIVATIVE TRANSACTIONS The following table presents the types of derivatives held by the Fund at October 31, 2021, the primary underlying risk exposure and the location of these instruments as presented on the Statements of Assets and Liabilities. ASSET DERIVATIVES LIABILITY DERIVATIVES ---------------------------------------- -------------------------------------- DERIVATIVE RISK STATEMENT OF ASSETS AND STATEMENT OF ASSETS AND INSTRUMENTS EXPOSURE LIABILITIES LOCATION VALUE LIABILITIES LOCATION VALUE ----------- ----------- ---------------------------- ---------- -------------------------- ---------- Options contracts written, Options Equity Risk -- $ -- at value $ 706,742 The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized for the fiscal year ended October 31, 2021, on derivative instruments, as well as the primary underlying risk exposure associated with the instruments. STATEMENT OF OPERATIONS LOCATION ------------------------------------------------------------------------------- EQUITY RISK EXPOSURE Net realized gain (loss) on written options contracts $ 1,128,524 Net change in unrealized appreciation (depreciation) on written options contracts (301,922) During the fiscal year ended October 31, 2021, the premiums for written options contracts opened were $3,171,958 and the premiums for written options contracts closed, exercised and expired were $2,818,784. 7. OFFSETTING ASSETS AND LIABILITIES The Fund is subject to a Master Netting Arrangement, which governs the terms of certain transactions with select counterparties. The Master Netting Arrangement allows the Fund to close out and net its total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty. The Master Netting Arrangement also specifies collateral posting arrangements at pre-arranged exposure levels. Under the Master Netting Arrangement, collateral is routinely transferred if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant Master Netting Arrangement with a counterparty in a given account exceeds a specified threshold depending on the counterparty and type of Master Netting Arrangement. Page 21 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 The following is a summary of the Assets and Liabilities subject to offsetting in the Fund as of the end of the reporting period: NET AMOUNT GROSS AMOUNT NOT OFFSET GROSS AMOUNT OF LIABILITIES IN THE STATEMENT OF GROSS OFFSET IN THE PRESENTED IN THE ASSETS AND LIABILITIES AMOUNT OF STATEMENT OF STATEMENT OF -------------------------------- DESCRIPTION/ RECOGNIZED ASSETS AND ASSETS AND FINANCIAL CASH COLLATERAL NET COUNTERPARTY LIABILITIES LIABILITIES LIABILITIES INSTRUMENTS PLEDGED AMOUNT ---------------------------- -------------- -------------- ---------------- -------------- --------------- ------------ Written Options Societe Generale $ 706,742 $ -- $ 706,742 $ (706,742) $ -- $ -- In some instances, the collateral amounts disclosed in the tables were adjusted due to the requirement to limit the collateral amounts to avoid the effect of overcollateralization. Actual collateral received/pledged may be more than the amounts disclosed herein. 8. CREATIONS, REDEMPTIONS AND TRANSACTION FEES The Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as "Authorized Participants" have contractual arrangements with the Fund's service providers to purchase and redeem Fund shares directly with the Fund in large blocks of shares known as "Creation Units." Prior to the start of trading on every business day, the Fund publishes through the National Securities Clearing Corporation ("NSCC") the "basket" of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund's shares. An Authorized Participant that wishes to effectuate a creation of the Fund's shares deposits with the Fund the "basket" of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund's shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may continue to hold the Fund's shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of the Fund's shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in the Fund's shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of the Fund's shares at or close to the NAV per share of the Fund. The Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, plus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket. The Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by the Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed. 9. 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. Page 22 -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 10. 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. 11. OTHER MATTERS By operation of law, the Fund now operates as a diversified open-end management investment company as defined in Section 5(b) of the 1940 Act. 12. SUBSEQUENT EVENTS Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were issued, and has determined that there was the following subsequent event: On November 18, 2021, First Trust Limited Duration Investment Grade Corporate ETF, an additional series of the Trust, began trading under the symbol "FSIG" on NYSE Arca, Inc. Page 23 -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -------------------------------------------------------------------------------- TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF FIRST TRUST EXCHANGE-TRADED FUND IV: OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS We have audited the accompanying statement of assets and liabilities of FT Cboe Vest S&P 500(R) Dividend Aristocrats Target Income ETF(R) (the "Fund"), a series of the First Trust Exchange-Traded Fund IV, including the portfolio of investments, as of October 31, 2021, the related statement of operations, the statement of changes in net assets, and the financial highlights for the year then ended and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2021, and the results of its operations, the statement of changes in net assets and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The statement of changes in net assets for the year ended October 31, 2020 and the financial highlights for the years ended October 31, 2020 and 2019 and for the period from March 26, 2018 (commencement of operations) through October 31, 2018 were audited by other auditors whose report dated December 23, 2020, expressed an unqualified opinion on such statement of changes in net assets and financial highlights. BASIS FOR OPINION These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Chicago, Illinois December 22, 2021 We have served as the auditor of one or more First Trust investment companies since 2001. Page 24 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 (UNAUDITED) PROXY VOTING POLICIES AND PROCEDURES A description of the policies and procedures that the Trust uses to determine how to vote proxies and information on how the Fund voted proxies relating to its portfolio securities during the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (800) 988-5891; (2) on the Fund's website at www.ftportfolios.com; and (3) on the Securities and Exchange Commission's ("SEC") website at www.sec.gov. PORTFOLIO HOLDINGS The Fund files portfolio holdings information for each month in a fiscal quarter within 60 days after the end of the relevant fiscal quarter on Form N-PORT. Portfolio holdings information for the third month of each fiscal quarter will be publicly available on the SEC's website at www.sec.gov. The Fund's complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the semi-annual and annual reports to shareholders, respectively, and is filed with the SEC on Form N-CSR. The semi-annual and annual report for the Fund is available to investors within 60 days after the period to which it relates. The Fund's Forms N-PORT and Forms N-CSR are available on the SEC's website listed above. FEDERAL TAX INFORMATION For the taxable year ended October 31, 2021, the following percentages of income dividend paid by the Fund qualified for the dividends received deduction available to corporations and is hereby designated as qualified dividend income: Dividends Received Deduction Qualified Dividend Income ---------------------------- ------------------------- 66.34% 70.71% For the fiscal year ended October 31, 2021, the amount of long-term capital gain distributions designated by the Fund was $791,282, which is taxable at the applicable capital gain tax rates for federal income tax purposes. A portion of the Fund's 2021 ordinary dividends (including short-term capital gains) paid to shareholders during the fiscal year ended October 31, 2021, may be eligible for the Qualified Business Income Deduction (QBI) under Internal Revenue Code of 1986, as amended, Section 199A for the aggregate dividends Fund received from the underlying Real Estate Investment Trusts (REITs) it invests in. RISK CONSIDERATIONS RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE, RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT WWW.FTPORTFOLIOS.COM OR CONTACT FIRST TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO REQUEST A PROSPECTUS, WHICH CONTAINS THIS AND OTHER INFORMATION ABOUT EACH FUND. CONCENTRATION RISK. To the extent that a fund is able to invest a significant percentage of its assets in a single asset class or the securities of issuers within the same country, state, region, industry or sector, an adverse economic, business or political development may affect the value of the fund's investments more than if the fund were more broadly diversified. A fund that tracks an index will be concentrated to the extent the fund's corresponding index is concentrated. A concentration makes a fund more susceptible to any single occurrence and may subject the fund to greater market risk than a fund that is more broadly diversified. CREDIT RISK. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and the related risk that the value of a security may decline because of concerns about the issuer's ability to make such payments. CYBER SECURITY RISK. The funds are susceptible to potential operational risks through breaches in cyber security. A breach in cyber security refers to both intentional and unintentional events that may cause a fund to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause a fund to incur regulatory penalties, reputational damage, 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. Page 25 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 (UNAUDITED) DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is designed to deliver returns tied to the price performance of an underlying ETF, an investor may not realize the returns the fund seeks to achieve if that investor does not hold shares for the entire target outcome period. In the event an investor purchases shares after the first day of the target outcome period or sells shares prior to the end of the target outcome period, the buffer that the fund seeks to provide against a decline in the value of the underlying ETF may not be available, the enhanced returns that the fund seeks to provide (if any) may not be available and the investor may not participate in a gain in the value of the underlying ETF up to the cap for the investor's investment period. Additionally, the fund will not participate in gains of the underlying ETF above the cap and a shareholder may lose their entire investment. If the fund seeks enhanced returns, there are certain time periods when the value of the fund may fall faster than the value of the underlying ETF, and it is very unlikely that, on any given day during which the underlying ETF share price increases in value, the fund's share price will increase at the same rate as the enhanced returns sought by the fund, which is designed for an entire target outcome period. Trading flexible exchange options involves risks different from, or possibly greater than, the risks associated with investing directly in securities, such as less liquidity and correlation and valuation risks. A fund may experience substantial downside from specific flexible exchange option positions and certain positions may expire worthless. DERIVATIVES RISK. To the extent a fund uses derivative instruments such as futures contracts, options contracts and swaps, the fund may experience losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivative. These risks are heightened when a fund's portfolio managers use derivatives to enhance the fund's return or as a substitute for a position or security, rather than solely to hedge (or offset) the risk of a position or security held by the fund. EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the value of the fund's shares will fluctuate with changes in the value of the equity securities. Equity securities prices fluctuate for several reasons, including changes in investors' perceptions of the financial condition of an issuer or the general condition of the relevant stock market, such as market volatility, or when political or economic events affecting the issuers occur. In addition, common stock prices may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase. Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market. ETF RISK. The shares of an ETF trade like common stock and represent an interest in a portfolio of securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities, although lack of liquidity in an ETF could result in it being more volatile and ETFs have management fees that increase their costs. Shares of an ETF trade on an exchange at market prices rather than net asset value, which may cause the shares to trade at a price greater than net asset value (premium) or less than net asset value (discount). In times of market stress, decisions by market makers to reduce or step away from their role of providing a market for an ETF's shares, or decisions by an ETF's authorized participants that they are unable or unwilling to proceed with creation and/or redemption orders of an ETF's shares, could result in shares of the ETF trading at a discount to net asset value and in greater than normal intraday bid-ask spreads. FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income securities, the fund will be subject to credit risk, income risk, interest rate risk, liquidity risk and prepayment risk. Income risk is the risk that income from a fund's fixed income investments could decline during periods of falling interest rates. Interest rate risk is the risk that the value of a fund's fixed income securities will decline because of rising interest rates. Liquidity risk is the risk that a security cannot be purchased or sold at the time desired, or cannot be purchased or sold without adversely affecting the price. Prepayment risk is the risk that the securities will be redeemed or prepaid by the issuer, resulting in lower interest payments received by the fund. In addition to these risks, high yield securities, or "junk" bonds, are subject to greater market fluctuations and risk of loss than securities with higher ratings, and the market for high yield securities is generally smaller and less liquid than that for investment grade securities. INDEX OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or more indices or ETF models. As a result, such a fund may be included in one or more index-tracking exchange-traded funds or mutual funds. Being a component security of such a vehicle could greatly affect the trading activity involving a fund, the size of the fund and the market volatility of the fund. Inclusion in an index could increase demand for the fund and removal from an index could result in outsized selling activity in a relatively short period of time. As a result, a fund's net asset value could be negatively impacted and the fund's market price may be significantly below its net asset value during certain periods. In addition, index rebalances may potentially result in increased trading activity in a fund's shares. 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 Page 26 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 (UNAUDITED) 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, will cease making LIBOR available as a reference rate over a phase-out period that will begin immediately after December 31, 2021. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition away from LIBOR on the fund or on certain instruments in which the fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to the fund. MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to management risk. In managing an actively-managed fund's investment portfolio, the fund's portfolio managers will apply investment techniques and risk analyses that may not have the desired result. There can be no guarantee that a fund will meet its investment objective. MARKET RISK. Securities held by a fund, as well as shares of a fund itself, are subject to market fluctuations caused by factors such as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on a fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. While the development of vaccines has slowed the spread of the virus and allowed for the resumption of "reasonably" normal business activity in the United States, many countries continue to impose lockdown measures in an attempt to slow the spread. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease. NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities, it is subject to additional risks not associated with securities of domestic issuers. Non-U.S. securities are subject to higher volatility than securities of domestic issuers due to: possible adverse political, social or economic developments; restrictions on foreign investment or exchange of securities; capital controls; lack of liquidity; currency exchange rates; excessive taxation; government seizure of assets; the imposition of sanctions by foreign governments; different legal or accounting standards; and less government supervision and regulation of exchanges in foreign countries. Investments in non-U.S. securities may involve higher costs than investments in U.S. securities, including higher transaction and custody costs, as well as additional taxes imposed by non-U.S. governments. These risks may be heightened for securities of companies located, or with significant operations, in emerging market countries. OPERATIONAL RISK. Each fund is subject to risks arising from various operational factors, including, but not limited to, human error, processing and communication errors, errors of a fund's service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. Each fund relies on third-parties for a range of services, including custody. Any delay or failure relating to engaging or maintaining such service providers may affect a fund's ability to meet its investment objective. Although the funds and the funds' investment advisor seek to reduce these operational risks through controls and procedures, there is no way to completely protect against such risks. PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund will invest in the securities included in, or representative of, the index regardless of their investment merit. A fund generally will not attempt to take defensive positions in declining markets. NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE Page 27 -------------------------------------------------------------------------------- ADDITIONAL INFORMATION (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 (UNAUDITED) BOARD OF TRUSTEES Effective November 1, 2021, Denise M. Keefe was appointed as a Trustee of the Trust. Ms. Keefe is Executive Vice President of Advocate Aurora Health and President of Advocate Aurora Continuing Health Division (together, "Advocate"), one of the largest integrated healthcare systems in the U.S. serving Illinois and Wisconsin. Ms. Keefe has been employed by Advocate since 1993 and is responsible for the Continuing Health Division's strategic direction, fiscal management, business development, revenue enhancement, operational efficiencies, and human resource management of 4,000 employees. Ms. Keefe also currently serves on the boards of several organizations within the Advocate Aurora Continuing Health Division and other health care organizations, including RML Long Term Acute Care Hospitals (since 2014) and Senior Helpers (since 2021). Prior thereto, Ms. Keefe was Corporate Vice President, Marketing and Business Development for the Visiting Nurse Association of Chicago (1989 - 1992) and a former Board Member of Sherman West Court Skilled Nursing Facility. Page 28 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 (UNAUDITED) The following tables identify the Trustees and Officers of the Trust. Unless otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite 400, Wheaton, IL 60187. The Trust's statement of additional information includes additional information about the Trustees and is available, without charge, upon request, by calling (800) 988-5891. NUMBER OF OTHER PORTFOLIOS IN TRUSTEESHIPS OR THE FIRST TRUST DIRECTORSHIPS NAME, TERM OF OFFICE AND FUND COMPLEX HELD BY TRUSTEE YEAR OF BIRTH AND YEAR FIRST ELECTED PRINCIPAL OCCUPATIONS OVERSEEN BY DURING PAST POSITION WITH THE TRUST OR APPOINTED DURING PAST 5 YEARS TRUSTEE 5 YEARS ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES ------------------------------------------------------------------------------------------------------------------------------------ Richard E. Erickson, Trustee o Indefinite Term Physician, Officer, Wheaton Orthopedics; 215 None (1951) Limited Partner, Gundersen Real Estate o Since Inception Limited Partnership (June 1992 to December 2016) Thomas R. Kadlec, Trustee o Indefinite Term President, ADM Investors Services, Inc. 215 Director of ADM (1957) (Futures Commission Merchant) Investor Services, o Since Inception Inc., ADM Investor Services International, Futures Industry Association, and National Futures Association Robert F. Keith, Trustee o Indefinite Term President, Hibs Enterprises (Financial 215 Director of Trust (1956) and Management Consulting) Company of o Since Inception Illinois Niel B. Nielson, Trustee o Indefinite Term Senior Advisor (August 2018 to Present), 215 None (1954) Managing Director and Chief Operating o Since Inception Officer (January 2015 to August 2018), Pelita Harapan Educational Foundation (Educational Products and Services) ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEE ------------------------------------------------------------------------------------------------------------------------------------ James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer, First Trust 215 None Chairman of the Board Advisors L.P. and First Trust (1955) o Since Inception Portfolios L.P.; Chairman of the Board of Directors, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) ----------------------------- (1) Mr. Bowen is deemed an "interested person" of the Trust due to his position as Chief Executive Officer of First Trust Advisors L.P., investment advisor of the Trust. Page 29 -------------------------------------------------------------------------------- BOARD OF TRUSTEES AND OFFICERS (CONTINUED) -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 (UNAUDITED) NAME AND POSITION AND OFFICES TERM OF OFFICE AND PRINCIPAL OCCUPATIONS YEAR OF BIRTH WITH TRUST LENGTH OF SERVICE DURING PAST 5 YEARS ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS(2) ------------------------------------------------------------------------------------------------------------------------------------ James M. Dykas President and Chief o Indefinite Term Managing Director and Chief Financial Officer (1966) Executive Officer (January 2016 to Present), Controller (January 2011 o Since January 2016 to January 2016), Senior Vice President (April 2007 to January 2016), First Trust Advisors L.P. and First Trust Portfolios L.P.; Chief Financial Officer (January 2016 to Present), BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) Donald P. Swade Treasurer, Chief Financial o Indefinite Term Senior Vice President (July 2016 to Present), Vice (1972) Officer and Chief Accounting President (April 2012 to July 2016), First Trust Officer o Since January 2016 Advisors L.P. and First Trust Portfolios L.P. W. Scott Jardine Secretary and Chief o Indefinite Term General Counsel, First Trust Advisors L.P. and First (1960) Legal Officer Trust Portfolios L.P.; Secretary and General o Since Inception Counsel, BondWave LLC; Secretary, Stonebridge Advisors LLC Daniel J. Lindquist Vice President o Indefinite Term Managing Director, First Trust Advisors L.P. and (1970) First Trust Portfolios L.P. o Since Inception Kristi A. Maher Chief Compliance Officer o Indefinite Term Deputy General Counsel, First Trust Advisors L.P. (1966) and Assistant Secretary and First Trust Portfolios L.P. o Since Inception Roger F. Testin Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P. and (1966) First Trust Portfolios L.P. o Since Inception Stan Ueland Vice President o Indefinite Term Senior Vice President, First Trust Advisors L.P. and (1970) First Trust Portfolios L.P. o Since Inception ----------------------------- (2) The term "officer" means the president, vice president, secretary, treasurer, controller or any other officer who performs a policy making function. Page 30 -------------------------------------------------------------------------------- PRIVACY POLICY -------------------------------------------------------------------------------- FT CBOE VEST S&P 500(R) DIVIDEND ARISTOCRATS TARGET INCOME ETF(R) (KNG) OCTOBER 31, 2021 (UNAUDITED) PRIVACY POLICY First Trust values our relationship with you and considers your privacy an important priority in maintaining that relationship. We are committed to protecting the security and confidentiality of your personal information. SOURCES OF INFORMATION We collect nonpublic personal information about you from the following sources: o Information we receive from you and your broker-dealer, investment professional or financial representative through interviews, applications, agreements or other forms; o Information about your transactions with us, our affiliates or others; o Information we receive from your inquiries by mail, e-mail or telephone; and o Information we collect on our website through the use of "cookies". For example, we may identify the pages on our website that your browser requests or visits. INFORMATION COLLECTED The type of data we collect may include your name, address, social security number, age, financial status, assets, income, tax information, retirement and estate plan information, transaction history, account balance, payment history, investment objectives, marital status, family relationships and other personal information. DISCLOSURE OF INFORMATION We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. In addition to using this information to verify your identity (as required under law), the permitted uses may also include the disclosure of such information to unaffiliated companies for the following reasons: o In order to provide you with products and services and to effect transactions that you request or authorize, we may disclose your personal information as described above to unaffiliated financial service providers and other companies that perform administrative or other services on our behalf, such as transfer agents, custodians and trustees, or that assist us in the distribution of investor materials such as trustees, banks, financial representatives, proxy services, solicitors and printers. o We may release information we have about you if you direct us to do so, if we are compelled by law to do so, or in other legally limited circumstances (for example to protect your account from fraud). In addition, in order to alert you to our other financial products and services, we may share your personal information within First Trust. USE OF WEBSITE ANALYTICS We currently use third party analytics tools, Google Analytics and AddThis to gather information for purposes of improving First Trust's website and marketing our products and services to you. These tools employ cookies, which are small pieces of text stored in a file by your web browser and sent to websites that you visit, to collect information, track website usage and viewing trends such as the number of hits, pages visited, videos and PDFs viewed and the length of user sessions in order to evaluate website performance and enhance navigation of the website. We may also collect other anonymous information, which is generally limited to technical and web navigation information such as the IP address of your device, internet browser type and operating system for purposes of analyzing the data to make First Trust's website better and more useful to our users. The information collected does not include any personal identifiable information such as your name, address, phone number or email address unless you provide that information through the website for us to contact you in order to answer your questions or respond to your requests. To find out how to opt-out of these services click on: Google Analytics and AddThis. CONFIDENTIALITY AND SECURITY With regard to our internal security procedures, First Trust restricts access to your nonpublic personal information to those First Trust employees who need to know that information to provide products or services to you. We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information. POLICY UPDATES AND INQUIRIES As required by federal law, we will notify you of our privacy policy annually. We reserve the right to modify this policy at any time, however, if we do change it, we will tell you promptly. For questions about our policy, or for additional copies of this notice, please go to www.ftportfolios.com, or contact us at 1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust Advisors). March 2021 Page 31 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 INVESTMENT SUB-ADVISOR Cboe Vest(SM) Financial LLC 1765 Greensboro Station Pl, 9th Floor McLean, VA 22102 ADMINISTRATOR, CUSTODIAN, FUND ACCOUNTANT & TRANSFER AGENT The Bank of New York Mellon 240 Greenwich Street New York, NY 10286 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP 111 S. Wacker Drive Chicago, IL 60606 LEGAL COUNSEL Chapman and Cutler LLP 111 W. Monroe Street Chicago, IL 60603 [BLANK BACK COVER]