American Agenda, Series 30
The United States presidential election occurred November 5th, leaving investors to wonder what
its outcome will mean for their portfolios. While most voters focus on the current state of affairs
when casting their ballots in U.S. presidential elections, equity investors tend to concentrate on
the impact an election may have on fiscal and monetary policy that can influence future economic
growth. Since 1928, the S&P 500 Index has averaged a 10.7% total return in the year following
a presidential election.1 Seeing the big picture can help investors to stay focused on long-term
investment goals.
The outcome of U.S. elections can have an impact on different sectors and industries. Our analysts
at First Trust have identified certain areas of the market that we believe may offer strong relative
value and growth potential under the new administration.
- Aerospace & Defense | Aerospace is largely comprised of companies involved in the
production, sale, and service of commercial aircraft. Air travel has continued to increase with
average daily checkpoint travel numbers of nearly 2.4 million in 2023 compared to an average
of 1.6 million in 2021 and 2.1 million in 2022.2 The defense market is dependent on a nation’s need for
military weapons and systems designed to operate on land, sea, and in the air. The United
States military is unquestionably the dominant force in the world. Defense spending is
expected to increase around the globe, as nations continue to strengthen their militaries in
response to heightened geopolitical tensions.3
- Energy | U.S. energy consumption is anticipated to increase through 2050 due to economic growth, population growth, and increased travel. In addition, with higher international demand, the
U.S. is expected to remain a net exporter of petroleum products and natural gas through 2050.4
- Financials | We believe the trend that has perhaps had the most notable impact on this sector is industry consolidation, and that improved efficiency, lower operating costs, and increased volume
are a few of the benefits. Consolidation across the financials sector could continue to play an important role as institutions react to regulatory mandates and competitive opportunities both here in
the U.S. and abroad.
- Semiconductors | Semiconductors were worth $52.7 billion in 2023 and were the top U.S. electronic product export and the sixth overall U.S. export, according to the Semiconductor Industry
Association (SIA) and U.S. International Trade Commission. Global semiconductor sales have grown steadily over the last several decades topping $500 billion in 2021. Although growth slowed in
2023, a rebound is anticipated in 2024 with growth continuing to reach over $687 billion in 2025.55
- U.S. Revenue | Although a company may be incorporated in the U.S., it does not necessarily mean that it has high exposure to the American economy. Approximately 41% of the S&P 500 Index
revenues are generated outside the U.S.6 Companies that derive over 90% of their revenue domestically provide the potential for exposure to the U.S. economy while avoiding companies that could
be adversely affected by slower global growth.
1 First Trust, Morningstar/Ibbotson Associates, as of 9/30/24.
2 TSA
3 Deloitte, 2023 Aerospace and Defense Industry Outlook
4 U.S. Energy Information Administration, Annual Energy Outlook 2023
5 World Semiconductor Trade Statistics (WSTS), SIA, and Statista
6 FactSet
Portfolio Objective
This unit investment trust seeks above-average capital appreciation; however, there is no
assurance the objective will be met.
| Not FDIC Insured • Not Bank Guaranteed • May Lose Value |
You should consider the portfolio's investment objectives, risks, and
charges and expenses carefully before investing. Contact your financial professional
or call First Trust Portfolios, L.P. at 1.800.621.1675 to request a prospectus,
which contains this and other information about the portfolio. Read it carefully
before you invest.
Risk Considerations
An investment in this unmanaged unit investment trust should
be made with an understanding of the risks involved with owning common stocks, such as an
economic recession and the possible deterioration of either the financial condition of the issuers
of the equity securities or the general condition of the stock market.
An investment in a portfolio containing mid-cap companies is subject to additional risks, as the share prices of certain mid-cap companies are often more volatile than those of larger companies due to several factors, including
limited trading volumes, products, financial resources, management inexperience and less publicly available information.
Large capitalization companies may grow at a slower rate than the overall market.
As the use of Internet technology has become more prevalent in the course of business, the trust
has become more susceptible to potential operational risks through breaches in cybersecurity.
Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility
within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities could have a significant impact on certain investments as well as performance.
The ongoing effects of the COVID-19 global pandemic, or the potential impacts of any future public health crisis, may cause significant volatility and uncertainty in global financial markets. While vaccines have been developed,
there is no guarantee that vaccines will be effective against future variants of the disease.
The value of the securities held by the trust may be subject to steep declines or increased
volatility due to changes in performance or perception of the issuers.
This UIT is a buy and hold strategy and investors should consider their ability to hold the trust until
maturity. There may be tax consequences unless units are purchased in an IRA or other qualified plan.