NextGen Communications and Technology, Series 23
A New Generation Of Possibilities1
5G, or the fifth generation of wireless technology, is the mobile wireless system that is expected
to transform our world. 5G runs on a higher frequency than 4G LTE and promises dramatically
faster upload and download speeds, reduced lag time and greater network capacity to handle
a significantly higher number of connected devices. In 2018, 5G became a reality with some
wireless carriers launching in certain test cities. All major U.S. carriers are working to build out 5G
networks; however, full deployment may take several years.
1 Source: Digital Trends
5G Possibilities
Enhanced Mobile Broadband | Network improvements that may enable more efficient data
transmission to potentially lower costs of data transmission to drive increased use of broadband
applications on mobile networks.
Internet of Things | 5G is expected to build upon earlier IoT applications to enable significant
increases in economies of scale to drive adoption and utilization across all economic sectors.
Fixed Wireless Access | Establishes a means of providing Internet access to homes using
wireless mobile network technology rather than fixed lines.
Mission-Critical Control | A new market opportunity for wireless technology to provide
ultra-reliable and secure connections to support applications such as driverless vehicles and health care
where failure is not acceptable.
The Portfolio
The portfolio includes companies in the Indxx 5G & NextG Thematic Index as well as other companies that
have devoted material resources or made material commitments to the use of 5G technology. The index is
designed to track the performance of companies that are at the core of the research and development of
the new 5G cellular technology.
Portfolio Objective
This unit investment trust seeks above-average capital appreciation; however, there is
no assurance the objective will be met.
“Indxx” and “Indxx 5G & NextG Thematic Index” are trademarks of Indxx and have been licensed by First Trust Portfolios L.P. The NextGen Communications and Technology Portfolio is not sponsored, endorsed, sold or promoted by Indxx, and Indxx makes no representation regarding the advisability of investing in such a product. Indxx has no obligation to take the needs of First Trust or the unit holders of the product into consideration in determining, composing or calculating the Indxx 5G & NextG Thematic Index.
| 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 the information
technology sector which involves
additional risks, including limited
diversification. 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.
The 5G communication network is an entirely new technology and risks associated with
such technology may not emerge until it is widely used. Risks associated with 5G
technology include, but are not limited to, device compatibility, geographical coverage,
and new and changing government regulation. In addition, 5G technology is subject to
risks associated with security and privacy protection as more devices are connecting to
the network than ever before.
Some of the companies in the portfolio are engaged in other lines of business unrelated
to 5G technology which could adversely affect their operating results.
Certain of the securities in the portfolio
are issued by Real Estate Investment
Trusts (REITs). Companies involved in the
real estate industry are subject to changes
in the real estate market, vacancy rates
and competition, volatile interest rates
and economic recession.
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.