U.S. Infrastructure Portfolio, Series 38

A sound infrastructure is fundamental to the quality of life and the economic growth and development of a community. Infrastructure assets help provide products and services that have become essential to everyday life such as water and wastewater systems, roads, railways, airports, utilities, hospitals, schools and communications systems. In November 2021, Congress passed the $1.2 trillion Bipartisan Infrastructure Deal which focuses on rebuilding America’s roads, bridges, rails and to expand access to clean drinking water. The passing of this bill could benefit companies that provide infrastructure services. The U.S. Infrastructure Portfolio invests in companies that provide products or services that aid the development and maintenance of our country’s infrastructure system as well as companies that tend to benefit from an increasing economic growth rate.

The Aging of America

Infrastructure funding gaps in the U.S. are immense in comparison to the rest of the world. To close the nearly $2.6 trillion 10-year investment gap, meet future need, and restore our global competitive advantage, the U.S. must increase investment from all levels of government and the private sector from approximately 2.5% to 3.5% of U.S. Gross Domestic Product by 2025.

• The U.S. has more than 617,000 bridges of which almost 42% are at least 50 years old. Approximately 7.5% of these bridges are considered structurally deficient, meaning they are in “poor” condition. The most recent estimate puts the nation’s backlog of bridge restoration needs at $125 billion.

• The growing wear and tear to our nation’s roads has left approximately 43% of our public roadways in poor or mediocre condition.

• Our nation continues to under invest in school facilities, leaving an estimated $40 billion per year gap in funding. As a result, 24% of public school buildings were rated as being in fair or poor condition.

• Estimates indicate that utilities spent over $3 billion in 2019, or more than $18 per wastewater customer to replace approximately 4,700 miles of pipeline nationwide. In 2019, the capital investment gap was $81 billion.

• Despite increasing demand, the nation’s transit systems have been continually underfunded. Currently, there is a $176 billion transit backlog, a deficit that is anticipated to increase to more than $250 billion through 2029.

Source: American Society of Civil Engineers

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 the industrials sector 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.

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.