Defensive Equity Portfolio, Series 71

Investors tend to gravitate toward less economically sensitive sectors when questions arise regarding sustained economic growth. Because of their unique combination of global exposure and historically defensive market characteristics, we believe that the consumer staples, health care and utilities sectors may represent an attractive opportunity for investors during times of uncertain economic growth. The portfolio invests approximately 50% in health care, 30% in consumer staples and 20% in utilities.

Consumer Staples

Consumer staples consist of food, beverages, household goods and personal products that most consumers use on a daily basis. Purchases of these products tend to be a relatively small portion of most consumers' yearly income, which keeps demand stable. Because of this stability, sales and earnings growth tend to remain fairly constant in up or down markets. We believe consumer staples represents an attractive sector for investors due to its non-cyclical nature and significant exposure to foreign demand.

Health Care

The health care industry has been responsible for numerous discoveries that have led to new drugs and products designed to better serve the masses, especially the aging population. These discoveries have improved the quality of life and the life expectancy of millions. In the last decade, biopharmaceutical companies have invested more than $1 trillion in research and development.¹From 2023-2032, it is projected that health care spending will grow at an average rate of 5.6% annually, outpacing the projected average GDP growth of 4.3% per year over the same period. As a result, the health care spending share of GDP is expected to increase to 19.7% in 2032, up from 17.3% in 2022.²

Utilities

The utilities industry is regarded as a sector with the potential to provide investors with a high degree of stability while generating an above-average level of current income relative to other equities. Historically, utility stocks tend to hold up better than stocks from other sectors in declining markets. Because of these characteristics, utility company stocks are sometimes considered an alternative to traditional fixed-income investments. The global utilities market is anticipated to grow from $6.4 trillion in 2023 to $6.9 trillion in 2024. By 2028, it is estimated to reach $8.8 trillion.³

¹ PhRMA
² CMS.gov
³ Research and Markets

Portfolio Objective

This unit investment trust seeks above-average capital appreciation; however, there is no assurance the objective will be met.

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 consumer staples and health care sectors which involves additional risks, including limited diversification. The companies engaged in the consumer staples industry are subject to global competition, changing government regulations and trade policies, currency fluctuations, and the financial and political risks inherent in producing products for foreign markets. The companies engaged in the health care sector are subject to fierce competition, high research and development costs, governmental regulations, loss of patent protection, and changing consumer spending trends. In addition, health crises, such as a pandemic outbreak, can severely impact the health care industry in particular.

The portfolio also invests in utilities companies. The companies engaged in the utilities sector are subject to certain risks, including price and supply fluctuations caused by international politics, energy conservation, taxes, and other regulatory policies of various governments.

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 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.