SMid Earnings Leaders Portfolio, Series 1

The SMid Earnings Leaders Portfolio is a unit investment trust (UIT) that invests in small and mid-size companies that we consider to be “Earnings Leaders,” which are the top 25 companies as determined by the selection process described below. We anticipate these companies to be profitable in the current and next two fiscal years and to grow earnings by at least 15% in each of the next two fiscal years.

The Importance Of Earnings Growth

When evaluating a company, one key metric to consider is earnings growth. Earnings growth refers to the percentage increase in a company’s net income or earnings over a specific time period. This metric is used to evaluate a company’s financial performance and to determine the potential the company has for future success. A company with consistent and strong earnings demonstrates its ability to generate higher profits and are often viewed more favorably as positive earnings growth indicates a healthy and sustainable business.

Portfolio Selection Process

Through our selection process, we seek to find the stocks that we believe have the best prospects for above-average capital appreciation.

Identify the Universe | The first step in the selection process is to identify the universe of stocks from which the portfolio is selected. We select U.S. companies that are liquid and currently profitable while eliminating the largest 500 companies.

Screen for Profitability | The next step in our process is to look for those companies that are anticipated to be profitable in the current fiscal year.*

Screen for Growth | Next, we select those companies that are projected to have greater than 15% year-over-year earnings growth in each of the next two fiscal years.*

Rank on Multiple Factors | The final step in our process is to rank companies on a combination of factors based on the company’s profitability, fundamental momentum, and expected stability of future earnings.

Select the Portfolio | The final step is to select an approximately equally weighted portfolio of the 25 stocks with the best overall rankings, allowing no more than approximately 40% of the portfolio in any one sector.

*According to Capital IQ and based on consensus non-GAAP (Generally Accepted Accounting Principles) estimates. Non-GAAP earnings are earnings measures that are not prepared using GAAP and are not required for external reporting or other public disclosures. There is no assurance that consensus estimates will be met.

Portfolio Objective

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

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.

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.

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.

A public health crisis, and the ensuing policies enacted by governments and central banks in response, could cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.

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.