Target High Quality Dividend, 1st Quarter 2025 Series
The Strategy
The Target High Quality Dividend Portfolio is a unit investment trust which invests in a fixed
portfolio of stocks for approximately 15 months. The stocks are selected by applying a disciplined
investment strategy which adheres to pre-determined screens and factors. The portfolio seeks
above-average total return; however, there is no assurance the objective will be met.
- The strategy is based on these steps:
- Begin with the 1,000 stocks with the largest market capitalization as of two business days prior
to the Initial Date of Deposit which trade on a U.S. exchange, excluding REITs, ADRs, regulated
investment companies and limited partnerships.
- Select only those stocks that meet the following criteria:
- Minimum three month average daily trading volume of $2.5 million.
- Three consecutive years of dividend increases.
- Screen for quality on the following factors:
- Net debt/assets of less than 50%.
- Three-year payout ratio of less than 50% of earnings.
- Positive free cash flow after dividends for the trailing 12 months.
- Purchase an approximately equally weighted portfolio
of the 30 stocks with the highest dividend yield, subject
to a maximum of nine stocks from any one of the major
GICS® market sectors. The financials and real estate
sectors are combined for the sector limit purpose.
- It is important to note that the past performance of the strategy is hypothetical and it is not indicative
of the future performance of the Target High Quality Dividend Portfolio.
| 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 1995 |
15.32% |
17.55% |
10.45% |
11.04% |
| 25 years |
15.37% |
18.04% |
7.55% |
8.96% |
| 20 years |
14.88% |
18.19% |
9.68% |
9.19% |
| 15 years |
15.36% |
19.60% |
13.95% |
13.38% |
| 10 years |
15.18% |
19.98% |
12.01% |
8.49% |
| 5 years |
18.51% |
24.87% |
15.66% |
11.85% |
| 3 years |
17.53% |
21.97% |
9.97% |
13.20% |
| *Through 12/29/23 |
| Annual Total Returns |
| Year |
S&P 500
Index |
Strategy |
| 1995 |
37.50% |
39.58% |
| 1996 |
22.89% |
24.18% |
| 1997 |
33.31% |
34.04% |
| 1998 |
28.55% |
5.00% |
| 1999 |
21.03% |
-8.11% |
| 2000 |
-9.10% |
17.69% |
| 2001 |
-11.88% |
22.21% |
| 2002 |
-22.09% |
-8.63% |
| 2003 |
28.65% |
21.84% |
| 2004 |
10.87% |
15.37% |
| 2005 |
4.90% |
1.91% |
| 2006 |
15.76% |
17.18% |
| 2007 |
5.56% |
-4.21% |
| 2008 |
-36.99% |
-33.10% |
| 2009 |
26.46% |
43.26% |
| 2010 |
15.08% |
14.03% |
| 2011 |
2.08% |
9.26% |
| 2012 |
15.98% |
11.26% |
| 2013 |
32.36% |
46.56% |
| 2014 |
13.66% |
10.60% |
| 2015 |
1.38% |
-9.49% |
| 2016 |
11.93% |
13.61% |
| 2017 |
21.80% |
25.22% |
| 2018 |
-4.39% |
-9.39% |
| 2019 |
31.45% |
27.91% |
| 2020 |
18.39% |
-5.64% |
| 2021 |
28.67% |
31.90% |
| 2022 |
-18.12% |
-5.42% |
| 2023 |
26.24% |
16.28% |
| 9/30/24 |
22.06% |
12.55% |
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 0.185%, plus organization costs, but not taxes or commissions paid by the portfolio to purchase securities. Returns
assume that 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
S&P 500 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.
You should be aware that the portfolio is concentrated in stocks in the financials sector which involves additional risks, including limited diversification. The companies engaged in the financials sector are subject to the adverse
effects of volatile interest rates, economic recession, decreases in the availability of capital, increased competition from new entrants in the field, and potential increased regulation.
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.
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.