UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-22717
First Trust Exchange-Traded Fund VI
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)
registrant's telephone number, including area code: (630) 765-8000
Date of fiscal year end: September 30
Date of reporting period: September 30, 2012
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORT TO STOCKHOLDERS.
The registrant's annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
FIRST TRUST
First Trust Exchange-Traded Fund VI
First Trust NASDAQ Technology Dividend Index Fund
Multi-Asset Diversified Income Index Fund
Annual Report
September 30, 2012
TABLE OF CONTENTS
First Trust Exchange-Traded Fund VI
Annual Report
September 30, 2012
Shareholder Letter........................................................... 2
Market Overview.............................................................. 3
Fund Performance Overview
First Trust NASDAQ Technology Dividend Index Fund...................... 4
Multi-Asset Diversified Income Index Fund.............................. 6
Notes to Fund Performance Overview........................................... 8
Understanding Your Fund Expenses............................................. 9
Portfolio of Investments
First Trust NASDAQ Technology Dividend Index Fund...................... 10
Multi-Asset Diversified Income Index Fund.............................. 13
Statements of Assets and Liabilities......................................... 19
Statements of Operations..................................................... 20
Statements of Changes in Net Assets.......................................... 21
Financial Highlights......................................................... 22
Notes to Financial Statements................................................ 24
Report of Independent Registered Public Accounting Firm...................... 30
Additional Information....................................................... 31
Board of Trustees and Officers............................................... 34
Risk Considerations.......................................................... 36
Privacy Policy............................................................... 39
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CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and its representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
any series of First Trust Exchange-Traded Fund VI (the "Trust") described in
this report (each series is referred to as a "Fund" and collectively, as the
"Funds") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and its representatives only as of the date hereof. We
undertake no obligation to publicly revise or update these forward-looking
statements to reflect events and circumstances that arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that any Fund will achieve its investment objective. Each
Fund is subject to market risk, which is the possibility that the market values
of securities owned by the Fund will decline and that the value of the Fund
shares may therefore be less than what you paid for them. Accordingly, you can
lose money investing in a Fund. See "Risk Considerations" at the end of this
report for a discussion of other risks of investing in the Funds.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
http://www.ftportfolios.com or speak with your financial advisor. Investment
returns, net asset value and share price will fluctuate and Fund shares, when
sold, may be worth more or less than their original cost.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund's portfolio and presents data and analysis that
provide insight into each Fund's performance and investment approach.
By reading the portfolio commentary by Robert F. Carey, Chief Market Strategist
of the Advisor, you may obtain an understanding of how the market environment
affected the performance of each Fund. The statistical information that follows
may help you understand each Fund's performance compared to that of relevant
market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of the
Advisor are just that: informed opinions. They should not be considered to be
promises or advice. The opinions, like the statistics, cover the period through
the date on the cover of this report. The risks of investing in each Fund are
spelled out in its prospectus, statement of additional information, this report
and other Fund regulatory filings.
Page 1
SHAREHOLDER LETTER
FIRST TRUST EXCHANGE-TRADED FUND VI
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
SEPTEMBER 30, 2012
Dear Shareholders:
I am pleased to present you with the first annual report for your investment in
First Trust Exchange-Traded Fund VI.
First Trust, now in our 22nd year, has always believed that staying invested in
quality products and having a long-term horizon can help investors reach their
financial goals. Like many successful investors, we understand that success in
the markets doesn't just happen--it requires a long-term investment perspective
through all kinds of markets. Although the markets have continued to be somewhat
choppy over the past six months, the equity market is well above the lows it
sank to during the recent recession.
The report you hold gives detailed information about the Funds that comprise the
First Trust Exchange-Traded Fund VI. It contains each Fund's performance review
and financial statements for the period. I encourage you to read this document
and discuss it with your financial advisor. A successful investor is also
typically a knowledgeable one, as we have found to be the case at First Trust.
First Trust remains committed to being a long-term investor and investment
manager and to bringing you quality investment solutions regardless of market
ups and downs. We offer a variety of products that could fit many financial
plans to help those investors seeking long-term investment success. You may want
to talk to your advisor about the other investments First Trust offers that
might also fit your financial goals.
First Trust will continue to make available up-to-date information about your
investments so you and your financial advisor are current on any First Trust
investments you own. We value our relationship with you, and thank you for the
opportunity to assist you in achieving your financial goals. I look forward to
the remainder of 2012 and to the next edition of your Fund's report.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees of First Trust Exchange-Traded Fund VI and
Chief Executive Officer of First Trust Advisors L.P.
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Page 2
MARKET OVERVIEW
FIRST TRUST EXCHANGE-TRADED FUND VI
ANNUAL REPORT
SEPTEMBER 30, 2012
ROBERT F. CAREY, CFA
SENIOR VICE PRESIDENT AND CHIEF MARKET STRATEGIST
FIRST TRUST ADVISORS L.P.
Mr. Carey is responsible for the overall management of research and analysis of
the First Trust product line. Mr. Carey has 23 years of experience as an Equity
and Fixed-Income Analyst and is a recipient of the Chartered Financial Analyst
(CFA) designation. He is a graduate of the University of Illinois at
Champaign-Urbana with a B.S. in Physics. He is also a member of the Investment
Analysts Society of Chicago and the CFA Institute. Mr. Carey has appeared as a
guest on such programs as Bloomberg TV, CNBC, and WBBM Radio, and has been
quoted by several publications, including The Wall Street Journal, The Wall
Street Reporter, Bloomberg News Service, and Registered Rep.
STATE OF THE GLOBAL ECONOMY
The Blue Chip Economic Indicators survey in September revealed a 2012 U.S. Gross
Domestic Product (GDP) forecast of 2.2%. Economists see GDP growth dipping
slightly to 2.1% in 2013. Brian Wesbury, Chief Economist at First Trust, is also
calling for 2.2% GDP growth in 2012, but is targeting 3.0% for 2013. The
International Monetary Fund recently trimmed its global GDP growth expectations
for 2012 from 3.5% to 3.3%. It is looking for 3.9% in 2013. So, economists
generally do not believe there is any recession in the offing at this time.
The Federal Reserve Bank (Fed) has been very aggressive with respect to
injecting monetary stimulus into the system. In late June, the Fed announced its
intention to extend "Operation Twist" through year-end. The Fed plans to
purchase $267 billion of Treasuries with maturities ranging from 6 to 30 years.
The Fed also announced a third round of quantitative easing in September that
calls for purchasing $40 billion worth of mortgage-backed securities each month
in an effort to keep interest rates artificially low. This initiative is
open-ended as of now. The Fed has also stated that it is prepared to hold
interest rates low through mid-2015, if warranted. At this stage of the economic
recovery (recovery began July 2009), any extension of this low interest rate
climate is a bonus for income investors.
News out of Europe that the European Central Bank was looking to initiate a bond
buying program, with the support of Germany, to help backstop the ongoing debt
crisis situation in Greece and a few other European Union members was
well-received by the markets. Investor fears gradually eased somewhat throughout
Q3 2012. The yields on 10-year government bonds issued by Greece, Portugal,
Spain and Italy are now well off their recent fear-induced highs. Any further
strides towards finding a comprehensive solution to the European debt crisis is
likely to be bullish in nature for the U.S. markets and abroad, in our opinion.
STATE OF INCOME DISTRIBUTIONS
Investors poured a net $21.1 billion into Lipper's Equity Income fund category
(open-end funds only) in the first nine months of 2012, down slightly from the
$21.5 billion reported over the same period in 2011. In 2012, the second closest
U.S. Diversified Equity Classification category in terms of net inflows was S&P
500 Index (S&P 500) funds at $15.1 billion ($2.4B over same period in 2011).
Investors have clearly demonstrated a bias for dividend-paying stocks.
For the first time in history, the Information Technology sector became the top
contributor to the total dividend payout of the S&P 500. As of October 16, 2012,
technology stocks were contributing 14.55% of the S&P 500's dividend
distribution, eclipsing the previous top contributor's (Consumer Staples)
14.23%, according to Standard & Poor's. What is even more impressive is that the
technology companies in the index were contributing only 5.95% of the total
dividend payout at the close of 2007, just prior to the financial crisis.
The $67.3 billion in S&P 500 dividend payouts in Q2'12 surpassed the previous
high of $67.1 billion in Q4'07. We believe there is room for companies to raise
their dividend payouts. Non-financial firms in the S&P 500 held a near-record
$1.12 trillion in cash in Q2'12, according to Standard & Poor's Capital IQ. The
dividend payout-ratio (% of a dollar's worth of earnings paid out as a dividend)
for these companies has been in the 30-35% range for a few years. Historically,
the ratio has been closer to 52%.
Page 3
FUND PERFORMANCE OVERVIEW
TDIV - FIRST TRUST NASDAQ TECHNOLOGY DIVIDEND INDEX FUND
The First Trust NASDAQ Technology Dividend Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before the
Fund's fees and expenses) of an equity index called the NASDAQ Technology
Dividend Index(SM) (the "Index"). The shares of the Fund are listed and trade on
the NASDAQ Stock Market LLC under the ticker symbol "TDIV." The Fund will
normally invest at least 90% of its net assets (plus the amount of any
borrowings for investment purposes) in the common stocks and/or depositary
receipts included in the Index.
The Index includes up to 100 Technology and Telecommunications companies that
pay a regular or common dividend. To be selected for the Index, a company must
be classified as a Technology or Telecommunications company under the Industry
Classification Benchmark ("ICB") and have a minimum market capitalization of
$500 million. International securities in the Index are U.S.-listed securities
of non-U.S. companies, some of which may be located in emerging markets.
PERFORMANCE AS OF SEPTEMBER 30, 2012
CUMULATIVE
TOTAL RETURNS
Inception (08/13/12)
to 09/30/12
FUND PERFORMANCE
NAV -0.72%
Market Price -0.67%
INDEX PERFORMANCE
NASDAQ Technology Dividend Index -0.65%
S&P 500(R) Index 2.90%
S&P 500 Information Technology Index 2.47%
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(See Notes to Fund Performance Overview on page 8.)
PERFORMANCE REVIEW
The Fund generated a net asset value ("NAV") return of -0.72% since the Fund's
inception on 8/13/2012. During the same period, the benchmark S&P 500(R) Index
generated a return of +2.90%. Cisco Systems, Inc. (+10.1%) and VimpelCom Ltd.,
ADR (+28.2%) were two of the top-performing stocks during the period covered by
this report. Intel Corp. (-15.1%) and Hewlett-Packard Co. (-12.4%) were two of
the worst-performing stocks during the period covered by this report. During the
very short period covered by this report, earnings news was the main driver of
stock performance, with Cisco Systems, Inc. and VimpelCom Ltd., ADR both
producing strong earnings announcements while Intel Corp. and Hewlett-Packard
Co. both disappointed with their outlooks.
NASDAQ(R), OMX(R), NASDAQ OMX(R), and NASDAQ Technology Dividend Index(SM) are
registered trademarks and service marks of The NASDAQ OMX Group, Inc. (which
with its affiliates is referred to as the "Corporations") and are licensed for
use by First Trust on behalf of the Fund. The Fund has not been passed on by the
Corporations as to its legality or suitability. The Fund is not issued,
endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 4
FUND PERFORMANCE OVERVIEW (CONTINUED)
TDIV - FIRST TRUST NASDAQ TECHNOLOGY DIVIDEND INDEX FUND (CONTINUED)
-------------------------------------------------------------
PORTFOLIO SECTOR ALLOCATION AS OF SEPTEMBER 30, 2012
-------------------------------------------------------------
% OF TOTAL
SECTOR LONG-TERM INVESTMENTS
Information Technology 78.36%
Telecommunication Services 18.87
Consumer Discretionary 2.39
Industrials 0.31
Health Care 0.07
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Total 100.00%
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TOP TEN PORTFOLIO HOLDINGS AS OF SEPTEMBER 30, 2012
-------------------------------------------------------------
% OF TOTAL
SECURITY LONG-TERM INVESTMENTS
International Business Machines Corp. 8.53%
QUALCOMM, Inc. 8.15
Oracle Corp. 7.97
Microsoft Corp. 7.74
Intel Corp. 7.32
Cisco Systems, Inc. 4.01
Hewlett-Packard Co. 3.80
Texas Instruments, Inc. 3.54
Corning, Inc. 2.21
Verizon Communications, Inc. 2.13
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Total 55.40%
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PERFORMANCE OF A $10,000 INITIAL INVESTMENT
AUGUST 13, 2012 - SEPTEMBER 30, 2012
First Trust NASDAQ Technology NASDAQ Technology S&P 500(R) S&P 500 Information
Dividend Index Fund Dividend Index(SM) Index Technology Index
8/13/12 $10,000 $10,000 $10,000 $10,000
9/30/12 9,928 9,935 10,290 10,247
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Performance figures assume reinvestment of all dividend distributions and do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. An index is a
statistical composite that tracks a specified financial market or sector. Unlike
the Fund, the indices do not actually hold a portfolio of securities and
therefore do not incur the expenses incurred by the Fund. These expenses
negatively impact the performance of the Fund. The Fund's past performance does
not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH SEPTEMBER 30, 2012
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period August 14, 2012 (commencement
of trading) through September 30, 2012. Shareholders may pay more than NAV when
they buy Fund shares and receive less than NAV when they sell those shares
because shares are bought and sold at current market price. Data presented
represents past performance and cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
8/14/12 - 9/30/12 33 0 0 0 0 0 0 0
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Page 5
MDIV - MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
The Multi-Asset Diversified Income Index Fund (the "Fund") seeks investment
results that correspond generally to the price and yield (before the Fund's fees
and expenses) of an equity index called the NASDAQ Multi-Asset Diversified
Income Index (the "Index"). The shares of the Fund are listed and trade on the
NASDAQ Stock Market LLC under the ticker symbol "MDIV." The Fund will normally
invest at least 90% of its net assets (plus the amount of any borrowings for
investment purposes) in common stocks and/or depositary receipts (25%), real
estate investment trusts ("REITs") (20%), preferred securities (20%), master
limited partnerships ("MLPs") (20%) and exchange-traded funds (15%) that
comprise the Index (each an "Index Segment"). The percentages provided reflect
the approximate percentages of each of the Index Segments included in the Index
as of each quarterly rebalance. The percentages will vary from these amounts
between rebalances of the Index.
The Index is designed to provide access to a diversified portfolio of small,
mid- and large capitalization income producing securities, which are composed of
domestic and international dividend-paying stocks, REITs, oil and gas or basic
materials MLPs, U.S.-listed preferred securities and index-based exchange-traded
funds that invests in high yield or "junk" bonds. International securities
included in the Index are U.S.-listed securities of non-U.S. companies, some of
which may be located in emerging markets.
PERFORMANCE AS OF SEPTEMBER 30, 2012
CUMULATIVE
TOTAL RETURNS
Inception (08/13/12)
to 09/30/12
FUND PERFORMANCE
NAV 1.18%
Market Price 1.23%
INDEX PERFORMANCE
NASDAQ Multi-Asset Diversified Income Index 1.32%
S&P 500(R) Index 2.90%
Dow Jones Select Dividend Index(SM) 1.34%
--------------------------------------------------------------------------------
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(See Notes to Fund Performance Overview on page 8.)
PERFORMANCE REVIEW
The Fund generated an NAV return of +1.18% since the Fund's inception on
8/13/2012. During the same period, the benchmark S&P 500(R) Index generated a
return of +2.90%. Two Harbors Investment Corp. (+8.0%) and American Capital
Agency Corp. (+4.8%) were two of the top-performing securities during the period
covered by this report. Buckeye Partners L.P. (-8.1%) and Teekay LNG Partners
L.P. (-6.9%) were two of the worst-performing securities during the period
covered by this report. During the short period covered by this report,
REIT-focused securities were the strongest performing, while energy- and
pipeline-focused companies were the laggards.
NASDAQ(R), OMX(R), NASDAQ OMX(R), and NASDAQ Multi-Asset Diversified Income
Index(SM) are registered trademarks and service marks of The NASDAQ OMX Group,
Inc. (which with its affiliates is referred to as the "Corporations") and are
licensed for use by First Trust on behalf of the Fund. The Fund has not been
passed on by the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.
Page 6
FUND PERFORMANCE OVERVIEW (CONTINUED)
MDIV - MULTI-ASSET DIVERSIFIED INCOME INDEX FUND (CONTINUED)
-------------------------------------------------------------
PORTFOLIO SECTOR ALLOCATION AS OF SEPTEMBER 30, 2012
-------------------------------------------------------------
% OF TOTAL
SECTOR LONG-TERM INVESTMENTS
Financials 58.49%
Energy 24.59
Utilities 6.56
Materials 3.11
Industrials 2.97
Consumer Staples 1.83
Consumer Discretionary 1.64
Health Care 0.81
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Total 100.00%
=======
-------------------------------------------------------------
TOP TEN PORTFOLIO HOLDINGS AS OF SEPTEMBER 30, 2012
-------------------------------------------------------------
% OF TOTAL
SECURITY LONG-TERM INVESTMENTS
iShares iBoxx $ High Yield Corporate
Bond Fund 21.24%
Public Storage 3.00
Plains All American Pipeline, L.P. 2.18
Federal Realty Investment Trust 2.11
Boston Properties, Inc. 1.94
Kinder Morgan Energy Partners, L.P. 1.90
Bank of Hawaii Corp. 1.62
Magellan Midstream Partners, L.P. 1.47
Holly Energy Partners, L.P. 1.45
Post Properties, Inc. 1.19
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Total 38.10%
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PERFORMANCE OF A $10,000 INITIAL INVESTMENT
AUGUST 13, 2012 - SEPTEMBER 30, 2012
Multi-Asset Diversified NASDAQ Multi-Asset S&P 500(R) Dow Jones Select
Income Index Fund Diversified Income Index Index Dividend Index(SM)
8/13/12 $10,000 $10,000 $10,000 $10,000
9/30/12 10,118 10,132 10,290 10,134
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Performance figures assume reinvestment of all dividend distributions and do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. An index is a
statistical composite that tracks a specified financial market or sector. Unlike
the Fund, the indices do not actually hold a portfolio of securities and
therefore do not incur the expenses incurred by the Fund. These expenses
negatively impact the performance of the Fund. The Fund's past performance does
not predict future performance.
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
BID/ASK MIDPOINT VS. NAV THROUGH SEPTEMBER 30, 2012
The following Frequency Distribution of Discounts and Premiums charts are
provided to show the frequency at which the bid/ask midpoint price for the Fund
was at a discount or premium to the daily NAV. The following tables are for
comparative purposes only and represent the period August 14, 2012 (commencement
of trading) through September 30, 2012. Shareholders may pay more than NAV when
they buy Fund shares and receive less than NAV when they sell those shares
because shares are bought and sold at current market price. Data presented
represents past performance and cannot be used to predict future results.
NUMBER OF DAYS BID/ASK MIDPOINT NUMBER OF DAYS BID/ASK MIDPOINT
AT/ABOVE NAV BELOW NAV
0.00%- 0.50%- 1.00%- 0.00%- 0.50%- 1.00%-
FOR THE PERIOD 0.49% 0.99% 1.99% >=2.00% 0.49% 0.99% 1.99% >=2.00%
8/14/12 - 9/30/12 33 0 0 0 0 0 0 0
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Page 7
NOTES TO FUND PERFORMANCE OVERVIEW
Total returns for the periods since inception are calculated from the inception
date of each Fund.
Each Fund's per share net asset value ("NAV") is the value of one share of the
Fund and is computed by dividing the value of all assets of the Fund (including
accrued interest and dividends), less all liabilities (including accrued
expenses and dividends declared but unpaid), by the total number of outstanding
shares. The price used to calculate market return ("Market Price") is determined
by using the midpoint between the highest bid and the lowest offer on the stock
exchange on which shares of the Fund are listed for trading as of the time that
the Fund's NAV is calculated. Since shares of each Fund did not trade in the
secondary market until after the Fund's inception, for the period from inception
to the first day of secondary market trading in shares of the Fund, the NAV of
each Fund is used as a proxy for the secondary market trading price to calculate
market returns. NAV and market returns assume that all dividend distributions
have been reinvested in each Fund at NAV and Market Price, respectively.
An index is a statistical composite that tracks a specified financial market or
sector. Unlike each Fund, the indices do not actually hold a portfolio of
securities and therefore do not incur the expenses incurred by each Fund. These
expenses negatively impact the performance of each Fund. Also, market returns do
not include brokerage commissions that may be payable on secondary market
transactions. If brokerage commissions were included, market returns would be
lower. The total returns presented reflect the reinvestment of dividends on
securities in the indices. The returns presented do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption or
sale of Fund shares. The investment return and principal value of shares of each
Fund will vary with changes in market conditions. Shares of each Fund may be
worth more or less than their original cost when they are redeemed or sold in
the market. Each Fund's past performance is no guarantee of future performance.
Page 8
FIRST TRUST EXCHANGE-TRADED FUND VI
UNDERSTANDING YOUR FUND EXPENSES
SEPTEMBER 30, 2012 (UNAUDITED)
As a shareholder of First Trust NASDAQ Technology Dividend Index Fund and
Multi-Asset Diversified Income Index Fund (each a "Fund" and collectively, the
"Funds"), you incur two types of costs: (1) transaction costs; and (2) ongoing
costs, including management fees, distribution and/or service fees and other
Fund expenses. This Example is intended to help you understand your ongoing
costs (in U.S. dollars) of investing in the Funds and to compare these costs
with the ongoing costs of investing in other funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period (or since inception) and held through the six-month (or shorter) period
ended September 30, 2012.
ACTUAL EXPENSES
The first line in the following table provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During the Period"
to estimate the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line in the following table provides information about hypothetical
account values and hypothetical expenses based on each Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
each Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing costs of
investing in the Funds and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as brokerage
commissions. Therefore, the second line in the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
----------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE AUGUST 13, 2012 (a)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
AUGUST 13, 2012 (a) SEPTEMBER 30, 2012 IN THE PERIOD SEPTEMBER 30, 2012 (a)
----------------------------------------------------------------------------------------------------------------------------------
FIRST TRUST NASDAQ TECHNOLOGY DIVIDEND INDEX FUND
Actual $1,000.00 $ 992.80 0.50% $0.67
Hypothetical (5% return before expenses) $1,000.00 $1,022.50 0.50% $2.53
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
Actual $1,000.00 $1,011.80 0.60% $0.81
Hypothetical (5% return before expenses) $1,000.00 $1,022.00 0.60% $3.03
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(a) Inception date.
(b) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (August
13, 2012 through September 30, 2012), multiplied by 49/366. Hypothetical
expenses are assumed for the most recent half-year period.
Page 9
FIRST TRUST NASDAQ TECHNOLOGY DIVIDEND INDEX FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2012
SHARES DESCRIPTION VALUE
COMMON STOCKS - 99.9%
COMMERCIAL SERVICES & SUPPLIES - 0.3%
6,271 Pitney Bowes, Inc....................................... $ 86,665
------------
COMMUNICATIONS EQUIPMENT - 15.0%
1,976 ADTRAN, Inc............................................. 34,145
58,163 Cisco Systems, Inc...................................... 1,110,332
3,540 Harris Corp............................................. 181,319
1,331 InterDigital, Inc....................................... 49,620
8,952 Motorola Solutions, Inc................................. 452,523
1,322 Plantronics, Inc........................................ 46,706
36,112 QUALCOMM, Inc........................................... 2,256,639
11,485 Tellabs, Inc............................................ 40,657
------------
4,171,941
------------
COMPUTERS & PERIPHERALS - 5.6%
1,975 Diebold, Inc............................................ 66,577
61,642 Hewlett-Packard Co...................................... 1,051,613
2,197 Lexmark International, Inc.............................. 48,883
12,558 Seagate Technology PLC.................................. 389,298
------------
1,556,371
------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 12.4%
15,144 AT&T, Inc............................................... 570,929
804 Atlantic Tele-Network, Inc.............................. 34,556
12,472 BCE, Inc................................................ 548,020
878 BT Group PLC, ADR....................................... 32,662
13,129 CenturyLink, Inc........................................ 530,411
2,695 China Unicom Hong Kong Ltd., ADR........................ 43,955
1,805 Chunghwa Telecom Co., Ltd., ADR......................... 57,309
2,057 Consolidated Communications Holdings, Inc............... 35,360
5,621 France Telecom S.A., ADR................................ 68,689
3,715 Telekomunikasi Indonesia Persero Tbk PT, ADR............ 144,625
7,774 TELUS Corp.............................................. 486,108
12,922 Verizon Communications, Inc............................. 588,855
30,310 Windstream Corp......................................... 306,434
------------
3,447,913
------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS - 2.2%
46,550 Corning, Inc............................................ 612,132
------------
HEALTH CARE TECHNOLOGY - 0.1%
345 Computer Programs & Systems, Inc........................ 19,165
------------
HOUSEHOLD DURABLES - 0.9%
6,093 Garmin Ltd.............................................. 254,322
------------
INTERNET SOFTWARE & SERVICES - 0.7%
2,556 InterActiveCorp......................................... 133,066
1,427 j2 Global, Inc.......................................... 46,834
------------
179,900
------------
|
Page 10 See Notes to Financial Statements
FIRST TRUST NASDAQ TECHNOLOGY DIVIDEND INDEX FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
SEPTEMBER 30, 2012
SHARES DESCRIPTION VALUE
COMMON STOCKS - (CONTINUED)
IT SERVICES - 10.3%
4,858 Computer Sciences Corp.................................. $ 156,476
1,409 DST Systems, Inc........................................ 79,693
701 Forrester Research, Inc................................. 20,168
2,327 Infosys Ltd., ADR....................................... 112,953
11,389 International Business Machines Corp.................... 2,362,648
10,685 SAIC, Inc............................................... 128,647
------------
2,860,585
------------
MEDIA - 1.5%
13,852 Virgin Media, Inc....................................... 407,803
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 24.8%
10,001 Altera Corp............................................. 339,884
9,346 Analog Devices, Inc..................................... 366,270
38,686 Applied Materials, Inc.................................. 431,929
3,925 ARM Holdings PLC, ADR................................... 109,822
3,987 ASML Holding NV......................................... 214,022
7,653 Avago Technologies Ltd.................................. 266,822
2,072 Brooks Automation, Inc.................................. 16,638
4,643 Cypress Semiconductor Corp.............................. 49,773
89,386 Intel Corp.............................................. 2,027,274
3,989 Intersil Corp........................................... 34,904
5,204 KLA-Tencor Corp......................................... 248,257
7,198 Linear Technology Corp.................................. 229,256
17,613 Marvell Technology Group Ltd............................ 161,159
9,124 Maxim Integrated Products, Inc.......................... 242,881
1,859 Micrel, Inc............................................. 19,371
6,053 Microchip Technology, Inc............................... 198,175
1,654 MKS Instruments, Inc.................................... 42,160
901 Power Integrations, Inc................................. 27,417
1,300 Spreadtrum Communications, Inc., ADR.................... 26,728
34,125 Taiwan Semiconductor Manufacturing Co., Ltd., ADR....... 539,858
1,625 Tessera Technologies, Inc............................... 22,230
35,568 Texas Instruments, Inc.................................. 979,898
8,197 Xilinx, Inc............................................. 273,862
------------
6,868,590
------------
SOFTWARE - 19.7%
1,411 Blackbaud, Inc.......................................... 33,751
14,663 CA, Inc................................................. 377,792
1,159 Ebix, Inc............................................... 27,364
9,181 Intuit, Inc............................................. 540,577
72,015 Microsoft Corp.......................................... 2,144,607
723 Opnet Technologies, Inc................................. 24,633
70,127 Oracle Corp............................................. 2,208,299
2,187 Solera Holdings, Inc.................................... 95,944
------------
5,452,967
------------
WIRELESS TELECOMMUNICATION SERVICES - 6.4%
5,148 China Mobile, Ltd., ADR................................. 284,993
|
See Notes to Financial Statements Page 11
FIRST TRUST NASDAQ TECHNOLOGY DIVIDEND INDEX FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
SEPTEMBER 30, 2012
SHARES DESCRIPTION VALUE
COMMON STOCKS - (CONTINUED)
WIRELESS TELECOMMUNICATION SERVICES - (CONTINUED)
13,738 Rogers Communications, Inc.............................. $ 555,015
5,231 Telephone & Data Systems, Inc........................... 133,966
3,994 TIM Participacoes S.A., ADR............................. 76,765
15,275 VimpelCom Ltd., ADR..................................... 181,772
19,187 Vodafone Group PLC, ADR................................. 546,734
------------
1,779,245
------------
TOTAL INVESTMENTS - 99.9%............................... 27,697,599
(Cost $27,968,060) (a)
NET OTHER ASSETS AND LIABILITIES - 0.1%................. 33,365
------------
NET ASSETS - 100.0%..................................... $ 27,730,964
------------
|
(a) Aggregate cost for federal income tax purposes is $28,088,159. As of
September 30, 2012, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$269,829 and the aggregate gross -unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$660,389.
ADR American Depositary Receipt
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of September 30,
2012 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
9/30/2012 PRICES INPUTS INPUTS
------------- ------------- ------------ -----------
Common Stocks*..................................... $ 27,697,599 $ 27,697,599 $ -- $ --
------------- ------------- ----------- -----------
Total Investments.................................. $ 27,697,599 $ 27,697,599 $ -- $ --
============= ============= =========== ===========
|
* See Portfolio of Investments for industry breakout.
All transfers in and out of the Levels during the period are assumed to be
transferred on the last day of the period at their current value. There were no
transfers between levels at September 30, 2012.
Page 12 See Notes to Financial Statements
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 2012
SHARES/
UNITS DESCRIPTION VALUE
-------- -------------------------------------------------------- -------------
|
MASTER LIMITED PARTNERSHIPS - 22.9%
ENERGY EQUIPMENT & SERVICES - 0.6%
9,813 Exterran Partners, L.P.................................. $ 211,568
------------
OIL, GAS & CONSUMABLE FUELS - 22.3%
8,249 Boardwalk Pipeline Partners, L.P........................ 230,147
9,534 BreitBurn Energy Partners, L.P.......................... 185,246
7,440 Buckeye Partners, L.P................................... 356,897
9,339 Dorchester Minerals, L.P................................ 206,205
14,831 Eagle Rock Energy Partners, L.P......................... 141,636
7,086 Enbridge Energy Partners, L.P........................... 208,612
8,441 Energy Transfer Partners, L.P........................... 359,333
6,615 Enterprise Products Partners, L.P....................... 354,564
7,434 Holly Energy Partners, L.P.............................. 493,989
7,824 Kinder Morgan Energy Partners, L.P...................... 645,480
9,277 Legacy Reserves, L.P.................................... 267,456
5,734 Magellan Midstream Partners, L.P........................ 501,496
10,908 Martin Midstream Partners, L.P.......................... 374,908
7,576 NuStar Energy, L.P...................................... 385,467
6,126 ONEOK Partners, L.P..................................... 364,497
3,896 PAA Natural Gas Storage, L.P............................ 77,530
9,657 Pioneer Southwest Energy Partners, L.P.................. 248,475
8,406 Plains All American Pipeline, L.P....................... 741,409
9,178 Regency Energy Partners, L.P............................ 214,031
8,123 Spectra Energy Partners, L.P............................ 258,555
6,938 TC Pipelines, L.P....................................... 313,251
8,155 Teekay Offshore Partners, L.P........................... 224,344
7,268 Transmontaigne Partners, L.P............................ 276,184
4,085 Williams Partners, L.P.................................. 223,368
------------
7,653,080
------------
TOTAL MASTER LIMITED PARTNERSHIPS....................... 7,864,648
(Cost $7,867,164) ------------
COMMON STOCKS - 21.5%
AEROSPACE & DEFENSE - 0.5%
1,866 Lockheed Martin Corp.................................... 174,247
------------
CAPITAL MARKETS - 0.6%
9,581 Federated Investors, Inc................................ 198,231
------------
CHEMICALS - 0.2%
3,902 Olin Corp............................................... 84,791
------------
COMMERCIAL BANKS - 3.5%
12,087 Bank of Hawaii Corp..................................... 551,409
9,182 FirstMerit Corp......................................... 135,251
16,844 FNB Corp................................................ 188,821
5,477 Trustmark Corp.......................................... 133,310
7,541 United Bankshares, Inc.................................. 187,847
------------
1,196,638
------------
|
See Notes to Financial Statements Page 13
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
SEPTEMBER 30, 2012
SHARES DESCRIPTION VALUE
COMMON STOCKS - (CONTINUED)
COMMERCIAL SERVICES & SUPPLIES - 1.0%
12,798 Pitney Bowes, Inc....................................... $ 176,868
4,663 Waste Management, Inc................................... 149,589
------------
326,457
------------
CONTAINERS & PACKAGING - 1.1%
6,640 Greif, Inc.............................................. 293,355
2,790 Sonoco Products Co...................................... 86,462
------------
379,817
------------
DIVERSIFIED CONSUMER SERVICES - 0.8%
5,407 H&R Block, Inc.......................................... 93,703
9,214 Hillenbrand, Inc........................................ 167,603
------------
261,306
------------
DIVERSIFIED FINANCIAL SERVICES - 0.5%
7,371 NYSE Euronext........................................... 181,695
------------
ELECTRIC UTILITIES - 2.3%
2,079 American Electric Power Co., Inc........................ 91,351
1,254 Entergy Corp............................................ 86,902
2,626 Exelon Corp............................................. 93,433
2,356 FirstEnergy Corp........................................ 103,900
4,074 Great Plains Energy, Inc................................ 90,687
1,951 Pinnacle West Capital Corp.............................. 103,013
1,123 Portland General Electric Co............................ 30,366
2,813 PPL Corp................................................ 81,718
1,805 Southern Co............................................. 83,192
785 Westar Energy, Inc...................................... 23,283
------------
787,845
------------
FOOD & STAPLES RETAILING - 0.4%
8,351 Safeway, Inc............................................ 134,368
------------
FOOD PRODUCTS - 0.2%
2,943 ConAgra Foods, Inc...................................... 81,197
------------
GAS UTILITIES - 0.5%
2,059 Atmos Energy Corp....................................... 73,692
3,188 Piedmont Natural Gas Co., Inc........................... 103,546
------------
177,238
------------
INSURANCE - 0.4%
3,385 Mercury General Corp.................................... 130,830
------------
MEDIA - 0.9%
8,469 Meredith Corp........................................... 296,415
------------
METALS & MINING - 1.7%
10,121 Nucor Corp.............................................. 387,230
6,011 Southern Copper Corp.................................... 206,538
------------
593,768
------------
|
Page 14 See Notes to Financial Statements
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
SEPTEMBER 30, 2012
SHARES DESCRIPTION VALUE
COMMON STOCKS - (CONTINUED)
MULTI-UTILITIES - 3.7%
1,481 Alliant Energy Corp..................................... $ 64,261
6,134 Avista Corp............................................. 157,889
4,650 CenterPoint Energy, Inc................................. 99,045
2,245 Consolidated Edison, Inc................................ 134,453
2,651 DTE Energy Co........................................... 158,901
6,138 NorthWestern Corp....................................... 222,380
3,347 Public Service Enterprise Group, Inc.................... 107,706
2,382 SCANA Corp.............................................. 114,979
6,073 TECO Energy, Inc........................................ 107,735
3,450 Vectren Corp............................................ 98,670
------------
1,266,019
------------
OIL, GAS & CONSUMABLE FUELS - 0.5%
3,037 ConocoPhillips.......................................... 173,656
------------
PHARMACEUTICALS - 0.8%
4,962 Bristol-Myers Squibb Co................................. 167,468
2,257 Eli Lilly & Co.......................................... 107,004
------------
274,472
------------
THRIFTS & MORTGAGE FINANCE - 0.1%
3,288 Northwest Bancshares, Inc............................... 40,212
------------
TOBACCO - 1.2%
2,635 Lorillard, Inc.......................................... 306,846
1,980 Universal Corp.......................................... 100,821
------------
407,667
------------
TRADING COMPANIES & DISTRIBUTORS - 0.6%
6,051 TAL International Group, Inc............................ 205,613
------------
TOTAL COMMON STOCKS..................................... 7,372,482
(Cost $7,440,886) ------------
EXCHANGE-TRADED FUNDS - 21.1%
CAPITAL MARKETS - 21.1%
78,226 iShares iBoxx $ High Yield Corporate Bond Fund.......... 7,225,735
------------
TOTAL EXCHANGE-TRADED FUNDS............................. 7,225,735
(Cost $7,240,800) ------------
REAL ESTATE INVESTMENT TRUSTS - 18.4%
3,384 Alexandria Real Estate Equities, Inc.................... 248,792
5,057 American Capital Agency Corp............................ 174,922
5,976 Boston Properties, Inc.................................. 661,005
12,848 Capstead Mortgage Corp.................................. 173,319
|
See Notes to Financial Statements Page 15
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
SEPTEMBER 30, 2012
SHARES DESCRIPTION VALUE
REAL ESTATE INVESTMENT TRUSTS - (CONTINUED)
13,265 CYS Investments, Inc.................................... $ 186,904
2,449 DuPont Fabros Technology, Inc........................... 61,837
2,964 Extra Space Storage, Inc................................ 98,553
6,827 Federal Realty Investment Trust......................... 718,883
5,706 Hatteras Financial Corp................................. 160,852
4,566 HCP, Inc................................................ 203,096
12,021 Invesco Mortgage Capital, Inc........................... 241,983
6,221 LTC Properties, Inc..................................... 198,139
24,356 MFA Financial, Inc...................................... 207,026
3,970 National Health Investors, Inc.......................... 204,217
4,506 Plum Creek Timber Co., Inc.............................. 197,543
8,417 Post Properties, Inc.................................... 403,679
1,550 PS Business Parks, Inc.................................. 103,571
7,334 Public Storage.......................................... 1,020,673
3,655 Rayonier, Inc........................................... 179,131
8,308 Starwood Property Trust, Inc............................ 193,327
2,015 Taubman Centers, Inc.................................... 154,611
17,333 Two Harbors Investment Corp............................. 203,663
633 UDR, Inc................................................ 15,711
8,159 Washington Real Estate Investment Trust................. 218,824
3,727 Weyerhaeuser Co......................................... 97,424
------------
TOTAL REAL ESTATE INVESTMENT TRUSTS .................... 6,327,685
(Cost $6,415,399) ------------
STATED STATED
|
SHARES DESCRIPTION RATE MATURITY VALUE
$25 PAR PREFERRED SECURITIES - 14.7%
CAPITAL MARKETS - 4.4%
10,190 Credit Suisse AG Guernsey........... 7.90% (a) 264,329
9,083 Deutsche Bank Contingent Capital
Trust II............................ 6.55% (a) 230,254
9,584 Deutsche Bank Contingent Capital
Trust V............................. 8.05% (a) 260,206
8,396 Goldman Sachs Group, Inc.,
Series A............................ 3.75% (a) 166,912
8,521 Goldman Sachs Group, Inc.,
Series B............................ 6.20% (a) 215,666
8,001 Goldman Sachs Group, Inc.,
Series D............................ 4.00% (a) 168,501
9,812 Morgan Stanley, Series A............ 4.00% (a) 195,357
------------
1,501,225
------------
COMMERCIAL BANKS - 4.2%
8,616 HSBC Holdings PLC, Series A......... 6.20% (a) 217,726
10,860 M&T Capital Trust IV................ 8.50% 01/31/68 278,994
5,381 US Bancorp, Series B................ 3.50% (a) 129,306
9,741 US Bancorp, Series D................ 7.87% (a) 259,208
7,813 Wells Fargo & Co., Series J......... 8.00% (a) 232,202
12,224 Zions Bancorp., Series C............ 9.50% (a) 319,902
------------
1,437,338
------------
|
Page 16 See Notes to Financial Statements
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
SEPTEMBER 30, 2012
STATED STATED
SHARES DESCRIPTION RATE MATURITY VALUE
-------- -------------------------------------------------------- -------------
|
$25 PAR PREFERRED SECURITIES - (CONTINUED)
DIVERSIFIED FINANCIAL SERVICES - 2.5%
11,363 Bank of America Corp., Series 8..... 8.63% (a) $ 294,870
10,762 Bank of America Corp., Series H..... 8.20% (a) 279,704
10,737 JPMorgan Chase & Co., Series J...... 8.63% (a) 284,531
------------
859,105
------------
INSURANCE - 1.7%
5,684 MetLife Inc., Series A.............. 4.00% (a) 141,645
8,653 MetLife Inc., Series B.............. 6.50% (a) 222,728
8,631 Prudential PLC...................... 6.50% (a) 219,659
------------
584,032
------------
MARINE - 0.9%
10,867 Seaspan Corp., Series C............. 9.50% (a) 305,580
------------
OIL, GAS & CONSUMABLE FUELS - 0.4%
4,818 Magnum Hunter Resources Corp.,
Series C............................ 10.25% (a) 123,437
------------
REAL ESTATE INVESTMENT TRUSTS (REITS) - 0.6%
7,969 Vornado Realty Trust, Series J...... 6.87% (a) 220,263
------------
TOTAL $25 PAR PREFERRED SECURITIES...................... 5,030,980
(Cost $5,019,683) ------------
$50 PAR PREFERRED SECURITIES - 0.6%
OIL, GAS & CONSUMABLE FUELS - 0.6%
4,221 Apache Corp., Series D (b).......... 6.00% 08/01/13 205,352
------------
TOTAL $50 PAR PREFERRED SECURITIES...................... 205,352
(Cost $207,824) ------------
TOTAL INVESTMENTS - 99.2%............................... 34,026,882
(Cost $34,191,756) (c)
NET OTHER ASSETS AND LIABILITIES - 0.8%................. 280,561
------------
NET ASSETS - 100.0%..................................... $ 34,307,443
------------
|
(a) Perpetual maturity.
(b) This security will automatically convert into shares of common stock on
August 1, 2013.
(c) Aggregate cost for federal income tax purposes is $34,254,301. As of
September 30, 2012, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$121,200 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$348,619.
See Notes to Financial Statements Page 17
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
SEPTEMBER 30, 2012
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of September 30,
2012 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
9/30/2012 PRICES INPUTS INPUTS
------------- ------------- ------------ -----------
Master Limited Partnerships*....................... $ 7,864,648 $ 7,864,648 $ -- $ --
Common Stocks*..................................... 7,372,482 7,372,482 -- --
Exchange-Traded Funds*............................. 7,225,735 7,225,735 -- --
Real Estate Investment Trusts...................... 6,327,685 6,327,685 -- --
$25 Par Preferred Securities*...................... 5,030,980 5,030,980 -- --
$50 Par Preferred Securities*...................... 205,352 205,352 -- --
------------- ------------- ----------- -----------
Total Investments.................................. $ 34,026,882 $ 34,026,882 $ -- $ --
============= ============= =========== ===========
|
* See Portfolio of Investments for industry breakout.
All transfers in and out of the Levels during the period are assumed to be
transferred on the last day of the period at their current value. There were no
transfers between levels at September 30, 2012.
Page 18 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND VI
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2012
FIRST TRUST
NASDAQ MULTI-ASSET
TECHNOLOGY DIVIDEND DIVERSIFIED INCOME
INDEX FUND INDEX FUND
------------------- ------------------
ASSETS:
Investments, at value.................................................. $ 27,697,599 $ 34,026,882
Cash................................................................... 26,950 172,624
Receivables:
Dividends........................................................... 29,311 118,671
Dividend reclaims................................................... 1,487 --
-------------- ----------------
Total Assets..................................................... 27,755,347 34,318,177
-------------- ----------------
LIABILITIES:
Payables:
Investment advisory fees............................................ 8,921 10,734
Investment securities purchased..................................... 15,462 --
-------------- ----------------
Total Liabilities................................................ 24,383 10,734
-------------- ----------------
NET ASSETS............................................................. $ 27,730,964 $ 34,307,443
============== ================
NET ASSETS CONSIST OF:
Paid-in capital........................................................ $ 28,117,022 $ 34,430,065
Par value.............................................................. 14,050 17,000
Accumulated net investment income (loss)............................... -- 84,445
Accumulated net realized gain (loss) on investments ................... (129,647) (59,193)
Net unrealized appreciation (depreciation) on investments ............. (270,461) (164,874)
-------------- ----------------
NET ASSETS............................................................. $ 27,730,964 $ 34,307,443
============== ================
NET ASSET VALUE, per share............................................. $ 19.74 $ 20.18
============== ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share).............................. 1,405,000 1,700,002
============== ================
Investments, at cost................................................... $ 27,968,060 $ 34,191,756
============== ================
|
See Notes to Financial Statements Page 19
FIRST TRUST EXCHANGE-TRADED FUND VI
STATEMENTS OF OPERATIONS
FOR THE PERIOD AUGUST 13, 2012 (a) THROUGH SEPTEMBER 30, 2012
FIRST TRUST
NASDAQ MULTI-ASSET
TECHNOLOGY DIVIDEND DIVERSIFIED INCOME
INDEX FUND INDEX FUND
------------------- ------------------
INVESTMENT INCOME:
Dividends.............................................................. $ 62,263 $ 155,880
Foreign tax withholding................................................ (3,562) --
-------------- ----------------
Total investment income............................................. 58,701 155,880
-------------- ----------------
EXPENSES:
Investment advisory fees............................................... 10,113 12,113
-------------- ----------------
Total expenses...................................................... 10,113 12,113
-------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... 48,588 143,767
-------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... (135,864) (70,990)
In-kind redemptions................................................. 165,302 173,472
-------------- ----------------
Net realized gain (loss)............................................... 29,438 102,482
Net change in unrealized appreciation (depreciation) on
Investments......................................................... (270,461) (164,874)
-------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ (241,023) (62,392)
-------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ (192,435) $ 81,375
============== ================
|
(a) Inception date is consistent with the commencement of investment operations
and is the date the initial creation units were -established. First Trust
Portfolios L.P. seeded the First Trust NASDAQ Technology Dividend Index
Fund on July 19, 2012 in order to establish the Trust and seeded the
Multi-Asset Diversified Income Index Fund on August 10, 2012.
Page 20 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND VI
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD AUGUST 13, 2012 (a) THROUGH SEPTEMBER 30, 2012
FIRST TRUST
NASDAQ MULTI-ASSET
TECHNOLOGY DIVIDEND DIVERSIFIED INCOME
INDEX FUND INDEX FUND
------------------- ------------------
OPERATIONS:
Net investment income (loss)........................................ $ 48,588 $ 143,767
Net realized gain (loss)............................................ 29,438 102,482
Net change in unrealized appreciation (depreciation)................ (270,461) (164,874)
-------------- ----------------
Net increase (decrease) in net assets resulting from operations..... (192,435) 81,375
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income............................................... (49,593) (56,575)
Net realized gain................................................... -- --
Return of capital................................................... -- --
-------------- ----------------
Total distributions to shareholders................................. (49,593) (56,575)
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold........................................... 30,989,339 40,391,888
Cost of shares redeemed............................................. (3,016,347) (6,109,245)
-------------- ----------------
Net increase (decrease) in net assets resulting from shareholder
transactions..................................................... 27,972,992 34,282,643
-------------- ----------------
Total increase (decrease) in net assets............................. 27,730,964 34,307,443
NET ASSETS:
Beginning of period................................................. -- --
-------------- ----------------
End of period....................................................... $ 27,730,964 $ 34,307,443
============== ================
Accumulated net investment income (loss) at end of period........... $ -- $ 84,445
============== ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................. -- --
Shares sold......................................................... 1,555,000 2,000,002
Shares redeemed..................................................... (150,000) (300,000)
-------------- ----------------
Shares outstanding, end of period................................... 1,405,000 1,700,002
============== ================
|
(a) Inception date is consistent with the commencement of investment operations
and is the date the initial creation units were -established. First Trust
Portfolios L.P. seeded the First Trust NASDAQ Technology Dividend Index Fund
on July 19, 2012 in order to establish the Trust and seeded the Multi-Asset
Diversified Income Index Fund on August 10, 2012.
See Notes to Financial Statements Page 21
FIRST TRUST EXCHANGE-TRADED FUND VI
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT THE PERIOD
FIRST TRUST NASDAQ TECHNOLOGY DIVIDEND INDEX FUND
FOR THE PERIOD
AUGUST 13, 2012 (a)
THROUGH
SEPTEMBER 30, 2012
-------------------
Net asset value, beginning of period $ 19.92
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.04
Net realized and unrealized gain (loss) (0.18)
----------
Total from investment operations (0.14)
----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.04)
----------
Total from distributions (0.04)
----------
Net asset value, end of period $ 19.74
==========
TOTAL RETURN (b) (0.72)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 27,731
Ratio of total expenses to average net assets 0.50% (c)
Ratio of net investment income (loss) to average net assets 2.39% (c)
Portfolio turnover rate (d) 18%
|
(a) Inception date is consistent with the commencement of investment operations
and is the date the initial creation units were established. First Trust
Portfolios L.P. seeded the Fund on July 19, 2012 in order to establish the
Trust.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividend
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized and does not include securities received or delivered from
processing creations or redemptions and in-kind transactions.
Page 22 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND VI
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT THE PERIOD
MULTI-ASSET DIVERSIFIED INCOME INDEX FUND
FOR THE PERIOD
AUGUST 13, 2012 (a)
THROUGH
SEPTEMBER 30, 2012
Net asset value, beginning of period $ 19.98
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.09
Net realized and unrealized gain (loss) 0.15
----------
Total from investment operations 0.24
----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.04)
----------
Total from distributions (0.04)
----------
Net asset value, end of period $ 20.18
==========
TOTAL RETURN (b) 1.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 34,307
Ratio of total expenses to average net assets 0.60% (c)
Ratio of net investment income (loss) to average net assets 7.10% (c)
Portfolio turnover rate (d) 34%
|
(a) Inception date is consistent with the commencement of investment operations
and is the date the initial creation units were established. First Trust
Portfolios L.P. seeded the Fund on August 10, 2012.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividend
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. The return presented does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption or sale of Fund shares. Total return is
calculated for the time period presented and is not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized and does not include securities received or delivered from
processing creations or redemptions and in-kind transactions.
See Notes to Financial Statements Page 23
NOTES TO FINANCIAL STATEMENTS
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012
1. ORGANIZATION
First Trust Exchange-Traded Fund VI (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on June 4, 2012,
and is registered with the Securities and Exchange Commission ("SEC") under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of two funds:
First Trust NASDAQ Technology Dividend Index Fund - (NASDAQ(R)
Stock Market LLC ("NASDAQ") ticker "TDIV")
Multi-Asset Diversified Income Index Fund - (NASDAQ ticker "MDIV")
Each fund represents a separate series of shares of beneficial interest in the
Trust (each a "Fund" and collectively, the "Funds"). Each Fund's shares
currently are listed and traded on NASDAQ. Unlike conventional mutual funds,
each Fund issues and redeems shares on a continuous basis, at net asset value
("NAV"), only in large specified blocks consisting of 50,000 shares called a
"Creation Unit." Creation Units are issued and redeemed principally in-kind for
securities included in a Fund's relevant index. Except when aggregated in
Creation Units, shares are not redeemable securities of a Fund. The investment
objective of each Fund is to seek investment results that correspond generally
to the price and yield (before the Fund's fees and expenses) of the following
indices:
FUND INDEX
First Trust NASDAQ Technology Dividend Index Fund NASDAQ Technology Dividend Index(SM)(1)
Multi-Asset Diversified Income Index Fund NASDAQ Multi-Asset Diversified Income Index(1)
|
(1) This index is developed, maintained and sponsored by The NASDAQ OMX Group,
Inc., and is licensed to First Trust Advisors L.P., the investment advisor
to the Trust.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of the financial statements. The
preparation of the financial statements in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
A. PORTFOLIO VALUATION
Each Fund's NAV is determined daily as of the close of regular trading on the
New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, on each day
the NYSE is open for trading. The NAV is calculated by dividing the value of all
assets of the Fund (including accrued interest and dividends), less all
liabilities (including accrued expenses and dividends declared but unpaid), by
the total number of shares outstanding.
Each Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value in
accordance with valuation procedures adopted by the Trust's Board of Trustees
and in accordance with the 1940 Act. Each Fund's securities will be valued as
follows:
Securities listed on any exchange other than the NASDAQ or the London Stock
Exchange Alternative Investment Market ("AIM") are valued at the last sale
price on the business day as of which such value is being determined. If
there has been no sale on such day, the securities are valued at the mean
of the most recent bid and asked prices on such day. Securities traded on
more than one securities exchange are valued at the last sale price or
official closing price, as applicable, on the business day as of which such
value is being determined at the close of the exchange representing the
principal market for such securities.
Securities listed on the NASDAQ or the AIM are valued at the official
closing price on the business day as of which such value is being
determined. If there is no official closing price on the valuation day, the
securities are valued at the mean of the most recent bid and asked prices
on such day.
Securities traded in the over-the-counter market, but excluding securities
trading on the NASDAQ or the AIM, are valued at the closing bid prices.
Short-term investments that mature in less than 60 days when purchased are
valued at amortized cost.
Page 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Board of Trustees or its delegate
at fair value. These securities generally include, but are not limited to,
restricted securities (securities which may not be publicly sold without
registration under the Securities Act of 1933, as amended) for which a pricing
service is unable to provide a market price; securities whose trading has been
formally suspended; a security whose market price is not available from a
pre-established pricing source; a security with respect to which an event has
occurred that is likely to materially affect the value of the security after the
market has closed but before the calculation of a Fund's NAV or make it
difficult or impossible to obtain a reliable market quotation; and a security
whose price, as provided by the pricing service, does not reflect the security's
"fair value." As a general principle, the current "fair value" of a security
would appear to be the amount which the owner might reasonably expect to receive
for the security upon its current sale. The use of fair value prices by a Fund
generally results in prices used by the Fund that may differ from current market
quotations or official closing prices on the applicable exchange. A variety of
factors may be considered in determining the fair value of such securities,
including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect the
value of the security.
In addition, the use of fair value prices and certain current market quotations
or official closing prices could result in a difference between the prices used
to calculate a Fund's NAV and the prices used by such Fund's corresponding
index, which, in turn, could result in a difference between a Fund's performance
and the performance of its underlying index.
The Funds are subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investments.
The inputs or methodology used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value the Funds' investments as of September 30, 2012, is
included with each Fund's Portfolio of Investments.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income, if any, is
recorded on the accrual basis.
Distributions received from a Fund's investments in real estate investment
trusts ("REITs") and master limited partnerships ("MLPs") may be comprised of
return of capital, capital gains and income. The actual character of the amounts
received during the year is not known until after the REIT's and MLP's fiscal
year end. A Fund records the character of distributions received from the REITs
and MLPs during the year based on estimates and historical information
available. The characterization of distributions received by a Fund may be
subsequently revised based on information received from the REITs and MLPs after
their tax reporting periods conclude.
Page 25
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012
C. SECURITIES LENDING
The Funds may lend securities representing up to 20% of the value of their total
assets to broker-dealers, banks and other institutions to generate additional
income. When a Fund loans its portfolio securities, it will receive, at the
inception of each loan, collateral equal to at least 102% (for domestic
securities) or 105% (for international securities) of the market value of the
loaned securities. Securities lending involves the risk that the Fund may lose
money because the borrower of the Fund's loaned securities fails to return the
securities in a timely manner or at all. The Fund could also lose money in the
event of (i) a decline in the value of the collateral provided for the loaned
securities, (ii) a decline in the value of any investments made with cash
collateral or (iii) an increase in the value of the loaned securities if the
borrower does not increase the collateral accordingly and the borrower fails to
return the securities. These events could also trigger adverse tax consequences
for the Fund. Under the Funds' securities lending agreement, the securities
lending agent will generally bear the risk that a borrower may default on its
obligation to return loaned securities. The Funds, however, will be responsible
for the risks associated with the investment of cash collateral. A Fund may lose
money on its investment of cash collateral, which may affect its ability to
repay the collateral to the borrower without the use of other Fund assets. Each
Fund that engages in securities lending receives compensation (net of any rebate
and securities lending agent fees) for lending its securities in the form of
fees or interest on the investment of any cash received as collateral. The
dividend and interest earned on the securities loaned is accounted for in the
same manner as other dividend and interest income. At September 30, 2012, the
Funds did not have any securities on loan.
D. DIVIDENDS AND DISTRIBUTION TO SHAREHOLDERS
Dividends from net investment income of each Fund, if any, are declared and paid
quarterly or as the Board of Trustees may determine from time to time.
Distributions of net realized capital gains earned by each Fund, if any, are
distributed at least annually.
Distributions from income and capital gains are determined in accordance with
income tax regulations, which may differ from U.S. GAAP. Certain capital
accounts in the financial statements are periodically adjusted for permanent
differences in order to reflect their tax character. These permanent differences
are primarily due to the varying treatment of income and gain/loss on portfolio
securities held by the Fund and have no impact on net assets or NAV per share.
Temporary differences, which arise from recognizing certain items of income,
expense and gain/loss in different periods for financial statement and tax
purposes, will reverse at some time in the future.
The tax character of distributions paid by each Fund during the period ended
September 30, 2012 was as follows:
Distributions Distributions Distributions
paid from paid from paid from
Ordinary Capital Return of
Income Gains Capital
------------- ------------- -------------
First Trust NASDAQ Technology Dividend Index Fund $ 49,593 $ -- $ --
Multi-Asset Diversified Income Index Fund 56,575 -- --
|
As of September 30, 2012, the components of distributable earnings on a tax
basis for each Fund were as follows:
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
------------- ------------- -------------
First Trust NASDAQ Technology Dividend Index Fund $ -- $ (9,548) $ (390,560)
Multi-Asset Diversified Income Index Fund 87,797 -- (227,419)
|
E. INCOME TAXES
Each Fund intends to qualify as a regulated investment company by complying with
the requirements under Subchapter M of the Internal Revenue Code of 1986, as
amended, which includes distributing substantially all of its net investment
income and net realized gains to shareholders. Accordingly, no provision has
been made for federal and state income taxes. However, due to the timing and
amount of distributions, each Fund may be subject to an excise tax of 4% of the
amount by which approximately 98% of the Fund's taxable income exceeds the
distributions from such taxable income for the calendar year.
The Funds are subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. The tax period ended 2012 remains
open to federal and state audit. As of September 30, 2012, management has
evaluated the application of these standards to the Funds and has determined
that no provision for income tax is required in the Funds' financial statements
for uncertain tax positions.
Page 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012
Under the Regulated Investment Company Modernization Act of 2010, net capital
losses may be carried forward indefinitely, and their character is retained as
short-term and/or long-term losses. At September 30, 2012, for federal income
tax purposes, each Fund has capital loss carryforwards available that are shown
in the table below, to the extent provided by regulations, to offset future
capital gains. To the extent that these loss carryfowards are used to offset
future capital gains, it is probable that the capital gains so offset will not
be distributed to Fund shareholders. The Funds are subject to certain
limitations, under U.S. tax rules, on the use of capital loss carryforwards and
net unrealized built-in losses. These limitations apply when there has been a
50% change in ownership.
Capital Loss
Available
------------
First Trust NASDAQ Technology Dividend Index Fund $9,548
Multi-Asset Diversified Income Index Fund --
|
In order to present paid-in capital and accumulated net realized gain (loss) on
investments on the Statements of Assets and Liabilities that more closely
represent their tax character, certain adjustments have been made to paid-in
capital, accumulated net investment income (loss) and accumulated net realized
gain (loss) on investments. These adjustments are primarily due to the
difference between book and tax treatments of income and gains on various
investment securities held by the Funds and in-kind transactions. The results of
operations and net assets were not affected by these adjustments. For the fiscal
year ended September 30, 2012, the adjustments for each Fund were as follows:
Accumulated
Accumulated Net Realized
Net Investment Gain (Loss) on Paid-in
Income (Loss) Investments Capital
-------------- -------------- -------------
First Trust NASDAQ Technology Dividend Index Fund $ 1,005 $ (159,085) $ 158,080
Multi-Asset Diversified Income Index Fund (2,747) (161,675) 164,422
|
F. EXPENSES
Expenses that are directly related to the Funds are paid by First Trust Advisors
L.P. ("First Trust" or the "Advisor") pursuant to the Investment Management
Agreement, with the exception of Rule 12b-1 distribution and service fees, if
any, brokerage expenses, taxes, interest and extraordinary expenses, which are
paid by each respective Fund.
First Trust has entered into licensing agreements with NASDAQ OMX Group, Inc.
("Licensor") for the Funds. The respective license agreements allow for the use
by First Trust of each Fund's respective index and of certain trademarks and
trade names of the Licensor. The Funds are sub-licensees to the applicable
license agreements.
G. ACCOUNTING PRONOUNCEMENT
In May 2011, the Financial Accounting Standards Board ("FASB") issued ASU No.
2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs," modifying Topic 820, "Fair Value
Measurements and Disclosures." At the same time, the International Accounting
Standards Board ("IASB") issued International Financial Reporting Standard
("IFRS") 13, "Fair Value Measurement." The objective of the FASB and IASB is
convergence of their guidance on fair value measurements and disclosures.
Specifically, the ASU requires reporting entities to disclose (i) the amounts of
any transfers between Level 1 and Level 2, and the reasons for the transfers,
(ii) for Level 3 fair value measurements, quantitative information about
significant unobservable inputs used, (iii) a description of the valuation
processes used by the reporting entity, and (iv) a narrative description of the
sensitivity of fair value measurement to changes in unobservable inputs if a
change in those inputs might result in a significantly higher or lower fair
value measurement. The effective date of the ASU is for interim and annual
periods beginning after December 15, 2011. Management is currently evaluating
the impact of the updated standards on the Funds' financial statements, if any.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Funds, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for the selection and ongoing monitoring of the securities
in each Fund's portfolio, managing the Funds' business affairs and providing
certain administrative services necessary for the management of the Funds.
Page 27
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012
For the First Trust NASDAQ Technology Dividend Index Fund and the Multi-Asset
Diversified Income Index Fund, First Trust is paid an annual unitary management
fee of 0.50% and 0.60%, respectively, of each Fund's average daily net assets.
First Trust is responsible for the expenses of each Fund including the cost of
transfer agency, custody, fund administration, legal, audit and other services,
including any compensation to Trustees, and excluding Rule 12b-1 distribution
and service fees, if any, brokerage expenses, taxes, interest, and extraordinary
expenses, which are paid by each respective Fund. First Trust also provides fund
reporting services to the Funds for a flat annual fee in the amount of $9,250
per Fund, which is included in the annual unitary management fee.
The Trust has multiple service agreements with Brown Brothers Harriman & Co.
("BBH"). Under the servicing agreements, BBH performs custodial, fund
accounting, certain administrative services, and transfer agency services for
the Trust. As custodian, BBH is responsible for custody of the Trust's assets.
As fund accountant and administrator, BBH is responsible for maintaining the
books and records of the Trust's securities and cash. As transfer agent, BBH is
responsible for maintaining shareholder records for the Trust.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") is paid a fixed annual
retainer of $125,000 per year and an annual per fund fee of $4,000 for each
closed-end fund or other actively managed fund and $1,000 for each index fund in
the First Trust Fund Complex. The fixed annual retainer is allocated pro rata
among each fund in the First Trust Fund Complex based on net assets.
Additionally, the Lead Independent Trustee is paid $15,000 annually, the
Chairman of the Audit Committee is paid $10,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
is paid $5,000 annually to serve in such capacities, with such compensation
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and each Committee
Chairman will serve two-year terms before rotating to serve as chairman of
another committee or as Lead Independent Trustee. The officers and "Interested"
Trustee receive no compensation from the funds for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the period ended September 30, 2012, the cost of purchases and proceeds from
sales of investment securities for each Fund, excluding short-term investments
and in-kind transactions, were as follows:
Purchases Sales
--------------- ----------------
First Trust NASDAQ Technology Dividend Index Fund $ 3,819,500 $ 3,725,289
Multi-Asset Diversified Income Index Fund 7,682,778 7,651,773
|
For the period ended September 30, 2012, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
Purchases Sales
--------------- ----------------
First Trust NASDAQ Technology Dividend Index Fund $ 30,862,065 $ 3,017,653
Multi-Asset Diversified Income Index Fund 40,178,808 6,120,538
|
5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES
Shares are created and redeemed by each Fund only in Creation Unit size
aggregations of 50,000 shares. In order to purchase Creation Units of a Fund, an
investor must deposit (i) a designated portfolio of equity securities determined
by First Trust (the "Deposit Securities") and generally make or receive a cash
payment referred to as the "Cash Component," which is an amount equal to the
difference between the NAV of the Fund Shares (per Creation Unit Aggregation)
and the market value of the Deposited Securities, and/or (ii) cash in lieu of
all or a portion of the Deposit Securities. If the Cash Component is a positive
number (i.e., the NAV per Creation Unit Aggregation exceeds the Deposit Amount),
the creator will deliver the Cash Component. If the Cash Component is a negative
number (i.e., the NAV per Creation Unit Aggregation is less than the Deposit
Amount), the creator will receive the Cash Component. Purchasers of Creation
Units must pay to BBH, as transfer agent, a creation fee (the "Creation
Transaction Fee") regardless of the number of Creation Units purchased in the
transaction. The Creation Transaction Fee may vary and is based on the
composition of the securities included in each Fund's portfolio and the
countries in which the transactions are settled. The Creation Transaction Fee
may increase or decrease as each Fund's portfolio is adjusted to conform to
changes in the composition of its corresponding index. The price for each
Creation Unit will equal the daily NAV per share times the number of shares in a
Creation Unit plus the fees described above and, if applicable, any operational
processing and brokerage costs, transfer fees or stamp taxes. When a Fund
permits an Authorized Participant to substitute cash or a different security in
lieu of depositing one or more of the requisite Deposit Securities, the
Authorized Participant may also be assessed an amount to cover the cost of
purchasing the Deposit Securities and/or disposing of the substituted
securities, including operational processing and brokerage costs, transfer fees,
stamp taxes, and part or all of the spread between the expected bid and offer
side of the market related to such Deposit Securities and/or substitute
securities.
Page 28
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012
Parties redeeming Creation Units must pay to BBH, as transfer agent, a
redemption transaction fee (the "Redemption Transaction Fee"), regardless of the
number of Creation Units redeemed in the transaction. The Redemption Transaction
Fee may vary and is based on the composition of the securities included in each
Fund's portfolio and the countries in which the transactions are settled. The
Redemption Transaction Fee may increase or decrease as each Fund's portfolio is
adjusted to conform to changes in the composition of its corresponding index.
Each Fund reserves the right to effect redemptions in cash. An Authorized
Participant may request a cash redemption in lieu of securities; however, each
Fund may, in its discretion, reject any such request.
The standard Creation Transaction Fees and the Redemption Transaction Fees for
each Fund are as follows:
Creation Redemption
Transaction Transaction
Fees Fees
----------- -----------
First Trust NASDAQ Technology Dividend Index Fund $ 500 $ 500
Multi-Asset Diversified Income Index Fund 1,000 1,000
|
6. DISTRIBUTION PLAN
The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Funds are
authorized to pay an amount up to 0.25% of their average daily net assets each
year to reimburse First Trust Portfolios L.P. ("FTP"), the distributor of the
Funds, for amounts expended to finance activities primarily intended to result
in the sale of Creation Units or the provision of investor services. FTP may
also use this amount to compensate securities dealers or other persons that are
Authorized Participants for providing distribution assistance, including
broker-dealer and shareholder support and educational and promotional services.
No 12b-1 fees are currently paid by the Funds, and pursuant to a contractual
arrangement, the Funds will not pay 12b-1 fees any time before August 10, 2013.
7. INDEMNIFICATION
The Trust, on behalf of the Funds, has a variety of indemnification obligations
under contracts with its service providers. The Trust's maximum exposure under
these arrangements is unknown. However, the Trust has not had prior claims or
losses pursuant to these contracts and expects the risk of loss to be remote.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Funds
through the date the financial statements were issued, and has determined there
were no subsequent events requiring recognition or disclosure in the financial
statements.
Page 29
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of First Trust Exchange-Traded
Fund VI:
We have audited the accompanying statements of assets and liabilities of First
Trust NASDAQ Technology Dividend Index Fund and Multi-Asset Diversified Income
Index Fund, each a series of the First Trust Exchange-Traded Fund VI (the
"Fund"), including the portfolios of investments, as of September 30, 2012, and
the related statements of operations, the statements of changes in net assets,
and the financial highlights for the period from August 13, 2012 (inception
date) through September 30, 2012. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of September 30, 2012 by correspondence with the Fund's
custodian and brokers. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the funds listed above included in the First Trust Exchange-Traded Fund VI as
of September 30, 2012, and the results of their operations, the changes in their
net assets, and the financial highlights for the period from August 13, 2012
(inception date) through September 30, 2012, in conformity with accounting
principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
November 28, 2012
|
Page 30
ADDITIONAL INFORMATION
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Trust uses to determine
how to vote proxies and information on how each Fund will vote relating to
portfolio investments during the most recent 12-month period ended June 30 will
be available (1) without charge, upon request, by calling (800) 988-5891; (2) on
the Fund's website located at http://www.ftportfolios.com; and (3) on the
Securities and Exchange Commission's ("SEC") website located at
http://www.sec.gov.
PORTFOLIO HOLDINGS
The Trust files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Trust's Forms N-Q
will be available (1) by calling (800) 988-5891; (2) on the Funds' website
located at http://www.ftportfolios.com; (3) on the SEC's website at
http://www.sec.gov; and (4) for review and copying at the SEC's Public Reference
Room ("PRR") in Washington, DC. Information regarding the operation of the PRR
may be obtained by calling (800) SEC-0330.
FEDERAL TAX INFORMATION
For the taxable period ended September 30, 2012, the following percentages of
income dividends paid by the Funds qualify for the dividends received deduction
available to corporations:
Dividends
Received
Deduction
----------
First Trust NASDAQ Technology Dividend Index Fund 57%
Multi-Asset Diversified Income Index Fund 24%
|
For the taxable period ended September 30, 2012, the following percentages of
income dividends paid by the Funds is hereby designated as qualified dividend
income:
Qualified
Dividend
Income
----------
First Trust NASDAQ Technology Dividend Index Fund 86%
Multi-Asset Diversified Income Index Fund 25%
|
Page 31
ADDITIONAL INFORMATION (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
ADVISORY AGREEMENT
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
The Board of Trustees of the First Trust Exchange-Traded Fund VI (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Agreement") with First Trust Advisors L.P. ("First Trust") on behalf of
the First Trust NASDAQ Technology Dividend Index Fund and the Multi-Asset
Diversified Income Index Fund, each a series of the Trust (each a "Fund" and
collectively, the "Funds"), for an initial two-year term at a meeting held on
June 11, 2012. The Board of Trustees determined that the Agreement is in the
best interests of each Fund in light of the services, expenses and such other
matters as the Board considered to be relevant in the exercise of its reasonable
business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreement, the
Independent Trustees received a report in advance of the Board meeting that,
among other things, outlined the services to be provided by First Trust to each
Fund (including the relevant personnel responsible for these services and their
experience); the proposed unitary fee structure for each Fund as compared to
fees charged by investment advisors to other comparable exchange-traded funds
("ETFs") and, in the case of the Multi-Asset Diversified Income Index Fund,
other comparable open-end funds, and as compared to fees charged to other First
Trust clients with similar investment objectives, and to other ETFs managed by
First Trust; the estimated expenses to be incurred in providing services to each
Fund and the potential for economies of scale, if any; financial data on First
Trust; fall-out benefits to First Trust and First Trust Portfolios L.P.; and
information on First Trust's compliance program. The Independent Trustees also
met separately with their independent legal counsel to discuss the information
provided by First Trust. The Board applied its business judgment to determine
whether the arrangement between the Trust and First Trust is a reasonable
business arrangement from each Fund's perspective as well as from the
perspective of shareholders.
In evaluating whether to approve the Agreement for each Fund, the Board
considered the nature, extent and quality of services to be provided by First
Trust under the Agreement. The Board noted that the Funds are the initial series
of the Trust and considered the efforts expended by First Trust in organizing
the Trust and making arrangements for other services to be provided to the
Funds. The Board considered that First Trust employees provide management
services to other ETFs in the First Trust fund complex with diligence and care.
The Board also considered the compliance program that had been developed by
First Trust and the skills of its employees who would be working with the Funds.
Since each Fund had yet to commence investment operations, the Board could not
consider the historical investment performance of the Funds, but the Board did
consider the hypothetical performance of each Fund's underlying index. The Board
considered reports it receives on a quarterly basis showing the correlation and
tracking error between other ETFs for which First Trust serves as investment
advisor and their applicable underlying indexes. In light of the information
presented and the considerations made, the Board concluded that the nature,
extent and quality of services to be provided to each Fund by First Trust under
the Agreement are expected to be satisfactory.
The Board reviewed information regarding the proposed unitary fee structure for
each Fund. The Board noted that under each Fund's unitary fee arrangement, the
First Trust NASDAQ Technology Dividend Index Fund would pay First Trust a fee
equal to an annual rate of 0.50% of its average daily net assets and the
Multi-Asset Diversified Income Index Fund would pay First Trust a fee equal to
an annual rate of 0.60% of its average daily net assets. The Board considered
that First Trust would be responsible for each Fund's expenses, including the
cost of transfer agency, custody, fund administration, legal, audit, licensing
and other services, but excluding interest, taxes, brokerage commissions and
other expenses connected with the execution of portfolio transactions, service
fees and distribution fees pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses. The Board reviewed information provided by First Trust
and Lipper, Inc. ("Lipper") for each Fund on the advisory fees and expense
ratios of other comparable ETFs and, in the case of the Multi-Asset Diversified
Income Index Fund, other comparable open-end funds, but also noted the
limitations on the comparability of each Fund's Lipper group of funds and First
Trust group of funds with the Fund. The Board noted that the First Trust NASDAQ
Technology Dividend Index Fund's total expense ratio under its proposed unitary
fee was slightly above the median of its Lipper and First Trust peer groups and
that the Multi-Asset Diversified Income Index Fund's total expense ratio under
its proposed unitary fee was below the median of its Lipper and First Trust peer
groups. The Board also considered the total expense ratios (after fee waivers)
of other First Trust ETFs, including First Trust ETFs that pay a unitary fee. In
light of the information considered and the nature, extent and quality of
services expected to be provided to each Fund under the Agreement, the Board
determined that the proposed unitary fee for each Fund was fair and reasonable.
Page 32
ADDITIONAL INFORMATION (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
The Board noted that the proposed unitary fee for each Fund was not structured
to pass the benefits of any economies of scale on to shareholders as the Fund's
assets grow. The Board noted that any reduction in fixed costs associated with
the management of the Funds would benefit First Trust, but that a unitary fee
structure provides certainty in expenses for the Funds. The Board noted that
First Trust has continued to invest in personnel and infrastructure for the
First Trust fund complex. The Board took the costs to be borne by First Trust in
connection with its services to be performed for the Funds under the Agreement
into consideration and noted that First Trust was unable to estimate the
profitability of the Agreement for the Funds to First Trust. The Board
considered fall-out benefits described by First Trust that may be realized from
its relationship with the Funds, including the Advisor's compensation for fund
reporting services pursuant to a separate Fund Reporting Services Agreement. The
Board also noted that First Trust would not utilize soft dollars in connection
with its management of each Fund's portfolio.
Based on all the information considered and the conclusions reached, the Board,
including the Independent Trustees, unanimously determined that the terms of the
Agreement are fair and reasonable and that the approval of the Agreement is in
the best interests of each Fund. No single factor was determinative in the
Board's analysis.
Page 33
BOARD OF TRUSTEES AND OFFICERS
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
Each Fund's respective statement of additional information includes additional
information about the Trustees and is available, without charge, upon request,
by calling (800) 988-5891.
NUMBER OF
PORTFOLIOS IN
TERM OF OFFICE THE FIRST TRUST OTHER
NAME, ADDRESS, AND YEAR FIRST FUND COMPLEX TRUSTEESHIPS OR
DATE OF BIRTH AND ELECTED OR PRINCIPAL OCCUPATIONS OVERSEEN BY DIRECTORSHIPS
POSITION WITH THE TRUST APPOINTED DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
INDEPENDENT TRUSTEES
Richard E. Erickson, Trustee o Indefinite Term Physician; President, Wheaton Orthopedics; 96 None
c/o First Trust Advisors L.P. Co-Owner and Co-Director (January 1996
120 East Liberty Drive, o Since Inception to May 2007), Sports Med Center for
Suite 400 Fitness; Limited Partner, Gundersen Real
Wheaton, IL 60187 Estate Limited Partnership; Member,
D.O.B.: 04/51 Sportsmed LLC
Thomas R. Kadlec, Trustee o Indefinite Term President (March 2010 to Present), Senior 96 Director of ADM
c/o First Trust Advisors L.P. Vice President and Chief Financial Officer Investor Services,
120 East Liberty Drive, o Since Inception (May 2007 to March 2010), Vice President Inc. and ADM
Suite 400 and Chief Financial Officer (1990 to May Investor Services
Wheaton, IL 60187 2007), ADM Investor Services, Inc. (Futures International
D.O.B.: 11/57 Commission Merchant)
Robert F. Keith, Trustee o Indefinite Term President (2003 to Present), Hibs 96 None
c/o First Trust Advisors L.P. Enterprises (Financial and Management
120 East Liberty Drive, o Since Inception Consulting)
Suite 400
Wheaton, IL 60187
D.O.B.: 11/56
Niel B. Nielson, Trustee o Indefinite Term President and Chief Executive Officer 96 Director of
c/o First Trust Advisors L.P. (June 2012 to Present), Dew Learning LLC Covenant
120 East Liberty Drive, o Since Inception (Educational Products and Services); President Transport Inc.
Suite 400 (June 2002 to June 2012), Covenant College
Wheaton, IL 60187
D.O.B.: 03/54
INTERESTED TRUSTEE
James A. Bowen(1), Trustee, o Indefinite Term Chief Executive Officer (December 2010 96 None
Chairman of the Board to Present), President (until December
120 East Liberty Drive, o Since Inception 2010), First Trust Advisors L.P. and First
Suite 400 Trust Portfolios L.P.; Chairman of the
Wheaton, IL 60187 Board of Directors, BondWave LLC
D.O.B.: 09/55 (Software Development Company/
Investment Advisor) and Stonebridge
Advisors LLC (Investment Advisor)
--------
(1) Mr. Bowen is deemed an "interested person" of the Trust due to his
position as Chief Executive Officer of First Trust Advisors L.P.,
investment advisor of the Trust.
|
Page 34
BOARD OF TRUSTEES AND OFFICERS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
POSITION AND TERM OF OFFICE
NAME, ADDRESS OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
AND DATE OF BIRTH WITH TRUST SERVICE DURING PAST 5 YEARS
OFFICERS WHO ARE NOT TRUSTEES(2)
Mark R. Bradley President and Chief o Indefinite Term Chief Operating Officer (December 2010 to Present)
120 E. Liberty Drive, Executive Officer and Chief Financial Officer, First Trust Advisors
Suite 400 o Since Inception L.P. and First Trust Portfolios L.P.; Chief
Wheaton, IL 60187 Financial Officer, BondWave LLC (Software
D.O.B.: 11/57 Development Company/Investment Advisor) and
Stonebridge Advisors LLC (Investment Advisor)
James M. Dykas Treasurer, Chief o Indefinite Term Controller (January 2011 to Present), Senior Vice
120 E. Liberty Drive, Financial Officer and President (April 2007 to January 2011), Vice
Suite 400 Chief Accounting o Since Inception President (January 2005 to April 2007), First
Wheaton, IL 60187 Officer Trust Advisors L.P. and First Trust
D.O.B.: 01/66 Portfolios L.P.
W. Scott Jardine Secretary o Indefinite Term General Counsel, First Trust Advisors L.P., First
120 E. Liberty Drive, Trust Portfolios L.P.; Secretary, BondWave LLC
Suite 400 o Since Inception (Software Development Company/Investment
Wheaton, IL 60187 Advisor) and Stonebridge Advisors LLC
D.O.B.: 05/60 (Investment Advisor)
Daniel J. Lindquist Vice President o Indefinite Term Senior Vice President (September 2005 to
120 E. Liberty Drive, Present), Vice President (April 2004 to September
Suite 400 o Since Inception 2005), First Trust Advisors L.P. and First Trust
Wheaton, IL 60187 Portfolios L.P.
D.O.B.: 02/70
Kristi A. Maher Assistant Secretary o Indefinite Term Deputy General Counsel (May 2007 to Present),
120 E. Liberty Drive, and Chief Compliance Assistant General Counsel (March 2004 to May
Suite 400 Officer o Since Inception 2007), First Trust Advisors L.P. and First Trust
Wheaton, IL 60187 Portfolios L.P.
D.O.B.: 12/66
Roger F. Testin Vice President o Indefinite Term Senior Vice President (November 2003 to Present),
120 E. Liberty Drive, Vice President (August 2001 to November 2003),
Suite 400 o Since Inception First Trust Advisors L.P. and First Trust
Wheaton, IL 60187 Portfolios L.P.
D.O.B.: 06/66
Stan Ueland Vice President o Indefinite Term Vice President (August 2005 to Present), First
120 E. Liberty Drive, Trust Advisors L.P. and First Trust Portfolios
Suite 400 o Since Inception L.P.; Vice President (May 2004 to August 2005)
Wheaton, IL 60187 BondWave LLC (Software Development Company/
D.O.B.: 11/70 Investment Advisor)
|
(2) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 35
RISK CONSIDERATIONS
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
RISKS ARE INHERENT IN ALL INVESTING. YOU SHOULD CONSIDER EACH FUND'S INVESTMENT
OBJECTIVE, RISKS, CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. YOU CAN
DOWNLOAD EACH FUND'S PROSPECTUS AT HTTP://WWW.FTPORTFOLIOS.COM OR CONTACT FIRST
TRUST PORTFOLIOS L.P. AT (800) 621-1675 TO REQUEST A PROSPECTUS, WHICH CONTAINS
THIS AND OTHER INFORMATION ABOUT EACH FUND. FOR ADDITIONAL INFORMATION ABOUT THE
RISKS ASSOCIATED WITH INVESTING IN THE FUNDS, PLEASE SEE THE FUNDS' STATEMENT OF
ADDITIONAL INFORMATION, AS WELL AS OTHER REGULATORY FILINGS. READ THESE
DOCUMENTS CAREFULLY BEFORE YOU INVEST. FIRST TRUST PORTFOLIOS L.P. IS THE
DISTRIBUTOR OF THE FIRST TRUST EXCHANGE-TRADED FUND VI.
The following summarizes some of the risks that should be considered for the
Funds. Shares are subject to market fluctuations caused by such factors as
economic, political, regulatory or market developments, changes in interest
rates and perceived trends in stock prices. Overall stock values could decline
generally or could underperform other investments.
An investment in a Fund involves risks similar to those of investing in any fund
of equity securities traded on an exchange. Investors buying or selling Fund
shares on the secondary market may incur brokerage commissions. In addition,
investors who sell Fund shares may receive less than the Fund shares' net asset
value. Unlike shares of open-end mutual funds, investors are generally not able
to purchase ETF shares directly from a Fund and individual ETF shares are not
redeemable. However, specified large blocks of ETF shares called creation units
can be purchased from, or redeemed to, a Fund.
Each Fund is subject to index tracking risk. You should anticipate that the
value of each Fund's shares will decline, more or less, in correlation with any
decline in the value of that Fund's corresponding index.
Each Fund's return may not match the return of the index it seeks to track for a
number of reasons. While First Trust seeks to have a correlation of 0.95 or
better, before expenses, between a Fund's performance and the performance of its
corresponding index, there can be no assurance that a Fund will be able to
achieve such a correlation. Accordingly, each Fund's performance may correlate
to a lesser extent and may possibly vary substantially from the performance of
its corresponding index.
Each Fund is exposed to additional market risk due to its policy of investing
principally in the securities included in its corresponding index. As a result
of this policy, securities held by each Fund will generally not be bought or
sold in response to market fluctuations and the securities may be issued by
companies concentrated in a particular industry. As a result, the Funds will
generally not sell a stock because the stock's issuer is in financial trouble,
unless that stock is removed or is anticipated to be removed from the index the
Fund seeks to track.
Each Fund relies on a license and related sublicense from an index provider that
permits it to use its corresponding index and associated trade names, trademarks
and service marks in connection with the name and investment strategies of the
Fund. Such license and related sublicense may be terminated by the index
provider and, as a result, a Fund may lose its ability to use such intellectual
property. There is no guarantee the index provider has all the rights to license
such intellectual property on behalf of the Fund. In the event the license is
terminated or the index provider does not have rights to license such
intellectual property, it may have a significant effect on the operation of the
respective Fund.
Each Fund is subject to issuer specific change risk. The value of an individual
security or particular type of security can be more volatile than the market as
a whole and can perform differently from the value of the market as a whole.
Each Fund may be concentrated in stocks of companies in an individual industry
if the Fund's corresponding index is concentrated in such industry. A
concentration makes a Fund more susceptible to any single occurrence affecting
the industry and may subject a Fund to greater market risk than more diversified
funds.
The First Trust NASDAQ Technology Dividend Index Fund is considered to be
non-diversified. As a result, the Fund is exposed to additional market risk. A
non-diversified fund may invest a relatively high percentage of its assets in a
limited number of issuers. As a result, changes in the market value of a single
portfolio security could cause greater fluctuations in share price than would
occur in a diversified fund. Furthermore, non-diversified funds are more
susceptible to any single political, regulatory or economic occurrence.
Each Fund is not actively managed. A Fund may be affected by a general decline
in certain market segments relating to a Fund's corresponding index. A Fund
invests in securities included in or representative of its corresponding index
regardless of its investment merit. A Fund generally will not attempt to take
defensive positions in declining markets.
Inflation risk is the risk that the value of assets or income from investments
will be less in the future as inflation decreases the value of money. As
inflation increases, the value of a Fund's assets can decline as can the value
of a Fund's distributions. Common stock prices may be particularly sensitive to
rising interest rates, as the cost of capital rises and borrowing costs
increase.
The Funds may invest in non-U.S. securities publicly traded in the United
States. Securities issued by non-U.S. companies present risks beyond those of
securities of U.S. issuers. Risks of investing in non-U.S. securities include:
different accounting standards; expropriation, nationalization or other adverse
political or economic developments; currency devaluation, blockages or transfer
restrictions; changes in non-U.S. currency exchange rates; taxes; restrictions
on non-U.S. investments and exchange of securities; and less government
supervision and regulation of issuers in non-U.S. countries. Prices of non-U.S.
securities also may be more volatile. These risks may be heightened for
securities of companies located in, or with significant operations in, emerging
market countries.
Page 36
RISK CONSIDERATIONS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
Depositary receipts may be less liquid than the underlying shares in their
primary trading market. Any distributions paid to the holders of depositary
receipts are usually subject to a fee charged by the depositary. Holders of
depositary receipts may have limited voting rights, and investment restrictions
in certain countries may adversely impact the value of depositary receipts
because such restrictions may limit the ability to convert equity shares into
depositary receipts and vice versa. Such restrictions may cause equity shares of
the underlying issuer to trade at a discount or premium to the market price of
the depositary receipts.
Each Fund invests in small and mid capitalization companies. Such companies may
be more vulnerable to adverse general market or economic developments, and their
securities may be less liquid and may experience greater price volatility than
larger, more established companies as a result of several factors, including
limited trading volumes, products or financial resources, management
inexperience and less publicly available information. Accordingly, such
companies are generally subject to greater market risk than larger, more
established companies.
The Multi-Asset Diversified Income Index Fund is subject to the risks of
investing in MLPs. An investment in MLP units involves risks which differ from
an investment in common stock of a corporation. Holders of MLP units have
limited control and voting rights on matters affecting the partnership. In
addition, there are certain tax risks associated with an investment in MLP units
and conflicts of interest exist between common unit holders and the general
partner, including those arising from incentive distribution payments. In
addition, there is the risk that a MLP could be, contrary to its intention,
taxed as a corporation, resulting in decreased returns from such MLP.
The Multi-Asset Diversified Income Index Fund invests in REITs. Therefore, the
Fund is subject to the risks associated with investing in real estate, which may
include, but are not limited to, fluctuations in the value of underlying
properties; defaults by borrowers or tenants; market saturation; changes in
general and local operating expenses; and other economic, political or
regulatory occurrences affecting companies in the real estate industry. In
addition to risks related to investments in real estate generally, investing in
REITs involves certain other risks related to their structure and focus, which
include, but are not limited to, dependency upon management skills, limited
diversification, the risks of locating and managing financing for projects,
heavy cash flow dependency, possible default by borrowers, the costs and
potential losses of self-liquidation of one or more holdings, the risk of a
possible lack of mortgage funds and associated interest rate risks,
overbuilding, property vacancies, increases in property taxes and operating
expenses, changes in zoning laws, losses due to environmental damages, changes
in neighborhood values and appeal to purchases, the possibility of failing to
maintain exemptions from registration under the 1940 Act and, in many cases,
relatively small market capitalization, which may result in less market
liquidity and greater price volatility.
REITs are also subject to the risk that the real estate market may experience an
economic downturn generally, which may have a material effect on the real estate
in which the REITs invest and their underlying portfolio securities.
The Multi-Asset Diversified Income Index Fund invests in ETFs. ETFs are
generally index funds bought and sold on a securities exchange. An ETF trades
like common stock and represents a portfolio of securities designed to track a
particular market index. The risks of owning an ETF generally reflect the risks
of owning the underlying securities they are designed to track, although lack of
liquidity in an ETF could result in it being more volatile and ETFs have
management fees that increase their costs.
The Multi-Asset Diversified Income Index Fund invests in an exchange-traded fund
that invests in high yield securities, which are subject to greater market
fluctuations and risk of loss than securities with higher investment ratings.
These securities are issued by companies that may have limited operating
history, narrowly focused operations, and/or other impediments to the timely
payment of periodic interest and principal at maturity. If the economy slows
down or dips into recession, the issuers of high-yield securities may not have
sufficient resources to continue making timely payment of periodic interest and
principal at maturity. The market for high-yield securities is smaller and less
liquid than that for investment grade securities. High-yield securities are
generally not listed on a national securities exchange but trade in the
over-the-counter markets. Due to the smaller, less liquid market for high-yield
securities, the bid-offer spread on such securities is generally greater than it
is for investment grade securities and the purchase or sale of such securities
may take longer to complete.
The Multi-Asset Diversified Income Index Fund invests in preferred securities.
Preferred securities combine some of the characteristics of both common stocks
and bonds. Preferred securities are typically subordinated to bonds and other
debt instruments in a company's capital structure, in terms of priority to
corporate income, and therefore will be subject to greater credit risk than
those debt instruments. Preferred securities are also subject to credit risk,
interest rate risk and income risk.
Credit risk is the risk that an issuer of a security will be unable or unwilling
to make dividend, interest and/or principal payments when due and the related
risk that the value of a security may decline because of concerns about the
issuer's ability to make such payments. Credit risk may be heightened for a fund
because it may invest in exchange-traded funds that invest in "high yield" or
"junk" debt; such securities, while generally offering higher yields than
investment-grade debt with similar maturities, involve greater risks, including
the possibility of dividend or interest deferral, default or bankruptcy, and are
regarded as predominantly speculative with respect to the issuer's capacity to
pay dividends or interest and repay principal.
The First Trust NASDAQ Technology Dividend Index Fund invests in the securities
of companies in the technology sector. General risks of technology companies
include the risks of rapidly changing technologies, short product life cycles,
Page 37
RISK CONSIDERATIONS (CONTINUED)
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012 (UNAUDITED)
fierce competition, aggressive pricing and reduced profit margins, loss of
patent, copyright and trademark protections, cyclical market patterns, evolving
industry standards, and frequent new product introductions. Technology companies
may be smaller and less experienced companies, with limited product lines,
markets or financial resources and fewer experienced management or marketing
personnel.
The First Trust NASDAQ Technology Dividend Index Fund invests in companies in
the telecommunications sector. Telecommunications companies are subject to
risks, such as: a market characterized by increasing competition and regulation
by the Federal Communications Commission and various state regulatory
authorities; the need to commit substantial capital to meet increasing
competition, particularly in formulating new products and services using new
technology; and technological innovations that may make various products and
services obsolete.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
Page 38
PRIVACY POLICY
FIRST TRUST EXCHANGE-TRADED FUND VI
SEPTEMBER 30, 2012
PRIVACY POLICY
First Trust values our relationship with you and considers your privacy an
important priority in maintaining that relationship. We are committed to
protecting the security and confidentiality of your personal information.
SOURCES OF INFORMATION
We collect nonpublic personal information about you from the following sources:
o Information we receive from you and your broker-dealer, investment
advisor or financial representative through interviews,
applications, agreements or other forms;
o Information about your transactions with us, our affiliates or
others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o Information we collect on our website through the use of "cookies."
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required under law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians
and trustees, or that assist us in the distribution of investor
materials such as trustees, banks, financial representatives, proxy
services, solicitors and printers.
o We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information with affiliates of the Fund.
PRIVACY ONLINE
We allow third-party companies, including AddThis, to collect certain anonymous
information when you visit our website. These companies may use non-personally
identifiable information during your visits to this and other websites in order
to provide advertisements about goods and services likely to be of greater
interest to you. These companies typically use a cookie, third party web beacon
or pixel tags, to collect this information. To learn more about this behavioral
advertising practice, you can visit www.networkadvertising.org.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, we restrict access to your
nonpublic personal information to those individuals who need to know that
information to provide products or services to you. We maintain physical,
electronic and procedural safeguards to protect your nonpublic personal
information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time, however, if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at
1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust
Advisors).
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FIRST TRUST
First Trust Exchange-Traded Fund VI
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR, CUSTODIAN,
FUND ACCOUNTANT &
TRANSFER AGENT
Brown Brothers Harriman & Co.
50 Milk Street
Boston, MA 02109
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
[BLANK BACK COVER]
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the registrant or a third
party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code
of ethics description.
(d) The registrant, during the period covered by this report, has not
granted any waivers, including an implicit waiver, from a provision of the
code of ethics that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether
these individuals are employed by the registrant or a third party, that
relates to one or more of the items set forth in paragraph (b) of this
item's instructions.
(e) Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Trustees has determined that Thomas R. Kadlec and Robert F. Keith are qualified
to serve as audit committee financial experts serving on its audit committee and
that each of them is "independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees (Registrant) -- The aggregate fees for professional
services rendered by the principal accountant for the audit of the registrant's
annual financial statements or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
were $46,700 from the inception of the registrant on August 13, 2012, through
September 30, 2012.
(b) Audit-Related Fees (Registrant) -- The aggregate fees billed for
assurance and related services by the principal accountant that are reasonably
related to the performance of the audit of the registrant's financial statements
and are not reported under paragraph (a) of this Item were $0 from the inception
of the registrant on August 13, 2012, through September 30, 2012.
Audit-Related Fees (Investment Adviser and Distributor) -- The aggregate
fees billed for assurance and related services by the principal accountant that
are reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this Item were
$7,000 from the inception of the registrant on August 13, 2012, through
September 30, 2012. These fees were for the seed audit of the initial series of
the registrant.
(c) Tax Fees (Registrant) -- The aggregate fees billed for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning to the registrant were $0 from the inception of the registrant
on August 13, 2012, through September 30, 2012.
Tax Fees (Investment Adviser and Distributor) -- The aggregate fees billed
for professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning to the registrant's adviser and
distributor were $0 from the inception of the registrant on August 13, 2012,
through September 30, 2012.
(d) All Other Fees (Registrant) -- The aggregate fees billed for products
and services provided by the principal accountant to the registrant, other than
the services reported in paragraphs (a) through (c) of this Item were $0 from
the inception of the registrant on August 13, 2012, through September 30, 2012.
All Other Fees (Investment Adviser and Distributor) -- The aggregate fees
billed for products and services provided by the principal accountant to the
registrant's investment adviser and distributor, other than the services
reported in paragraphs (a) through (c) of this Item were $0 from the inception
of the registrant on August 13, 2012, through September 30, 2012.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
Pursuant to its charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Audit Committee (the "Committee") is responsible for the
pre-approval of all audit services and permitted non-audit services (including
the fees and terms thereof) to be performed for the registrant by its
independent auditors. The Chairman of the Committee is authorized to give such
pre-approvals on behalf of the Committee up to $25,000 and report any such
pre-approval to the full Committee.
The Committee is also responsible for the pre-approval of the independent
auditor's engagements for non-audit services with the registrant's adviser (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the registrant, if the engagement relates
directly to the operations and financial reporting of the registrant, subject to
the de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditor has provided non-audit services to
the registrant's adviser (other than any sub-adviser whose role is primarily
portfolio management and is sub-contracted with or overseen by another
investment adviser) and any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to its policies, the Committee
will consider whether the provision of such non-audit services is compatible
with the auditor's independence.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) for the registrant and the registrant's investment adviser and
distributor of this Item that were approved by the audit committee pursuant to
the pre-approval exceptions included in paragraph (c)(7)(i)(C) or
paragraph(C)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:
Registrant: Adviser and Distributor:
----------- ------------------------
(b) 0% (b) 0%
(c) 0% (c) 0%
(d) 0% (d) 0%
|
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year that were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees was less than fifty
percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant from the inception of
the registrant on August 13, 2012, through September 30, 2012 ,were $0 for the
registrant, $0 for the registrant's investment adviser and $6,250 for the
registrant's distributor.
(h) The registrant's audit committee of its Board of Trustees has
determined that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal accountant's
independence.
ITEMS 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934.
The audit committee of the registrant is comprised of: Richard E. Erickson,
Thomas R. Kadlec, Robert F. Keith and Niel B. Nielson.
ITEM 6. INVESTMENTS.
(a) The Schedule of Investments in securities of unaffiliated issuers as of
the close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the registrant's organizational meeting the registrant's Board of Trustees
adopted a Nominating and Governance Committee Charter which includes procedures
by which shareholders may recommend nominees to the registrant's board of
trustees as described below:
When a vacancy on the Board of Trustees of a First Trust Fund occurs and
nominations are sought to fill such vacancy, the Nominating and Governance
Committee may seek nominations from those sources it deems appropriate in
its discretion, including shareholders of the Fund. A shareholder may
recommend a person for nomination as a candidate at any time. If a
recommendation is received with satisfactorily completed information (as
set forth below) regarding a candidate during a time when a vacancy exists
on the Board or during such other time as the Committee is accepting
recommendations, the recommendation will be forwarded to the Chair of the
Committee and the outside counsel to the independent trustees.
Recommendations received at any other time will be kept on file until such
time as the Committee is accepting recommendations, at which point they
may be considered for nomination.
To submit a recommendation for nomination as a candidate for a position on
the Board of Trustees, shareholders of the Fund shall mail such
recommendation to W. Scott Jardine, Secretary, at the Fund's address, 120
East Liberty Drive, Suite 400, Wheaton, Illinois 60187. Such
recommendation shall include the following information: (i) a statement in
writing setting forth (A) the name, age, date of birth, business address,
residence address and nationality of the person or persons to be
nominated; (B) the class or series and number of all shares of the
Registrant owned of record or beneficially by each such person or persons,
as reported to such shareholder by such nominee(s); (C) any other
information regarding each such person required by paragraphs (a), (d),
(e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (or any successor provision thereto); (D) any
other information regarding the person or persons to be nominated that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitation of proxies for
election of trustees or directors pursuant to Section 14 of the Exchange
Act and the rules and regulations promulgated thereunder; and (E) whether
such shareholder believes any nominee is or will be an "interested person"
of the Registrant (as defined in the Investment Company Act of 1940) and,
if not an "interested person," information regarding each nominee that
will be sufficient for the Registrant to make such determination; and (ii)
the written and signed consent of any person to be nominated to be named
as a nominee and to serve as a trustee if elected. In addition, the
trustees may require any proposed nominee to furnish such other
information as they may reasonably require or deem necessary to determine
the eligibility of such proposed nominee to serve as a trustee. The
Committee will not consider new trustee candidates who are 72 years of age
or older.
A copy of the Nominating and Governance Committee Charter is available on
the Registrant's website at www.ftportfolios.com.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR
270.30a-3 (c))) are effective, as of a date within 90 days of the filing
date of the report that includes the disclosure required by this
paragraph, based on their evaluation of these controls and procedures
required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as
amended (17 CFR 240.13a-15(b) or 240.15d-15 (b)).
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's last fiscal quarter of
the period covered by this report that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not Applicable
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section
906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) First Trust Exchange-Traded Fund VI
--------------------------------------------------------
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date November 19, 2012
-----------------------
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
|
Date November 19, 2012
By (Signature and Title)* /s/ James M. Dykas
------------------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer
and Chief Accounting Officer
(principal financial officer)
|
Date November 19, 2012
* Print the name and title of each signing officer under his or her signature.
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