Corporate Investment Grade Portfolio, Long-Term Series 5
Corporate Bonds
A corporate bond is a debt obligation issued by a corporation. Issuing bonds can be an alternative
to offering equity ownership by issuing stock. Payments to bondholders have priority over
payments to stockholders.
Why Investment Grade?
Within the bond market, there is a category of bonds considered "investment grade." Investment
grade bonds are rated BBB/Baa or higher by major credit rating agencies. The designation
of a bond as investment grade is based upon an evaluation by a credit rating agency of the
corporation's credit history and ability to repay obligations. This rating generally signifies that
the quality of a particular bond is sufficient to provide reasonable assurance of the issuer's
ability to meet their obligations to bondholders. Investment grade bonds generally are a high
credit quality asset class with historically low default rates. There is, however, no assurance that
the securities selected for the trust will continue to receive an investment grade rating in the
future or that such rating will ensure an issuers' ability to satisfy its obligations to bondholders.
Portfolio Objectives
The objectives of this unit investment trust are to distribute current monthly income and to
preserve capital by investing in a portfolio of investment grade corporate bonds. There is,
however, no assurance that the objectives will be achieved.
Not FDIC Insured Not Bank Guaranteed May Lose Value |
You should carefully consider the portfolio's investment objectives,
risks, and charges and expenses before investing. Contact your financial advisor
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 associated with investment grade corporate bonds, including higher interest rates,
economic recession, deterioration of the bond market or investors’ perception thereof, possible downgrades and defaults of interest and/or principal.
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.
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 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.