The Target VIP Portfolio, 4th Quarter 2024 Series
This unit investment trust seeks above-average total return; however, there is no assurance the objective will be met. The portfolio provides you with the convenience of owning six distinct strategies in
one investment. It invests in a fixed portfolio of stocks which are selected by applying pre-determined screens and factors. On the initial date of deposit, the portfolio is approximately equally weighted
among the six strategies described below.
Nasdaq® Target 15 Strategy
- Begin with the Nasdaq 100 Index®. The index represents the largest and most
active non-financial domestic and international issues listed on The Nasdaq
Stock Market®.
- Purchase a market cap-weighted portfolio of the 15 stocks with the best
overall ranking on the following criteria:
- 12 month price appreciation.
- 6 month price appreciation.
- Return on assets.
- Price to cash flow.
S&P Target 24 Strategy
- Begin with the companies listed in the S&P 500 Index.
- Select the eight largest sectors in the index based upon market capitalization.
- Purchase the three stocks from each sector with the best overall ranking
on the following criteria:
- Trailing four quarters return on assets.
- Buyback yield. A measure of the percentage decrease in a company's outstanding
common shares versus one year earlier.
- Bullish interest indicator. A comparison, over the past twelve months,
between the number of a company's shares that traded in months when the
stock price rose versus the number of shares that traded in months when
the stock price fell.
- The stocks are weighted according to their market capitalization relative
to their sector and relative to their peers within the sector.
The Dow® DART 5 Strategy
- Rank the companies in the DJIA® by a combination of dividend yield and
the percentage reduction in the number of outstanding shares over the past
12 months and select the top ten.
- Rank the ten stocks based on the one year change in return on assets and
purchase an approximately equally weighted portfolio of the top five stocks.
Target Small-Cap Strategy
- Identify U.S. companies with the following attributes:
- Trade on the NYSE, the NYSE MTK or Nasdaq (excluding limited partnerships, ADRs,
business development companies and mineral and oil royalty trusts).
- Have positive earnings over the last year.
- Have market caps between $150 million and $1 billion and average daily
trading volume of more than $500,000 (based on 1996 dollars).
- Select only companies with positive three-year sales growth.
- Eliminate any company whose stock has appreciated more than 75% in the last
12 months.
- Purchase a market cap-weighted portfolio of the 40 companies with the greatest
price appreciation in the last 12 months.
Value Line® Target 25 Strategy
- Begin with the 100 stocks that Value Line® currently gives a #1 ranking
for TimelinessTM (stocks of financial companies and companies whose shares
are not listed on a U.S. exchange are not eligible for inclusion in the Value
Line® Target 25 Strategy). Value Line® ranks approximately 1,700 stocks, only
100 of which are given their #1 ranking for TimelinessTM. They base their
rankings on a long-term trend of earnings, prices, recent earnings, price
momentum, and earnings surprises.
- Rank the stocks on four factors:
- 12 month price appreciation.
- 6 month price appreciation.
- Return on assets.
- Price to cash flow.
- Purchase a market cap-weighted portfolio of the 25 eligible stocks with the best overall
ranking on the factors, subject to a minimum weighting of approximately 1% and a
maximum weighting of approximately 25%.
European Target 20 Strategy
- Select the largest 120 companies based on market capitalization which are domiciled in Europe.
- Purchase an approximately equally weighted portfolio of the 20 highest dividend-yielding
companies.
|
Not FDIC Insured • Not Bank Guaranteed • May Lose Value
|
| Standard Deviations* |
Average Annual Total Returns* |
|
S&P 500 Index |
Strategy |
S&P 500 Index |
Strategy |
| Since 1990 |
14.92% |
17.58% |
10.18% |
10.65% |
| 30 years |
15.18% |
17.66% |
10.13% |
9.60% |
| 25 years |
15.37% |
17.57% |
7.55% |
5.78% |
| 20 years |
14.88% |
16.30% |
9.68% |
5.74% |
| 15 years |
15.36% |
15.96% |
13.95% |
9.38% |
| 10 years |
15.18% |
15.67% |
12.01% |
6.85% |
| 5 years |
18.51% |
19.13% |
15.66% |
9.85% |
| 3 years |
17.53% |
17.36% |
9.97% |
6.46% |
| *Through 12/29/23 |
| Annual Total Returns |
| Year |
S&P 500
Index |
Strategy
|
| 1990 |
-3.19% |
0.09% |
| 1991 |
30.33% |
57.03% |
| 1992 |
7.61% |
4.06% |
| 1993 |
10.04% |
22.01% |
| 1994 |
1.30% |
2.01% |
| 1995 |
37.50% |
42.84% |
| 1996 |
22.89% |
38.61% |
| 1997 |
33.31% |
25.76% |
| 1998 |
28.55% |
51.19% |
| 1999 |
21.03% |
48.73% |
| 2000 |
-9.10% |
-4.56% |
| 2001 |
-11.88% |
-11.34% |
| 2002 |
-22.09% |
-21.36% |
| 2003 |
28.65% |
34.69% |
| 2004 |
10.87% |
12.99% |
| 2005 |
4.90% |
6.70% |
| 2006 |
15.76% |
11.80% |
| 2007 |
5.56% |
9.19% |
| 2008 |
-36.99% |
-45.95% |
| 2009 |
26.46% |
11.96% |
| 2010 |
15.08% |
18.22% |
| 2011 |
2.08% |
-2.10% |
| 2012 |
15.98% |
12.18% |
| 2013 |
32.36% |
36.08% |
| 2014 |
13.66% |
6.08% |
| 2015 |
1.38% |
-4.51% |
| 2016 |
11.93% |
8.19% |
| 2017 |
21.80% |
19.85% |
| 2018 |
-4.39% |
-7.62% |
| 2019 |
31.45% |
18.81% |
| 2020 |
18.39% |
11.57% |
| 2021 |
28.67% |
29.45% |
| 2022 |
-18.12% |
-16.85% |
| 2023 |
26.24% |
12.09% |
| 9/30/24 |
22.06% |
21.48% |
Past performance is no guarantee of future results and the actual current
performance of the portfolio may be lower or higher than the hypothetical performance
of the strategy. Hypothetical returns for the strategy in certain years were
significantly higher than the returns of the S&P 500 Index. Hypothetical strategy
returns were the result of certain market factors and events which may not be
replicated in the future. You can obtain performance information which is current
through the most recent month-end by calling First Trust Portfolios L.P. at
1-800-621-1675 option 2. Investment return and principal value of the portfolio
will fluctuate causing units of the portfolio, when redeemed, to be worth more
or less than their original cost.
Simulated strategy returns are hypothetical, meaning that they do not represent actual trading, and, thus, may not reflect material economic and market factors, such as liquidity constraints, that may have had an impact on actual decision making. The hypothetical performance is the retroactive application of the strategy designed with the full benefit of hindsight. Strategy returns reflect a sales
charge of 1.85% and estimated annual operating expenses of 0.276%, plus organization costs, but not taxes or commissions paid by the portfolio to purchase securities. Strategy returns assume that dividends are reinvested semi-annually while index returns assume dividends are reinvested monthly. Actual portfolio performance will vary from that of investing in the strategy stocks because it may not be invested equally in these stocks and may not be fully invested at all times. It is important to note that the strategy may underperform the index in certain years and may produce negative results.
The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap
U.S. stock market performance. The index cannot be purchased directly by investors.
Standard Deviation is a measure of price variability (risk). A higher degree of variability indicates more volatility and therefore greater risk.
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.
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.
The Dow Jones Industrial Average and S&P 500 Index are products of S&P Dow Jones Indices LLC or its affiliates ("SPDJI") and have been licensed for use by First Trust Portfolios L.P. Standard & Poor's® and S&P® are
registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by
SPDJI and sublicensed for certain purposes by First Trust Portfolios L.P. The Target VIP Portfolio, which contains The Dow Dart 5® Strategy and the S&P Target 24 Strategy, is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones,
S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the Dow
Jones Industrial Average and the S&P 500 Index.
The Nasdaq 100®, Nasdaq 100 Index®, and Nasdaq® are trade or service marks of Nasdaq, Inc. (which with its affiliates are the Corporations) and are licensed for use by First Trust Portfolios L.P. The portfolio has not been
passed on by the Corporations as to its legality or suitability. The portfolio is not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH
RESPECT TO THE PORTFOLIO.
“Value Line”, “The Value Line Investment Survey”, and “Timeliness,” are trademarks or registered trademarks of Value Line, Inc. (“Value Line”) and have been licensed for use for certain purposes by First Trust Portfolios L.P.
The Target VIP Portfolio is not sponsored, endorsed, recommended, sold or promoted by Value Line and Value Line makes no representation regarding the advisability of investing in products utilizing such strategy. First
Trust Portfolios L.P. is not affiliated with any Value Line company.