Clean Energy Portfolio, Series 11
Clean energy is developed from renewable, zero-emissions sources, as well as energy that
is stored through energy efficiency measures. As opposed to coal and oil, clean energy does
not pollute the atmosphere. The clean energy industry generates hundreds of billions in
economic activity and is anticipated to grow rapidly in the coming years.1 The potential
for economic opportunity may exist for companies that invent, manufacture and export clean
energy technologies.
Consider The following
- Renewable energy is estimated to be the fastest growing source of energy over the next 30 years, supported
by a significant increase in the development and investment of new wind and solar capacity.2
- Global contributions of approximately $4 trillion is required annually by 2030 to accelerate the
transition from current levels to net zero emissions by 2050.3
- In 2021, the energy sector employed more than 7.8 million Americans with approximately
40% of total energy jobs in areas aligned with reducing U.S. emissions to net-zero.4
- Electric vehicles of all types are currently displacing more than 1.5 million barrels of oil per day
and are expected to displace nearly 2.5 million barrels per day by 2025.5
1,4 U.S. Department of Energy
2 BP Energy Outlook
3 International Energy Agency, World Energy Outlook 2022
5 BloombergNEF
Portfolio Objective
This unit investment trust seeks above-average capital appreciation; however, there is no
assurance the objective will be met.
Portfolio Selection Process
An initial universe of stocks is created by selecting clean energy stocks that are involved in the
development, manufacturing, distribution and installation of clean energy technologies such as
solar, wind, water, bioenergy, nuclear and hydrogen & fuel cells. All of the stocks selected trade
on a U.S. stock exchange and have adequate liquidity for investment.
From the initial universe, a team of equity analysts individually evaluated each common stock
by examining the common stock’s relative valuation. Relative valuation uses price and enterprise
value against underlying business metrics, such as cash flow, sales, earnings growth and returns
to equity to enable cross company comparisons. In addition, the equity analysts examine other
qualitative factors such as third-party analyst ratings (including research provided as to earnings
expectations and primary risk considerations for a stock), competitive advantages (including
asset growth and favoring companies with high and stable returns in excess of cost) and quality of
management (including how a company makes use of generated returns, i.e., reinvesting returns
back into the business or using returns in a manner favorable to shareholders). Additionally, the
sponsor’s analysts reviewed Bloomberg/Hoovers business or industry descriptions to ensure
companies are identified as involved in the development, manufacturing, distribution or
installation of clean energy technologies.
The selection process attempts to find the common stocks with the best prospects for aboveaverage
capital appreciation by identifying those that meet the trust’s investment objective,
trade at attractive valuations, and, in sponsor’s opinion, are likely to exceed market expectations
of future cash flows.
The final portfolio is comprised of 30 approximately equally weighted clean energy stocks.
| 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.
You should be aware that the portfolio is concentrated in
stocks in both the industrials and information technology sectors which involves additional risks, including
limited diversification. The companies engaged in the industrials sector are subject to certain risks, including
a deterioration in the general state of the economy, intense competition, domestic and international politics,
excess capacity and changing spending trends. The companies engaged in the information technology sector
are subject to fierce competition, high research and development costs, and their products and services
may be subject to rapid obsolescence. Technology company stocks, especially those which are Internet-related,
may experience extreme price and volume fluctuations that are often unrelated to their operating
performance. There is no assurance that the projections stated herein will be realized.
Renewable and alternative energy companies can be significantly affected by obsolescence of existing
technology, short product cycles, legislation resulting in more strict government regulations and
enforcement policies, fluctuations in energy prices and supply and demand of alternative energy fuels,
energy conservation, the success of exploration projects, the supply of and demand for oil and gas, world
events and economic conditions. Shares of clean energy companies have been significantly more volatile
than shares of companies operating in other more established industries. This industry is relatively nascent
and under-researched in comparison to more established and mature sectors.
Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.
An investment in a portfolio containing small-cap and mid-cap companies is subject to additional risks, as
the share prices of small-cap companies and 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.