S&P Dividend Aristocrats Target 25 Portfolio, 3rd Quarter 2024 Series
The Strategy
The S&P Dividend Aristocrats Target 25 Portfolio in a unit investment trust which is based on the S&P 500 Dividend Aristocrats
Index and invests in companies from the index. The index consists of companies from the S&P 500 Index that have increased
dividends every year for at least 25 consecutive years. The index captures companies with a history of providing sustainable
dividend income and capital appreciation potential, both key factors in total return. The objective of the portfolio is to identify
companies with the potential to provide total return through a combination of dividend income and capital appreciation; however,
there is no assurance the objective will be met. The strategy is based on these steps:
- Begin with the stocks that comprise the S&P 500 Dividend Aristocrats Index. Regulated investment companies, limited
partnerships and business development companies are not eligible for selection.
- Rank each stock on three equally weighted factors:
- Debt-to-equity. Compares a company's long-term debt to their stockholder's equity. Higher
levels of this ratio are associated with higher risk, lower levels with lower risk.
- Price-to-cash flow. Measures the cost of a company's stock for every dollar of cash flow
generated. A lower, but positive, ratio indicates investors are paying less for the cash flow generated
which can be a sign of value.
- Return-on-assets. Compares a company's net income to its total assets. The ratio shows how
efficiently a company generates net income from its assets.
- Purchase an approximately equally weighted portfolio of the 25 stocks with the best overall
ranking on the three factors with a maximum of seven stocks from any one of the major Global
Industry Classification Standard (GICS) market sectors.
It is important to note that the past performance of the strategy is hypothetical and it is not
indicative of the future performance of the S&P Dividend Aristocrats Target 25 Portfolio.
|
Not FDIC Insured • Not Bank Guaranteed • May Lose Value
|
| Standard Deviations* |
Average Annual Total Returns* |
|
S&P 500
Index |
Strategy |
S&P 500
Index |
Strategy |
| Since 2000 |
15.46% |
14.52% |
7.02% |
8.90% |
| 20 years |
14.88% |
14.27% |
9.68% |
9.19% |
| 15 years |
15.36% |
15.39% |
13.95% |
11.24% |
| 10 years |
15.18% |
16.37% |
12.01% |
7.88% |
| 5 years |
18.51% |
20.27% |
15.66% |
10.38% |
| 3 years |
17.53% |
20.01% |
9.97% |
7.68% |
| *Through 12/29/23 |
| Annual Total Returns |
| Year |
S&P 500
Index |
Strategy
|
| 2000 |
-9.10% |
6.85% |
| 2001 |
-11.88% |
16.05% |
| 2002 |
-22.09% |
-10.19% |
| 2003 |
28.65% |
19.76% |
| 2004 |
10.87% |
17.19% |
| 2005 |
4.90% |
3.63% |
| 2006 |
15.76% |
18.01% |
| 2007 |
5.56% |
5.24% |
| 2008 |
-36.99% |
-22.21% |
| 2009 |
26.46% |
21.73% |
| 2010 |
15.08% |
16.90% |
| 2011 |
2.08% |
8.44% |
| 2012 |
15.98% |
12.46% |
| 2013 |
32.36% |
33.44% |
| 2014 |
13.66% |
11.55% |
| 2015 |
1.38% |
-2.87% |
| 2016 |
11.93% |
13.34% |
| 2017 |
21.80% |
16.65% |
| 2018 |
-4.39% |
-9.06% |
| 2019 |
31.45% |
28.57% |
| 2020 |
18.39% |
2.08% |
| 2021 |
28.67% |
28.85% |
| 2022 |
-18.12% |
-9.83% |
| 2023 |
26.24% |
7.44% |
| 3/28/24 |
10.55% |
6.87% |
Past performance is no guarantee of future results and the actual current performance of the portfolio may be lower or higher than the hypothetical performance of the
strategy. Hypothetical returns for the strategy in certain years were significantly higher than the returns of the S&P 500 Index. Hypothetical strategy returns were the result
of certain market factors and events which may not be replicated in the future. You can obtain performance information which is current through the most recent month-end
by calling First Trust Portfolios L.P. at 1-800-621-1675 option 2. Investment return and principal value of the portfolio will fluctuate causing units of the portfolio, when
redeemed, to be worth more or less than their original cost.
Simulated strategy returns are hypothetical, meaning that they
do not represent actual trading, and, thus, may not reflect
material economic and market factors, such as liquidity
constraints, that may have had an impact on actual decision
making. The hypothetical performance is the retroactive
application of the strategy designed with the full benefit of
hindsight. Strategy returns reflect a sales
charge of 1.85% and estimated annual operating expenses of 0.185%, plus organization costs, but not
taxes or commissions paid by the portfolio to purchase
securities. Returns assume that dividends are reinvested
monthly. Actual portfolio performance will vary from that of
investing in the strategy stocks because it may not be invested
equally in these stocks and may not be fully invested at all
times. It is important to note that the strategy may
underperform the S&P 500 Index in certain years and may
produce negative results.
Standard Deviation is a measure of price variability (risk). A
higher degree of variability indicates more volatility and
therefore greater risk.
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.
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