Deep Value Dividend Opportunity Portfolio, Series 32
The Deep Value Dividend Opportunity Portfolio invests in 30 companies that have low estimated current year price-to-earnings (P/E) ratios in addition to above-average dividend yields. We believe
these companies may offer long-term investors an opportunity for capital appreciation and dividend income.
The Importance of P/E Ratios
The P/E ratio is considered the most common measure of a stock’s value. Stocks that have high P/E ratios
tend to be considered a higher risk investment than those with low P/E ratios, since a high P/E ratio often
signifies high earnings growth expectations. The current environment has led to certain companies being
undervalued, in our opinion. We believe there is opportunity in the U.S. stock market with the combination
of attractive valuations, rising earnings and ultra-low interest rates, which may benefit equities.
The Importance of Dividends
Dividends have traditionally been one of the few constants in the world of investing, helping to
buffer volatility in both good and bad markets. When markets decline, dividends have the potential
to offset losses, and when markets rise, dividends have the potential to enhance returns.
A dividend is a payment from a company’s earnings. Since corporations are not obligated to share
their earnings with stockholders, dividends may be viewed as a sign of a company’s profitability as
well as management’s assessment of the future.
Portfolio Selection Process
Through our selection process we seek to find the stocks that we believe have the best prospects for
above-average total return.
Identify the Universe |
We begin with the companies listed in the S&P 1500 Index.
Screen the Universe |
We then evaluate the companies in the universe based on market-capitalization,
the ratio of each stock’s current price to its estimated current year earnings, its
dividend payout and dividend yield ratios. These screens are designed to identify stocks with a low P/E ratio and the ability to
sustain its dividend yield.
Select the Portfolio |
The final step is to select the 30 stocks
for the portfolio subject to a maximum of approximately 30% in a single sector. The stocks are
approximately equally weighted within the portfolio.
The S&P 500 Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. The index cannot be purchased directly by investors.
Portfolio Objective
This unit investment trust seeks above-average total return through a combination of
capital appreciation and dividend income; 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 objective, 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.
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.