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Document/Exhibit Description Pages Size 1: N-CSRS Semi-Annual Report to Shareholders HTML 875K 3: EX-99.906 CERT Section 906 Certifications HTML 7K 2: EX-99.CERT Section 302 Certifications HTML 18K
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 811-21944
| First Trust Exchange-Traded Fund II |
| (Exact name of registrant as specified in charter) |
| 120 East Liberty Drive, Suite 400 Wheaton, IL 60187 |
| (Address of principal executive offices) |
| 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: March 31, 2023
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, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Report to Stockholders.
| (a) | The registrant's semi-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 II
--------------------------------------------------------------------------------
Book 1
First Trust STOXX(R) European Select Dividend Index Fund (FDD)
First Trust Alerian Disruptive Technology Real Estate ETF (DTRE)
First Trust Dow Jones Global Select Dividend Index Fund (FGD)
First Trust Global Wind Energy ETF (FAN)
First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID)
First Trust Indxx Global Natural Resources Income ETF (FTRI)
First Trust Indxx Global Agriculture ETF (FTAG)
First Trust BICK Index Fund (BICK)
First Trust Indxx NextG ETF (NXTG)
First Trust S-Network Future Vehicles & Technology ETF (CARZ)
First Trust Cloud Computing ETF (SKYY)
First Trust International Equity Opportunities ETF (FPXI)
First Trust Nasdaq Cybersecurity ETF (CIBR)
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE)
First Trust Dow Jones International Internet ETF (FDNI)
----------------------
Semi-Annual Report
March 31, 2023
----------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2023
<TABLE>
<CAPTION>
<S> <C>
Shareholder Letter....................................................................... 2
Market Overview.......................................................................... 3
Fund Performance Overview
First Trust STOXX(R) European Select Dividend Index Fund (FDD)..................... 4
First Trust Alerian Disruptive Technology Real Estate ETF (DTRE)................... 6
First Trust Dow Jones Global Select Dividend Index Fund (FGD)...................... 8
First Trust Global Wind Energy ETF (FAN)........................................... 10
First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD)......................... 12
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID).... 14
First Trust Indxx Global Natural Resources Income ETF (FTRI)....................... 16
First Trust Indxx Global Agriculture ETF (FTAG).................................... 18
First Trust BICK Index Fund (BICK)................................................. 20
First Trust Indxx NextG ETF (NXTG)................................................. 22
First Trust S-Network Future Vehicles & Technology ETF (CARZ)...................... 24
First Trust Cloud Computing ETF (SKYY)............................................. 26
First Trust International Equity Opportunities ETF (FPXI).......................... 28
First Trust Nasdaq Cybersecurity ETF (CIBR)........................................ 30
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE)......................... 32
First Trust Dow Jones International Internet ETF (FDNI)............................ 34
Notes to Fund Performance Overview....................................................... 36
Understanding Your Fund Expenses......................................................... 37
Portfolio of Investments
First Trust STOXX(R) European Select Dividend Index Fund (FDD)..................... 39
First Trust Alerian Disruptive Technology Real Estate ETF (DTRE)................... 41
First Trust Dow Jones Global Select Dividend Index Fund (FGD)...................... 43
First Trust Global Wind Energy ETF (FAN)........................................... 46
First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD)......................... 50
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund (GRID).... 52
First Trust Indxx Global Natural Resources Income ETF (FTRI)....................... 56
First Trust Indxx Global Agriculture ETF (FTAG).................................... 59
First Trust BICK Index Fund (BICK)................................................. 61
First Trust Indxx NextG ETF (NXTG)................................................. 65
First Trust S-Network Future Vehicles & Technology ETF (CARZ)...................... 69
First Trust Cloud Computing ETF (SKYY)............................................. 73
First Trust International Equity Opportunities ETF (FPXI).......................... 75
First Trust Nasdaq Cybersecurity ETF (CIBR)........................................ 79
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE)......................... 82
First Trust Dow Jones International Internet ETF (FDNI)............................ 86
Statements of Assets and Liabilities..................................................... 88
Statements of Operations................................................................. 92
Statements of Changes in Net Assets...................................................... 96
Financial Highlights..................................................................... 103
Notes to Financial Statements............................................................ 111
Additional Information................................................................... 124
</TABLE>
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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 II (the "Trust") described in
this report (each such 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 described in this report 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's shares may therefore be less than what you paid
for them. Accordingly, you can lose money by investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of certain 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
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.
The Advisor may also periodically provide additional information on Fund
performance on each Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund and presents data and analysis that provide
insight into each Fund's performance and investment approach.
By reading the market overview 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 material risks of investing in each
Fund are spelled out in its prospectus, statement of additional information, and
other Fund regulatory filings.
Page 1
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SHAREHOLDER LETTER
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
MARCH 31, 2023
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for certain
series of the First Trust Exchange-Traded Fund II (the "Funds"), which contains
detailed information about the Funds for the six months ended March 31, 2023.
I am constantly amazed by the depth and breadth of innovation that occurs when
people from different geographic, economic, cultural, and educational
backgrounds come together to solve problems. Many of the greatest companies to
ever exist found their humble beginnings in the simple premise that problems are
best solved through ingenuity and cooperation. That idea is still alive and well
today, in my opinion. Take, as examples, the recent flood of interest sparked by
artificial intelligence programs, advances in robotics, new medicines, more
fuel-efficient gasoline engines, electric and hybrid vehicles, quantum
computing, developments in wind and solar power; the list goes on and on. That
said, the global economy is facing serious issues such as stubborn inflation and
the specter of slowing economic growth to name a few.
As many investors know, the global financial system is currently navigating the
fallout of the banking crisis that took lending markets by storm in March 2023.
The turmoil that started in the U.S. with the failure of Silicon Valley Bank
quickly spread around the globe, leading the Swiss government to broker the
merger of two of Switzerland's largest banks. In the U.S., the Federal Reserve
(the "Fed") created the Bank Term Funding Program, which allocated capital to
help assure that banks can meet the needs of their depositors. Furthermore,
inflation remains elevated on a global scale. Each of the countries that
comprise the so-called Group of Ten is currently battling levels of inflation
that are higher than the targets set by their central banks, according to data
from Bloomberg. Additionally, political unrest stemming from the war between
Russia and Ukraine remains a significant factor, with the potential to disturb
global fuel and energy supplies as well as provoke interference from other
foreign powers.
In the U.S., inflation, as measured by the trailing 12-month rate on the
Consumer Price Index, stood at 5.0% as of March 31, 2023, well above the Fed's
stated goal of 2.0%. Despite signals pointing to a potential slowdown in
economic growth in the U.S., the Fed stayed the course with regards to interest
rate policy. Since February 28, 2022, the Fed raised the Federal Funds target
rate (upper bound) a total of nine times, increasing the rate from 0.25%, where
it stood on February 28, 2022, to 5.00% as of March 31, 2023.
Global markets have been resilient over time, and the S&P 500(R) Index has never
failed to recover from a bear market. While the issues plaguing the U.S. and
global economies are severe, they are not insurmountable, in my view. As Brian
Wesbury, Chief Economist at First Trust, recently wrote: "what made America
strong is ... its human resources and freedom." We will continue to work the
problems before us with ingenuity and resolve, as we always have.
Thank you for giving First Trust the opportunity to play a role in your
financial future. We value our relationship with you and will report on the
Funds again in six months.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
Page 2
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MARKET OVERVIEW
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FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2023
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 more than 30 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 latest global growth forecast from the International Monetary Fund ("IMF")
released in April 2023 sees real gross domestic product growth rising by 2.8%
worldwide in 2023, down from its 2.9% projection in January 2023. The IMF is
calling for a 1.6% growth rate for the U.S., up from its January 2023 estimate
of 1.4%. Emerging Market and Developing Economies are expected to grow by 3.9%
this year, down from the IMF's 4.0% estimate in January 2023. The IMF notes that
risks to their global outlook are squarely to the downside, especially given the
recent turmoil in the Financials sector as well as stubbornly high inflation.
In the U.S., inflation, as measured by the Consumer Price Index ("CPI"), stood
at 5.0% on a trailing 12-month basis at the end of March 2023, according to the
U.S. Bureau of Labor Statistics. While this is significantly lower than the most
recent high of 9.1% in June 2022, the CPI remains above its 30-year average of
2.5% as of March 31, 2023, and even further from the Federal Reserve's (the
"Fed") target of 2.0%.
PERFORMANCE OF GLOBAL STOCKS AND BONDS
The major U.S. stock indices delivered positive results over the past six
months. The S&P 500(R) (the "Index"), S&P MidCap 400(R) and S&P SmallCap 600(R)
Indices posted total returns of 15.62%, 15.00% and 12.00%, respectively, for the
six-month period ended March 31, 2023. Each of the 11 major sectors that
comprise the Index were up on a total return basis. The top performer was the
Information Technology sector, up 27.59%, while the worst showing came from the
Consumer Discretionary sector, up 4.31%.
A Bloomberg survey of twenty-four equity strategists found that their average
2023 year-end price target for the Index was 4,025, as of April 19, 2023,
according to its own release. The highest and lowest estimates were 4,750 and
3,225, respectively. Brian Wesbury, Chief Economist at First Trust, announced in
December 2022 that his 2023 year-end price target stood at 3,900. The Index
closed trading on March 31, 2023, at 4,109. The outlook for corporate earnings
in 2023 has turned negative. Bloomberg's consensus year-over-year earnings
growth rate estimates for the Index for the 2023 and 2024 calendar years stood
at -2.67% and 11.56%, respectively, as of April 21, 2023.
The broader foreign stock indices posted positive total returns over the past
six months. Between September 30, 2022, and March 31, 2023, the MSCI World ex
USA and MSCI Emerging Markets equity indices posted total returns of 25.50%
(USD) and 14.04% (USD), respectively, according to Bloomberg. The major foreign
bond indices were also up over the same period. The Bloomberg Global Aggregate
Index of higher quality debt posted a total return of 7.69% (USD), while the
Bloomberg EM Hard Currency Aggregate Index of emerging markets debt increased by
9.87% (USD), according to Bloomberg. The U.S. dollar fell by 8.57% over the past
six months against a basket of major currencies, as measured by the U.S. Dollar
Index (DXY). The sizable decline in the dollar provided a boost to the
performance of both foreign stock and bond indices, in our opinion.
Results were also positive in the U.S. bond market over the period. The top
performing major debt group we track was long-term municipal bonds. The
Bloomberg Municipal Bond: Long Bond (22+ Years) Index posted a total return of
9.68% for the six-month period ended March 31, 2023. The worst-performing U.S.
debt group that we track was intermediate U.S. Treasuries. The Bloomberg U.S.
Treasury: Intermediate Index posted a total return of 3.31%. The yield on the
benchmark 10-Year Treasury Note ("T-Note") fell by 36 basis points in the period
to close at 3.47% on March 31, 2023, according to Bloomberg. For comparative
purposes, the average yield on the 10-Year T-Note was 2.19% for the 10-year
period ended March 31, 2023.
Page 3
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FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
First Trust STOXX(R) European Select 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 STOXX(R) Europe Select
Dividend 30 Index (the "STOXX Index"). The shares of the Fund are listed and
trade on the NYSE Arca, Inc. under the ticker symbol "FDD." The Fund will
normally invest at least 90% of its net assets (including investment borrowings)
in the common stocks and depositary receipts that comprise the STOXX Index.
The STOXX Index is compiled and maintained by STOXX Limited (the "Index
Provider"). According to the Index Provider, the STOXX Index consists of 30 high
dividend-yielding securities selected from the STOXX(R) Europe 600 Index,
including secondary lines of those companies (where there are multiple lines of
equity capital in a company), which covers 18 European countries: Austria,
Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland,
Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland
and the United Kingdom. In addition, a company must have a non-negative
five-year dividend-per-share growth rate and a dividend-to-earnings ratio of 60%
or less.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (8/27/07) Ended Ended (8/27/07)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 24.94% -7.13% 1.40% 4.42% -1.47% 7.19% 54.07% -20.58%
Market Price 25.59% -6.85% 1.42% 4.36% -1.47% 7.29% 53.21% -20.61%
INDEX PERFORMANCE
STOXX(R) Europe Select
Dividend 30 Index 24.45% -8.17% 1.72% 4.76% -1.06% 8.91% 59.16% -15.31%
STOXX(R) Europe 600 Index 32.04% 0.64% 4.34% 5.54% 2.68% 23.68% 71.47% 51.01%
MSCI Europe Index 31.95% 1.38% 4.35% 5.36% 2.49% 23.74% 68.50% 46.75%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
The STOXX(R) Europe Select Dividend 30 Index ("STOXX Index") is the intellectual
property (including registered trademarks) of STOXX Ltd., Zug, Switzerland
("STOXX"), Deutsche Borse Group or their licensors, which is used under license.
The Fund is neither sponsored nor promoted, distributed or in any other manner
supported by STOXX Deutsche Borse Group or their licensors, research partners or
data providers and STOXX, Deutsche Borse Group and their licensors, research
partners or data providers do not give any warranty, and exclude any liability
(whether in negligence or otherwise) with respect thereto generally or
specifically in relation to any errors, omissions or interruptions in the STOXX
Index or its data.
Page 4
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
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FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Financials 32.3%
Materials 18.9
Utilities 13.5
Consumer Discretionary 10.8
Industrials 8.0
Real Estate 6.8
Communication Services 6.3
Energy 3.4
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Yara International ASA 4.8%
Taylor Wimpey PLC 4.7
Glencore PLC 4.6
Rio Tinto PLC 4.3
AP Moller - Maersk A/S, Class A 4.3
Legal & General Group PLC 4.2
Endesa S.A. 4.1
ACS Actividades de Construccion y
Servicios S.A. 3.7
Close Brothers Group PLC 3.4
NN Group N.V. 3.4
------
Total 41.5%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust STOXX(R) European STOXX(R) Europe Select STOXX(R) Europe MSCI Europe
Select Dividend Index Fund Dividend 30 Index 600 Index Index
----------------------------- ---------------------- --------------- -----------
<S> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000
3/31/13 9,991 10,006 11,027 10,991
9/30/13 11,329 11,381 12,522 12,423
3/31/14 12,674 12,751 13,856 13,684
9/30/14 12,313 12,407 13,267 13,146
3/31/15 12,102 12,232 13,182 13,008
9/30/15 11,340 11,428 12,196 11,919
3/31/16 11,647 11,802 12,200 11,909
9/30/16 11,780 11,932 12,465 12,215
3/31/17 12,368 12,578 13,318 13,071
9/30/17 14,010 14,250 15,248 14,939
3/31/18 14,360 14,623 15,291 14,966
9/30/18 14,113 14,404 15,204 14,894
3/31/19 13,910 14,221 14,690 14,408
9/30/19 14,446 14,759 15,082 14,781
3/31/20 10,963 11,443 12,473 12,174
9/30/20 12,185 12,569 15,226 14,665
3/31/21 16,820 17,450 18,299 17,646
9/30/21 17,082 17,771 19,366 18,664
3/31/22 16,573 17,344 18,793 18,268
9/30/22 12,320 12,797 14,320 14,036
3/31/23 15,393 15,926 18,908 18,521
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 5
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ALERIAN DISRUPTIVE TECHNOLOGY REAL ESTATE ETF (DTRE)
First Trust Alerian Disruptive Technology Real Estate ETF (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 Alerian Disruptive
Technology Real Estate Index (the "Index"). The shares of the Fund are listed
and trade on the NYSE Arca, Inc. under the ticker symbol "DTRE." The Fund will
normally invest at least 90% of its net assets (plus any borrowings for
investment purposes) in the common stocks, real estate investment trusts
("REITs") and depositary receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by VettaFi LLC
(the "Index Provider"). According to the Index Provider, the Index includes
common stocks, REITs and depositary receipts of companies listed on a global
securities exchange and included in the Global Industry Classification Standard
Real Estate sector within the S-Network Global 5000 Index and the S-Network
Global REIT Index and derive at least 50 percent of their revenues from the
following disruptive technology business segments: (i) Rapid Data Transfer; (ii)
Distributed Data Handling; or (iii) E-Commerce Warehousing.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (8/27/07) Ended Ended (8/27/07)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 9.18% -20.07% 1.29% 2.71% 1.89% 6.63% 30.63% 33.92%
Market Price 10.63% -20.16% 1.26% 2.68% 1.87% 6.47% 30.25% 33.48%
INDEX PERFORMANCE
Alerian Disruptive Technology
Real Estate Index(1)(2) 8.94% -22.46% N/A N/A N/A N/A N/A N/A
FTSE EPRA/NAREIT
Developed Index 8.22% -20.63% 1.81% 3.36% 2.63% 9.37% 39.17% 49.85%
S&P Global REIT Index(3) 8.34% -20.29% 2.41% 3.26% 2.57% 12.62% 37.83% 48.44%
MSCI World REIT Index(3) 6.32% -20.13% 4.14% 4.48% 2.93% 22.48% 54.98% 56.85%
MSCI World Real Estate Index(2)(3) 6.34% -19.94% 1.99% N/A N/A 10.34% N/A N/A
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
(1) On September 30, 2022, the Fund's underlying index changed from the FTSE
EPRA/NAREIT Developed Index to the Alerian Disruptive Technology Real
Estate Index. Therefore, the Fund's performance and historical returns
shown for the periods prior to this date are not necessarily indicative of
the performance that the Fund, based on its current index, would have
generated.
(2) Performance data is not available for all the periods shown in the table
for the index because performance data does not exist for some of the
entire periods.
(3) Prior to February 1, 2023, the Fund's primary benchmark indices were the
S&P Global REIT Index and the MSCI World REIT Index. Effective February 1,
2023, the Fund's primary benchmark index became the MSCI World Real Estate
Index. The Fund's investment advisor believes the MSCI World Real Estate
Index better reflects the investment strategies of the Fund.
-----------------------------
Alerian and Alerian Disruptive Technology Real Estate Index are service marks of
VettaFi LLC and have been licensed for use by First Trust Advisors L.P. The Fund
is not issued, sponsored, endorsed, sold or promoted by VettaFi LLC or its
affiliates (collectively, "VettaFi"). VettaFi makes no representation or
warranty, express or implied, to the purchasers or owners of the Fund or any
member of the public regarding the advisability of investing in securities
generally or in the Fund particularly or the ability of the Index to track
general market performance.
Page 6
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ALERIAN DISRUPTIVE TECHNOLOGY REAL ESTATE ETF (DTRE) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Real Estate 100.0%
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Prologis, Inc. 7.2%
Equinix, Inc. 7.0
Digital Realty Trust, Inc. 6.5
Crown Castle, Inc. 6.2
American Tower Corp. 6.2
SBA Communications Corp. 6.0
Rexford Industrial Realty, Inc. 4.6
First Industrial Realty Trust, Inc. 4.4
EastGroup Properties, Inc. 4.4
STAG Industrial, Inc. 4.0
------
Total 56.5%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust FTSE EPRA/ NAREIT Developed FTSE EPRA/NAREIT S&P Global MSCI World
Markets Real Estate Index Fund Developed Index REIT Index REIT Index
-------------------------------------- ---------------- ---------- ----------
<S> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000
3/31/13 11,227 11,254 11,178 10,945
9/30/13 11,002 11,095 10,669 10,417
3/31/14 11,342 11,484 11,305 10,950
9/30/14 11,647 11,839 11,705 11,468
3/31/15 13,060 13,328 13,304 12,932
9/30/15 11,993 12,262 12,186 12,041
3/31/16 13,128 13,497 13,668 13,605
9/30/16 13,786 14,206 14,248 14,149
3/31/17 13,286 13,749 13,715 13,642
9/30/17 13,879 14,423 14,103 14,115
3/31/18 13,754 14,319 13,681 13,848
9/30/18 14,432 15,088 14,505 14,563
3/31/19 15,608 16,384 15,587 16,147
9/30/19 16,335 17,216 16,692 17,528
3/31/20 11,882 12,580 11,943 13,433
9/30/20 13,374 14,203 13,591 15,471
3/31/21 16,013 17,103 16,248 17,635
9/30/21 17,385 18,581 17,882 19,652
3/31/22 18,352 19,735 19,325 21,236
9/30/22 13,433 14,473 14,220 15,953
3/31/23 14,666 15,663 15,406 16,961
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 7
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
First Trust Dow Jones Global Select 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 Dow Jones Global Select
Dividend Index (the "Index"). The shares of the Fund are listed and trade on the
NYSE Arca, Inc. under the ticker symbol "FGD." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index.
The Index is compiled and maintained by S&P Dow Jones Indices LLC (the "Index
Provider"). According to the Index Provider, the Index is an indicated annual
dividend yield weighted index of 100 stocks selected from the developed-market
portion of the Dow Jones World Index(SM). Indicated annual dividend yield is a
stock's unadjusted indicated annual dividend (not including any special
dividends) divided by its unadjusted price.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (11/21/07) Ended Ended (11/21/07)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 21.92% -7.12% 3.04% 4.38% 3.19% 16.17% 53.53% 62.01%
Market Price 22.08% -7.32% 3.06% 4.35% 3.17% 16.25% 53.08% 61.61%
INDEX PERFORMANCE
Dow Jones Global Select
Dividend Index 21.56% -7.70% 3.33% 4.57% 3.37% 17.77% 56.33% 66.35%
Dow Jones World Developed
Markets Index(SM) 18.55% -7.02% 7.64% 8.88% 6.26% 44.53% 134.08% 154.12%
MSCI World Index 18.25% -7.02% 8.02% 8.85% 6.00% 47.09% 133.55% 144.52%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
Dow Jones Global Select Dividend Index ("Index") is a product of S&P Dow Jones
Indices LLC or its affiliates ("SPDJI") and has been licensed for use by First
Trust. S&P(R) is a registered trademark of Standard & Poor's Financial Services
LLC ("S&P"); Dow Jones(R) is a registered trademark of Dow Jones Trademark
Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by
SPDJI and sublicensed for certain purposes by First Trust. The Fund is not
sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their
respective affiliates, and none of such parties make any representation
regarding the advisability of investing in such product(s) nor do they have any
liability for any errors, omissions, or interruptions of the Index.
Page 8
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Financials 32.4%
Industrials 12.8
Materials 11.7
Consumer Discretionary 8.2
Communication Services 8.0
Energy 8.0
Utilities 7.0
Real Estate 6.1
Consumer Staples 5.8
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Hapag-Lloyd AG 3.0%
Mitsui OSK Lines Ltd. 2.1
Nippon Yusen KK 1.8
Peyto Exploration & Development Corp. 1.6
Sitio Royalties Corp., Class A 1.6
Enagas S.A. 1.5
ICL Group Ltd. 1.5
Yara International ASA 1.5
Camping World Holdings, Inc., Class A 1.4
AP Moller - Maersk A/S, Class A 1.4
------
Total 17.4%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust Dow Jones Global Dow Jones Global Dow Jones World Developed MSCI World
Select Dividend Index Fund Select Dividend Index Markets Index(SM) Index
---------------------------- ----------------------- ------------------------- ----------
<S> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000
3/31/13 10,518 10,513 11,120 11,042
9/30/13 11,439 11,452 12,144 12,021
3/31/14 12,577 12,608 13,313 13,146
9/30/14 12,418 12,443 13,599 13,487
3/31/15 12,054 12,090 14,118 13,939
9/30/15 10,616 10,597 12,967 12,802
3/31/16 11,291 11,345 13,657 13,459
9/30/16 12,068 12,082 14,517 14,256
3/31/17 12,739 12,819 15,744 15,446
9/30/17 13,775 13,860 17,224 16,845
3/31/18 13,902 13,956 18,009 17,534
9/30/18 14,087 14,183 19,153 18,739
3/31/19 13,342 13,433 18,598 18,250
9/30/19 13,634 13,726 19,381 19,082
3/31/20 9,867 9,960 16,513 16,353
9/30/20 11,401 11,555 21,341 21,066
3/31/21 16,316 16,622 25,823 25,189
9/30/21 16,764 17,103 27,665 27,141
3/31/22 17,389 17,809 27,998 27,742
9/30/22 13,245 13,520 21,956 21,809
3/31/23 16,148 16,435 26,029 25,789
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 9
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
First Trust Global Wind Energy ETF (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 ISE Clean Edge Global Wind Energy(TM)
Index (the "Index"). The shares of the Fund are listed and trade on the NYSE
Arca, Inc. under the ticker symbol "FAN." The Fund will normally invest at least
90% of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. (the "Index
Provider"). According to the Index Provider, the Index provides a benchmark for
investors interested in tracking public companies throughout the world that are
active in the wind energy industry. According to the Index Provider, in order to
be eligible for inclusion in the Index, a security must be issued by a company
that is actively engaged in some aspect of the wind energy industry, such as the
development or management of a wind farm, the production or distribution of
electricity generated by wind power, or involvement in the design, manufacture
or distribution of machinery or materials designed specifically for the wind
energy industry. In addition, in order to be eligible for inclusion in the Index
a security must have a market capitalization of at least $100 million, a minimum
three-month average daily dollar trading volume of $500,000, a minimum free
float of 25%, be listed on an Index-eligible global exchange and have seasoned
on an Index-eligible global exchange for at least three months.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (6/18/08) Ended Ended (6/18/08)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 18.85% -7.47% 8.14% 11.45% -1.48% 47.87% 195.78% -19.76%
Market Price 18.62% -8.01% 8.02% 11.47% -1.50% 47.08% 196.26% -20.03%
INDEX PERFORMANCE
ISE Clean Edge Global Wind
Energy(TM) Index 18.70% -7.73% 9.03% 12.33% -0.70% 54.06% 219.76% -9.81%
Russell 3000(R) Index 14.88% -8.58% 10.45% 11.73% 9.72% 64.37% 203.26% 294.02%
MSCI World Index 18.25% -7.02% 8.02% 8.85% 6.49% 47.09% 133.55% 153.47%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
Nasdaq(R), Clean Edge(R), and ISE Clean Edge Global Wind Energy(TM) Index are
registered trademarks and service marks of Nasdaq, Inc. and Clean Edge, Inc.,
respectively (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. 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 10
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Utilities 63.7%
Industrials 33.3
Materials 2.6
Energy 0.4
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
EDP Renovaveis S.A. 8.6%
Northland Power, Inc. 8.0
Vestas Wind Systems A/S 7.9
Orsted A/S 7.5
China Longyuan Power Group Corp., Ltd.,
Class H 4.9
Boralex, Inc., Class A 3.5
Nordex SE 2.4
Innergex Renewable Energy, Inc. 2.3
General Electric Co. 2.2
ERG S.p.A. 2.2
------
Total 49.5%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust Global ISE Clean Edge Global Russell 3000(R) MSCI World
Wind Energy ETF Wind Energy(TM) Index Index Index
------------------ --------------------- --------------- ----------
<S> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000
3/31/13 11,476 11,475 11,135 11,042
9/30/13 15,662 15,754 12,159 12,021
3/31/14 18,242 18,421 13,652 13,146
9/30/14 17,569 17,778 14,318 13,486
3/31/15 16,908 17,195 15,339 13,938
9/30/15 16,274 16,576 14,247 12,801
3/31/16 18,435 18,946 15,287 13,458
9/30/16 21,224 21,847 16,378 14,255
3/31/17 21,078 21,891 18,047 15,445
9/30/17 22,543 23,430 19,440 16,844
3/31/18 22,953 23,819 20,538 17,533
9/30/18 21,883 22,864 22,857 18,738
3/31/19 23,122 24,218 22,338 18,249
9/30/19 23,543 24,797 23,524 19,081
3/31/20 22,032 23,359 20,301 16,352
9/30/20 31,885 33,866 27,053 21,065
3/31/21 41,055 43,887 32,994 25,187
9/30/21 38,823 41,690 35,684 27,138
3/31/22 36,685 39,768 36,936 27,739
9/30/22 28,563 30,912 29,394 21,811
3/31/23 33,942 36,694 33,769 25,789
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 11
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ALERIAN U.S. NEXTGEN INFRASTRUCTURE ETF (RBLD)
First Trust Alerian U.S. NextGen Infrastructure ETF (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 Alerian U.S. NextGen
Infrastructure Index (the "Index"). The shares of the Fund are listed and trade
on the NYSE Arca, Inc. under the ticker symbol "RBLD." The Fund will normally
invest in at least 90% of its net assets (plus any borrowings for investment
purposes) in the common stocks and real estate investment trusts ("REITs") that
comprise the Index.
The Index is developed, maintained and sponsored by VettaFi LLC (the "Index
Provider"). According to the Index Provider, the Index seeks to provide exposure
to U.S. infrastructure companies with securities listed on recognized U.S.
securities exchanges that build, operate and own infrastructure assets. U.S.
infrastructure companies are companies that are domiciled and incorporated in
the United States and are included in the Global Industry Classification
("GICS") sub-industries or custom segments within the S-Network US Equity WR
3000 Index. According to the Index Provider, in addition to comprising one of
the GICS sub-industries or custom segments, in order to be eligible for
inclusion in the Index a company's stock must trade on a recognized U.S. stock
exchange and meet the size, float and liquidity standards of the Index.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (10/13/08) Ended Ended (10/13/08)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 15.74% -6.24% -0.49% 3.45% 5.40% -2.45% 40.40% 114.07%
Market Price 15.72% -6.18% -0.45% 3.47% 5.40% -2.22% 40.71% 114.00%
INDEX PERFORMANCE
Alerian U.S. NextGen
Infrastructure Index(1) (2) 16.08% -4.29% N/A N/A N/A N/A N/A N/A
MSCI World Industrials Index 26.19% -0.90% 6.11% 8.39% 9.65% 34.51% 123.82% 279.21%
Russell 3000(R) Index 14.88% -8.58% 10.45% 11.73% 12.32% 64.37% 203.26% 436.45%
MSCI USA Infrastructure Index(2) 8.53% -4.78% 7.12% 6.63% N/A 41.06% 89.95% N/A
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
(1) On July 29, 2022, the Fund's underlying index changed from the ISE Global
Engineering and Construction(TM) Index to Alerian U.S. NextGen
Infrastructure Index. Therefore, the Fund's performance and historical
returns shown for the periods prior to this date are not necessarily
indicative of the performance that the Fund, based on its current index,
would have generated. Since the Fund's new underlying index had an
inception date of April 30, 2021, it was not in existence for all the
periods shown.
(2) Performance data is not available for all the periods shown in the table
for the index because performance data does not exist for some of the
entire periods.
-----------------------------
Alerian and Alerian U.S. NextGen Infrastructure Index ("Index") are service
marks of VettaFi LLC and have been licensed for use by First Trust Advisors L.P.
The Fund is not issued, sponsored, endorsed, sold or promoted by VettaFi LLC or
its affiliates (collectively, "VettaFi"). VettaFi makes no representation or
warranty, express or implied, to the purchasers or owners of the Fund or any
member of the public regarding the advisability of investing in securities
generally or in the Fund particularly or the ability of the Index to track
general market performance.
Page 12
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST ALERIAN U.S. NEXTGEN INFRASTRUCTURE ETF (RBLD) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Industrials 43.5%
Utilities 30.2
Information Technology 8.1
Energy 7.4
Materials 6.2
Real Estate 4.6
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Cloudflare, Inc., Class A 1.4%
Okta, Inc. 1.3
Builders FirstSource, Inc. 1.3
MongoDB, Inc. 1.2
General Electric Co. 1.2
Reliance Steel & Aluminum Co. 1.2
Quanta Services, Inc. 1.1
A.O. Smith Corp. 1.1
Snowflake, Inc., Class A 1.1
PACCAR, Inc. 1.1
------
Total 12.0%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust Alerian U.S. MSCI World Industrials Russell 3000(R) MSCI USA Infrastructure
NextGen Infrastructure ETF Index Index Index
------------------------------ -------------------------- --------------- -----------------------
<S> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000
3/31/13 11,029 11,489 11,135 10,693
9/30/13 12,504 12,818 12,159 10,468
3/31/14 13,698 13,975 13,652 11,591
9/30/14 12,761 13,865 14,318 12,456
3/31/15 12,432 14,353 15,339 12,771
9/30/15 11,843 12,899 14,247 11,922
3/31/16 12,568 14,244 15,287 13,666
9/30/16 13,312 15,211 16,378 14,233
3/31/17 14,285 16,603 18,047 14,810
9/30/17 15,761 18,504 19,440 14,969
3/31/18 15,873 19,116 20,538 14,398
9/30/18 16,025 19,867 22,857 15,596
3/31/19 14,166 19,023 22,338 16,700
9/30/19 13,517 19,792 23,524 18,664
3/31/20 10,434 15,695 20,301 15,594
9/30/20 12,502 20,577 27,053 17,183
3/31/21 16,476 25,575 32,994 19,064
9/30/21 16,273 26,140 35,684 19,269
3/31/22 16,514 25,950 36,936 21,330
9/30/22 13,379 20,377 29,395 18,715
3/31/23 15,485 25,714 33,769 20,311
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 13
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure 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
Clean Edge Smart Grid Infrastructure(TM) Index (the "Index"). The shares of the
Fund are listed and trade on The Nasdaq Stock Market LLC under the ticker symbol
"GRID." The Fund will normally invest at least 90% of its net assets (including
investment borrowings) in the common stocks and depositary receipts that
comprise the Index.
Clean Edge, Inc. and Nasdaq, Inc. serve as index providers to the Index (the
"Index Providers"). According to the Index Providers, the Index is designed to
act as a transparent and liquid benchmark for the grid and electric energy
infrastructure sector. The Index includes companies that are primarily engaged
and involved in electric grid, electric meters and devices, networks, energy
storage and management, and enabling software used by the smart grid
infrastructure sector.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (11/16/09) Ended Ended (11/16/09)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 30.18% 5.17% 15.77% 13.05% 10.39% 107.96% 241.03% 274.99%
Market Price 30.41% 5.38% 15.79% 13.08% 10.39% 108.11% 241.91% 275.03%
INDEX PERFORMANCE
Nasdaq Clean Edge Smart Grid
Infrastructure(TM) Index 29.97% 5.43% 16.82% 13.96% 11.29% 117.52% 269.34% 317.92%
Russell 3000(R) Index 14.88% -8.58% 10.45% 11.73% 12.26% 64.37% 203.26% 369.22%
S&P Composite 1500(R) Industrials
Index 23.27% 0.85% 8.75% 11.29% 12.40% 52.12% 191.33% 376.97%
MSCI World Industrials Index 26.19% -0.90% 6.11% 8.39% 9.00% 34.51% 123.82% 216.36%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
Nasdaq(R), Clean Edge(R), and Nasdaq Clean Edge Smart Grid Infrastructure(TM)
Index are registered trademarks and service marks of Nasdaq, Inc. and Clean
Edge, Inc. respectively (together with its affiliates hereinafter referred to as
the "Corporations") and are licensed for use by First Trust. 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 14
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
(CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Industrials 49.3%
Information Technology 25.3
Utilities 19.2
Consumer Discretionary 6.2
Materials 0.0*
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
National Grid PLC 8.3%
Schneider Electric SE 8.0
ABB Ltd. 8.0
Eaton Corp. PLC 7.6
Johnson Controls International PLC 7.5
Samsung SDI Co., Ltd. 4.2
Quanta Services, Inc. 4.0
Enphase Energy, Inc. 3.9
Aptiv PLC 3.7
SolarEdge Technologies, Inc. 3.7
------
Total 58.9%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust NASDAQ(R) NASDAQ Russell MSCI World
Clean Edge(R) SmartGrid Clean Edge Smart Grid 3000(R) S&P Composite 1500(R) Industrials
Infrastructure Index Fund Infrastructure(TM) Index Index Industrials Index Index
------------------------- ------------------------ ------- ------------------- -----------
<S> <C> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000 $10,000
3/31/13 11,152 11,199 11,135 11,692 11,489
9/30/13 11,844 11,959 12,159 13,073 12,818
3/31/14 13,641 13,831 13,652 14,829 13,975
9/30/14 12,577 12,799 14,318 15,069 13,865
3/31/15 12,762 13,033 15,339 16,064 14,353
9/30/15 11,322 11,579 14,247 14,530 12,899
3/31/16 12,476 12,845 15,287 16,410 14,244
9/30/16 14,234 14,677 16,378 17,401 15,211
3/31/17 15,277 15,823 18,047 19,583 16,603
9/30/17 18,038 18,734 19,440 21,400 18,504
3/31/18 18,292 19,017 20,538 22,391 19,116
9/30/18 17,740 18,536 22,857 23,963 19,867
3/31/19 16,323 17,111 22,338 23,019 19,023
9/30/19 18,685 19,734 23,524 24,149 19,792
3/31/20 16,234 17,267 20,301 18,527 15,695
9/30/20 23,935 25,526 27,053 24,448 20,576
3/31/21 32,793 35,177 32,994 31,980 25,574
9/30/21 35,498 38,278 35,684 32,010 26,137
3/31/22 36,162 39,231 36,936 33,777 25,947
9/30/22 29,214 31,823 29,395 27,634 20,377
3/31/23 38,031 41,360 33,769 34,064 25,714
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 15
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
First Trust Indxx Global Natural Resources Income ETF (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 Indxx Global Natural
Resources Income Index (the "Index"). The shares of the Fund are listed and
traded on The Nasdaq Stock Market LLC under the ticker symbol "FTRI." The Fund
will normally invest at least 90% of its net assets (including investment
borrowings) in the common stocks and depositary receipts that comprise the
Index.
The Index is owned and is developed, maintained and sponsored by Indxx, Inc.
(the "Index Provider"). According to the Index Provider, the Index is a free
float adjusted market capitalization weighted index designed to measure the
market performance of the 50 highest dividend yielding companies involved in the
upstream (i.e., generally exploration and production) segment of the natural
resources sector.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (3/11/10) Ended Ended (3/11/10)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 11.53% -12.58% 7.67% -2.22% -2.29% 44.67% -20.14% -26.07%
Market Price 11.54% -12.90% 7.72% -2.26% -2.30% 45.03% -20.46% -26.16%
INDEX PERFORMANCE
Indxx Global Natural Resources
Income Index* 12.03% -12.20% 8.85% N/A N/A 52.83% N/A N/A
MSCI ACWI Materials Index 22.37% -9.40% 6.26% 5.38% 4.16% 35.47% 68.81% 70.19%
MSCI ACWI Index 17.78% -7.44% 6.94% 8.06% 8.10% 39.88% 117.12% 176.43%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
* Effective on the close of business December 18, 2015, the Fund's underlying
index changed from the ISE Global Copper(TM) Index to the Indxx Global Natural
Resources Income Index. Therefore, the Fund's performance and total returns
shown for the period prior to December 18, 2015, are not necessarily indicative
of the performance the Fund, based on its current index, would have generated.
Since the Fund's new underlying index had an inception date of June 1, 2015, it
was not in existence for all the periods disclosed.
-----------------------------
Indxx and Indxx Global Natural Resources Income Index ("Index") are trademarks
of Indxx, Inc. ("Indxx") and have been licensed for use for certain purposes by
First Trust. The Fund is not sponsored, endorsed, sold or promoted by Indxx, and
Indxx makes no representation regarding the advisability of trading in such
product. The Index is determined, composed and calculated by Indxx without
regard to First Trust or the Fund.
Page 16
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Materials 58.4%
Energy 27.9
Consumer Staples 8.4
Utilities 5.3
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
BHP Group Ltd., ADR 10.3%
Rio Tinto PLC, ADR 9.8
Vale S.A., ADR 9.7
Suncor Energy, Inc. 7.1
Fortescue Metals Group Ltd. 4.8
Archer-Daniels-Midland Co. 4.6
Ecopetrol S.A., ADR 4.3
Petroleo Brasileiro S.A., ADR 4.3
Nutrien Ltd. 4.2
Coterra Energy, Inc. 3.7
------
Total 62.8%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust Indxx Global MSCI ACWI MSCI ACWI
Natural Resources Income ETF Materials Index Index
---------------------------- --------------- ---------
<S> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000
3/31/13 9,127 10,015 10,955
9/30/13 7,973 10,039 11,773
3/31/14 7,916 10,531 12,771
9/30/14 7,784 10,241 13,106
3/31/15 6,103 9,787 13,464
9/30/15 4,087 7,828 12,233
3/31/16 3,821 8,571 12,879
9/30/16 4,095 9,710 13,696
3/31/17 4,376 10,777 14,816
9/30/17 4,729 12,017 16,250
3/31/18 5,039 12,480 17,004
9/30/18 5,255 12,572 17,839
3/31/19 5,185 12,102 17,459
9/30/19 5,023 11,966 18,086
3/31/20 3,758 9,529 15,494
9/30/20 4,431 13,368 19,973
3/31/21 6,234 16,829 23,954
9/30/21 6,330 16,952 25,454
3/31/22 8,340 18,662 25,698
9/30/22 6,538 13,816 20,195
3/31/23 7,288 16,907 23,786
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 17
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
First Trust Indxx Global Agriculture ETF (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 Indxx Global Agriculture Index (the
"Index"). The shares of the Fund are listed and traded on The Nasdaq Stock
Market LLC under the ticker symbol "FTAG." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by Indxx, Inc.
(the "Index Provider"). According to the Index Provider, the Index is a market
capitalization weighted index designed to measure the performance of companies
that are directly or indirectly engaged in improving agricultural yields. The
Index is composed of farmland companies and firms involved in chemicals and
fertilizers, seeds, irrigation equipment, and farm machinery.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (3/11/10) Ended Ended (3/11/10)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 10.35% -10.92% 3.94% -6.58% -10.47% 21.33% -49.40% -76.39%
Market Price 10.14% -11.43% 3.87% -6.62% -10.49% 20.89% -49.58% -76.45%
INDEX PERFORMANCE
Indxx Global Agriculture Index* 10.22% -10.39% 5.07% N/A N/A 28.05% N/A N/A
MSCI ACWI Index 17.78% -7.44% 6.94% 8.06% 8.10% 39.88% 117.12% 176.43%
MSCI ACWI Materials Index 22.37% -9.40% 6.26% 5.38% 4.16% 35.47% 68.81% 70.19%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
* Effective on the close of business December 18, 2015, the Fund's underlying
index changed from the ISE Global Platinum(TM) Index to the Indxx Global
Agriculture Index. Therefore, the Fund's performance and total returns shown for
the period prior to December 18, 2015, are not necessarily indicative of the
performance the Fund, based on its current Index, would have generated. Since
the Fund's new underlying index had an inception date of June 1, 2015, it was
not in existence for all the periods disclosed.
-----------------------------
Indxx and the Indxx Global Agriculture Index ("Index") are trademarks of Indxx,
Inc. ("Indxx") and have been licensed for use for certain purposes by First
Trust. The Fund is not sponsored, endorsed, sold or promoted by Indxx and Indxx
makes no representation regarding the advisability of trading in such product.
The Index is determined, composed and calculated by Indxx without regard to
First Trust or the Fund.
Page 18
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Materials 50.9%
Industrials 28.5
Health Care 10.6
Consumer Staples 6.8
Consumer Discretionary 3.2
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Bayer AG 10.6%
Deere & Co. 9.9
BASF SE 8.4
Corteva, Inc. 7.5
Nutrien Ltd. 4.2
Industries Qatar QSC 4.0
CNH Industrial N.V. 3.8
Wilmar International Ltd. 3.7
Kubota Corp. 3.3
Mahindra & Mahindra Ltd. 3.2
------
Total 58.6%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust Indxx MSCI ACWI MSCI ACWI
Global Agriculture ETF Index Materials Index
---------------------- --------- ---------------
<S> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000
3/31/13 9,581 10,955 10,015
9/30/13 9,016 11,773 10,039
3/31/14 8,957 12,771 10,531
9/30/14 8,056 13,106 10,241
3/31/15 6,667 13,464 9,787
9/30/15 3,932 12,233 7,828
3/31/16 3,040 12,879 8,571
9/30/16 3,188 13,696 9,710
3/31/17 3,660 14,816 10,777
9/30/17 4,051 16,250 12,017
3/31/18 3,996 17,004 12,480
9/30/18 3,989 17,839 12,572
3/31/19 3,572 17,459 12,102
9/30/19 3,586 18,086 11,965
3/31/20 2,560 15,494 9,528
9/30/20 3,474 19,973 13,367
3/31/21 4,845 23,954 16,828
9/30/21 4,790 25,455 16,952
3/31/22 5,441 25,697 18,660
9/30/22 4,394 20,195 13,816
3/31/23 4,849 23,786 16,907
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 19
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST BICK INDEX FUND (BICK)
The First Trust BICK 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 ISE BICK(TM) Index (the "Index"). The
shares of the Fund are listed and trade on The Nasdaq Stock Market LLC under the
ticker symbol "BICK." The Fund will normally invest at least 90% of its net
assets (including investment borrowings) in the common stocks and depositary
receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. (the "Index
Provider"). According to the Index Provider, the Index is designed to provide a
benchmark for investors interested in tracking some of the largest and most
liquid public companies that are domiciled in Brazil, India, China (including
Hong Kong) and South Korea that are accessible for investment by U.S. investors.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (4/12/10) Ended Ended (4/12/10)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 10.12% -14.53% -1.92% 2.20% 0.41% -9.23% 24.30% 5.40%
Market Price 9.91% -13.65% -2.01% 2.19% 0.40% -9.67% 24.20% 5.27%
INDEX PERFORMANCE
ISE BICK(TM) Index 9.85% -14.63% -0.86% 3.14% 1.29% -4.23% 36.28% 18.08%
MSCI ACWI Index 17.78% -7.44% 6.94% 8.06% 7.81% 39.88% 117.12% 165.05%
MSCI Emerging Markets Index 14.04% -10.70% -0.88% 2.02% 2.05% -4.32% 22.13% 30.15%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
Nasdaq(R) and ISE BICK(TM) Index are registered trademarks and service marks of
Nasdaq, Inc. (together with its affiliates hereinafter referred to as the
"Corporations") and are licensed for use by First Trust. 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 20
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST BICK INDEX FUND (BICK) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Financials 22.5%
Consumer Discretionary 20.9
Information Technology 10.7
Industrials 9.2
Materials 8.7
Communication Services 7.4
Utilities 5.7
Health Care 5.3
Energy 4.8
Consumer Staples 3.8
Real Estate 1.0
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
ReNew Energy Global PLC, Class A 2.4%
Dr. Reddy's Laboratories Ltd., ADR 2.0
WNS (Holdings) Ltd., ADR 2.0
ICICI Bank Ltd., ADR 1.9
Larsen & Toubro Ltd., GDR 1.9
Axis Bank Ltd., GDR 1.9
Reliance Industries Ltd., GDR 1.9
State Bank of India, GDR 1.9
HDFC Bank Ltd., ADR 1.8
Infosys Ltd., ADR 1.8
------
Total 19.5%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust BICK ISE BICK(TM) MSCI ACWI MSCI Emerging
Index Fund Index Index Markets Index
---------------- ------------ --------- -------------
<S> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000
3/31/13 10,182 10,176 10,955 10,364
9/30/13 10,252 10,338 12,897 10,466
3/31/14 10,769 10,908 13,991 10,611
9/30/14 11,065 11,272 14,358 10,916
3/31/15 10,389 10,660 14,750 10,657
9/30/15 8,393 8,560 13,402 8,810
3/31/16 9,027 9,288 14,110 9,375
9/30/16 10,407 10,703 15,005 10,289
3/31/17 11,290 11,666 16,232 10,989
9/30/17 13,232 13,754 17,803 12,600
3/31/18 14,199 14,735 18,629 13,710
9/30/18 12,330 12,983 19,544 12,498
3/31/19 12,822 13,575 19,128 12,712
9/30/19 12,113 12,857 19,815 12,247
3/31/20 9,756 10,464 16,976 10,465
9/30/20 13,817 14,819 21,884 13,539
3/31/21 17,805 19,242 26,245 16,576
9/30/21 16,343 17,807 27,888 16,004
3/31/22 15,080 16,532 28,156 14,692
9/30/22 11,704 12,847 22,128 11,504
3/31/23 12,656 13,867 23,786 12,657
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 21
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX NEXTG ETF (NXTG)
The First Trust Indxx NextG ETF (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 Indxx 5G & NextG Thematic Index(SM) (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "NXTG." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by Indxx, Inc.
(the "Index Provider"). According to the Index Provider, the Index is designed
to track the performance of companies that have devoted, or have committed to
devote, material resources to the research, development and application of fifth
generation (5G) and next generation digital cellular technologies as they
emerge.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (2/17/11) Ended Ended (2/17/11)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 25.61% -6.09% 7.39% 11.60% 8.56% 42.81% 199.65% 170.33%
Market Price 25.63% -6.28% 7.34% 11.60% 8.54% 42.48% 199.72% 169.80%
INDEX PERFORMANCE
Indxx 5G & NextG Thematic
Index(SM) (1) (2) 25.87% -5.84% N/A N/A N/A N/A N/A N/A
MSCI ACWI Information
Technology Index 27.38% -7.49% 15.63% 17.20% 14.70% 106.73% 389.02% 426.87%
MSCI ACWI Index 17.78% -7.44% 6.94% 8.06% 7.37% 39.88% 117.12% 136.77%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
(1) On May 30, 2019, the Fund's underlying index changed from the Nasdaq CTA
Smartphone(TM) Index to the Indxx 5G & NextG Thematic Index(SM).
Therefore, the Fund's performance and historical returns shown for the
periods prior to this date are not necessarily indicative of the
performance that the Fund, based on its current index, would have
generated.
(2) Performance data is not available for all the periods shown in the table
for the index because performance data does not exist for some of the
entire periods.
-----------------------------
Indxx and Indxx 5G & NextG Thematic Index(SM) ("Index") are trademarks of Indxx,
Inc. ("Indxx") and have been licensed for use for certain purposes by First
Trust. The Fund is not sponsored, endorsed, sold or promoted by Indxx and Indxx
makes no representation regarding the advisability of trading in such product.
The Index is determined, composed and calculated by Indxx without regard to
First Trust or the Fund.
Page 22
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX NEXTG ETF (NXTG) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 61.5%
Communication Services 28.7
Real Estate 5.5
Consumer Discretionary 2.9
Industrials 1.4
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
NVIDIA Corp. 1.9%
Renesas Electronics Corp. 1.8
Advanced Micro Devices, Inc. 1.6
STMicroelectronics N.V. 1.6
Lenovo Group Ltd. 1.6
LG Electronics, Inc. 1.5
Arista Networks, Inc. 1.5
BT Group PLC 1.5
Infrastrutture Wireless Italiane S.p.A. 1.5
ZTE Corp., Class H 1.5
------
Total 16.0%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust Indxx MSCI ACWI Information MSCI ACWI
NextG ETF Technology Index Index
--------------------- --------------------- ---------
<S> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000
3/31/13 11,558 10,197 10,955
9/30/13 14,061 11,126 11,773
3/31/14 15,525 12,640 12,771
9/30/14 16,334 13,725 13,106
3/31/15 17,835 14,656 13,464
9/30/15 15,623 13,561 12,233
3/31/16 16,781 14,940 12,879
9/30/16 18,686 16,663 13,696
3/31/17 21,106 18,664 14,816
9/30/17 23,113 21,660 16,250
3/31/18 24,255 24,123 17,004
9/30/18 23,159 26,608 17,839
3/31/19 22,826 26,201 17,459
9/30/19 23,570 28,289 18,086
3/31/20 21,939 27,958 15,494
9/30/20 28,040 40,958 19,973
3/31/21 34,643 48,007 23,954
9/30/21 36,624 53,364 25,455
3/31/22 36,880 53,908 25,699
9/30/22 27,572 39,149 20,195
3/31/23 34,633 49,868 23,786
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 23
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ)
The First Trust S-Network Future Vehicles & Technology ETF (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 S-Network Electric &
Future Vehicle Ecosystem Index (the "Index"). The shares of the Fund are listed
and trade on The Nasdaq Stock Market LLC under the ticker symbol "CARZ." The
Fund will normally invest at least 90% of its net assets (plus any borrowings
for investment purposes) in the common stocks and depositary receipts that
comprise the Index.
The Index is owned and is developed, maintained and sponsored by VettaFi LLC
(the "Index Provider"). According to the Index Provider, to be eligible for
inclusion in the Index a company must be listed on a major recognized stock
exchange and engaged in one of the following sectors: (a) electric and
autonomous vehicle manufacturing; (b) enabling technologies; (c) enabling
materials; or (d) the development and manufacture of future automotive
technology and products.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (5/9/11) Ended Ended (5/9/11)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 27.30% -10.05% 6.66% 7.47% 6.43% 38.04% 105.47% 109.80%
Market Price 26.61% -10.41% 6.61% 7.43% 6.40% 37.71% 104.75% 109.20%
INDEX PERFORMANCE
S-Network Electric & Future
Vehicle Ecosystem Index(1) 27.21% -10.33% N/A N/A N/A N/A N/A N/A
MSCI ACWI Index(2) 17.78% -7.44% 6.94% 8.06% 7.44% 39.88% 117.12% 134.75%
MSCI World Index(2) 18.25% -7.02% 8.02% 8.85% 8.30% 47.09% 133.55% 158.14%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
(1) On January 26, 2022, the Fund's underlying index changed from the Nasdaq
Global Auto Index(SM) to the S-Network Electric & Future Vehicle Ecosystem
Index. Therefore, the Fund's performance and historical returns shown for
the periods prior to this date are not necessarily indicative of the
performance that the Fund, based on its current index, would have
generated. Since the Fund's new underlying index had an inception date of
May 11, 2021, it was not in existence for all the periods shown.
(2) Prior to February 1, 2023, the Fund's primary benchmark index was the MSCI
World Index. Effective February 1, 2023, the Fund's primary benchmark
index became the MSCI ACWI Index. The Fund's investment advisor believes
the MSCI ACWI Index better reflects the investment strategies of the Fund.
-----------------------------
S-Network and S-Network Electric & Future Vehicle Ecosystem Index are service
marks of VettaFi LLC and have been licensed for use by First Trust Advisors L.P.
The Fund is not issued, sponsored, endorsed, sold or promoted by VettaFi LLC or
its affiliates (collectively, "VettaFi"). VettaFi makes no representation or
warranty, express or implied, to the purchasers or owners of the Fund or any
member of the public regarding the advisability of investing in securities
generally or in the Fund particularly or the ability of the Index to track
general market performance.
Page 24
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 54.5%
Consumer Discretionary 28.0
Materials 6.3
Industrials 5.9
Communication Services 5.3
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
NVIDIA Corp. 6.7%
Tesla, Inc. 6.7
Apple, Inc. 4.9
Microsoft Corp. 4.8
Alphabet, Inc., Class A 4.5
Taiwan Semiconductor Manufacturing
Co., Ltd., ADR 4.2
Texas Instruments, Inc. 4.1
Samsung Electronics Co., Ltd. 4.0
Advanced Micro Devices, Inc. 2.8
QUALCOMM, Inc. 2.6
------
Total 45.3%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust S-Network
Future Vehicles & MSCI ACWI MSCI World
Technology ETF Index Index
---------------------- ---------- ----------
<S> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000
3/31/13 12,328 10,955 11,042
9/30/13 15,944 11,773 12,021
3/31/14 16,413 12,771 13,146
9/30/14 15,799 13,106 13,486
3/31/15 16,944 13,464 13,938
9/30/15 14,158 12,233 12,801
3/31/16 14,277 12,879 13,458
9/30/16 14,475 13,696 14,255
3/31/17 15,804 14,816 15,445
9/30/17 17,871 16,250 16,844
3/31/18 18,352 17,004 17,533
9/30/18 16,519 17,839 18,738
3/31/19 15,077 17,459 18,249
9/30/19 15,035 18,086 19,081
3/31/20 11,343 15,494 16,352
9/30/20 18,542 19,973 21,065
3/31/21 27,328 23,954 25,187
9/30/21 27,893 25,454 27,136
3/31/22 28,160 25,698 27,736
9/30/22 19,898 20,195 21,809
3/31/23 25,330 23,786 25,789
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 25
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
The First Trust Cloud Computing ETF (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 ISE CTA Cloud Computing(TM) Index (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "SKYY." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. (the "Index
Provider"). According to the Index Provider, the Index is designed to track the
performance of companies involved in the cloud computing industry. To be
eligible for inclusion in the Index, a security must be issued by a "cloud
computing" company as classified by the Consumer Technology Association ("CTA").
A cloud computing company is a company engaged in one or more of the following
activities: Infrastructure-as-a-Service, Platform-as-a-Service or
Software-as-a-Service. According to the Index Provider, in order to be eligible
for inclusion in the Index, a security's issuer must not be identified by the
U.S. Securities and Exchange Commission as having used to audit its financial
statements an accounting firm that has been identified by the Public Company
Accounting Oversight Board ("PCAOB") under the Holding Foreign Companies
Accountable Act ("HFCAA").
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
6 Months 1 Year 5 Years 10 Years Inception 5 Years 10 Years Inception
Ended Ended Ended Ended (7/5/11) Ended Ended (7/5/11)
3/31/23 3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 11.01% -25.95% 7.24% 12.62% 11.14% 41.83% 228.21% 245.63%
Market Price 10.94% -26.02% 7.15% 12.62% 11.14% 41.23% 228.11% 245.53%
INDEX PERFORMANCE
ISE CTA Cloud Computing(TM)
Index(1) 11.33% -25.61% 7.92% 13.23% 11.76% 46.36% 246.53% 268.76%
S&P 500(R) Index 15.62% -7.73% 11.19% 12.24% 12.22% 69.94% 217.36% 287.05%
S&P Composite 1500(R)
Information Technology Index 27.41% -4.46% 19.22% 19.74% 18.14% 140.83% 505.95% 607.83%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
(1) On June 24, 2019, the Fund's underlying index changed its methodology and
changed its name from "ISE Cloud Computing(TM) Index" to "ISE CTA Cloud
Computing(TM) Index."
-----------------------------
Nasdaq(R) and ISE CTA Cloud Computing(TM) Index are registered trademarks and
service marks of Nasdaq, Inc. (together with its affiliates hereinafter referred
to as the "Corporations") and are licensed for use by First Trust. 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 26
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST CLOUD COMPUTING ETF (SKYY) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 87.2%
Communication Services 7.6
Consumer Discretionary 3.9
Health Care 0.7
Financials 0.6
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Arista Networks, Inc. 4.4%
Microsoft Corp. 4.2
Alphabet, Inc., Class A 4.2
Amazon.com, Inc. 3.9
Oracle Corp. 3.8
International Business Machines Corp. 3.7
MongoDB, Inc. 3.3
Nutanix, Inc., Class A 3.3
Pure Storage, Inc., Class A 3.2
Cisco Systems, Inc. 2.6
------
Total 36.6%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
SEPTEMBER 30, 2012 - MARCH 31, 2023
First Trust Cloud ISE CTA Cloud S&P 500(R) S&P Composite 1500(R)
Computing ETF Computing(TM) Index Index Information Technology Index
----------------- ------------------- ---------- ----------------------------
<S> <C> <C> <C> <C>
9/30/12 $10,000 $10,000 $10,000 $10,000
3/31/13 10,676 10,711 11,019 9,989
9/30/13 12,382 12,458 11,934 10,875
3/31/14 13,574 13,703 13,427 12,531
9/30/14 13,768 13,944 14,289 13,812
3/31/15 14,751 14,984 15,136 14,753
9/30/15 14,186 14,449 14,201 14,150
3/31/16 14,992 15,348 15,407 15,798
9/30/16 17,349 17,814 16,393 17,379
3/31/17 19,658 20,062 18,052 19,816
9/30/17 21,341 21,845 19,444 22,356
3/31/18 24,704 25,366 20,580 25,135
9/30/18 28,983 29,863 22,928 29,152
3/31/19 29,681 30,696 22,534 28,884
9/30/18 29,147 30,272 23,904 31,596
3/31/20 28,235 29,397 20,961 31,492
9/30/20 40,673 42,482 27,524 45,789
3/31/21 49,658 52,032 32,773 52,868
9/30/21 54,732 57,511 35,783 59,416
3/31/22 47,321 49,891 37,902 63,350
9/30/22 31,564 33,334 30,244 47,506
3/31/23 35,040 37,123 34,970 60,528
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 27
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
First Trust International Equity Opportunities ETF (the "Fund") seeks investment
results that correspond generally to the price and yield (before the Fund's fees
and expenses) of an index called the IPOX(R) International Index (the "Index").
The shares of the Fund are listed and trade on The Nasdaq Stock Market LLC under
the ticker symbol "FPXI." The Fund will normally invest at least 90% of its net
assets (including investment borrowings) in the common stocks and depositary
receipts that comprise the Index.
The Index is owned and is developed, maintained and sponsored by IPOX(R)
Schuster LLC (the "Index Provider"). According to the Index Provider, the Index
is a market-cap weighted portfolio measuring the performance of the top 50
companies domiciled outside the United States ranked quarterly by market
capitalization in the IPOX(R) Global Composite Index (the "Base Index") and
represents, on average, 25% of the total market capitalization of the Base
Index, a fully market capitalization-weighted index constructed and managed to
provide a broad and objective view of global aftermarket performance of initial
public offerings and spin-offs in all world countries (both developed and
emerging market countries).
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (11/4/14) Ended (11/4/14)
3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 14.86% -15.62% 2.74% 4.80% 14.48% 48.23%
Market Price 14.66% -15.84% 2.65% 4.76% 14.00% 47.84%
INDEX PERFORMANCE
IPOX(R) International Index 14.90% -15.48% 3.74% 5.66% 20.14% 58.79%
MSCI ACWI ex USA Index 22.13% -5.07% 2.51% 3.83% 13.17% 37.14%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
IPOX(R) and IPOX(R) International Index ("Index") are registered international
trademarks and service marks of IPOX(R) Schuster LLC ("IPOX") and have been
licensed for use by First Trust. The Fund is not sponsored, endorsed, sold or
promoted by IPOX, and IPOX makes no representation regarding the advisability of
trading in such Fund.
Page 28
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 41.0%
Health Care 15.7
Industrials 11.4
Information Technology 8.9
Communication Services 8.1
Financials 5.9
Energy 3.2
Consumer Staples 2.4
Utilities 1.6
Real Estate 1.5
Materials 0.3
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Alibaba Group Holding Ltd., ADR 9.8%
Novo Nordisk A/S, ADR 9.0
Dr. Ing hc F Porsche AG (Preference Shares) 8.8
Prosus N.V. 7.7
PDD Holdings, Inc., ADR 6.7
LG Energy Solution Ltd. 5.2
SoftBank Corp. 3.4
Takeda Pharmaceutical Co., Ltd., ADR 2.7
Universal Music Group N.V. 2.4
Spotify Technology S.A. 2.3
------
Total 58.0%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 4, 2014 - MARCH 31, 2023
First Trust International IPOX(R) International MSCI ACWI
Equity Opportunities ETF Index ex USA Index
------------------------- --------------------- ------------
<S> <C> <C> <C>
11/4/14 $10,000 $10,000 $10,000
3/31/15 9,798 9,813 10,137
9/30/15 8,526 8,522 8,950
3/31/16 8,864 8,954 9,206
9/30/16 9,432 9,523 9,779
3/31/17 9,913 10,072 10,415
9/30/17 11,952 12,204 11,696
3/31/18 12,949 13,217 12,118
9/30/18 12,352 12,713 11,903
3/31/19 12,308 12,716 11,625
9/30/19 12,920 13,403 11,756
3/31/20 13,086 13,684 9,815
9/30/20 20,185 21,054 12,109
3/31/21 23,365 24,630 14,664
9/30/21 22,956 24,297 15,005
3/31/22 17,567 18,788 14,447
9/30/22 12,906 13,820 11,230
3/31/23 14,823 15,879 13,714
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 29
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
The First Trust Nasdaq Cybersecurity ETF (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 CTA Cybersecurity(TM) Index (the
"Index"). The shares of the Fund are listed and trade on The Nasdaq Stock Market
LLC under the ticker symbol "CIBR." The Fund will normally invest at least 90%
of its net assets (including investment borrowings) in the common stocks and
depositary receipts that comprise the Index.
The Index is owned by Nasdaq, Inc. (the "Index Provider"). The Index Provider
and the Consumer Technology Association ("CTA") have jointly developed the
eligibility and selection criteria and rules for the Index. According to the
Index Provider and CTA, the Index includes securities of companies classified as
"cybersecurity" companies by the CTA. CTA gives the cybersecurity classification
to those companies that meet one of three elements: (1) companies focused on
developing technologies that are designed and implemented to protect computer
and communication networks from attacks and outside unauthorized use; (2)
companies involved in the deployment of technologies for cybersecurity industry
use including government, private and public corporations, financial
institutions and various other industries; or (3) companies focused on the
protection of priority data from being accessed and exploited by unauthorized
external parties.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
-------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
6 Months 1 Year 5 Years Inception 5 Years Inception
Ended Ended Ended (7/6/15) Ended (7/6/15)
3/31/23 3/31/23 3/31/23 to 3/31/23 3/31/23 to 3/31/23
<S> <C> <C> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 11.11% -19.00% 11.99% 10.98% 76.16% 123.94%
Market Price 11.09% -19.19% 11.97% 10.97% 76.03% 123.77%
INDEX PERFORMANCE
Nasdaq CTA Cybersecurity(TM) Index 11.30% -18.76% 12.80% 11.76% 82.58% 136.33%
S&P 500(R) Index 15.62% -7.73% 11.19% 11.35% 69.94% 129.69%
S&P Composite 1500(R) Information Technology Index 27.41% -4.46% 19.22% 19.95% 140.83% 308.43%
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
Nasdaq(R) and Nasdaq CTA Cybersecurity(TM) Index are registered trademarks and
service marks of Nasdaq, Inc. (together with its affiliates hereinafter referred
to as the "Corporations") and are licensed for use by First Trust. 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 30
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 88.5%
Industrials 11.5
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Fortinet, Inc. 6.4%
Cisco Systems, Inc. 6.2
Broadcom, Inc. 6.2
Palo Alto Networks, Inc. 6.1
Infosys Ltd., ADR 5.8
Okta, Inc. 3.5
Crowdstrike Holdings, Inc., Class A 3.3
Juniper Networks, Inc. 3.2
Open Text Corp. 3.2
Akamai Technologies, Inc. 3.1
------
Total 47.0%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
JULY 6, 2015 - MARCH 31, 2023
First Trust Nasdaq Nasdaq CTA S&P 500(R) S&P Composite 1500(R)
Cybersecurity ETF Cybersecurity(TM) Index Index Information Technology Index
--------------------- ----------------------- ---------- ----------------------------
<S> <C> <C> <C> <C>
7/6/15 $10,000 $10,000 $10,000 $10,000
9/30/15 8,575 8,585 9,328 9,547
3/31/16 8,595 8,645 10,120 10,659
9/30/16 10,018 10,113 10,768 11,726
3/31/17 10,993 11,137 11,858 13,370
9/30/17 11,093 11,276 12,772 15,084
3/31/18 12,713 12,943 13,518 16,959
9/30/18 14,475 14,808 15,060 19,669
3/31/19 14,271 14,642 14,801 19,488
9/30/19 14,074 14,493 15,701 21,318
3/31/20 13,318 13,794 13,767 21,250
9/30/20 18,050 18,758 18,077 30,898
3/31/21 21,665 22,591 21,525 35,674
9/30/21 25,359 26,529 23,501 40,098
3/31/22 27,647 29,091 24,893 42,751
9/30/22 20,154 21,234 19,865 32,056
3/31/23 22,394 23,633 22,969 40,843
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 31
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
The First Trust IPOX(R) Europe Equity Opportunities ETF (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 IPOX(R)-100 Europe Index
(the "Index"). The shares of the Fund are listed and trade on The Nasdaq Stock
Market LLC under the ticker symbol "FPXE." The Fund will normally invest at
least 90% of its net assets (including investment borrowings) in the common
stocks and depositary receipts that comprise the Index. The Index is owned,
developed, maintained and sponsored by IPOX(R) Schuster LLC (the "Index
Provider"). According to the Index Provider, the Index seeks to measure the
performance of the equity securities of the 100 largest and typically most
liquid initial public offerings ("IPOs") (including spin-offs and equity
carve-outs) of companies that are economically tied to Europe.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
6 Months Ended 1 Year Ended (10/4/18) (10/4/18)
3/31/23 3/31/23 to 3/31/23 to 3/31/23
<S> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 27.99% -11.24% 3.74% 17.90%
Market Price 28.46% -11.48% 3.67% 17.57%
INDEX PERFORMANCE
IPOX(R)-100 Europe Index 27.63% -11.29% 4.92% 24.07%
MSCI Europe Index 31.95% 1.38% 5.36% 26.41%
---------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
IPOX(R) and IPOX(R)-100 Europe Index ("Index") are registered international
trademarks of IPOX(R) Schuster LLC ("IPOX") and have been licensed for use by
First Trust. The Fund is not sponsored, endorsed, sold or promoted by IPOX, and
IPOX makes no representation regarding the advisability of trading in such Fund.
IPOX(R) is an international trademark of IPOX Schuster LLC. Index of Initial
Public Offerings (IPOX) and IPOX Derivatives Patent No. US 7,698,197.
Page 32
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 22.3%
Health Care 18.5
Industrials 18.2
Financials 10.9
Energy 10.1
Communication Services 9.2
Information Technology 4.9
Materials 3.6
Consumer Staples 1.5
Utilities 0.6
Real Estate 0.2
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Novo Nordisk A/S, Class B 10.6%
Dr. Ing hc F Porsche AG (Preference Shares) 10.4
Prosus N.V. 6.5
Spotify Technology S.A. 6.0
BP PLC 4.7
Swedish Orphan Biovitrum AB 4.2
nVent Electric PLC 4.1
ANDRITZ AG 2.8
Daimler Truck Holding AG 2.8
Nordnet AB publ 2.7
------
Total 54.8%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
OCTOBER 4, 2018 - MARCH 31, 2023
First Trust IPOX(R) Europe IPOX(R)-100 MSCI Europe
Equity Opportunities ETF Europe Index Index
-------------------------- ------------ ------------
<S> <C> <C> <C>
10/4/18 $10,000 $10,000 $10,000
3/31/19 9,715 9,769 9,836
9/30/19 10,132 10,255 10,091
3/31/20 9,587 9,800 8,311
9/30/20 13,003 13,352 10,011
3/31/21 14,757 15,217 12,046
9/30/21 16,147 16,766 12,739
3/31/22 13,283 13,986 12,469
9/30/22 9,212 9,722 9,580
3/31/23 11,790 12,408 12,641
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 33
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
The First Trust Dow Jones International Internet ETF (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 Dow Jones International
Internet Index (the "Index"). The shares of the Fund are listed and trade on The
Nasdaq Stock Market LLC under the ticker symbol "FDNI." The Fund will normally
invest at least 90% of its net assets (including investment borrowings) in the
common stocks and depositary receipts that comprise the Index. The Index is
developed, maintained and sponsored by S&P Dow Jones Indices LLC (the "Index
Provider"). According to the Index Provider, the Index is designed to measure
the performance of securities of non-US issuers whose primary business focus is
Internet-related.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
PERFORMANCE
---------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
6 Months Ended 1 Year Ended (11/5/18) (11/5/18)
3/31/23 3/31/23 to 3/31/23 to 3/31/23
<S> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 24.93% -6.92% 5.80% 28.16%
Market Price 21.40% -10.09% 5.33% 25.69%
INDEX PERFORMANCE
Dow Jones International Internet Index 24.20% -7.52% 6.60% 32.46%
MSCI ACWI ex-USA Information
Technology Index 33.10% -9.51% 13.08% 71.73%
MSCI ACWI ex-USA Index 22.13% -5.07% 4.90% 23.44%
---------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 36.)
-----------------------------
Dow Jones International Internet Index ("Index") is a product of S&P Dow Jones
Indices LLC or its affiliates ("SPDJI") and has been licensed for use by First
Trust. S&P(R) is a registered trademark of Standard & Poor's Financial Services
LLC ("S&P"); Dow Jones(R) is a registered trademark of Dow Jones Trademark
Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by
SPDJI and sublicensed for certain purposes by First Trust. The Fund is not
sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their
respective affiliates and none of such parties make any representation regarding
the advisability of investing in such product nor do they have any liability for
any errors, omissions, or interruptions of the Index.
Page 34
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Consumer Discretionary 50.0%
Communication Services 34.4
Information Technology 8.6
Financials 5.1
Health Care 1.1
Consumer Staples 0.8
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Alibaba Group Holding Ltd. 10.6%
Tencent Holdings Ltd. 10.3
Prosus N.V. 9.2
Meituan, Class B 8.6
Shopify, Inc., Class A 5.8
JD.com, Inc., Class A 5.3
Adyen N.V. 4.8
Baidu, Inc., Class A 4.3
PDD Holdings, Inc., ADR 4.2
Naspers Ltd., Class N 4.1
------
Total 67.2%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
NOVEMBER 5, 2018 - MARCH 31, 2023
MSCI All Country World
First Trust Dow Jones Dow Jones International ex-USA Information MSCI All Country
International Internet ETF Internet Index Technology Index World ex-USA Index
-------------------------- ----------------------- ---------------------- ------------------
<S> <C> <C> <C> <C>
11/5/18 $10,000 $10,000 $10,000 $10,000
3/31/19 11,275 11,318 10,863 10,463
9/30/19 10,907 10,977 11,546 10,581
3/31/20 11,865 12,008 11,000 8,834
9/30/20 20,535 20,785 15,539 10,899
3/31/21 23,574 24,042 20,050 13,199
9/30/21 21,033 21,527 21,243 13,505
3/31/22 13,770 14,322 18,976 13,003
9/30/22 10,258 10,665 12,902 10,107
3/31/23 12,815 13,246 17,173 12,344
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 35
--------------------------------------------------------------------------------
NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
Total returns for the periods since inception are calculated from the inception
date of each Fund. "Average Annual Total Returns" represent the average annual
change in value of an investment over the periods indicated. "Cumulative Total
Returns" represent the total change in value of an investment over the periods
indicated. For certain Funds, the total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the Advisor.
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 of the national best bid and offer price ("NBBO") as of
the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists
of the highest displayed buy and lowest sell prices among the various exchanges
trading the Fund at the time the Fund's NAV is calculated. Prior to January 1,
2019, the price used was the midpoint between the highest bid and the lowest
offer on the stock exchange on which shares of the Fund were listed for trading
as of the time that the Fund's NAV was 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 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 36
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES
MARCH 31, 2023 (UNAUDITED)
As a shareholder of First Trust STOXX(R) European Select Dividend Index Fund,
First Trust Alerian Disruptive Technology Real Estate ETF, First Trust Dow Jones
Global Select Dividend Index Fund, First Trust Global Wind Energy ETF, First
Trust Alerian U.S. NextGen Infrastructure ETF, First Trust NASDAQ(R) Clean
Edge(R) Smart Grid Infrastructure Index Fund, First Trust Indxx Global Natural
Resources Income ETF, First Trust Indxx Global Agriculture ETF, First Trust BICK
Index Fund, First Trust Indxx NextG ETF, First Trust S-Network Future Vehicles &
Technology ETF, First Trust Cloud Computing ETF, First Trust International
Equity Opportunities ETF, First Trust Nasdaq Cybersecurity ETF, First Trust
IPOX(R) Europe Equity Opportunities ETF or First Trust Dow Jones International
Internet ETF (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 (12b-1) fees, if any, 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 and held through the six-month period ended March 31, 2023.
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 Six-Month
Period" to estimate the expenses you paid on your account during this six-month
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.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
OCTOBER 1, 2022 MARCH 31, 2023 PERIOD (a) PERIOD (b)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
Actual $1,000.00 $1,249.40 0.60% $3.36
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
FIRST TRUST ALERIAN DISRUPTIVE TECHNOLOGY REAL ESTATE ETF (DTRE)
Actual $1,000.00 $1,091.80 0.60% $3.13
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
Actual $1,000.00 $1,219.20 0.57% $3.15
Hypothetical (5% return before expenses) $1,000.00 $1,022.09 0.57% $2.87
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
Actual $1,000.00 $1,188.50 0.60% $3.27
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
FIRST TRUST ALERIAN U.S. NEXTGEN INFRASTRUCTURE ETF (RBLD)
Actual $1,000.00 $1,157.40 0.65% $3.50
Hypothetical (5% return before expenses) $1,000.00 $1,021.69 0.65% $3.28
</TABLE>
Page 37
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
OCTOBER 1, 2022 MARCH 31, 2023 PERIOD (a) PERIOD (b)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
Actual $1,000.00 $1,301.80 0.58% $3.33
Hypothetical (5% return before expenses) $1,000.00 $1,022.04 0.58% $2.92
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
Actual $1,000.00 $1,115.30 0.70% $3.69
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
Actual $1,000.00 $1,103.50 0.70% $3.67
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST BICK INDEX FUND (BICK)
Actual $1,000.00 $1,101.20 0.64% $3.35
Hypothetical (5% return before expenses) $1,000.00 $1,021.74 0.64% $3.23
FIRST TRUST INDXX NEXTG ETF (NXTG)
Actual $1,000.00 $1,256.10 0.70% $3.94
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ)
Actual $1,000.00 $1,273.00 0.70% $3.97
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
Actual $1,000.00 $1,110.10 0.60% $3.16
Hypothetical (5% return before expenses) $1,000.00 $1,021.94 0.60% $3.02
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
Actual $1,000.00 $1,148.60 0.70% $3.75
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
Actual $1,000.00 $1,111.10 0.59% $3.11
Hypothetical (5% return before expenses) $1,000.00 $1,021.99 0.59% $2.97
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
Actual $1,000.00 $1,279.90 0.70% $3.98
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
Actual $1,000.00 $1,249.30 0.65% $3.65
Hypothetical (5% return before expenses) $1,000.00 $1,021.69 0.65% $3.28
</TABLE>
(a) These expense ratios reflect expense caps for certain Funds. See Note 3 in
the Notes to Financial Statements.
(b) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (October 1,
2022 through March 31, 2023), multiplied by 182/365 (to reflect the
six-month period).
Page 38
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 98.6%
BELGIUM -- 5.8%
121,150 Ageas S.A./N.V. (b) $ 5,240,768
64,276 Cofinimmo S.A. (b) 5,696,287
--------------
10,937,055
--------------
DENMARK -- 4.3%
4,513 AP Moller - Maersk A/S,
Class A (b) 8,006,269
--------------
FRANCE -- 14.3%
75,243 BNP Paribas S.A. (b) 4,493,349
84,642 Covivio (b) 4,923,662
520,104 Credit Agricole S.A. (b) 5,867,422
478,354 Orange S.A. (b) 5,682,954
216,206 Rubis SCA (b) 5,785,310
--------------
26,752,697
--------------
GERMANY -- 10.8%
18,084 Allianz SE (b) 4,174,458
54,957 Bayerische Motoren Werke AG
(Preference Shares) (b) 5,617,638
224,913 Evonik Industries AG (b) 4,731,997
75,126 Mercedes-Benz Group AG (b) 5,777,423
--------------
20,301,516
--------------
ITALY -- 5.4%
468,557 Poste Italiane S.p.A.
(b) (c) (d) 4,778,168
1,009,186 Snam S.p.A. (b) 5,350,767
--------------
10,128,935
--------------
JERSEY -- 4.5%
1,465,877 Glencore PLC (b) 8,434,932
--------------
LUXEMBOURG -- 1.0%
1,288,783 Aroundtown S.A. (b) 1,842,382
--------------
NETHERLANDS -- 6.1%
130,419 ASR Nederland N.V. (b) 5,189,384
173,594 NN Group N.V. (b) 6,303,213
--------------
11,492,597
--------------
NORWAY -- 8.0%
253,178 Aker BP ASA 6,197,780
203,233 Yara International ASA (b) 8,832,628
--------------
15,030,408
--------------
SPAIN -- 7.7%
212,512 ACS Actividades de Construccion
y Servicios S.A. (b) 6,768,479
352,152 Endesa S.A. (b) 7,648,710
--------------
14,417,189
--------------
SWEDEN -- 3.2%
601,173 Tele2 AB, Class B (b) 5,983,518
--------------
SWITZERLAND -- 4.8%
77,102 Holcim AG (b) 4,972,411
8,258 Zurich Insurance Group AG (b) 3,957,223
--------------
8,929,634
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED KINGDOM -- 22.7%
571,158 Close Brothers Group PLC (b) $ 6,369,798
648,307 IG Group Holdings PLC (b) 5,594,520
2,627,448 Legal & General Group PLC (b) 7,770,921
118,437 Rio Tinto PLC (b) 8,039,222
280,040 SSE PLC (b) 6,248,737
5,867,220 Taylor Wimpey PLC (b) 8,631,647
--------------
42,654,845
--------------
TOTAL INVESTMENTS -- 98.6% 184,911,977
(Cost $190,752,470)
NET OTHER ASSETS AND
LIABILITIES -- 1.4% 2,647,130
--------------
NET ASSETS -- 100.0% $ 187,559,107
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $178,714,197 or 95.3% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
See Notes to Financial Statements Page 39
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 51.9%
British Pound Sterling 27.6
Norwegian Krone 8.1
Swiss Franc 4.8
Danish Krone 4.3
Swedish Krona 3.3
------
Total 100.0%
======
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Norway....................................... $ 15,030,408 $ 6,197,780 $ 8,832,628 $ --
Other Country Categories*.................... 169,881,569 -- 169,881,569 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 184,911,977 $ 6,197,780 $ 178,714,197 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
Page 40 See Notes to Financial Statements
FIRST TRUST ALERIAN DISRUPTIVE TECHNOLOGY REAL ESTATE ETF (DTRE)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.5%
BELGIUM -- 1.6%
14,155 Warehouses De Pauw C.V.A. (b) $ 420,917
--------------
CAYMAN ISLANDS -- 1.1%
161,200 ESR Group Ltd. (b) (c) (d) 289,077
--------------
JAPAN -- 12.6%
224 Daiwa House REIT Investment
Corp. (b) 458,977
752 GLP J-REIT (b) 812,858
110 Japan Logistics Fund, Inc. (b) 244,417
191 LaSalle Logiport REIT (b) 221,645
121 Mitsubishi Estate Logistics
REIT Investment Corp. (b) 356,527
73 Mitsui Fudosan Logistics Park,
Inc. (b) 256,128
423 Nippon Prologis REIT, Inc. (b) 895,511
--------------
3,246,063
--------------
SINGAPORE -- 5.7%
470,964 Frasers Logistics & Commercial
Trust (b) (d) 464,851
198,694 Keppel DC REIT (b) 308,108
543,677 Mapletree Logistics Trust 698,593
--------------
1,471,552
--------------
UNITED KINGDOM -- 5.8%
97,462 LondonMetric Property PLC (b) 212,302
99,914 Segro PLC (b) 951,756
198,940 Tritax Big Box REIT PLC (b) 344,240
--------------
1,508,298
--------------
UNITED STATES -- 72.7%
7,808 American Tower Corp. 1,595,487
34,755 Americold Realty Trust, Inc. 988,780
11,987 Crown Castle, Inc. 1,604,340
16,901 Digital Realty Trust, Inc. 1,661,537
86,037 DigitalBridge Group, Inc. 1,031,584
6,833 EastGroup Properties, Inc. 1,129,632
2,500 Equinix, Inc. 1,802,600
21,480 First Industrial Realty Trust,
Inc. 1,142,736
76,208 LXP Industrial Trust 785,704
14,847 Prologis, Inc. 1,852,460
19,978 Rexford Industrial Realty, Inc. 1,191,688
5,917 SBA Communications Corp. 1,544,751
30,810 STAG Industrial, Inc. 1,041,994
15,237 Terreno Realty Corp. 984,310
124,011 Uniti Group, Inc. 440,239
--------------
18,797,842
--------------
TOTAL COMMON STOCKS
-- 99.5% 25,733,749
(Cost $24,258,644) --------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
MONEY MARKET FUNDS -- 0.2%
53,942 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class 4.65% (e) $ 53,942
(Cost $53,942) --------------
TOTAL INVESTMENTS -- 99.7% 25,787,691
(Cost $24,312,586)
NET OTHER ASSETS AND
LIABILITIES -- 0.3% 79,708
--------------
NET ASSETS -- 100.0% $ 25,867,399
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $6,237,314 or 24.1% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Rate shown reflects yield as of March 31, 2023.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 73.1%
Japanese Yen 12.6
British Pound Sterling 5.9
Singapore Dollar 5.7
Euro 1.6
Hong Kong Dollar 1.1
------
Total 100.0%
======
See Notes to Financial Statements Page 41
FIRST TRUST ALERIAN DISRUPTIVE TECHNOLOGY REAL ESTATE ETF (DTRE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Singapore.................................... $ 1,471,552 $ 698,593 $ 772,959 $ --
United States................................ 18,797,842 18,797,842 -- --
Other Country Categories*.................... 5,464,355 -- 5,464,355 --
Money Market Funds.............................. 53,942 53,942 -- --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 25,787,691 $ 19,550,377 $ 6,237,314 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
Page 42 See Notes to Financial Statements
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 97.8%
AUSTRALIA -- 4.3%
583,349 Fortescue Metals Group Ltd. (b) $ 8,768,642
2,940,040 Harvey Norman Holdings Ltd. (b) 7,075,745
271,847 JB Hi-Fi Ltd. (b) 7,758,325
646,718 Super Retail Group Ltd. (b) 5,469,352
--------------
29,072,064
--------------
BELGIUM -- 0.9%
142,470 Ageas S.A./N.V. (b) 6,163,040
--------------
BERMUDA -- 1.5%
1,044,340 CK Infrastructure Holdings
Ltd. (b) 5,682,126
133,838 Lazard Ltd., Class A 4,431,376
--------------
10,113,502
--------------
CANADA -- 12.2%
114,555 Bank of Nova Scotia (The) 5,769,707
136,316 BCE, Inc. 6,106,231
1,399,233 Birchcliff Energy Ltd. 7,930,540
114,392 Canadian Imperial Bank of
Commerce 4,850,763
182,952 Canadian Utilities Ltd.,
Class A 5,098,019
196,727 Great-West Lifeco, Inc. 5,214,030
159,408 IGM Financial, Inc. 4,763,958
291,545 Labrador Iron Ore Royalty Corp. 6,903,026
201,747 Laurentian Bank of Canada 4,748,481
257,655 Manulife Financial Corp. 4,727,964
1,172,515 Peyto Exploration &
Development Corp. 10,506,220
187,589 Power Corp. of Canada 4,794,172
157,928 TC Energy Corp. 6,143,008
244,128 TELUS Corp. 4,846,433
--------------
82,402,552
--------------
CAYMAN ISLANDS -- 0.8%
877,081 CK Hutchison Holdings Ltd. (b) 5,426,191
--------------
DENMARK -- 1.3%
5,085 AP Moller - Maersk A/S,
Class A (b) 9,021,023
--------------
FINLAND -- 2.0%
484,053 Fortum OYJ (b) 7,415,010
727,911 Metsa Board OYJ, Class B (b) 5,866,635
--------------
13,281,645
--------------
FRANCE -- 2.9%
573,007 ALD S.A. (b) (c) (d) 6,717,070
355,587 Nexity S.A. (b) 8,929,365
72,115 TotalEnergies SE (b) 4,252,187
--------------
19,898,622
--------------
GERMANY -- 6.7%
20,431 Allianz SE (b) 4,716,232
128,608 BASF SE (b) 6,751,779
262,828 Freenet AG (b) 6,829,481
61,058 Hapag-Lloyd AG (b) (c) (d) 20,062,185
84,361 Mercedes-Benz Group AG (b) 6,487,623
--------------
44,847,300
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
HONG KONG -- 4.2%
1,718,259 Henderson Land Development
Co., Ltd. (b) $ 5,944,825
1,839,338 Hysan Development Co., Ltd. (b) 5,228,816
3,039,429 New World Development Co.,
Ltd. (b) 8,147,500
17,837,620 PCCW Ltd. (b) 8,904,197
--------------
28,225,338
--------------
ISRAEL -- 1.5%
1,462,630 ICL Group Ltd. (b) 9,910,156
--------------
ITALY -- 4.2%
4,166,614 A2A S.p.A. (b) 6,649,167
1,167,814 Anima Holding S.p.A.
(b) (c) (d) 4,745,767
229,697 Azimut Holding S.p.A. (b) 4,901,232
464,044 Eni S.p.A. (b) 6,471,757
522,331 Poste Italiane S.p.A.
(b) (c) (d) 5,326,535
--------------
28,094,458
--------------
JAPAN -- 7.6%
283,754 Aozora Bank Ltd. (b) 5,141,305
409,000 Haseko Corp. (b) 4,754,070
312,170 Japan Tobacco, Inc. (b) 6,594,138
562,700 Mitsui OSK Lines Ltd. (b) 14,111,194
127,400 MS&AD Insurance Group
Holdings, Inc. (b) 3,948,238
517,000 Nippon Yusen KK (b) 12,076,265
255,700 Sumitomo Corp. (b) 4,529,816
--------------
51,155,026
--------------
JERSEY -- 1.7%
4,774,135 Centamin PLC (b) 6,150,468
197,310 Janus Henderson Group PLC 5,256,338
--------------
11,406,806
--------------
LUXEMBOURG -- 1.4%
128,100 APERAM S.A. (b) 4,778,653
3,370,445 Aroundtown S.A. (b) 4,818,225
--------------
9,596,878
--------------
MAURITIUS -- 1.0%
30,597,700 Golden Agri-Resources Ltd. (b) 6,573,079
--------------
NETHERLANDS -- 3.4%
126,861 ASR Nederland N.V. (b) 5,047,811
49,381 LyondellBasell Industries N.V.,
Class A 4,636,382
168,131 NN Group N.V. (b) 6,104,850
487,556 SBM Offshore N.V. (b) 7,238,979
--------------
23,028,022
--------------
NEW ZEALAND -- 0.9%
1,953,067 Spark New Zealand Ltd. (b) 6,187,715
--------------
NORWAY -- 2.5%
933,654 Norsk Hydro ASA (b) 6,968,253
224,679 Yara International ASA (b) 9,764,684
--------------
16,732,937
--------------
See Notes to Financial Statements Page 43
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SOUTH KOREA -- 11.0%
1,758,158 BNK Financial Group, Inc. (b) $ 8,819,828
100,205 DB Insurance Co., Ltd. (b) 5,765,036
1,305,572 DGB Financial Group, Inc. (b) 6,933,532
209,409 Hana Financial Group, Inc. (b) 6,558,475
98,671 Hyundai Motor Co. (Preference
Shares) (b) 7,288,556
1,139,463 Industrial Bank of Korea (b) 8,861,731
140,295 KB Financial Group, Inc. (b) 5,123,881
80,918 KT&G Corp. (b) 5,200,433
37,910 Samsung Fire & Marine
Insurance Co., Ltd. (b) 5,992,519
197,936 Samsung Securities Co.,
Ltd. (b) 4,838,172
981,493 Woori Financial Group, Inc. (b) 8,633,879
--------------
74,016,042
--------------
SPAIN -- 7.1%
215,237 ACS Actividades de Construccion
y Servicios S.A. (b) 6,855,270
233,191 Cia de Distribucion Integral
Logista Holdings S.A. (b) 5,818,721
525,722 Enagas S.A. (b) 10,102,161
3,117,735 Mapfre S.A. (b) 6,283,405
155,608 Naturgy Energy Group S.A. (b) 4,684,370
357,704 Red Electrica Corp., S.A. (b) 6,294,297
1,742,427 Telefonica S.A. (b) 7,504,349
--------------
47,542,573
--------------
SWEDEN -- 2.1%
5,175,456 Samhallsbyggnadsbolaget i
Norden AB (b) 7,076,165
2,685,193 Telia Co., AB (b) 6,818,413
--------------
13,894,578
--------------
SWITZERLAND -- 2.2%
31,499 Helvetia Holding AG (b) 4,390,599
54,512 Swiss Re AG (b) 5,600,210
10,561 Zurich Insurance Group AG (b) 5,060,818
--------------
15,051,627
--------------
UNITED KINGDOM -- 5.5%
2,207,614 abrdn PLC (b) 5,556,252
1,913,176 Ashmore Group PLC (b) 5,659,372
183,706 British American Tobacco PLC (b) 6,439,672
2,206,726 Legal & General Group PLC (b) 6,526,597
971,462 Phoenix Group Holdings PLC (b) 6,563,575
94,353 Rio Tinto PLC (b) 6,404,457
--------------
37,149,925
--------------
UNITED STATES -- 8.9%
161,664 Altria Group, Inc. 7,213,448
294,688 AT&T, Inc. 5,672,744
456,936 Camping World Holdings, Inc.,
Class A 9,536,254
246,357 Kohl's Corp. 5,799,244
406,942 Northwest Bancshares, Inc. 4,895,512
49,313 Prudential Financial, Inc. 4,080,158
453,739 Sitio Royalties Corp., Class A 10,254,501
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
114,584 Universal Corp. $ 6,060,348
574,759 Western Union (The) Co. 6,408,563
--------------
59,920,772
--------------
TOTAL COMMON STOCKS
-- 97.8% 658,711,871
(Cost $694,317,022) --------------
MONEY MARKET FUNDS -- 0.3%
2,234,570 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class 4.65% (e) 2,234,570
(Cost $2,234,570) --------------
TOTAL INVESTMENTS -- 98.1% 660,946,441
(Cost $696,551,592)
NET OTHER ASSETS AND
LIABILITIES -- 1.9% 12,848,121
--------------
NET ASSETS -- 100.0% $ 673,794,562
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $502,064,451 or 74.5% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Rate shown reflects yield as of March 31, 2023.
Page 44 See Notes to Financial Statements
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 28.4%
Canadian Dollar 12.5
United States Dollar 11.6
South Korean Won 11.2
Japanese Yen 7.7
British Pound Sterling 6.6
Hong Kong Dollar 5.9
Australian Dollar 4.4
Norwegian Krone 2.5
Swiss Franc 2.3
Swedish Krona 2.1
Israeli Shekel 1.5
Danish Krone 1.4
Singapore Dollar 1.0
New Zealand Dollar 0.9
------
Total 100.0%
======
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Bermuda...................................... $ 10,113,502 $ 4,431,376 $ 5,682,126 $ --
Canada....................................... 82,402,552 82,402,552 -- --
Jersey....................................... 11,406,806 5,256,338 6,150,468 --
Netherlands.................................. 23,028,022 4,636,382 18,391,640 --
United States................................ 59,920,772 59,920,772 -- --
Other Country Categories*.................... 471,840,217 -- 471,840,217 --
Money Market Funds.............................. 2,234,570 2,234,570 -- --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 660,946,441 $ 158,881,990 $ 502,064,451 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 45
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.6%
BERMUDA -- 0.7%
21,969,180 Concord New Energy Group
Ltd. (b) $ 1,961,360
--------------
BRAZIL -- 0.6%
1,393,107 Aeris Industria E Comercio De
Equipamentos Para Geracao
De Energia S.A. (c) 324,333
724,936 Omega Energia S.A. (c) 1,343,044
--------------
1,667,377
--------------
CANADA -- 14.1%
325,103 Boralex, Inc., Class A 9,898,623
593,917 Innergex Renewable Energy,
Inc. (d) 6,451,129
904,737 Northland Power, Inc. 22,680,347
140,869 TransAlta Renewables, Inc. (d) 1,296,641
--------------
40,326,740
--------------
CAYMAN ISLANDS -- 0.2%
1,605,680 China High Speed Transmission
Equipment Group Co.,
Ltd. (b) (c) 599,470
--------------
CHINA -- 7.0%
8,003,409 China Datang Corp. Renewable
Power Co., Ltd., Class H (b) 2,863,949
12,145,342 China Longyuan Power Group
Corp., Ltd., Class H (b) 13,855,581
2,257,418 China Suntien Green Energy
Corp., Ltd., Class H (b) 987,421
2,503,555 Xinjiang Goldwind Science &
Technology Co., Ltd.,
Class H (b) 2,143,540
--------------
19,850,491
--------------
DENMARK -- 15.8%
337,713 Cadeler A/S (b) (c) 1,374,549
251,304 Orsted A/S (b) (e) (f) 21,428,186
770,702 Vestas Wind Systems A/S (b) 22,461,660
--------------
45,264,395
--------------
FRANCE -- 2.9%
375,336 Engie S.A. (b) 5,939,605
77,177 Neoen S.A. (b) (e) (f) 2,433,394
--------------
8,372,999
--------------
GERMANY -- 7.9%
22,380 Energiekontor AG (b) 1,614,361
462,423 Nordex SE (b) (c) 6,796,591
122,495 PNE AG (b) 1,827,897
129,053 RWE AG (b) 5,552,966
74,267 SGL Carbon SE (b) (c) (d) 733,865
273,758 Siemens Energy AG (b) (c) (d) 6,036,796
--------------
22,562,476
--------------
GREECE -- 1.4%
189,581 Terna Energy S.A. (b) 4,038,944
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
ITALY -- 6.3%
976,711 Enel S.p.A. (b) $ 5,956,938
202,017 ERG S.p.A. (b) 6,129,844
142,785 Prysmian S.p.A. (b) 5,995,670
--------------
18,082,452
--------------
JAPAN -- 4.0%
109,100 Hitachi Ltd. (b) 5,996,211
962,810 Toray Industries, Inc. (b) 5,507,977
--------------
11,504,188
--------------
MARSHALL ISLANDS -- 0.3%
92,488 Eneti, Inc. 864,763
--------------
NORWAY -- 0.1%
300,647 Aker Horizons ASA (b) (c) (d) 268,918
--------------
PORTUGAL -- 2.1%
1,087,347 EDP - Energias de Portugal
S.A. (b) 5,924,887
--------------
SOUTH KOREA -- 2.1%
52,037 CS Bearing Co., Ltd. (b) (g) 442,552
85,877 CS Wind Corp. (b) 4,823,794
37,706 Dongkuk Structures &
Construction Co., Ltd.
(b) (c) 139,766
386,748 Unison Co., Ltd. (b) (c) 481,569
--------------
5,887,681
--------------
SPAIN -- 14.8%
29,161 Acciona S.A. (b) 5,850,874
1,070,206 EDP Renovaveis S.A. (b) 24,514,186
279,653 Endesa S.A. (b) 6,074,038
477,975 Iberdrola S.A. (b) 5,954,545
--------------
42,393,643
--------------
SWEDEN -- 3.3%
79,022 Eolus Vind AB, Class B (b) (d) 626,822
436,025 OX2 AB (b) (c) 3,249,728
288,107 SKF AB, Class B (b) (d) 5,674,820
--------------
9,551,370
--------------
SWITZERLAND -- 1.4%
25,781 BKW AG (b) 4,053,508
--------------
TAIWAN -- 0.7%
642,173 Century Iron & Steel Industrial
Co., Ltd. (b) 2,001,762
--------------
UNITED KINGDOM -- 0.9%
431,407 ReNew Energy Global PLC,
Class A (c) (d) 2,424,507
--------------
UNITED STATES -- 13.0%
107,418 Alliant Energy Corp. 5,736,121
37,022 American Superconductor
Corp. (c) 181,778
54,340 Arcosa, Inc. 3,429,397
98,814 Clearway Energy, Inc., Class C 3,095,843
65,013 General Electric Co. 6,215,243
75,493 Hexcel Corp. 5,152,397
77,536 NextEra Energy, Inc. 5,976,475
56,316 Owens Corning 5,395,073
Page 46 See Notes to Financial Statements
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
UNITED STATES (CONTINUED)
142,749 TPI Composites, Inc. (c) $ 1,862,874
--------------
37,045,201
--------------
TOTAL COMMON STOCKS
-- 99.6% 284,647,132
(Cost $304,384,067) --------------
MONEY MARKET FUNDS -- 0.2%
458,266 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class 4.65% (h) 458,266
(Cost $458,266) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 5.1%
$ 7,144,472 Bank of America Corp.,
4.80% (h), dated 03/31/23,
due 04/03/23, with a
maturity value of
$7,147,330. Collateralized
by U.S. Treasury Securities,
interest rates of 2.00% to
3.00%, due 11/15/41 to
08/15/48. The value of the
collateral including accrued
interest is $7,287,364. (i) 7,144,472
7,438,093 JPMorgan Chase & Co.,
4.80% (h), dated 03/31/23,
due 04/03/23, with a
maturity value of
$7,441,068. Collateralized
by U.S. Treasury Securities,
interest rates of 0.50% to
3.25%, due 11/15/25 to
08/31/27. The value of the
collateral including accrued
interest is $7,586,855. (i) 7,438,093
--------------
TOTAL REPURCHASE AGREEMENTS
-- 5.1% 14,582,565
(Cost $14,582,565) --------------
TOTAL INVESTMENTS -- 104.9% 299,687,963
(Cost $319,424,898)
NET OTHER ASSETS AND
LIABILITIES -- (4.9)% (13,892,052)
--------------
NET ASSETS -- 100.0% $ 285,795,911
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $202,318,544 or 70.8% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) Non-income producing security.
(d) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $13,803,300 and the
total value of the collateral held by the Fund is $14,582,565.
(e) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(f) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(g) Non-income producing security which makes payment-in-kind ("PIK")
distributions. There were no in-kind distributions received for the six
months ended March 31, 2023.
(h) Rate shown reflects yield as of March 31, 2023.
(i) This security serves as collateral for securities on loan.
See Notes to Financial Statements Page 47
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 13,803,300
Non-cash Collateral(2) (13,803,300)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 14,582,565
Non-cash Collateral(4) (14,582,565)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 33.8%
United States Dollar 18.5
Danish Krone 14.6
Canadian Dollar 13.5
Hong Kong Dollar 7.5
Japanese Yen 3.8
Swedish Krona 3.2
South Korean Won 2.0
Swiss Franc 1.3
New Taiwan Dollar 0.7
Brazilian Real 0.6
Norwegian Krone 0.5
------
Total 100.0%
======
Page 48 See Notes to Financial Statements
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Brazil....................................... $ 1,667,377 $ 1,667,377 $ -- $ --
Canada....................................... 40,326,740 40,326,740 -- --
Marshall Islands............................. 864,763 864,763 -- --
United Kingdom............................... 2,424,507 2,424,507 -- --
United States................................ 37,045,201 37,045,201 -- --
Other Country Categories*.................... 202,318,544 -- 202,318,544 --
Money Market Funds.............................. 458,266 458,266 -- --
Repurchase Agreements........................... 14,582,565 -- 14,582,565 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 299,687,963 $ 82,786,854 $ 216,901,109 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 49
FIRST TRUST ALERIAN U.S. NEXTGEN INFRASTRUCTURE ETF (RBLD)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS -- 99.6%
BUILDING PRODUCTS -- 11.3%
1,237 A.O. Smith Corp. $ 85,539
669 Allegion PLC 71,402
1,082 Builders FirstSource, Inc. (a) 96,060
314 Carlisle Cos., Inc. 70,986
1,679 Carrier Global Corp. 76,814
1,212 Fortune Brands Innovations,
Inc. 71,181
1,111 Johnson Controls International
PLC 66,904
301 Lennox International, Inc. 75,635
1,465 Masco Corp. 72,840
832 Owens Corning 79,706
421 Trane Technologies PLC 77,456
--------------
844,523
--------------
CONSTRUCTION & ENGINEERING
-- 4.1%
885 AECOM 74,623
514 Quanta Services, Inc. 85,653
225 Valmont Industries, Inc. 71,838
1,653 WillScot Mobile Mini Holdings
Corp. (a) 77,493
--------------
309,607
--------------
CONSTRUCTION MATERIALS -- 2.0%
216 Martin Marietta Materials, Inc. 76,693
420 Vulcan Materials Co. 72,055
--------------
148,748
--------------
ELECTRIC UTILITIES -- 15.6%
1,361 Alliant Energy Corp. 72,677
788 American Electric Power Co.,
Inc. 71,700
901 Constellation Energy Corp. 70,729
723 Duke Energy Corp. 69,748
1,110 Edison International 78,355
711 Entergy Corp. 76,603
1,188 Evergy, Inc. 72,611
892 Eversource Energy 69,808
1,751 Exelon Corp. 73,349
1,763 FirstEnergy Corp. 70,626
893 NextEra Energy, Inc. 68,832
2,329 NRG Energy, Inc. 79,861
4,757 PG&E Corp. (a) 76,921
2,473 PPL Corp. 68,725
1,080 Southern (The) Co. 75,146
1,056 Xcel Energy, Inc. 71,217
--------------
1,166,908
--------------
ELECTRICAL EQUIPMENT -- 5.1%
522 AMETEK, Inc. 75,862
461 Eaton Corp. PLC 78,988
775 Emerson Electric Co. 67,533
324 Hubbell, Inc. 78,832
270 Rockwell Automation, Inc. 79,232
--------------
380,447
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES
-- 2.5%
2,412 Baker Hughes Co. $ 69,610
1,801 Halliburton Co. 56,984
1,310 Schlumberger Ltd. 64,321
--------------
190,915
--------------
GAS UTILITIES -- 1.0%
653 Atmos Energy Corp. 73,371
--------------
GROUND TRANSPORTATION -- 2.7%
2,338 CSX Corp. 70,000
299 Norfolk Southern Corp. 63,388
354 Union Pacific Corp. 71,246
--------------
204,634
--------------
INDEPENDENT POWER AND RENEWABLE
ELECTRICITY PRODUCERS
-- 2.0%
2,744 AES (The) Corp. 66,075
3,348 Vistra Corp. 80,352
--------------
146,427
--------------
INDUSTRIAL CONGLOMERATES
-- 2.9%
587 3M Co. 61,700
963 General Electric Co. 92,063
352 Honeywell International, Inc. 67,274
--------------
221,037
--------------
IT SERVICES -- 8.1%
857 Akamai Technologies, Inc. (a) 67,103
1,747 Cloudflare, Inc., Class A (a) 107,720
1,005 GoDaddy, Inc., Class A (a) 78,108
399 MongoDB, Inc. (a) 93,015
1,154 Okta, Inc. (a) 99,521
534 Snowflake, Inc., Class A (a) 82,391
357 VeriSign, Inc. (a) 75,445
--------------
603,303
--------------
MACHINERY -- 17.2%
298 Caterpillar, Inc. 68,194
304 Cummins, Inc. 72,620
532 Dover Corp. 80,832
1,133 Fortive Corp. 77,237
1,085 Graco, Inc. 79,216
322 IDEX Corp. 74,392
327 Illinois Tool Works, Inc. 79,608
1,324 Ingersoll Rand, Inc. 77,030
483 Lincoln Electric Holdings, Inc. 81,675
314 Nordson Corp. 69,790
916 Otis Worldwide Corp. 77,310
1,123 PACCAR, Inc. 82,204
241 Parker-Hannifin Corp. 81,002
306 Snap-on, Inc. 75,548
881 Stanley Black & Decker, Inc. 70,991
733 Westinghouse Air Brake
Technologies Corp. 74,077
654 Xylem, Inc. 68,474
--------------
1,290,200
--------------
Page 50 See Notes to Financial Statements
FIRST TRUST ALERIAN U.S. NEXTGEN INFRASTRUCTURE ETF (RBLD)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (CONTINUED)
METALS & MINING -- 4.2%
1,684 Freeport-McMoRan, Inc. $ 68,893
488 Nucor Corp. 75,381
356 Reliance Steel & Aluminum Co. 91,400
688 Steel Dynamics, Inc. 77,785
--------------
313,459
--------------
MULTI-UTILITIES -- 9.7%
846 Ameren Corp. 73,086
2,445 CenterPoint Energy, Inc. 72,030
1,181 CMS Energy Corp. 72,490
779 Consolidated Edison, Inc. 74,527
1,208 Dominion Energy, Inc. 67,539
636 DTE Energy Co. 69,667
2,723 NiSource, Inc. 76,135
1,210 Public Service Enterprise Group,
Inc. 75,565
472 Sempra Energy 71,348
784 WEC Energy Group, Inc. 74,315
--------------
726,702
--------------
OIL, GAS & CONSUMABLE FUELS
-- 4.8%
495 Cheniere Energy, Inc. 78,012
4,022 Kinder Morgan, Inc. 70,425
1,071 ONEOK, Inc. 68,051
1,007 Targa Resources Corp. 73,461
2,305 Williams (The) Cos., Inc. 68,827
--------------
358,776
--------------
SPECIALIZED REITS -- 4.6%
327 American Tower Corp. 66,819
502 Crown Castle, Inc. 67,188
708 Digital Realty Trust, Inc. 69,604
105 Equinix, Inc. 75,709
248 SBA Communications Corp. 64,745
--------------
344,065
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
WATER UTILITIES -- 1.8%
477 American Water Works Co., Inc. $ 69,876
1,551 Essential Utilities, Inc. 67,701
--------------
137,577
--------------
TOTAL COMMON STOCKS
-- 99.6% 7,460,699
(Cost $7,255,207) --------------
WARRANTS -- 0.0%
CONSTRUCTION & ENGINEERING
-- 0.0%
298 Webuild S.p.A., expiring
7/5/23 (a) (b) (c) 3
(Cost $0) --------------
TOTAL INVESTMENTS -- 99.6% 7,460,702
(Cost $7,255,207)
NET OTHER ASSETS AND
LIABILITIES -- 0.4% 26,795
--------------
NET ASSETS -- 100.0% $ 7,487,497
==============
(a) Non-income producing security.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $3 or 0.0% of net assets.
(c) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks*.................................. $ 7,460,699 $ 7,460,699 $ -- $ --
Warrants*....................................... 3 -- 3 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 7,460,702 $ 7,460,699 $ 3 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 51
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.5%
AUSTRIA -- 0.1%
7,868 Verbund AG (b) $ 684,383
--------------
BELGIUM -- 1.1%
61,553 Elia Group S.A./N.V. (b) 8,128,500
--------------
BRAZIL -- 1.1%
471,835 Alupar Investimento S.A. 2,512,568
3,359 Centrais Eletricas Brasileiras
S.A., ADR 22,270
656,648 Energisa S.A. 5,221,106
--------------
7,755,944
--------------
CANADA -- 2.2%
31,831 Fortis, Inc. 1,353,083
510,933 Hydro One Ltd. (c) (d) 14,547,319
3,384 Stella-Jones, Inc. 129,676
--------------
16,030,078
--------------
CHINA -- 0.3%
63,643 BYD Co., Ltd., Class H (b) 1,872,132
--------------
DENMARK -- 0.5%
69,196 NKT A/S (b) (e) (f) 3,608,869
--------------
FRANCE -- 9.7%
122,186 Engie S.A. (b) 1,933,565
38,747 Nexans S.A. (b) 3,860,697
345,894 Schneider Electric SE (b) 57,807,408
219,377 SPIE S.A. (b) 6,367,393
--------------
69,969,063
--------------
GERMANY -- 2.2%
139,498 E. ON SE (b) 1,740,206
80,178 Infineon Technologies AG (b) 3,292,540
45,950 Siemens AG (b) 7,444,111
30,171 SMA Solar Technology
AG (b) (e) (f) 3,249,375
--------------
15,726,232
--------------
IRELAND -- 16.4%
318,990 Eaton Corp. PLC 54,655,747
889,678 Johnson Controls International
PLC 53,576,409
244,937 nVent Electric PLC 10,517,595
--------------
118,749,751
--------------
ITALY -- 5.4%
476,540 Enel S.p.A. (b) 2,906,407
410,167 Prysmian S.p.A. (b) 17,223,279
2,265,477 Terna - Rete Elettrica
Nazionale S.p.A. (b) 18,593,726
--------------
38,723,412
--------------
JAPAN -- 1.2%
5,035 GS Yuasa Corp. (b) 90,939
64,024 Hitachi Ltd. (b) 3,518,803
63,099 Meidensha Corp. (b) 918,375
16,825 NGK Insulators Ltd. (b) 223,108
161,970 Panasonic Holdings Corp. (b) 1,449,164
104,600 Renesas Electronics
Corp. (b) (f) 1,514,693
17,100 Takaoka Toko Co., Ltd. (b) 304,332
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
JAPAN (CONTINUED)
24,186 Toshiba Corp. (b) $ 812,156
--------------
8,831,570
--------------
JERSEY -- 3.7%
239,942 Aptiv PLC (f) 26,919,093
--------------
NETHERLANDS -- 0.8%
33,269 Alfen N.V. (b) (c) (d) (e) (f) 2,651,894
14,371 NXP Semiconductors N.V. 2,679,832
4,586 STMicroelectronics N.V. 245,305
--------------
5,577,031
--------------
PORTUGAL -- 0.4%
172,790 EDP - Energias de Portugal
S.A. (b) 941,522
569,369 REN - Redes Energeticas
Nacionais SGPS S.A. (b) 1,667,635
--------------
2,609,157
--------------
SOUTH KOREA -- 4.3%
277 Hyosung Heavy Industries
Corp. (b) (f) 14,251
18,868 LS Electric Co., Ltd. (b) 821,755
53,046 Samsung SDI Co., Ltd. (b) 30,132,191
--------------
30,968,197
--------------
SPAIN -- 2.2%
365,995 Iberdrola S.A. (b) 4,559,514
653,417 Red Electrica Corp., S.A. (b) 11,497,777
--------------
16,057,291
--------------
SWITZERLAND -- 8.3%
1,671,966 ABB Ltd. (b) 57,518,181
34,444 Landis+Gyr Group AG (b) 2,651,067
--------------
60,169,248
--------------
TAIWAN -- 0.1%
32,356 Advantech Co., Ltd. (b) 395,837
26,728 Chung-Hsin Electric & Machinery
Manufacturing Corp. (b) 83,428
--------------
479,265
--------------
UNITED KINGDOM -- 8.4%
4,398,038 National Grid PLC (b) 59,491,966
62,794 SSE PLC (b) 1,401,168
--------------
60,893,134
--------------
UNITED STATES -- 31.1%
51,281 Advanced Energy Industries,
Inc. 5,025,538
33,074 AES (The) Corp. 796,422
45,171 American Superconductor
Corp. (f) 221,790
33,394 Analog Devices, Inc. 6,585,965
2,720 Arcosa, Inc. 171,659
1,234 AZZ, Inc. 50,890
2,550 Belden, Inc. 221,263
256,877 Cisco Systems, Inc. 13,428,245
1,863 Digi International, Inc. (f) 62,746
37,722 Emerson Electric Co. 3,287,095
2,429 EnerSys 211,032
132,526 Enphase Energy, Inc. (f) 27,867,567
Page 52 See Notes to Financial Statements
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
UNITED STATES (CONTINUED)
1,276 ESCO Technologies, Inc. $ 121,794
63,606 Fluence Energy, Inc. (f) 1,288,022
4,084 Generac Holdings, Inc. (f) 441,113
65,441 General Electric Co. 6,256,160
44,109 Honeywell International, Inc. 8,430,112
73,358 Hubbell, Inc. 17,848,735
56,294 International Business Machines
Corp. 7,379,580
61,992 Itron, Inc. (f) 3,437,456
1,406 Littelfuse, Inc. 376,935
3,684 MasTec, Inc. (f) 347,917
22,541 MYR Group, Inc. (f) 2,840,391
7,378 National Instruments Corp. 386,681
60,089 NVIDIA Corp. 16,690,922
103,239 Oracle Corp. 9,592,968
4,359 Preformed Line Products Co. 558,126
69,929 QUALCOMM, Inc. 8,921,542
172,864 Quanta Services, Inc. 28,806,057
87,759 SolarEdge Technologies,
Inc. (f) 26,674,348
67,816 Tesla, Inc. (f) 14,069,107
56,236 Texas Instruments, Inc. 10,460,458
14,347 Trimble, Inc. (f) 752,070
1,295 Valmont Industries, Inc. 413,468
2,934 WESCO International, Inc. 453,420
20,338 Willdan Group, Inc. (f) 317,680
--------------
224,795,274
--------------
TOTAL COMMON STOCKS
-- 99.5% 718,547,624
(Cost $656,699,956) --------------
MONEY MARKET FUNDS -- 1.0%
7,487,934 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (g) (h) 7,487,934
(Cost $7,487,934) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.2%
$ 1,205,408 BNP Paribas S.A., 4.74% (g),
dated 03/31/23, due
04/03/23, with a maturity
value of $1,205,884.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $1,233,235. (h) 1,205,408
(Cost $1,205,408) --------------
DESCRIPTION VALUE
-------------------------------------------------------------
TOTAL INVESTMENTS -- 100.7% $ 727,240,966
(Cost $665,393,298)
NET OTHER ASSETS AND
LIABILITIES -- (0.7)% (4,724,927)
--------------
NET ASSETS -- 100.0% $ 722,516,039
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $321,372,347 or 44.5% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $8,367,568 and the
total value of the collateral held by the Fund is $8,693,342.
(f) Non-income producing security.
(g) Rate shown reflects yield as of March 31, 2023.
(h) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
See Notes to Financial Statements Page 53
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 8,367,568
Non-cash Collateral(2) (8,367,568)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 1,205,408
Non-cash Collateral(4) (1,205,408)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 52.5%
Euro 21.2
British Pound Sterling 8.4
Swiss Franc 8.3
South Korean Won 4.3
Canadian Dollar 2.2
Japanese Yen 1.2
Brazilian Real 1.1
Danish Krone 0.5
Hong Kong Dollar 0.2
New Taiwan Dollar 0.1
------
Total 100.0%
======
Page 54 See Notes to Financial Statements
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Brazil....................................... $ 7,755,944 $ 7,755,944 $ -- $ --
Canada....................................... 16,030,078 16,030,078 -- --
Ireland...................................... 118,749,751 118,749,751 -- --
Jersey....................................... 26,919,093 26,919,093 -- --
Netherlands.................................. 5,577,031 2,925,137 2,651,894 --
United States................................ 224,795,274 224,795,274 -- --
Other Country Categories*.................... 318,720,453 -- 318,720,453 --
Money Market Funds.............................. 7,487,934 7,487,934 -- --
Repurchase Agreements........................... 1,205,408 -- 1,205,408 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 727,240,966 $ 404,663,211 $ 322,577,755 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 55
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 98.8%
AUSTRALIA -- 15.3%
1,367,125 Alumina Ltd. (b) $ 1,340,103
468,966 BHP Group Ltd., ADR 29,737,134
919,299 Fortescue Metals Group Ltd. (b) 13,818,492
--------------
44,895,729
--------------
BERMUDA -- 0.4%
468,133 China Water Affairs Group
Ltd. (b) 382,238
891,852 Nine Dragons Paper Holdings
Ltd. (b) 667,702
--------------
1,049,940
--------------
BRAZIL -- 14.0%
1,195,468 Petroleo Brasileiro S.A., ADR 12,468,731
53,962 SLC Agricola S.A. 485,381
1,774,328 Vale S.A., ADR 27,998,896
--------------
40,953,008
--------------
CANADA -- 12.9%
121,810 Enerplus Corp. 1,755,722
165,825 Nutrien Ltd. 12,246,176
97,067 Peyto Exploration &
Development Corp. (c) 869,761
662,866 Suncor Energy, Inc. 20,579,991
32,318 West Fraser Timber Co., Ltd. 2,305,183
--------------
37,756,833
--------------
CHILE -- 0.1%
35,281 CAP S.A. 293,339
--------------
CHINA -- 3.2%
1,969,207 China Shenhua Energy Co., Ltd.,
Class H (b) 6,196,943
219,176 Shandong Chenming Paper
Holdings Ltd.,
Class H (b) (d) 68,752
844,185 Yankuang Energy Group Co.,
Ltd., Class H (b) (c) 3,022,559
--------------
9,288,254
--------------
COLOMBIA -- 4.3%
1,191,245 Ecopetrol S.A., ADR 12,579,547
--------------
INDIA -- 2.8%
1,220,982 Coal India Ltd. (b) 3,182,852
1,578,443 GAIL India Ltd. (b) 2,025,702
660,655 NMDC Ltd. (b) 899,740
656,392 Vedanta Ltd. (b) 2,198,847
--------------
8,307,141
--------------
INDONESIA -- 0.5%
7,607,355 Adaro Energy Indonesia Tbk
PT (b) 1,474,676
--------------
JAPAN -- 2.0%
45,600 Daio Paper Corp. (b) 356,626
528,900 Inpex Corp. (b) 5,597,098
--------------
5,953,724
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
LUXEMBOURG -- 0.3%
24,938 APERAM S.A. (b) $ 930,289
--------------
NORWAY -- 1.3%
89,725 Yara International ASA (b) 3,899,502
--------------
PORTUGAL -- 0.2%
124,811 Navigator (The) Co., S.A. (b) 446,202
--------------
SOUTH AFRICA -- 2.9%
61,879 African Rainbow Minerals
Ltd. (b) 804,787
203,892 Exxaro Resources Ltd. (b) 2,131,082
495,585 Impala Platinum Holdings
Ltd. (b) 4,561,534
32,717 Kumba Iron Ore Ltd. (b) 827,219
37,465 Royal Bafokeng Platinum Ltd. 301,656
--------------
8,626,278
--------------
SWEDEN -- 2.1%
156,633 Boliden AB (b) 6,153,203
--------------
TAIWAN -- 0.4%
435,159 Taiwan Fertilizer Co., Ltd. (b) 801,658
581,917 YFY, Inc. (b) 508,808
--------------
1,310,466
--------------
UNITED KINGDOM -- 13.3%
341,316 Ferrexpo PLC (b) 496,690
414,456 Rio Tinto PLC, ADR 28,431,682
137,166 Severn Trent PLC (b) 4,872,514
391,474 United Utilities Group PLC (b) 5,123,374
--------------
38,924,260
--------------
UNITED STATES -- 22.8%
18,457 Andersons (The), Inc. 762,643
168,750 Archer-Daniels-Midland Co. 13,442,625
32,220 California Water Service Group 1,875,204
113,782 CF Industries Holdings, Inc. 8,248,057
440,300 Coterra Energy, Inc. 10,804,962
72,732 FMC Corp. 8,882,759
202,386 International Paper Co. 7,298,039
15,662 SJW Group 1,192,348
162,940 Tyson Foods, Inc., Class A 9,665,601
147,637 Westrock Co. 4,498,500
--------------
66,670,738
--------------
TOTAL COMMON STOCKS
-- 98.8% 289,513,129
(Cost $307,940,819) --------------
MONEY MARKET FUNDS -- 1.0%
2,805,220 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (e) (f) 2,805,220
(Cost $2,805,220) --------------
Page 56 See Notes to Financial Statements
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.1%
$ 451,584 BNP Paribas S.A., 4.74% (e),
dated 03/31/23, due
04/03/23, with a maturity
value of $451,763.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $462,009. (f) $ 451,584
(Cost $451,584) --------------
TOTAL INVESTMENTS -- 99.9% 292,769,933
(Cost $311,197,623)
NET OTHER ASSETS AND
LIABILITIES -- 0.1% 277,548
--------------
NET ASSETS -- 100.0% $ 293,047,481
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $72,789,192 or 24.8% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $3,108,773 and the
total value of the collateral held by the Fund is $3,256,804.
(d) Non-income producing security.
(e) Rate shown reflects yield as of March 31, 2023.
(f) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 3,108,773
Non-cash Collateral(2) (3,108,773)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 451,584
Non-cash Collateral(4) (451,584)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
See Notes to Financial Statements Page 57
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 66.1%
Canadian Dollar 8.7
Australian Dollar 5.2
British Pound Sterling 3.6
Hong Kong Dollar 3.5
South African Rand 2.9
Indian Rupee 2.8
Swedish Krona 2.1
Japanese Yen 2.0
Norwegian Krone 1.3
Indonesian Rupiah 0.5
Euro 0.5
New Taiwan Dollar 0.5
Brazilian Real 0.2
Chilean Peso 0.1
------
Total 100.0%
======
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Australia.................................... $ 44,895,729 $ 29,737,134 $ 15,158,595 $ --
Brazil....................................... 40,953,008 40,953,008 -- --
Canada....................................... 37,756,833 37,756,833 -- --
Chile........................................ 293,339 293,339 -- --
Colombia..................................... 12,579,547 12,579,547 -- --
South Africa................................. 8,626,278 301,656 8,324,622 --
United Kingdom............................... 38,924,260 28,431,682 10,492,578 --
United States................................ 66,670,738 66,670,738 -- --
Other Country Categories*.................... 38,813,397 -- 38,813,397 --
Money Market Funds.............................. 2,805,220 2,805,220 -- --
Repurchase Agreements........................... 451,584 -- 451,584 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 292,769,933 $ 219,529,157 $ 73,240,776 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
Page 58 See Notes to Financial Statements
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.4%
AUSTRALIA -- 1.0%
66,073 Incitec Pivot Ltd. (b) $ 139,231
12,944 Nufarm Ltd. (b) 49,694
--------------
188,925
--------------
BELGIUM -- 0.5%
2,901 Tessenderlo Group S.A. (b) (c) 90,664
--------------
BERMUDA -- 2.6%
5,106 Bunge Ltd. 487,725
--------------
CANADA -- 4.2%
10,610 Nutrien Ltd. 783,562
--------------
CHILE -- 2.1%
4,864 Sociedad Quimica y Minera de
Chile S.A., ADR 394,276
--------------
FRANCE -- 0.2%
781 Vilmorin & Cie S.A. (b) 36,889
--------------
GERMANY -- 21.4%
29,860 BASF SE (b) 1,567,617
30,753 Bayer AG (b) 1,964,560
15,861 Evonik Industries AG (b) 333,703
6,514 K+S AG (b) 138,715
--------------
4,004,595
--------------
INDIA -- 7.2%
14,184 Chambal Fertilisers and
Chemicals Ltd. (b) 45,734
10,023 Coromandel International
Ltd. (b) 107,479
6,047 EID Parry India Ltd. (b) 34,538
4,499 Escorts Kubota Ltd. (b) 103,838
5,316 Gujarat Narmada Valley
Fertilizers & Chemicals
Ltd. (b) 33,024
42,410 Mahindra & Mahindra Ltd. (b) 599,314
17,018 Sumitomo Chemical India
Ltd. (b) 88,460
8,687 Tata Chemicals Ltd. (b) 103,030
25,588 UPL Ltd. (b) 223,871
--------------
1,339,288
--------------
ISRAEL -- 1.6%
43,856 ICL Group Ltd. (b) 297,149
--------------
JAPAN -- 6.7%
40,400 Kubota Corp. (b) 612,518
6,900 Mitsui Chemicals, Inc. (b) 178,162
4,800 Nissan Chemical Corp. (b) 218,002
1,700 Sakata Seed Corp. (b) 50,179
56,300 Sumitomo Chemical Co., Ltd. (b) 189,561
--------------
1,248,422
--------------
MALAYSIA -- 2.3%
272,501 Petronas Chemicals Group
Bhd (b) 437,907
--------------
MEXICO -- 0.8%
68,130 Orbia Advance Corp. SAB de CV 148,169
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
NETHERLANDS -- 5.0%
45,784 CNH Industrial N.V. $ 699,122
7,172 OCI N.V. (b) 243,131
--------------
942,253
--------------
QATAR -- 4.0%
206,154 Industries Qatar QSC (b) 738,731
--------------
RUSSIA -- 0.0%
1,918 PhosAgro PJSC (b) (d) (e) 0
--------------
SINGAPORE -- 3.7%
218,000 Wilmar International Ltd. (b) 690,648
--------------
SWITZERLAND -- 0.9%
349 Bucher Industries AG (b) 163,231
--------------
TURKEY -- 0.9%
11,375 Gubre Fabrikalari TAS (b) (c) 117,881
1,818 Turk Traktor ve Ziraat
Makineleri AS (b) 47,505
--------------
165,386
--------------
UNITED ARAB EMIRATES -- 1.6%
282,732 Fertiglobe PLC (b) 308,223
--------------
UNITED STATES -- 32.7%
934 AdvanSix, Inc. 35,744
2,550 AGCO Corp. 344,760
407 Alamo Group, Inc. 74,953
6,668 CF Industries Holdings, Inc. 483,363
1,401 Compass Minerals International,
Inc. 48,040
23,190 Corteva, Inc. 1,398,589
360 CVR Partners, L.P. (f) 32,101
4,473 Deere & Co. 1,846,812
4,261 FMC Corp. 520,396
375 Lindsay Corp. 56,674
11,461 Mosaic (The) Co. 525,831
1,906 Scotts Miracle-Gro (The) Co. 132,925
1,531 SiteOne Landscape Supply,
Inc. (c) 209,548
3,542 Toro (The) Co. 393,729
--------------
6,103,465
--------------
TOTAL INVESTMENTS -- 99.4% 18,569,508
(Cost $20,759,896)
NET OTHER ASSETS AND
LIABILITIES -- 0.6% 120,670
--------------
NET ASSETS -- 100.0% $ 18,690,178
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
See Notes to Financial Statements Page 59
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $9,953,189 or 53.3% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) Non-income producing security.
(d) This security's value was determined using significant unobservable inputs
(see Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(e) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
(f) Security is a Master Limited Partnership ("MLP").
ADR - American Depositary Receipt
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 41.4%
Euro 23.6
Indian Rupee 7.2
Japanese Yen 6.7
Canadian Dollar 4.2
Qatar Riyal 4.0
Singapore Dollar 3.7
Malaysian Ringgit 2.3
United Arab Emirates Dirham 1.7
Israeli Shekel 1.6
Australian Dollar 1.0
Turkish Lira 0.9
Swiss Franc 0.9
Mexican Peso 0.8
Russian Ruble 0.0*
------
Total 100.0%
======
* Investment is valued at $0.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Bermuda...................................... $ 487,725 $ 487,725 $ -- $ --
Canada....................................... 783,562 783,562 -- --
Chile........................................ 394,276 394,276 -- --
Mexico....................................... 148,169 148,169 -- --
Netherlands.................................. 942,253 699,122 243,131 --
Russia....................................... --* -- -- --*
United States................................ 6,103,465 6,103,465 -- --
Other Country Categories**................... 9,710,058 -- 9,710,058 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 18,569,508 $ 8,616,319 $ 9,953,189 $ --*
=============== =============== =============== ===============
</TABLE>
* Investment is valued at $0.
** See Portfolio of Investments for country breakout.
Level 3 investments are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments.
Level 3 investments values are based on unobservable and non-quantitative
inputs.
Page 60 See Notes to Financial Statements
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.8%
BRAZIL -- 21.2%
43,285 Ambev S.A., ADR $ 122,064
54,620 B3 S.A. - Brasil Bolsa Balcao 111,321
43,627 Banco Bradesco S.A., ADR 114,303
14,299 Banco do Brasil S.A. 110,421
16,844 BB Seguridade Participacoes S.A. 108,007
16,790 Centrais Eletricas Brasileiras
S.A. 110,146
11,135 Cia de Saneamento Basico do
Estado de Sao Paulo 111,076
21,133 Gerdau S.A. (Preference Shares) 105,489
128,340 Hapvida Participacoes e
Investimentos
S.A. (b) (c) (d) 66,595
22,947 Itau Unibanco Holding S.A., ADR 111,752
70,018 Itausa S.A. (Preference Shares) 113,555
30,028 JBS S.A. 105,456
10,385 Localiza Rent a Car S.A. 109,106
30,898 Lojas Renner S.A. 101,196
160,514 Magazine Luiza S.A. (d) 104,825
17,099 Petro Rio S.A. (d) 105,358
9,953 Petroleo Brasileiro S.A., ADR 103,810
22,554 Rede D'Or Sao Luiz S.A. (b) (c) 94,916
32,085 Rumo S.A. 119,327
31,767 Sendas Distribuidora S.A. 97,273
12,070 Suzano S.A. 99,233
6,755 Vale S.A., ADR 106,594
14,715 WEG S.A. 117,582
--------------
2,449,405
--------------
CAYMAN ISLANDS -- 21.2%
1,257 Alibaba Group Holding Ltd.,
ADR (d) 128,440
8,442 ANTA Sports Products Ltd. (e) 122,570
802 Baidu, Inc., ADR (d) 121,038
5,719 Bilibili, Inc., ADR (d) 134,397
15,800 JD Health International,
Inc. (b) (c) (d) (e) 117,157
2,484 JD.com, Inc., ADR 109,023
6,048 KE Holdings, Inc., ADR (d) 113,944
16,494 Kuaishou
Technology (b) (c) (d) (e) 126,828
4,675 Li Auto, Inc., ADR (d) (f) 116,641
13,174 Li Ning Co., Ltd. (e) 103,599
6,354 Meituan, Class B (b) (c) (d) (e) 115,276
1,422 NetEase, Inc., ADR 125,762
11,755 NIO, Inc., ADR (d) 123,545
21,900 NU Holdings Ltd., Class A (d) 104,244
1,258 PDD Holdings, Inc., ADR (d) 95,482
2,545 Tencent Holdings Ltd. (e) 124,372
3,105 Trip.com Group Ltd., ADR (d) 116,965
15,901 Wuxi Biologics Cayman,
Inc. (b) (c) (d) (e) 97,981
73,084 Xiaomi Corp.,
Class B (b) (c) (d) (e) 112,473
8,887 XP, Inc., Class A (d) 105,489
12,374 XPeng, Inc., ADR (d) (f) 137,475
--------------
2,452,701
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
CHINA -- 4.9%
4,186 BYD Co., Ltd., Class H (e) $ 123,136
180,351 China Construction Bank Corp.,
Class H (e) 116,722
20,181 China Merchants Bank Co., Ltd.,
Class H (e) 102,480
220,699 Industrial & Commercial Bank of
China Ltd., Class H (e) 117,288
16,483 Ping An Insurance (Group) Co.
of China Ltd., Class H (e) 106,632
--------------
566,258
--------------
INDIA -- 16.8%
4,195 Axis Bank Ltd., GDR (c) (e) 217,424
4,062 Dr. Reddy's Laboratories Ltd.,
ADR 231,250
3,138 HDFC Bank Ltd., ADR 209,210
10,264 ICICI Bank Ltd., ADR 221,497
11,832 Infosys Ltd., ADR 206,350
8,324 Larsen & Toubro Ltd.,
GDR (c) (e) 220,920
3,811 Reliance Industries Ltd.,
GDR (b) (e) 215,012
3,385 State Bank of India,
GDR (c) (e) 214,635
45,453 Wipro Ltd., ADR 204,084
--------------
1,940,382
--------------
JERSEY -- 2.0%
2,442 WNS (Holdings) Ltd., ADR (d) 227,521
--------------
MAURITIUS -- 3.1%
63,935 Azure Power Global Ltd. (d) (f) 159,198
8,189 MakeMyTrip Ltd. (d) 200,385
--------------
359,583
--------------
SOUTH KOREA -- 26.2%
1,006 Celltrion, Inc. (e) 116,231
8,983 Doosan Enerbility Co.,
Ltd. (d) (e) 117,964
878 Ecopro BM Co., Ltd. (e) 152,153
512 Ecopro Co., Ltd. (e) 197,259
3,217 Hana Financial Group, Inc. (e) 100,753
3,026 Hanwha Galleria Co., Ltd. (d) 4,951
2,683 Hanwha Solutions Corp. (d) (e) 110,671
687 Hyundai Mobis Co., Ltd. (e) 114,104
828 Hyundai Motor Co. (e) 117,802
2,341 Kakao Corp. 109,871
5,481 KakaoBank Corp. (e) (f) 102,441
2,847 KB Financial Group, Inc. (e) 103,979
1,940 Kia Corp. (e) 121,072
557 L&F Co., Ltd. (e) 135,035
215 LG Chem Ltd. (e) 118,077
1,313 LG Electronics, Inc. (e) 117,177
527 LG Innotek Co., Ltd. (e) 110,518
701 NAVER Corp. (e) 109,840
661 POSCO Chemical Co., Ltd. (e) 139,318
459 POSCO Holdings, Inc. (e) 129,861
1,014 Samsung Electro-Mechanics Co.,
Ltd. (e) 119,724
See Notes to Financial Statements Page 61
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SOUTH KOREA (CONTINUED)
2,410 Samsung Electronics Co.,
Ltd. (e) $ 119,177
210 Samsung SDI Co., Ltd. (e) 119,288
3,759 Shinhan Financial Group Co.,
Ltd. (e) 102,114
1,634 SK Hynix, Inc. (e) 111,823
974 SK Innovation Co., Ltd. (e) (g) 134,887
--------------
3,036,090
--------------
UNITED KINGDOM -- 2.4%
48,909 ReNew Energy Global PLC,
Class A (d) 274,868
--------------
UNITED STATES -- 2.0%
7,116 Coupang, Inc. (d) 113,856
1,879 Yum China Holdings, Inc. 119,110
--------------
232,966
--------------
TOTAL COMMON STOCKS
-- 99.8% 11,539,774
(Cost $11,985,762) --------------
RIGHTS (a) -- 0.0%
BRAZIL -- 0.0%
46 Localiza Rent a Car S.A.,
expiring 5/17/23 (d) (h) 119
(Cost $0) --------------
MONEY MARKET FUNDS -- 2.1%
241,529 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (i) (j) 241,529
(Cost $241,529) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.4%
$ 38,882 BNP Paribas S.A., 4.74% (i),
dated 03/31/23, due
04/03/23, with a maturity
value of $38,897.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $39,779. (j) 38,882
(Cost $38,882) --------------
TOTAL INVESTMENTS -- 102.3% 11,820,304
(Cost $12,266,173)
NET OTHER ASSETS AND
LIABILITIES -- (2.3)% (261,225)
--------------
NET ASSETS -- 100.0% $ 11,559,079
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(c) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(d) Non-income producing security.
(e) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $5,275,773 or 45.6% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(f) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $271,391 and the
total value of the collateral held by the Fund is $280,411.
(g) Non-income producing security which makes payment-in-kind ("PIK")
distributions. There were no in-kind distributions received for the six
months ended March 31, 2023. (h) Pursuant to procedures adopted by the
Trust's Board of Trustees, this security has been determined to be
illiquid by First Trust Advisors, L.P., the Fund's Advisor.
(i) Rate shown reflects yield as of March 31, 2023.
(j) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
Page 62 See Notes to Financial Statements
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 271,391
Non-cash Collateral(2) (271,391)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 38,882
Non-cash Collateral(4) (38,882)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 45.7%
South Korean Won 25.7
Brazilian Real 16.0
Hong Kong Dollar 12.6
------
Total 100.0%
======
See Notes to Financial Statements Page 63
FIRST TRUST BICK INDEX FUND (BICK)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Cayman Islands............................... $ 2,452,701 $ 1,532,445 $ 920,256 $ --
China........................................ 566,258 -- 566,258 --
India........................................ 1,940,382 1,072,391 867,991 --
South Korea.................................. 3,036,090 114,822 2,921,268 --
Other Country Categories*.................... 3,544,343 3,544,343 -- --
Rights*......................................... 119 119 -- --
Money Market Funds.............................. 241,529 241,529 -- --
Repurchase Agreements........................... 38,882 -- 38,882 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 11,820,304 $ 6,505,649 $ 5,314,655 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
Page 64 See Notes to Financial Statements
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.4%
AUSTRALIA -- 0.5%
818,924 Telstra Group Ltd. (b) $ 2,318,700
--------------
BRAZIL -- 0.5%
310,381 Telefonica Brasil S.A., ADR 2,349,584
--------------
CANADA -- 1.4%
47,385 BCE, Inc. 2,122,595
49,181 Rogers Communications, Inc.,
Class B 2,279,466
106,727 TELUS Corp. 2,118,746
--------------
6,520,807
--------------
CAYMAN ISLANDS -- 1.2%
3,659,818 Xiaomi Corp.,
Class B (b) (c) (d) (e) 5,632,279
--------------
CHINA -- 2.8%
48,099,550 China Tower Corp., Ltd.,
Class H (b) (c) (d) 5,821,492
2,298,364 ZTE Corp., Class H (b) 6,736,232
--------------
12,557,724
--------------
FINLAND -- 2.4%
97,485 Elisa OYJ (b) 5,879,484
1,059,524 Nokia OYJ, ADR 5,202,263
--------------
11,081,747
--------------
FRANCE -- 0.6%
227,272 Orange S.A. (b) 2,700,043
--------------
GERMANY -- 2.6%
108,587 Deutsche Telekom AG (b) 2,631,324
156,416 Infineon Technologies AG (b) 6,423,282
937,235 Telefonica Deutschland Holding
AG (b) 2,885,056
--------------
11,939,662
--------------
GUERNSEY -- 1.2%
58,417 Amdocs Ltd. 5,609,785
--------------
HONG KONG -- 1.6%
6,623,888 Lenovo Group Ltd. (b) 7,176,417
--------------
INDIA -- 5.9%
218,786 Bharti Airtel Ltd. (b) 1,995,220
388,553 HCL Technologies Ltd. (b) 5,158,268
265,144 Infosys Ltd., ADR 4,624,111
127,725 Tata Consultancy Services
Ltd. (b) 5,006,545
398,387 Tech Mahindra Ltd. (b) 5,370,522
1,053,066 Wipro Ltd., ADR 4,728,266
--------------
26,882,932
--------------
INDONESIA -- 0.6%
9,226,037 Telkom Indonesia Persero
Tbk PT (b) 2,505,266
--------------
ITALY -- 2.3%
517,237 Infrastrutture Wireless Italiane
S.p.A. (b) (c) (d) 6,795,656
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
ITALY (CONTINUED)
10,436,468 Telecom Italia S.p.A. (b) (e) $ 3,441,800
--------------
10,237,456
--------------
JAPAN -- 11.2%
38,832 Fujitsu Ltd. (b) 5,247,378
75,248 KDDI Corp. (b) 2,320,481
103,271 Kyocera Corp. (b) 5,387,231
537,565 Mitsubishi Electric Corp. (b) 6,423,974
150,659 NEC Corp. (b) 5,816,220
191,266 Nippon Telegraph & Telephone
Corp. (b) 5,715,552
555,659 Renesas Electronics
Corp. (b) (e) 8,046,394
481,098 SoftBank Corp. (b) 5,553,700
66,676 Sony Group Corp. (b) 6,073,076
--------------
50,584,006
--------------
MALAYSIA -- 0.5%
2,524,555 CelcomDigi Bhd (b) 2,486,404
--------------
MEXICO -- 0.6%
2,387,638 America Movil SAB de CV,
Series B 2,517,487
--------------
NETHERLANDS -- 3.4%
704,411 Koninklijke KPN N.V. (b) 2,489,095
30,276 NXP Semiconductors N.V. 5,645,717
135,172 STMicroelectronics N.V. (b) 7,198,280
--------------
15,333,092
--------------
NEW ZEALAND -- 0.5%
660,770 Spark New Zealand Ltd. (b) 2,093,454
--------------
NORWAY -- 0.6%
237,410 Telenor ASA (b) 2,783,672
--------------
PHILIPPINES -- 0.4%
56,210 Globe Telecom, Inc. (b) 1,934,906
--------------
QATAR -- 0.5%
886,042 Ooredoo QPSC (b) 2,288,282
--------------
RUSSIA -- 0.0%
755,018 Mobile TeleSystems PJSC,
ADR (b) (e) (f) (g) 0
--------------
SINGAPORE -- 0.5%
1,128,152 Singapore Telecommunications
Ltd. (b) 2,090,321
--------------
SOUTH AFRICA -- 0.9%
287,235 MTN Group Ltd. (b) 2,057,881
292,259 Vodacom Group Ltd. (b) 2,005,884
--------------
4,063,765
--------------
SOUTH KOREA -- 4.7%
154,935 KT Corp., ADR 1,756,963
76,204 LG Electronics, Inc. (b) 6,800,731
115,591 Samsung Electronics Co.,
Ltd. (b) 5,716,086
54,304 Samsung SDS Co., Ltd. (b) 4,856,398
58,031 SK Telecom Co., Ltd. (b) 2,153,073
--------------
21,283,251
--------------
See Notes to Financial Statements Page 65
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SPAIN -- 1.1%
64,225 Cellnex Telecom
S.A. (b) (c) (d) $ 2,497,570
612,231 Telefonica S.A. (b) 2,636,779
--------------
5,134,349
--------------
SWEDEN -- 2.0%
244,205 Tele2 AB, Class B (b) 2,430,590
804,239 Telefonaktiebolaget LM Ericsson,
Class B (b) (h) 4,714,309
807,625 Telia Co., AB (b) 2,050,773
--------------
9,195,672
--------------
SWITZERLAND -- 0.6%
4,066 Swisscom AG (b) 2,594,808
--------------
TAIWAN -- 10.2%
483,820 Advantech Co., Ltd. (b) 5,918,969
1,643,512 ASE Technology Holding Co.,
Ltd. (b) 6,099,177
611,359 Chunghwa Telecom Co., Ltd. (b) 2,403,189
541,325 Delta Electronics, Inc. (b) 5,370,831
1,005,355 Far EasTone Telecommunications
Co., Ltd. (b) 2,484,631
226,135 MediaTek, Inc. (b) 5,862,805
1,672,821 Taiwan Mobile Co., Ltd. (b) 5,550,537
64,257 Taiwan Semiconductor
Manufacturing Co., Ltd., ADR 5,977,186
3,751,066 United Microelectronics
Corp. (b) 6,564,113
--------------
46,231,438
--------------
THAILAND -- 0.6%
412,300 Advanced Info Service PCL (b) 2,557,531
--------------
UNITED ARAB EMIRATES -- 0.5%
341,055 Emirates Telecommunications
Group Co. PJSC (b) 2,049,213
--------------
UNITED KINGDOM -- 2.0%
3,775,223 BT Group PLC (b) 6,800,384
2,104,856 Vodafone Group PLC (b) 2,321,849
--------------
9,122,233
--------------
UNITED STATES -- 35.0%
73,667 Advanced Micro Devices,
Inc. (e) 7,220,103
24,463 American Tower Corp. 4,998,769
30,609 Analog Devices, Inc. 6,036,707
36,394 Apple, Inc. 6,001,371
40,513 Arista Networks, Inc. (e) 6,800,512
115,585 AT&T, Inc. 2,225,011
9,779 Broadcom, Inc. 6,273,620
100,088 Ciena Corp. (e) 5,256,622
105,977 Cisco Systems, Inc. 5,539,948
37,292 Crown Castle, Inc. 4,991,161
48,377 Digital Realty Trust, Inc. 4,755,943
7,605 Equinix, Inc. 5,483,509
34,159 F5, Inc. (e) 4,976,625
318,695 Hewlett Packard Enterprise Co. 5,076,811
182,551 Intel Corp. 5,963,941
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
35,135 International Business Machines
Corp. $ 4,605,847
159,984 Juniper Networks, Inc. 5,506,649
28,668 Keysight Technologies, Inc. (e) 4,629,309
124,495 Marvell Technology, Inc. 5,390,633
67,580 Microchip Technology, Inc. 5,661,852
94,055 Micron Technology, Inc. 5,675,279
19,244 Motorola Solutions, Inc. 5,506,286
30,232 NVIDIA Corp. 8,397,543
52,563 Qorvo, Inc. (e) 5,338,824
42,642 QUALCOMM, Inc. 5,440,266
17,948 SBA Communications Corp. 4,685,684
54,545 Skyworks Solutions, Inc. 6,435,219
15,371 T-Mobile US, Inc. (e) 2,226,336
59,571 Verizon Communications, Inc. 2,316,716
43,509 VMware, Inc., Class A (e) 5,432,099
--------------
158,849,195
--------------
TOTAL COMMON STOCKS
-- 99.4% 450,705,481
(Cost $455,546,948) --------------
MONEY MARKET FUNDS -- 0.9%
3,826,023 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (i) (j) 3,826,023
(Cost $3,826,023) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.1%
$ 615,913 BNP Paribas S.A., 4.74% (i),
dated 03/31/23, due
04/03/23, with a maturity
value of $616,157.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $630,132. (j) 615,913
(Cost $615,913) --------------
TOTAL INVESTMENTS -- 100.4% 455,147,417
(Cost $459,988,884)
NET OTHER ASSETS AND
LIABILITIES -- (0.4)% (1,825,081)
--------------
NET ASSETS -- 100.0% $ 453,322,336
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
Page 66 See Notes to Financial Statements
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $246,924,117 or 54.5% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Non-income producing security.
(f) This security's value was determined using significant unobservable inputs
(see Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(g) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
(h) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $4,275,510 and the
total value of the collateral held by the Fund is $4,441,936.
(i) Rate shown reflects yield as of March 31, 2023.
(j) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 4,275,510
Non-cash Collateral(2) (4,275,510)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 615,913
Non-cash Collateral(4) (615,913)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
See Notes to Financial Statements Page 67
FIRST TRUST INDXX NEXTG ETF (NXTG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 43.8%
Japanese Yen 11.1
Euro 10.0
New Taiwan Dollar 8.8
Hong Kong Dollar 5.6
South Korean Won 4.3
Indian Rupee 3.9
Swedish Krona 2.0
British Pound Sterling 2.0
Canadian Dollar 1.4
South African Rand 0.9
Norwegian Krone 0.6
Swiss Franc 0.6
Thai Baht 0.6
Mexican Peso 0.6
Indonesian Rupiah 0.5
Malaysian Ringgit 0.5
Qatar Riyal 0.5
Australian Dollar 0.5
New Zealand Dollar 0.5
Singapore Dollar 0.5
United Arab Emirates Dirham 0.4
Philippine Peso 0.4
Russian Ruble 0.0*
------
Total 100.0%
======
* Investment is valued at $0.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Brazil....................................... $ 2,349,584 $ 2,349,584 $ -- $ --
Canada....................................... 6,520,807 6,520,807 -- --
Finland...................................... 11,081,747 5,202,263 5,879,484 --
Guernsey..................................... 5,609,785 5,609,785 -- --
India........................................ 26,882,932 9,352,377 17,530,555 --
Mexico....................................... 2,517,487 2,517,487 -- --
Netherlands.................................. 15,333,092 5,645,717 9,687,375 --
Russia....................................... --* -- -- --*
South Korea.................................. 21,283,251 1,756,963 19,526,288 --
Taiwan....................................... 46,231,438 5,977,186 40,254,252 --
United States................................ 158,849,195 158,849,195 -- --
Other Country Categories**................... 154,046,163 -- 154,046,163 --
Money Market Funds.............................. 3,826,023 3,826,023 -- --
Repurchase Agreements........................... 615,913 -- 615,913 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 455,147,417 $ 207,607,387 $ 247,540,030 $ --*
=============== =============== =============== ===============
</TABLE>
* Investment is valued at $0.
** See Portfolio of Investments for country breakout.
Level 3 investments are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments.
Level 3 investments values are based on unobservable and non-quantitative
inputs.
Page 68 See Notes to Financial Statements
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.8%
AUSTRALIA -- 1.5%
20,371 Allkem Ltd. (b) (c) $ 163,194
17,317 IGO Ltd. (b) 148,495
234,123 Nickel Industries Ltd. (b) 142,049
62,189 Pilbara Minerals Ltd. (b) 165,448
--------------
619,186
--------------
AUSTRIA -- 0.4%
18,248 ams-OSRAM AG (b) (c) 142,201
--------------
BELGIUM -- 0.5%
1,600 Solvay S.A. (b) 182,987
--------------
CANADA -- 1.0%
10,190 Lithium Americas Corp. (c) 221,734
3,328 Magna International, Inc. 178,281
--------------
400,015
--------------
CAYMAN ISLANDS -- 4.0%
2,102 Ambarella, Inc. (c) 162,737
2,074 Baidu, Inc., ADR (c) 313,008
114,432 Geely Automobile Holdings
Ltd. (b) 147,460
25,768 Himax Technologies, Inc.,
ADR (d) 209,494
7,913 Li Auto, Inc., ADR (c) (d) 197,429
15,185 NIO, Inc., ADR (c) 159,594
17,737 XPeng, Inc., ADR (c) (d) 197,058
88,435 Yadea Group Holdings
Ltd. (b) (e) (f) 227,802
--------------
1,614,582
--------------
CHILE -- 0.4%
2,108 Sociedad Quimica y Minera de
Chile S.A., ADR 170,875
--------------
CHINA -- 2.0%
17,387 BYD Co., Ltd., Class H (b) 511,459
22,498 Ganfeng Lithium Group Co.,
Ltd., Class H (b) (e) (f) 140,193
22,400 Tianqi Lithium Corp.,
Class H (b) (c) 151,154
--------------
802,806
--------------
FRANCE -- 1.6%
3,860 Schneider Electric SE (b) 645,101
--------------
GERMANY -- 3.8%
2,746 Bayerische Motoren Werke
AG (b) 300,959
2,488 Continental AG (b) 186,425
9,503 Infineon Technologies AG (b) 390,245
6,287 Mercedes-Benz Group AG (b) 483,490
1,264 Wacker Chemie AG (b) 205,412
--------------
1,566,531
--------------
INDIA -- 0.5%
8,471 Tata Motors Ltd.,
ADR (b) (c) (g) 216,858
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
INDONESIA -- 0.4%
375,159 Vale Indonesia Tbk PT (b) (c) $ 166,699
--------------
JAPAN -- 6.0%
6,600 Aisin Corp. (b) (d) 181,913
3,500 Denso Corp. (b) 197,566
10,364 Honda Motor Co., Ltd. (b) 274,140
54,409 Nissan Motor Co., Ltd. (b) 205,916
20,700 Panasonic Holdings Corp. (b) 185,205
18,300 Renesas Electronics
Corp. (b) (c) 264,999
11,510 Subaru Corp. (b) 183,741
67,960 Toyota Motor Corp. (b) 967,438
--------------
2,460,918
--------------
JERSEY -- 0.5%
1,972 Aptiv PLC (c) 221,239
--------------
NETHERLANDS -- 3.5%
2,152 Alfen N.V. (b) (c) (e) (f) 171,537
954 Ferrari N.V. 258,477
1,893 NXP Semiconductors N.V. 352,997
15,896 Stellantis N.V. (b) 289,090
6,663 STMicroelectronics N.V. 356,404
7,107 Yandex N.V.,
Class A (b) (c) (g) (h) 0
--------------
1,428,505
--------------
SOUTH KOREA -- 8.7%
2,093 Ecopro BM Co., Ltd. (b) (d) 362,706
983 Hyundai Mobis Co., Ltd. (b) 163,266
1,258 Hyundai Motor Co. (b) 178,979
3,282 Kia Corp. (b) 204,823
349 LG Chem Ltd. (b) 191,669
3,585 Lotte Energy Materials Corp. (b) 190,715
2,719 LX Semicon Co., Ltd. (b) 236,006
33,148 Samsung Electronics Co.,
Ltd. (b) 1,639,201
358 Samsung SDI Co., Ltd. (b) 203,358
3,242 SK IE Technology Co.,
Ltd. (b) (c) (e) (f) 178,887
--------------
3,549,610
--------------
SWEDEN -- 0.6%
12,390 Volvo AB, Class B (b) (d) 255,316
--------------
TAIWAN -- 4.2%
18,552 Taiwan Semiconductor
Manufacturing Co., Ltd., ADR 1,725,707
--------------
UNITED KINGDOM -- 0.3%
30,447 Polestar Automotive Holding UK
PLC, Class A, ADR (c) (d) 115,394
--------------
UNITED STATES -- 59.9%
16,439 Adeia, Inc. 145,650
11,699 Advanced Micro Devices,
Inc. (c) 1,146,619
856 Albemarle Corp. 189,210
5,347 Allegro MicroSystems, Inc. (c) 256,603
17,711 Alphabet, Inc., Class A (c) 1,837,162
3,711 Analog Devices, Inc. 731,883
12,099 Apple, Inc. 1,995,125
13,773 Blink Charging Co. (c) (d) 119,136
See Notes to Financial Statements Page 69
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
UNITED STATES (CONTINUED)
4,021 BorgWarner, Inc. $ 197,471
8,292 Cerence, Inc. (c) 232,922
15,772 ChargePoint Holdings,
Inc. (c) (d) 165,133
2,128 Cirrus Logic, Inc. (c) 232,761
1,015 Cummins, Inc. 242,463
31,190 EVgo, Inc. (c) (d) 242,970
22,279 Fisker, Inc. (c) (d) 136,793
28,840 Ford Motor Co. 363,384
10,374 General Motors Co. 380,518
25,730 indie Semiconductor, Inc.,
Class A (c) (d) 271,452
30,177 Intel Corp. 985,883
1,305 Lear Corp. 182,034
7,558 Livent Corp. (c) 164,160
21,580 Lucid Group, Inc. (c) (d) 173,503
31,134 Luminar Technologies,
Inc. (c) (d) 202,060
6,213 Marvell Technology, Inc. 269,023
4,840 MaxLinear, Inc. (c) 170,416
3,942 Microchip Technology, Inc. 330,261
7,955 Micron Technology, Inc. 480,005
6,767 Microsoft Corp. 1,950,926
5,218 Mobileye Global, Inc.,
Class A (c) (d) 225,783
9,775 NVIDIA Corp. 2,715,202
3,151 ON Semiconductor Corp. (c) 259,390
3,750 PACCAR, Inc. 274,500
10,680 Plug Power, Inc. (c) 125,170
38,156 Proterra, Inc. (c) 57,997
1,800 Qorvo, Inc. (c) 182,826
8,184 QUALCOMM, Inc. 1,044,115
4,594 Rambus, Inc. (c) 235,488
10,200 Rivian Automotive, Inc.,
Class A (c) 157,896
1,188 Silicon Laboratories, Inc. (c) 208,007
1,749 SiTime Corp. (c) 248,760
1,770 Skyworks Solutions, Inc. 208,825
1,615 Synaptics, Inc. (c) 179,507
13,064 Tesla, Inc. (c) 2,710,257
9,062 Texas Instruments, Inc. 1,685,623
2,280 Wolfspeed, Inc. (c) 148,086
--------------
24,462,958
--------------
TOTAL COMMON STOCKS
-- 99.8% 40,747,488
(Cost $43,619,041) --------------
MONEY MARKET FUNDS -- 5.4%
2,187,362 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (i) (j) 2,187,362
(Cost $2,187,362) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.9%
$ 352,121 BNP Paribas S.A., 4.74% (i),
dated 03/31/23, due
04/03/23, with a maturity
value of $352,261.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $360,250. (j) $ 352,121
(Cost $352,121) --------------
TOTAL INVESTMENTS -- 106.1% 43,286,971
(Cost $46,158,524)
NET OTHER ASSETS AND
LIABILITIES -- (6.1)% (2,457,891)
--------------
NET ASSETS -- 100.0% $ 40,829,080
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $11,444,102 or 28.0% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) Non-income producing security.
(d) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $2,501,345 and the
total value of the collateral held by the Fund is $2,539,483.
(e) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(f) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
Page 70 See Notes to Financial Statements
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
(g) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
(h) This security's value was determined using significant unobservable inputs
(see Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(i) Rate shown reflects yield as of March 31, 2023.
(j) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 2,501,345
Non-cash Collateral(2) (2,501,345)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 352,121
Non-cash Collateral(4) (352,121)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
See Notes to Financial Statements Page 71
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 74.1%
South Korean Won 8.2
Euro 6.6
Japanese Yen 5.7
Hong Kong Dollar 2.7
Australian Dollar 1.4
Swedish Krona 0.6
Indonesian Rupiah 0.4
Swiss Franc 0.3
------
Total 100.0%
======
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Canada....................................... $ 400,015 $ 400,015 $ -- $ --
Cayman Islands............................... 1,614,582 1,239,320 375,262 --
Chile........................................ 170,875 170,875 -- --
Jersey....................................... 221,239 221,239 -- --
Netherlands.................................. 1,428,505 967,878 460,627 --*
Taiwan....................................... 1,725,707 1,725,707 -- --
United Kingdom............................... 115,394 115,394 -- --
United States................................ 24,462,958 24,462,958 -- --
Other Country Categories**................... 10,608,213 -- 10,608,213 --
Money Market Funds.............................. 2,187,362 2,187,362 -- --
Repurchase Agreements........................... 352,121 -- 352,121 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 43,286,971 $ 31,490,748 $ 11,796,223 $ --*
=============== =============== =============== ===============
</TABLE>
* Investment is valued at $0.
** See Portfolio of Investments for country breakout.
Level 3 investments are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments.
Level 3 investments values are based on unobservable and non-quantitative
inputs.
Page 72 See Notes to Financial Statements
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 100.0%
CANADA -- 2.8%
482,274 Open Text Corp. $ 18,591,663
1,209,087 Shopify, Inc., Class A (b) 57,963,631
--------------
76,555,294
--------------
GERMANY -- 1.3%
291,348 SAP SE, ADR (c) 36,870,089
--------------
ISRAEL -- 1.3%
366,301 Wix.com Ltd. (b) 36,556,840
--------------
NETHERLANDS -- 0.6%
280,931 Elastic N.V. (b) 16,265,905
--------------
UNITED STATES -- 94.0%
153,548 Adobe, Inc. (b) 59,172,793
913,533 Akamai Technologies, Inc. (b) 71,529,634
1,104,638 Alphabet, Inc., Class A (b) 114,584,100
1,055,754 Amazon.com, Inc. (b) 109,048,831
125,554 Appfolio, Inc., Class A (b) 15,628,962
800,029 Appian Corp., Class A (b) 35,505,287
3,684,582 AppLovin Corp., Class A (b) 58,032,166
717,259 Arista Networks, Inc. (b) 120,399,096
1,121,069 Asana, Inc., Class A (b) 23,688,188
302,695 Atlassian Corp., Class A (b) 51,812,303
297,730 Blackbaud, Inc. (b) 20,632,689
242,549 Blackline, Inc. (b) 16,287,165
497,169 Box, Inc., Class A (b) 13,319,158
1,369,734 Cisco Systems, Inc. 71,602,845
1,105,190 Cloudflare, Inc., Class A (b) 68,146,015
2,039,437 Confluent, Inc., Class A (b) 49,089,249
137,381 Crowdstrike Holdings, Inc.,
Class A (b) 18,856,916
216,683 Datadog, Inc., Class A (b) 15,744,187
1,579,402 DigitalOcean Holdings, Inc. (b) 61,865,176
270,262 DocuSign, Inc. (b) 15,756,275
812,776 Dropbox, Inc., Class A (b) 17,572,217
1,718,959 Eventbrite, Inc., Class A (b) 14,748,668
507,363 Everbridge, Inc. (b) 17,590,275
2,537,959 Fastly, Inc., Class A (b) 45,074,152
1,456,311 HashiCorp, Inc., Class A (b) 42,655,349
3,186,539 Hewlett Packard Enterprise Co. 50,761,566
128,578 HubSpot, Inc. (b) 55,127,817
769,401 International Business Machines
Corp. 100,860,777
40,721 Intuit, Inc. 18,154,643
23,230,928 Lumen Technologies, Inc. 61,561,959
398,861 Microsoft Corp. 114,991,626
395,680 MongoDB, Inc. (b) 92,240,922
770,594 NetApp, Inc. 49,202,427
3,521,547 Nutanix, Inc., Class A (b) 91,525,007
1,138,257 Oracle Corp. 105,766,840
88,021 Palo Alto Networks, Inc. (b) 17,581,315
57,360 Paycom Software, Inc. (b) 17,438,014
86,085 Paylocity Holding Corp. (b) 17,111,976
3,485,765 Pure Storage, Inc., Class A (b) 88,921,865
513,649 Q2 Holdings, Inc. (b) 12,646,038
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES (CONTINUED)
979,942 Qualtrics International, Inc.,
Class A (b) $ 17,472,366
140,336 Qualys, Inc. (b) 18,246,487
4,639,348 Rackspace Technology, Inc. (b) 8,721,974
1,505,504 RingCentral, Inc., Class A (b) 46,173,808
304,026 Salesforce, Inc. (b) 60,738,314
115,097 ServiceNow, Inc. (b) 53,487,878
376,660 Smartsheet, Inc., Class A (b) 18,004,348
107,402 Snowflake, Inc., Class A (b) 16,571,055
485,287 Splunk, Inc. (b) 46,529,318
271,902 Sprout Social, Inc., Class A (b) 16,553,394
708,270 Squarespace, Inc., Class A (b) 22,501,738
876,355 Toast, Inc., Class A (b) 15,555,301
296,294 Trade Desk (The), Inc.,
Class A (b) 18,047,268
740,096 Twilio, Inc., Class A (b) 49,312,596
100,089 Veeva Systems, Inc., Class A (b) 18,395,357
89,399 Workday, Inc., Class A (b) 18,464,469
557,644 Workiva, Inc. (b) 57,108,322
222,291 Zoom Video Communications,
Inc., Class A (b) 16,413,967
126,425 Zscaler, Inc. (b) 14,770,233
1,957,570 Zuora, Inc., Class A (b) 19,340,792
--------------
2,594,643,473
--------------
TOTAL COMMON STOCKS
-- 100.0% 2,760,891,601
(Cost $3,106,440,260) --------------
MONEY MARKET FUNDS -- 0.8%
21,955,034 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (d) (e) 21,955,034
(Cost $21,955,034) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.1%
$ 3,534,322 BNP Paribas S.A., 4.74% (d),
dated 03/31/23, due
04/03/23, with a maturity
value of $3,535,718.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $3,615,912. (e) 3,534,322
(Cost $3,534,322) --------------
TOTAL INVESTMENTS -- 100.9% 2,786,380,957
(Cost $3,131,929,616)
NET OTHER ASSETS AND
LIABILITIES -- (0.9)% (25,036,918)
--------------
NET ASSETS -- 100.0% $2,761,344,039
==============
See Notes to Financial Statements Page 73
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) Non-income producing security.
(c) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $25,062,721 and the
total value of the collateral held by the Fund is $25,489,356.
(d) Rate shown reflects yield as of March 31, 2023.
(e) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 25,062,721
Non-cash Collateral(2) (25,062,721)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 3,534,322
Non-cash Collateral(4) (3,534,322)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks*.................................. $ 2,760,891,601 $ 2,760,891,601 $ -- $ --
Money Market Funds.............................. 21,955,034 21,955,034 -- --
Repurchase Agreements........................... 3,534,322 -- 3,534,322 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 2,786,380,957 $ 2,782,846,635 $ 3,534,322 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
Page 74 See Notes to Financial Statements
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.0%
AUSTRALIA -- 1.6%
1,149,731 Lottery (The) Corp. (b) $ 3,954,335
--------------
AUSTRIA -- 0.5%
17,907 ANDRITZ AG (b) 1,211,668
--------------
BERMUDA -- 1.8%
63,915 Arch Capital Group Ltd. (c) 4,337,911
--------------
BRAZIL -- 0.4%
348,474 Sendas Distribuidora S.A. 1,067,055
--------------
CANADA -- 3.1%
39,909 Definity Financial Corp. 1,041,503
30,178 Intact Financial Corp. 4,318,926
71,071 Pembina Pipeline Corp. 2,302,248
--------------
7,662,677
--------------
CAYMAN ISLANDS -- 19.9%
234,575 Alibaba Group Holding Ltd.,
ADR (c) 23,968,873
393,008 China Resources Mixc Lifestyle
Services Ltd. (b) (d) (e) 2,066,336
108,804 Hygeia Healthcare Holdings Co.,
Ltd. (b) (c) (d) (e) (f) 775,828
54,538 MINISO Group Holding Ltd.,
ADR 967,504
29,260 New Oriental Education &
Technology Group, Inc.,
ADR (c) 1,129,729
214,616 PDD Holdings, Inc., ADR (c) 16,289,354
110,501 Trip.com Group Ltd., ADR (c) 4,162,573
--------------
49,360,197
--------------
DENMARK -- 8.9%
138,179 Novo Nordisk A/S, ADR 21,989,806
--------------
FINLAND -- 0.8%
61,172 TietoEVRY OYJ (b) 1,921,712
--------------
GERMANY -- 12.0%
106,276 Daimler Truck Holding
AG (b) (c) 3,586,727
168,172 Dr. Ing hc F Porsche AG
(Preference Shares) (b) (c) 21,584,845
27,120 Hensoldt AG (b) 977,631
156,395 Siemens Energy AG (b) (c) (f) 3,448,757
--------------
29,597,960
--------------
IRELAND -- 1.2%
71,177 nVent Electric PLC 3,056,340
--------------
ITALY -- 0.5%
45,576 Stevanato Group S.p.A. 1,180,418
--------------
JAPAN -- 10.0%
337,200 Renesas Electronics
Corp. (b) (c) 4,882,930
17,600 Socionext, Inc. (b) 1,298,731
718,617 SoftBank Corp. (b) 8,295,572
408,672 Takeda Pharmaceutical Co.,
Ltd., ADR (f) 6,734,914
100,500 TDK Corp. (b) 3,607,563
--------------
24,819,710
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
LUXEMBOURG -- 3.2%
745,389 Samsonite International
S.A. (b) (c) (d) (e) $ 2,311,268
41,630 Spotify Technology S.A. (c) 5,562,601
--------------
7,873,869
--------------
NETHERLANDS -- 11.1%
241,114 Prosus N.V. (b) 18,880,287
123,853 Technip Energies N.V. (b) 2,642,368
234,196 Universal Music Group N.V. (b) 5,930,981
--------------
27,453,636
--------------
SAUDI ARABIA -- 4.2%
60,265 Dr. Sulaiman Al Habib Medical
Services Group Co. (b) 4,691,112
41,322 Elm Co. (b) 4,883,337
29,291 Saudi Aramco Base Oil Co. (c) 869,280
--------------
10,443,729
--------------
SOUTH KOREA -- 6.3%
16,841 Ecopro BM Co., Ltd. (b) 2,918,454
28,095 LG Energy Solution Ltd. (b) (c) 12,658,290
--------------
15,576,744
--------------
SWEDEN -- 2.0%
107,617 Nordnet AB publ (b) 1,774,310
133,360 Swedish Orphan Biovitrum
AB (b) (c) 3,107,366
--------------
4,881,676
--------------
TAIWAN -- 0.9%
459,204 Pegatron Corp. (b) 1,053,714
72,537 Yageo Corp. (b) 1,264,474
--------------
2,318,188
--------------
THAILAND -- 2.7%
9,642,500 Asset World Corp. PCL (b) 1,637,429
779,000 Central Retail Corp.
PCL (b) (d) (e) 1,022,505
2,525,200 Gulf Energy Development
PCL (b) (e) 3,903,131
--------------
6,563,065
--------------
UNITED ARAB EMIRATES -- 1.8%
2,754,958 ADNOC Drilling, Co. PJSC (b) 2,964,892
1,033,109 Emaar Development PJSC (b) (c) 1,554,762
--------------
4,519,654
--------------
UNITED KINGDOM -- 3.1%
1,192,539 Haleon PLC (b) 4,737,261
428,954 Wise PLC, Class A (b) (c) 2,879,641
--------------
7,616,902
--------------
UNITED STATES -- 3.0%
9,667 SolarEdge Technologies, Inc. (c) 2,938,285
72,051 Yum China Holdings, Inc. 4,567,313
--------------
7,505,598
--------------
TOTAL COMMON STOCKS
-- 99.0% 244,912,850
(Cost $221,001,548) --------------
See Notes to Financial Statements Page 75
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
MONEY MARKET FUNDS -- 3.6%
8,906,337 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (g) (h) $ 8,906,337
(Cost $8,906,337) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.6%
$ 1,433,743 BNP Paribas S.A., 4.74% (g),
dated 03/31/23, due
04/03/23, with a maturity
value of $1,434,309.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $1,466,841. (h) 1,433,743
(Cost $1,433,743) --------------
TOTAL INVESTMENTS -- 103.2% 255,252,930
(Cost $231,341,628)
NET OTHER ASSETS AND
LIABILITIES -- (3.2)% (7,862,668)
--------------
NET ASSETS -- 100.0% $ 247,390,262
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $138,428,217 or 56.0% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) Non-income producing security.
(d) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(e) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(f) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $10,093,271 and the
total value of the collateral held by the Fund is $10,340,080.
(g) Rate shown reflects yield as of March 31, 2023.
(h) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
Page 76 See Notes to Financial Statements
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 10,093,271
Non-cash Collateral(2) (10,093,271)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 1,433,743
Non-cash Collateral(4) (1,433,743)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 42.0%
Euro 23.6
Japanese Yen 7.1
South Korean Won 6.1
Saudi Riyad 4.1
British Pound Sterling 3.0
Canadian Dollar 3.0
Thai Baht 2.6
Hong Kong Dollar 2.0
Swedish Krona 1.9
United Arab Emirates Dirham 1.8
Australian Dollar 1.5
New Taiwan Dollar 0.9
Brazilian Real 0.4
------
Total 100.0%
======
See Notes to Financial Statements Page 77
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Bermuda...................................... $ 4,337,911 $ 4,337,911 $ -- $ --
Brazil....................................... 1,067,055 1,067,055 -- --
Canada....................................... 7,662,677 7,662,677 -- --
Cayman Islands............................... 49,360,197 46,518,033 2,842,164 --
Denmark...................................... 21,989,806 21,989,806 -- --
Ireland...................................... 3,056,340 3,056,340 -- --
Italy........................................ 1,180,418 1,180,418 -- --
Japan........................................ 24,819,710 6,734,914 18,084,796 --
Luxembourg................................... 7,873,869 5,562,601 2,311,268 --
Saudi Arabia................................. 10,443,729 869,280 9,574,449 --
United States................................ 7,505,598 7,505,598 -- --
Other Country Categories*.................... 105,615,540 -- 105,615,540 --
Money Market Funds.............................. 8,906,337 8,906,337 -- --
Repurchase Agreements........................... 1,433,743 -- 1,433,743 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 255,252,930 $ 115,390,970 $ 139,861,960 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
Page 78 See Notes to Financial Statements
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 100.0%
CANADA -- 3.2%
4,049,253 Open Text Corp. $ 156,187,613
--------------
FRANCE -- 3.0%
996,440 Thales S.A. (b) 147,321,140
--------------
INDIA -- 5.8%
16,063,927 Infosys Ltd., ADR 280,154,887
--------------
ISRAEL -- 6.5%
1,129,157 Check Point Software
Technologies Ltd. (c) 146,790,410
964,973 CyberArk Software Ltd. (c) 142,796,705
1,150,628 Radware Ltd. (c) 24,784,527
--------------
314,371,642
--------------
JAPAN -- 3.0%
2,968,673 Trend Micro, Inc. (b) 145,644,461
--------------
SOUTH KOREA -- 0.2%
240,052 Ahnlab, Inc. (b) 11,484,907
--------------
UNITED KINGDOM -- 1.3%
15,191,794 Darktrace PLC (b) (c) (d) 48,265,599
10,008,283 NCC Group PLC 12,617,765
--------------
60,883,364
--------------
UNITED STATES -- 77.0%
2,026,204 A10 Networks, Inc. 31,385,900
1,924,229 Akamai Technologies, Inc. (c) 150,667,131
1,474,707 Booz Allen Hamilton Holding
Corp. 136,690,592
470,138 Broadcom, Inc. 301,612,332
5,770,307 Cisco Systems, Inc. 301,642,798
2,327,929 Cloudflare, Inc., Class A (c) 143,540,102
1,157,504 Crowdstrike Holdings, Inc.,
Class A (c) 158,878,999
977,056 F5, Inc. (c) 142,347,289
4,700,508 Fortinet, Inc. (c) 312,395,762
7,160,389 Gen Digital, Inc. 122,872,275
4,538,635 Juniper Networks, Inc. 156,219,817
1,439,160 Leidos Holdings, Inc. 132,489,070
2,036,550 NetScout Systems, Inc. (c) 58,347,157
1,959,592 Okta, Inc. (c) 168,995,214
1,039,952 OneSpan, Inc. (c) 18,199,160
1,483,243 Palo Alto Networks, Inc. (c) 296,262,957
1,112,119 Qualys, Inc. (c) 144,597,712
1,885,281 Rapid7, Inc. (c) 86,553,251
1,310,007 Science Applications
International Corp. 140,773,352
5,224,908 SentinelOne, Inc., Class A (c) 85,479,495
1,362,920 Splunk, Inc. (c) 130,676,770
3,158,473 Tenable Holdings, Inc. (c) 150,059,052
3,379,158 Varonis Systems, Inc. (c) 87,891,899
709,745 VeriSign, Inc. (c) 149,990,411
1,065,187 Zscaler, Inc. (c) 124,445,797
--------------
3,733,014,294
--------------
TOTAL COMMON STOCKS
-- 100.0% 4,849,062,308
(Cost $4,682,660,394) --------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
MONEY MARKET FUNDS -- 0.1%
5,502,556 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (e) (f) $ 5,502,556
(Cost $5,502,556) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.0%
$ 885,802 BNP Paribas S.A., 4.74% (e),
dated 03/31/23, due
04/03/23, with a maturity
value of $886,152.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $906,251. (f) 885,802
(Cost $885,802) --------------
TOTAL INVESTMENTS -- 100.1% 4,855,450,666
(Cost $4,689,048,752)
NET OTHER ASSETS AND
LIABILITIES -- (0.1)% (3,776,563)
--------------
NET ASSETS -- 100.0% $4,851,674,103
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $352,716,107 or 7.3% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) Non-income producing security.
(d) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $5,956,609 and the
total value of the collateral held by the Fund is $6,388,358.
(e) Rate shown reflects yield as of March 31, 2023.
(f) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
See Notes to Financial Statements Page 79
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 5,956,609
Non-cash Collateral(2) (5,956,609)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 885,802
Non-cash Collateral(4) (885,802)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
United States Dollar 89.3%
Canadian Dollar 3.2
Euro 3.0
Japanese Yen 3.0
British Pound Sterling 1.3
South Korean Won 0.2
------
Total 100.0%
======
Page 80 See Notes to Financial Statements
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
France....................................... $ 147,321,140 $ -- $ 147,321,140 $ --
Japan........................................ 145,644,461 -- 145,644,461 --
South Korea.................................. 11,484,907 -- 11,484,907 --
United Kingdom............................... 60,883,364 12,617,765 48,265,599 --
Other Country Categories*.................... 4,483,728,436 4,483,728,436 -- --
Money Market Funds.............................. 5,502,556 5,502,556 -- --
Repurchase Agreements........................... 885,802 -- 885,802 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 4,855,450,666 $ 4,501,848,757 $ 353,601,909 $ --
=============== =============== =============== ===============
</TABLE>
* See Portfolio of Investments for country breakout.
See Notes to Financial Statements Page 81
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.7%
AUSTRIA -- 3.1%
2,258 ANDRITZ AG (b) $ 152,786
298 BAWAG Group AG (b) (c) (d) 14,474
--------------
167,260
--------------
BELGIUM -- 2.1%
423 Azelis Group N.V. (b) 10,719
200 D'ieteren Group (b) 38,917
3,980 Euronav N.V. (b) 66,511
--------------
116,147
--------------
BERMUDA -- 4.4%
2,015 Arch Capital Group Ltd. (e) 136,758
6,202 AutoStore Holdings
Ltd. (b) (c) (d) (e) 13,389
2,232 Conduit Holdings Ltd. 13,492
13,753 Hafnia Ltd. (b) 78,883
--------------
242,522
--------------
CAYMAN ISLANDS -- 0.7%
286 MoonLake
Immunotherapeutics (e) 6,117
2,048 Opera Ltd., ADR 20,828
266 Patria Investments Ltd.,
Class A 3,937
3,510 Shelf Drilling
Ltd. (b) (c) (d) (e) 8,473
--------------
39,355
--------------
CYPRUS -- 0.0%
1,795 HeadHunter Group PLC,
ADR (b) (e) (f) (g) 0
--------------
DENMARK -- 10.8%
100 Better Collective A/S (b) (e) 1,944
2,681 Cadeler A/S (b) (e) 10,912
3,631 Novo Nordisk A/S, Class B (b) 576,681
--------------
589,537
--------------
FINLAND -- 2.0%
1,758 Kempower OYJ (b) (e) (h) 47,411
1,534 Puuilo OYJ (b) 11,170
1,607 TietoEVRY OYJ (b) 50,484
--------------
109,065
--------------
FRANCE -- 2.0%
346 La Francaise des Jeux
SAEM (b) (c) (d) 14,420
2,212 Verallia S.A. (b) (c) (d) 94,202
--------------
108,622
--------------
GERMANY -- 19.0%
439 BioNTech SE, ADR 54,686
4,466 Daimler Truck Holding
AG (b) (e) 150,724
4,422 Dr. Ing hc F Porsche AG
(Preference Shares) (b) (e) 567,563
291 Encavis AG (b) 4,999
950 Hensoldt AG (b) 34,246
760 Ionos SE (e) 12,215
6,573 Siemens Energy AG (b) (e) 144,945
1,687 TeamViewer SE (b) (c) (d) (e) 28,739
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
GERMANY (CONTINUED)
915 Vantage Towers AG (b) $ 33,588
72 Vitesco Technologies Group
AG (b) (e) 5,207
--------------
1,036,912
--------------
IRELAND -- 4.9%
858 Dole PLC 10,073
148 ICON PLC (e) 31,611
5,235 nVent Electric PLC 224,791
--------------
266,475
--------------
ISRAEL -- 0.4%
283 Global-e Online Ltd. (e) 9,121
81 Monday.com Ltd. (e) 11,563
--------------
20,684
--------------
ITALY -- 2.9%
362 Carel Industries
S.p.A. (b) (c) (d) 9,880
303 Eurogroup Laminations S.p.A. (e) 1,594
2,736 Industrie De Nora S.p.A. (b) (e) 54,967
174 Intercos S.p.A. (e) 2,512
1,466 Italgas S.p.A. (b) 8,942
315 Sanlorenzo S.p.A. (b) 13,688
2,394 Stevanato Group S.p.A. 62,005
1,087 Technoprobe S.p.A. (b) (e) 7,857
--------------
161,445
--------------
JERSEY -- 0.1%
717 Yellow Cake PLC (b) (c) (d) (e) 3,270
--------------
LUXEMBOURG -- 6.3%
1,912 Allegro.eu S.A. (b) (c) (d) (e) 13,055
72 Befesa S.A. (b) (c) (d) 3,272
253 FREYR Battery S.A. (e) 2,249
2,449 Spotify Technology S.A. (e) 327,235
--------------
345,811
--------------
NETHERLANDS -- 13.0%
674 Ariston Holding N.V. (b) 7,425
784 CTP N.V. (b) (c) (d) 10,117
4,392 Ermenegildo Zegna N.V. 59,907
4,687 Iveco Group N.V. (b) (e) 44,326
1,040 Pepco Group N.V. (b) (d) (e) 10,017
4,541 Prosus N.V. (b) 355,580
6,506 Technip Energies N.V. (b) 138,804
3,281 Universal Music Group N.V. (b) 83,091
--------------
709,267
--------------
NORWAY -- 2.3%
17,352 Elkem ASA (b) (c) (d) 58,966
1,510 Europris ASA (b) (c) (d) 10,486
4,141 Hoegh Autoliners ASA (b) 23,301
892 Kahoot! ASA (b) (e) 2,061
171 Norske Skog ASA (b) (c) (e) 947
2,532 Telenor ASA (b) 29,688
--------------
125,449
--------------
SPAIN -- 1.3%
447 Corp ACCIONA Energias
Renovables S.A. (b) 17,335
Page 82 See Notes to Financial Statements
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
SPAIN (CONTINUED)
331 Soltec Power Holdings
S.A. (b) (e) $ 2,186
48,028 Unicaja Banco S.A. (b) (c) (d) 51,636
--------------
71,157
--------------
SWEDEN -- 9.6%
4,539 Alleima AB (b) (e) 22,423
479 BioArctic AB (b) (c) (d) (e) 11,625
2,395 BoneSupport Holding
AB (b) (c) (d) (e) 19,255
275 Engcon AB (b) (e) 2,087
2,159 EQT AB (b) 44,103
915 Hemnet Group AB 15,393
9,045 Nordnet AB publ (b) 149,127
225 Olink Holding AB, ADR (e) 5,069
493 OX2 AB (b) (e) 3,674
9,808 Swedish Orphan Biovitrum
AB (b) (e) 228,532
5,390 Volvo Car AB, Class B (b) (e) 23,580
--------------
524,868
--------------
SWITZERLAND -- 2.0%
513 Accelleron Industries AG (b) (e) 12,147
1,134 On Holding AG, Class A (e) 35,188
57 Sensirion Holding
AG (b) (c) (d) (e) 6,263
692 SIG Group AG (b) 17,828
1,434 Softwareone Holding AG (b) 20,457
747 Sportradar Holding AG,
Class A (e) 8,688
181 Stadler Rail AG (b) 7,077
--------------
107,648
--------------
UNITED KINGDOM -- 10.5%
6,799 Airtel Africa PLC (b) (c) (d) 8,920
2,528 Aston Martin Lagonda Global
Holdings PLC (b) (c) (d) (e) 7,111
40,531 BP PLC (b) 256,176
1,532 Finablr PLC (b) (c) (e) (f) (g) 0
857 Frasers Group PLC (b) (e) 8,220
16,706 Haleon PLC (b) 66,363
87 Immunocore Holdings PLC,
ADR (e) 4,301
12,809 M&G PLC (b) 31,395
17,501 NatWest Group PLC (b) 57,106
980 Network International Holdings
PLC (b) (c) (d) (e) 2,981
4,559 Rentokil Initial PLC (b) 33,320
2,469 Virgin Money UK PLC (b) 4,462
433 Watches of Switzerland Group
PLC (b) (c) (e) 4,367
12,877 Wise PLC, Class A (b) (e) 86,446
--------------
571,168
--------------
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
UNITED STATES -- 2.2%
1,769 Soho House & Co., Inc. (e) $ 11,569
356 SolarEdge Technologies,
Inc. (e) 108,206
--------------
119,775
--------------
VIRGIN ISLANDS -- 0.1%
110 Establishment Labs Holdings,
Inc. (e) 7,451
--------------
TOTAL COMMON STOCKS
-- 99.7% 5,443,888
(Cost $4,817,158) --------------
MONEY MARKET FUNDS -- 0.6%
32,577 Goldman Sachs Financial Square
Treasury Obligations Fund -
Institutional Class -
4.69% (i) (j) 32,577
(Cost $32,577) --------------
PRINCIPAL
VALUE DESCRIPTION VALUE
-------------------------------------------------------------
REPURCHASE AGREEMENTS -- 0.1%
$ 5,244 BNP Paribas S.A., 4.74% (i),
dated 03/31/23, due
04/03/23, with a maturity
value of $5,246.
Collateralized by U.S.
Treasury Securities,
interest rates of 1.50% to
2.13%, due 05/15/25 to
11/30/28. The value of the
collateral including accrued
interest is $5,365. (j) 5,244
(Cost $5,244) --------------
TOTAL INVESTMENTS -- 100.4% 5,481,709
(Cost $4,854,979)
NET OTHER ASSETS AND
LIABILITIES -- (0.4)% (19,054)
--------------
NET ASSETS -- 100.0% $ 5,462,655
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $4,257,329 or 77.9% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this
See Notes to Financial Statements Page 83
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
threshold is not exceeded, these securities are typically valued at the
last sale price on the exchange on which they are principally traded.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) Non-income producing security.
(f) This security's value was determined using significant unobservable inputs
(see Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(g) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
(h) All or a portion of this security is on loan (see Note 2E - Securities
Lending in the Notes to Financial Statements). The remaining contractual
maturity of all of the securities lending transactions is overnight and
continuous. The aggregate value of such securities is $35,815 and the
total value of the collateral held by the Fund is $37,821.
(i) Rate shown reflects yield as of March 31, 2023.
(j) This security serves as collateral for securities on loan.
ADR - American Depositary Receipt
---------------------------------
OFFSETTING ASSETS AND LIABILITIES
-------------------------------------------------------------
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset, and to
disclose instruments and transactions subject to master netting or similar
agreements (see Note 2C - Offsetting on the Statements of Assets and Liabilities
in the Notes to Financial Statements).
The Fund's loaned securities were all subject to an enforceable Securities
Lending Agency Agreement. Securities lent in accordance with the Securities
Lending Agency Agreement on a gross basis were as follows:
SECURITIES LENDING AGENCY AGREEMENT
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(1) $ 35,815
Non-cash Collateral(2) (35,815)
--------------
Net Amount $ --
==============
(1) The amount presented on the Statements of Assets and Liabilities, which is
included in "Investments, at value," is not offset and is shown on a gross
basis.
(2) At March 31, 2023, the value of the collateral received from each borrower
exceeded the value of the related securities loaned. This amount is
disclosed on the Portfolio of Investments.
The Fund's investments in repurchase agreements were all subject to an
enforceable Master Repurchase Agreement. Repurchase Agreements on a gross basis
were as follows:
REPURCHASE AGREEMENTS
-------------------------------------------------------------
Total gross amount presented on the
Statements of Assets and Liabilities(3) $ 5,244
Non-cash Collateral(4) (5,244)
--------------
Net Amount $ --
==============
(3) The amount is included in "Investments, at value" on the Statements of
Assets and Liabilities.
(4) At March 31, 2023, the value of the collateral received from each seller
exceeded the value of the repurchase agreements.
Page 84 See Notes to Financial Statements
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Euro 41.9%
United States Dollar 21.5
British Pound Sterling 10.7
Danish Krone 10.5
Swedish Krona 9.5
Norwegian Krone 4.3
Swiss Franc 1.2
Polish Zloty 0.4
------
Total 100.0%
======
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Bermuda...................................... $ 242,522 $ 150,250 $ 92,272 $ --
Cayman Islands............................... 39,355 30,882 8,473 --
Cyprus....................................... --* -- -- --*
Germany...................................... 1,036,912 66,901 970,011 --
Ireland...................................... 266,475 266,475 -- --
Israel....................................... 20,684 20,684 -- --
Italy........................................ 161,445 66,111 95,334 --
Luxembourg................................... 345,811 329,484 16,327 --
Netherlands.................................. 709,267 59,907 649,360 --
Sweden....................................... 524,868 20,462 504,406 --
Switzerland.................................. 107,648 43,876 63,772 --
United Kingdom............................... 571,168 4,301 566,867 --*
United States................................ 119,775 119,775 -- --
Virgin Islands............................... 7,451 7,451 -- --
Other Country Categories**................... 1,290,507 -- 1,290,507 --
Money Market Funds.............................. 32,577 32,577 -- --
Repurchase Agreements........................... 5,244 -- 5,244 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 5,481,709 $ 1,219,136 $ 4,262,573 $ --*
=============== =============== =============== ===============
</TABLE>
* Investment is valued at $0.
** See Portfolio of Investments for country breakout.
Level 3 investments are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments.
Level 3 investments values are based on unobservable and non-quantitative
inputs.
See Notes to Financial Statements Page 85
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) -- 99.5%
AUSTRALIA -- 2.4%
12,350 carsales.com Ltd. (b) $ 184,571
1,691 REA Group Ltd. (b) 157,674
11,638 SEEK Ltd. (b) 188,129
5,718 WiseTech Global Ltd. (b) 251,899
--------------
782,273
--------------
CANADA -- 6.4%
2,783 Descartes Systems Group (The),
Inc. (c) 224,617
39,230 Shopify, Inc., Class A (c) 1,880,950
--------------
2,105,567
--------------
CAYMAN ISLANDS -- 51.7%
273,200 Alibaba Group Holding
Ltd. (b) (c) 3,460,214
74,450 Baidu, Inc., Class A (b) (c) 1,402,733
34,445 JD Health International,
Inc. (b) (c) (d) (e) 255,409
78,850 JD.com, Inc., Class A (b) 1,721,784
64,286 Kuaishou
Technology (b) (c) (d) (e) 494,316
154,802 Meituan, Class B (b) (c) (d) (e) 2,808,451
60,100 NetEase, Inc. (b) 1,060,938
17,838 PDD Holdings, Inc., ADR (c) 1,353,904
11,855 Sea Ltd., ADR (c) 1,026,050
68,644 Tencent Holdings Ltd. (b) 3,354,586
--------------
16,938,385
--------------
GERMANY -- 2.1%
6,332 Delivery Hero SE (b) (c) (d) (e) 216,016
2,631 Scout24 SE (b) (d) (e) 156,490
7,349 Zalando SE (b) (c) (d) (e) 308,002
--------------
680,508
--------------
INDONESIA -- 0.7%
29,920,454 GoTo Gojek Tokopedia Tbk
PT (b) (c) 217,822
--------------
IRELAND -- 2.8%
5,027 Flutter Entertainment
PLC (b) (c) 914,774
--------------
ISLE OF MAN -- 0.9%
19,320 Entain PLC (b) 300,041
--------------
ISRAEL -- 0.6%
1,878 Wix.com Ltd. (c) 187,424
--------------
JAPAN -- 3.7%
13,600 CyberAgent, Inc. (b) 115,231
14,072 M3, Inc. (b) 354,179
14,782 Nexon Co., Ltd. (b) 352,976
30,273 Rakuten Group, Inc. (b) 141,187
87,676 Z Holdings Corp. (b) 248,601
--------------
1,212,174
--------------
LUXEMBOURG -- 1.9%
4,629 Spotify Technology S.A. (c) 618,527
--------------
NETHERLANDS -- 13.9%
976 Adyen N.V. (b) (c) (d) (e) 1,555,193
38,131 Prosus N.V. (b) 2,985,825
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
NETHERLANDS (CONTINUED)
15,088 Yandex N.V.,
Class A (b) (c) (f) (g) $ 0
--------------
4,541,018
--------------
NEW ZEALAND -- 0.8%
4,583 Xero Ltd. (b) (c) 277,965
--------------
SOUTH AFRICA -- 4.0%
7,144 Naspers Ltd., Class N (b) 1,323,743
--------------
SOUTH KOREA -- 4.3%
10,232 Kakao Corp. 480,221
4,898 NAVER Corp. (b) 767,473
519 NCSoft Corp. (b) 148,730
--------------
1,396,424
--------------
UNITED KINGDOM -- 1.7%
31,792 Auto Trader Group
PLC (b) (d) (e) 242,498
13,699 IG Group Holdings PLC (b) 118,215
28,726 Rightmove PLC (b) 199,951
--------------
560,664
--------------
UNITED STATES -- 1.6%
33,502 Coupang, Inc. (c) 536,032
--------------
TOTAL INVESTMENTS -- 99.5% 32,593,341
(Cost $43,020,587)
NET OTHER ASSETS AND
LIABILITIES -- 0.5% 154,850
--------------
NET ASSETS -- 100.0% $ 32,748,191
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $26,285,616 or 80.3% of net assets. Certain of these
securities are fair valued using a factor provided by a third-party
pricing service due to the change in value between the foreign markets'
close and the New York Stock Exchange close exceeding a certain threshold.
On days when this threshold is not exceeded, these securities are
typically valued at the last sale price on the exchange on which they are
principally traded.
(c) Non-income producing security.
(d) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely
Page 86 See Notes to Financial Statements
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
without any additional registration. As such, it does not require the
additional disclosure required of restricted securities.
(e) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(f) This security's value was determined using significant unobservable inputs
(see Note 2A - Portfolio Valuation in the Notes to Financial Statements).
(g) Pursuant to procedures adopted by the Trust's Board of Trustees, this
security has been determined to be illiquid by First Trust Advisors, L.P.,
the Fund's Advisor.
ADR - American Depositary Receipt
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-------------------------------------------------------------
Hong Kong Dollar 44.7%
Euro 18.8
United States Dollar 11.4
Canadian Dollar 6.5
South Korean Won 4.3
South African Rand 4.1
Japanese Yen 3.7
Australian Dollar 3.2
British Pound Sterling 2.6
Indonesian Rupiah 0.7
------
Total 100.0%
======
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Common Stocks:
Canada....................................... $ 2,105,567 $ 2,105,567 $ -- $ --
Cayman Islands............................... 16,938,385 2,379,954 14,558,431 --
Israel....................................... 187,424 187,424 -- --
Luxembourg................................... 618,527 618,527 -- --
Netherlands.................................. 4,541,018 -- 4,541,018 --*
South Korea.................................. 1,396,424 480,221 916,203 --
United States................................ 536,032 536,032 -- --
Other Country Categories**................... 6,269,964 -- 6,269,964 --
--------------- --------------- --------------- ---------------
Total Investments............................... $ 32,593,341 $ 6,307,725 $ 26,285,616 $ --*
=============== =============== =============== ===============
</TABLE>
* Investment is valued at $0.
** See Portfolio of Investments for country breakout.
Level 3 investments are fair valued by the Advisor's Pricing Committee and are
footnoted in the Portfolio of Investments.
Level 3 investments values are based on unobservable and non-quantitative
inputs.
See Notes to Financial Statements Page 87
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST
STOXX(R) ALERIAN DOW JONES
EUROPEAN DISRUPTIVE GLOBAL SELECT
SELECT DIVIDEND TECHNOLOGY DIVIDEND
INDEX FUND REAL ESTATE ETF INDEX FUND
(FDD) (DTRE) (FGD)
------------------ ------------------ ------------------
ASSETS:
<S> <C> <C> <C>
Investments, at value............................................ $ 184,911,977 $ 25,787,691 $ 660,946,441
Cash............................................................. -- 3 --
Foreign currency, at value....................................... 2,681 3,116 2,392,260
Receivables:
Dividends..................................................... 3,487,756 138,247 9,295,704
Investment securities sold.................................... 3,413,979 -- --
Reclaims...................................................... 2,135,789 11,723 1,674,097
Capital shares sold........................................... -- -- --
Securities lending income..................................... -- -- --
Prepaid expenses................................................. 5,109 -- 6,898
---------------- ---------------- ----------------
Total Assets.................................................. 193,957,291 25,940,780 674,315,400
---------------- ---------------- ----------------
LIABILITIES:
Due to custodian................................................. 5,191 -- --
Due to custodian foreign currency................................ -- -- --
Payables:
Investment securities purchased............................... 6,200,879 -- --
Investment advisory fees...................................... 62,284 12,895 227,472
Audit and tax fees............................................ 46,739 -- 50,285
Shareholder reporting fees.................................... 18,370 -- 26,375
Licensing fees................................................ 18,130 -- 88,993
Trustees' fees................................................ 1,840 -- 1,887
Capital shares purchased...................................... -- -- --
Foreign capital gains tax..................................... -- -- --
Collateral for securities on loan............................. -- -- --
Other liabilities................................................ 44,751 60,486 125,826
---------------- ---------------- ----------------
Total Liabilities............................................. 6,398,184 73,381 520,838
---------------- ---------------- ----------------
NET ASSETS....................................................... $ 187,559,107 $ 25,867,399 $ 673,794,562
================ ================ ================
NET ASSETS CONSIST OF:
Paid-in capital.................................................. $ 278,697,545 $ 32,033,124 $ 927,177,541
Par value........................................................ 161,033 6,416 304,500
Accumulated distributable earnings (loss)........................ (91,299,471) (6,172,141) (253,687,479)
---------------- ---------------- ----------------
NET ASSETS....................................................... $ 187,559,107 $ 25,867,399 $ 673,794,562
================ ================ ================
NET ASSET VALUE, per share....................................... $ 11.65 $ 40.32 $ 22.13
================ ================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share)........................ 16,103,334 641,608 30,450,002
================ ================ ================
Investments, at cost............................................. $ 190,752,470 $ 24,312,586 $ 696,551,592
================ ================ ================
Foreign currency, at cost (proceeds)............................. $ 2,669 $ 3,079 $ 2,393,621
================ ================ ================
Securities on loan, at value..................................... $ -- $ -- $ --
================ ================ ================
</TABLE>
Page 88 See Notes to Financial Statements
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
FIRST TRUST ALERIAN NASDAQ(R) CLEAN FIRST TRUST FIRST TRUST
GLOBAL U.S. NEXTGEN EDGE(R) SMART GRID INDXX GLOBAL INDXX GLOBAL
WIND ENERGY INFRASTRUCTURE INFRASTRUCTURE NATURAL RESOURCES AGRICULTURE
ETF ETF INDEX FUND INCOME ETF ETF
(FAN) (RBLD) (GRID) (FTRI) (FTAG)
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
$ 299,687,963 $ 7,460,702 $ 727,240,966 $ 292,769,933 $ 18,569,508
-- 23,572 2,970,045 2,392,719 --
16,548 -- 202,061 61 102,011
300,416 6,099 411,703 1,257,624 14,587
-- -- -- 1,305,385 57,681
613,323 7,151 975,409 98,174 6,170
-- -- 5,019 -- 1,789
8,450 -- 8,951 2,103 --
5,602 -- 5,869 -- --
---------------- ---------------- ---------------- ---------------- ----------------
300,632,302 7,497,524 731,820,023 297,825,999 18,751,746
---------------- ---------------- ---------------- ---------------- ----------------
-- -- -- -- 39,178
-- -- -- -- --
-- -- -- -- --
67,423 4,037 240,906 177,563 12,381
21,919 -- 24,419 -- --
32,009 -- 35,729 -- --
71,597 -- 154,359 -- --
1,843 -- 1,869 -- --
-- -- -- 1,321,434 --
-- -- -- 22,717 10,009
14,582,565 -- 8,693,342 3,256,804 --
59,035 5,990 153,360 -- --
---------------- ---------------- ---------------- ---------------- ----------------
14,836,391 10,027 9,303,984 4,778,518 61,568
---------------- ---------------- ---------------- ---------------- ----------------
$ 285,795,911 $ 7,487,497 $ 722,516,039 $ 293,047,481 $ 18,690,178
================ ================ ================ ================ ================
$ 380,389,694 $ 16,633,238 $ 703,575,411 $ 393,941,157 $ 41,688,552
159,500 1,500 74,000 220,500 6,399
(94,753,283) (9,147,241) 18,866,628 (101,114,176) (23,004,773)
---------------- ---------------- ---------------- ---------------- ----------------
$ 285,795,911 $ 7,487,497 $ 722,516,039 $ 293,047,481 $ 18,690,178
================ ================ ================ ================ ================
$ 17.92 $ 49.92 $ 97.64 $ 13.29 $ 29.21
================ ================ ================ ================ ================
15,950,002 150,002 7,400,002 22,050,002 639,928
================ ================ ================ ================ ================
$ 319,424,898 $ 7,255,207 $ 665,393,298 $ 311,197,623 $ 20,759,896
================ ================ ================ ================ ================
$ 16,597 $ -- $ 202,375 $ 61 $ 101,812
================ ================ ================ ================ ================
$ 13,803,300 $ -- $ 8,367,568 $ 3,108,773 $ --
================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 89
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST
S-NETWORK
FIRST TRUST FIRST TRUST FUTURE VEHICLES
BICK INDXX NEXTG & TECHNOLOGY
INDEX FUND ETF ETF
(BICK) (NXTG) (CARZ)
------------------ ------------------ ------------------
ASSETS:
<S> <C> <C> <C>
Investments, at value............................................ $ 11,820,304 $ 455,147,417 $ 43,286,971
Cash............................................................. -- 1,090,104 --
Foreign currency, at value....................................... 14 17,688 17
Receivables:
Dividends..................................................... 57,152 1,433,084 90,625
Investment securities sold.................................... -- -- --
Reclaims...................................................... -- 356,692 27,616
Capital shares sold........................................... -- -- --
Securities lending income..................................... 1,588 2,097 21,855
Prepaid expenses................................................. -- -- --
---------------- ---------------- ----------------
Total Assets.................................................. 11,879,058 458,047,082 43,427,084
---------------- ---------------- ----------------
LIABILITIES:
Due to custodian................................................. 33,521 -- 32,543
Due to custodian foreign currency................................ -- -- --
Payables:
Investment securities purchased............................... -- -- --
Investment advisory fees...................................... 6,047 262,664 25,978
Audit and tax fees............................................ -- -- --
Shareholder reporting fees.................................... -- -- --
Licensing fees................................................ -- -- --
Trustees' fees................................................ -- -- --
Capital shares purchased...................................... -- -- --
Foreign capital gains tax..................................... -- 20,146 --
Collateral for securities on loan............................. 280,411 4,441,936 2,539,483
Other liabilities................................................ -- -- --
---------------- ---------------- ----------------
Total Liabilities............................................. 319,979 4,724,746 2,598,004
---------------- ---------------- ----------------
NET ASSETS....................................................... $ 11,559,079 $ 453,322,336 $ 40,829,080
================ ================ ================
NET ASSETS CONSIST OF:
Paid-in capital.................................................. $ 49,185,727 $ 472,047,392 $ 58,849,612
Par value........................................................ 4,500 65,000 8,000
Accumulated distributable earnings (loss)........................ (37,631,148) (18,790,056) (18,028,532)
---------------- ---------------- ----------------
NET ASSETS....................................................... $ 11,559,079 $ 453,322,336 $ 40,829,080
================ ================ ================
NET ASSET VALUE, per share....................................... $ 25.69 $ 69.74 $ 51.04
================ ================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share)........................ 450,002 6,500,002 800,002
================ ================ ================
Investments, at cost............................................. $ 12,266,173 $ 459,988,884 $ 46,158,524
================ ================ ================
Foreign currency, at cost (proceeds)............................. $ 13 $ 17,844 $ 18
================ ================ ================
Securities on loan, at value..................................... $ 271,391 $ 4,275,510 $ 2,501,345
================ ================ ================
</TABLE>
Page 90 See Notes to Financial Statements
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
FIRST TRUST FIRST TRUST FIRST TRUST IPOX(R) EUROPE DOW JONES
CLOUD INTERNATIONAL NASDAQ EQUITY INTERNATIONAL
COMPUTING EQUITY CYBERSECURITY OPPORTUNITIES INTERNET
ETF OPPORTUNITIES ETF ETF ETF ETF
(SKYY) (FPXI) (CIBR) (FPXE) (FDNI)
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
$ 2,786,380,957 $ 255,252,930 $ 4,855,450,666 $ 5,481,709 $ 32,593,341
876,264 1,472,276 4,673,272 559 94,274
-- 216,247 -- 1,555 --
340,660 661,194 161,574 13,307 14,376
-- 2,096,060 -- -- 64,890
550,071 205,104 83,054 6,366 --
-- -- -- -- --
18,323 5,197 55,953 121 --
-- -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
2,788,166,275 259,909,008 4,860,424,519 5,503,617 32,766,881
---------------- ---------------- ---------------- ---------------- ----------------
-- -- -- -- --
-- -- 33 -- 1,154
-- -- -- -- --
1,332,880 145,083 2,362,025 3,141 17,536
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- 2,033,583 -- -- --
-- -- -- -- --
25,489,356 10,340,080 6,388,358 37,821 --
-- -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
26,822,236 12,518,746 8,750,416 40,962 18,690
---------------- ---------------- ---------------- ---------------- ----------------
$ 2,761,344,039 $ 247,390,262 $ 4,851,674,103 $ 5,462,655 $ 32,748,191
================ ================ ================ ================ ================
$ 4,563,696,679 $ 577,799,063 $ 5,350,523,511 $ 8,507,970 $ 70,266,230
412,500 60,500 1,135,000 2,500 13,500
(1,802,765,140) (330,469,301) (499,984,408) (3,047,815) (37,531,539)
---------------- ---------------- ---------------- ---------------- ----------------
$ 2,761,344,039 $ 247,390,262 $ 4,851,674,103 $ 5,462,655 $ 32,748,191
================ ================ ================ ================ ================
$ 66.94 $ 40.89 $ 42.75 $ 21.85 $ 24.26
================ ================ ================ ================ ================
41,250,002 6,050,002 113,500,002 250,002 1,350,002
================ ================ ================ ================ ================
$ 3,131,929,616 $ 231,341,628 $ 4,689,048,752 $ 4,854,979 $ 43,020,587
================ ================ ================ ================ ================
$ -- $ 216,245 $ (33) $ 1,555 $ (1,154)
================ ================ ================ ================ ================
$ 25,062,721 $ 10,093,271 $ 5,956,609 $ 35,815 $ --
================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 91
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST
STOXX(R) ALERIAN DOW JONES
EUROPEAN DISRUPTIVE GLOBAL SELECT
SELECT DIVIDEND TECHNOLOGY DIVIDEND
INDEX FUND REAL ESTATE ETF INDEX FUND
(FDD) (DTRE) (FGD)
------------------ ------------------ ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................................................ $ 4,917,583 $ 439,269 $ 21,700,046
Securities lending income (net of fees).......................... -- -- --
Foreign withholding tax.......................................... (538,366) (10,288) (2,448,292)
---------------- ---------------- ----------------
Total investment income....................................... 4,379,217 428,981 19,251,754
---------------- ---------------- ----------------
EXPENSES:
Investment advisory fees......................................... 357,887 76,872 (a) 1,171,876
Licensing fees................................................... 53,683 -- 175,781
Accounting and administration fees............................... 45,509 -- 147,826
Audit and tax fees............................................... 29,720 -- 33,222
Shareholder reporting fees....................................... 23,634 -- 57,826
Custodian fees................................................... 14,312 -- 37,843
Transfer agent fees.............................................. 4,474 -- 14,648
Legal fees....................................................... 4,036 -- 14,212
Listing fees..................................................... 3,896 -- 3,896
Trustees' fees and expenses...................................... 3,602 -- 3,708
Registration and filing fees..................................... -- -- 107
Other expenses................................................... 2,275 -- 5,636
---------------- ---------------- ----------------
Total expenses................................................ 543,028 76,872 1,666,581
Less fees waived and expenses reimbursed by the investment
advisor.................................................... (6,198) -- --
---------------- ---------------- ----------------
Net expenses.................................................. 536,830 76,872 1,666,581
---------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS)..................................... 3,842,387 352,109 17,585,173
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... (13,668,339) 164,428 (32,913,992)
In-kind redemptions........................................... (2,859,607) -- (833,546)
Foreign currency transactions................................. (74,796) (7,486) (436,448)
Foreign capital gains tax..................................... -- -- --
---------------- ---------------- ----------------
Net realized gain (loss)......................................... (16,602,742) 156,942 (34,183,986)
---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................... 49,855,591 1,688,107 114,587,733
Foreign currency translation.................................. 255,169 1,688 236,859
Deferred foreign capital gains tax............................ -- -- --
---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)............. 50,110,760 1,689,795 114,824,592
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS).......................... 33,508,018 1,846,737 80,640,606
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................................... $ 37,350,405 $ 2,198,846 $ 98,225,779
================ ================ ================
</TABLE>
(a) Fund is subject to a unitary fee (see Note 3 in the Notes to Financial
Statements).
Page 92 See Notes to Financial Statements
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
FIRST TRUST ALERIAN NASDAQ(R) CLEAN FIRST TRUST FIRST TRUST
GLOBAL U.S. NEXTGEN EDGE(R) SMART GRID INDXX GLOBAL INDXX GLOBAL
WIND ENERGY INFRASTRUCTURE INFRASTRUCTURE NATURAL RESOURCES AGRICULTURE
ETF ETF INDEX FUND INCOME ETF ETF
(FAN) (RBLD) (GRID) (FTRI) (FTAG)
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
$ 2,384,663 $ 80,399 $ 5,922,502 $ 8,019,015 $ 274,029
33,378 390 36,416 8,225 --
(253,699) -- (413,043) (304,696) (26,883)
---------------- ---------------- ---------------- ---------------- ----------------
2,164,342 80,789 5,545,875 7,722,544 247,146
---------------- ---------------- ---------------- ---------------- ----------------
554,650 24,206 (a) 1,309,054 944,881 (a) 83,519 (a)
138,663 -- 294,537 -- --
70,247 -- 164,596 -- --
39,137 -- 17,300 -- --
40,000 -- 74,873 -- --
17,041 -- 2,775 -- --
6,933 -- 16,363 -- --
6,316 -- 14,927 -- --
4,163 -- 5,001 -- --
3,631 -- 3,725 -- --
-- -- 87 -- --
2,894 -- 5,624 -- --
---------------- ---------------- ---------------- ---------------- ----------------
883,675 24,206 1,908,862 944,881 83,519
(51,700) -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
831,975 24,206 1,908,862 944,881 83,519
---------------- ---------------- ---------------- ---------------- ----------------
1,332,367 56,583 3,637,013 6,777,663 163,627
---------------- ---------------- ---------------- ---------------- ----------------
(6,549,416) (113,260) (11,915,063) (9,355,462) (703,624)
2,510,147 (254,323) 19,921,034 2,257,273 129,196
(18,517) (3) (68,586) (44,507) (3,118)
-- -- -- -- (9,464)
---------------- ---------------- ---------------- ---------------- ----------------
(4,057,786) (367,586) 7,937,385 (7,142,696) (587,010)
---------------- ---------------- ---------------- ---------------- ----------------
48,071,704 1,313,500 149,614,158 20,895,037 2,691,970
50,190 590 51,900 8,653 611
-- -- -- (10,636) 34,451
---------------- ---------------- ---------------- ---------------- ----------------
48,121,894 1,314,090 149,666,058 20,893,054 2,727,032
---------------- ---------------- ---------------- ---------------- ----------------
44,064,108 946,504 157,603,443 13,750,358 2,140,022
---------------- ---------------- ---------------- ---------------- ----------------
$ 45,396,475 $ 1,003,087 $ 161,240,456 $ 20,528,021 $ 2,303,649
================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 93
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE SIX MONTHS ENDED MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST
S-NETWORK
FIRST TRUST FIRST TRUST FUTURE VEHICLES
BICK INDXX NEXTG & TECHNOLOGY
INDEX FUND ETF ETF
(BICK) (NXTG) (CARZ)
------------------ ------------------ ------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................................................ $ 226,993 $ 4,889,798 $ 310,628
Securities lending income (net of fees).......................... 26,160 20,475 114,276
Foreign withholding tax.......................................... (8,452) (391,962) (21,783)
---------------- ---------------- ----------------
Total investment income....................................... 244,701 4,518,311 403,121
---------------- ---------------- ----------------
EXPENSES:
Investment advisory fees......................................... 77,530 (a) 1,630,273 (a) 149,529 (a)
Licensing fees................................................... -- -- --
Accounting and administration fees............................... -- -- --
Audit and tax fees............................................... -- -- --
Shareholder reporting fees....................................... -- -- --
Custodian fees................................................... -- -- --
Transfer agent fees.............................................. -- -- --
Legal fees....................................................... -- -- --
Listing fees..................................................... -- -- --
Trustees' fees and expenses...................................... -- -- --
Registration and filing fees..................................... -- -- --
Other expenses................................................... -- -- --
---------------- ---------------- ----------------
Total expenses................................................ 77,530 1,630,273 149,529
Less fees waived and expenses reimbursed by the investment
advisor.................................................... -- -- --
---------------- ---------------- ----------------
Net expenses.................................................. 77,530 1,630,273 149,529
---------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS)..................................... 167,171 2,888,038 253,592
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................... (1,322,653) (10,924,771) (2,774,934)
In-kind redemptions........................................... 312,186 2,975,942 207,043
Foreign currency transactions................................. (150,502) (54,596) (6,499)
Foreign capital gains tax..................................... -- (120,191) --
---------------- ---------------- ----------------
Net realized gain (loss)......................................... (1,160,969) (8,123,616) (2,574,390)
---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................... 5,072,349 112,038,004 12,347,288
Foreign currency translation.................................. 986 43,720 1,289
Deferred foreign capital gains tax............................ -- (19,142) --
---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)............. 5,073,335 112,062,582 12,348,577
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS).......................... 3,912,366 103,938,966 9,774,187
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................................... $ 4,079,537 $ 106,827,004 $ 10,027,779
================ ================ ================
</TABLE>
(a) Fund is subject to a unitary fee (see Note 3 in the Notes to Financial
Statements).
Page 94 See Notes to Financial Statements
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
FIRST TRUST FIRST TRUST FIRST TRUST IPOX(R) EUROPE DOW JONES
CLOUD INTERNATIONAL NASDAQ EQUITY INTERNATIONAL
COMPUTING EQUITY CYBERSECURITY OPPORTUNITIES INTERNET
ETF OPPORTUNITIES ETF ETF ETF ETF
(SKYY) (FPXI) (CIBR) (FPXE) (FDNI)
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
$ 7,241,794 $ 1,748,753 $ 24,985,492 $ 48,383 $ 231,945
81,290 20,049 1,098,058 121 --
(42,172) (154,269) (870,986) (5,524) (2,294)
---------------- ---------------- ---------------- ---------------- ----------------
7,280,912 1,614,533 25,212,564 42,980 229,651
---------------- ---------------- ---------------- ---------------- ----------------
8,268,081 (a) 968,407 (a) 14,037,549 (a) 19,949 (a) 100,605 (a)
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
8,268,081 968,407 14,037,549 19,949 100,605
-- -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
8,268,081 968,407 14,037,549 19,949 100,605
---------------- ---------------- ---------------- ---------------- ----------------
(987,169) 646,126 11,175,015 23,031 129,046
---------------- ---------------- ---------------- ---------------- ----------------
(668,330,882) (23,827,864) (237,169,266) (257,955) (14,170,645)
66,994,721 1,708,332 81,897,768 201,842 (528,989)
-- (134,793) 128,183 511 (5,520)
-- -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
(601,336,161) (22,254,325) (155,143,315) (55,602) (14,705,154)
---------------- ---------------- ---------------- ---------------- ----------------
880,807,566 60,850,855 640,985,107 1,452,817 21,157,254
-- 29,671 3,569 638 151
-- -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
880,807,566 60,880,526 640,988,676 1,453,455 21,157,405
---------------- ---------------- ---------------- ---------------- ----------------
279,471,405 38,626,201 485,845,361 1,397,853 6,452,251
---------------- ---------------- ---------------- ---------------- ----------------
$ 278,484,236 $ 39,272,327 $ 497,020,376 $ 1,420,884 $ 6,581,297
================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 95
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
STOXX(R) EUROPEAN ALERIAN DISRUPTIVE
SELECT DIVIDEND TECHNOLOGY
INDEX FUND REAL ESTATE ETF
(FDD) (DTRE)
----------------------------------- -----------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED
(UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022
---------------- ---------------- ---------------- ----------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss)............................ $ 3,842,387 $ 13,604,823 $ 352,109 $ 694,047
Net realized gain (loss)................................ (16,602,742) (6,159,050) 156,942 (4,691,501)
Net change in unrealized appreciation (depreciation).... 50,110,760 (79,745,328) 1,689,795 (3,423,023)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from operations...................................... 37,350,405 (72,299,555) 2,198,846 (7,420,477)
---------------- ---------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................... (1,271,511) (13,077,255) (361,354) (1,182,167)
---------------- ---------------- ---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................... 9,769,705 14,995,535 -- 2,663,290
Cost of shares redeemed................................. (19,339,925) (54,599,138) -- (4,687,732)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions........................ (9,570,220) (39,603,603) -- (2,024,442)
---------------- ---------------- ---------------- ----------------
Total increase (decrease) in net assets................. 26,508,674 (124,980,413) 1,837,492 (10,627,086)
NET ASSETS:
Beginning of period..................................... 161,050,433 286,030,846 24,029,907 34,656,993
---------------- ---------------- ---------------- ----------------
End of period........................................... $ 187,559,107 $ 161,050,433 $ 25,867,399 $ 24,029,907
================ ================ ================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................. 17,153,334 20,603,334 641,608 691,608
Shares sold............................................. 800,000 1,050,000 -- 50,000
Shares redeemed......................................... (1,850,000) (4,500,000) -- (100,000)
---------------- ---------------- ---------------- ----------------
Shares outstanding, end of period....................... 16,103,334 17,153,334 641,608 641,608
================ ================ ================ ================
</TABLE>
Page 96 See Notes to Financial Statements
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
DOW JONES FIRST TRUST ALERIAN U.S. NEXTGEN
GLOBAL SELECT DIVIDEND GLOBAL WIND ENERGY INFRASTRUCTURE
INDEX FUND ETF ETF
(FGD) (FAN) (RBLD)
----------------------------------- ----------------------------------- -----------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED
(UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
$ 17,585,173 $ 32,771,228 $ 1,332,367 $ 4,120,598 $ 56,583 $ 168,848
(34,183,986) 7,477,426 (4,057,786) 1,428,826 (367,586) (25,295)
114,824,592 (181,567,622) 48,121,894 (98,719,034) 1,314,090 (2,108,137)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
98,225,779 (141,318,968) 45,396,475 (93,169,610) 1,003,087 (1,964,584)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(12,755,551) (33,007,963) (1,381,520) (4,523,536) (50,146) (174,012)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
140,286,166 183,686,839 16,975,450 29,990,153 -- 2,488,028
(47,538,289) (18,237,594) (19,125,591) (74,286,166) (2,150,019) (2,454,490)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
92,747,877 165,449,245 (2,150,141) (44,296,013) (2,150,019) 33,538
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
178,218,105 (8,877,686) 41,864,814 (141,989,159) (1,197,078) (2,105,058)
495,576,457 504,454,143 243,931,097 385,920,256 8,684,575 10,789,633
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 673,794,562 $ 495,576,457 $ 285,795,911 $ 243,931,097 $ 7,487,497 $ 8,684,575
================ ================ ================ ================ ================ ================
26,700,002 20,200,002 16,100,002 18,450,002 200,002 200,002
6,100,000 7,250,000 950,000 1,500,000 -- 50,000
(2,350,000) (750,000) (1,100,000) (3,850,000) (50,000) (50,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
30,450,002 26,700,002 15,950,002 16,100,002 150,002 200,002
================ ================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 97
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
NASDAQ(R) CLEAN EDGE(R) INDXX GLOBAL
SMART GRID INFRASTRUCTURE NATURAL RESOURCES
INDEX FUND INDEX FUND
(GRID) (FTRI)
----------------------------------- -----------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED
(UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022
---------------- ---------------- ---------------- ----------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss)............................ $ 3,637,013 $ 6,836,821 $ 6,777,663 $ 14,595,715
Net realized gain (loss)................................ 7,937,385 (14,555,581) (7,142,696) (13,746,646)
Net change in unrealized appreciation (depreciation).... 149,666,058 (138,492,254) 20,893,054 (36,933,878)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from operations...................................... 161,240,456 (146,211,014) 20,528,021 (36,084,809)
---------------- ---------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................... (2,588,156) (6,402,097) (7,089,146) (14,042,378)
---------------- ---------------- ---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................... 106,477,994 287,294,194 93,839,626 226,862,215
Cost of shares redeemed................................. (81,044,261) (146,513,572) (13,978,462) (13,299,327)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions........................ 25,433,733 140,780,622 79,861,164 213,562,888
---------------- ---------------- ---------------- ----------------
Total increase (decrease) in net assets................. 184,086,033 (11,832,489) 93,300,039 163,435,701
NET ASSETS:
Beginning of period..................................... 538,430,006 550,262,495 199,747,442 36,311,741
---------------- ---------------- ---------------- ----------------
End of period........................................... $ 722,516,039 $ 538,430,006 $ 293,047,481 $ 199,747,442
================ ================ ================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................. 7,150,002 5,950,002 16,350,002 2,800,002
Shares sold............................................. 1,150,000 2,900,000 6,750,000 14,550,000
Shares redeemed......................................... (900,000) (1,700,000) (1,050,000) (1,000,000)
---------------- ---------------- ---------------- ----------------
Shares outstanding, end of period....................... 7,400,002 7,150,002 22,050,002 16,350,002
================ ================ ================ ================
</TABLE>
Page 98 See Notes to Financial Statements
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FIRST TRUST
INDXX GLOBAL BICK INDXX NEXTG
AGRICULTURE ETF INDEX FUND ETF
(FTAG) (BICK) (NXTG)
----------------------------------- ----------------------------------- -----------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED
(UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
$ 163,627 $ 380,604 $ 167,171 $ 618,915 $ 2,888,038 $ 18,081,910
(587,010) 926,105 (1,160,969) 7,774,747 (8,123,616) 97,093,376
2,727,032 (5,684,565) 5,073,335 (15,497,918) 112,062,582 (292,040,782)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
2,303,649 (4,377,856) 4,079,537 (7,104,256) 106,827,004 (176,865,496)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(145,896) (278,287) (199,376) (755,321) (1,769,060) (25,616,645)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
-- 32,602,633 1,379,929 34,290,818 -- 72,484,061
(5,837,349) (11,185,760) (37,499,487) (69,598,007) (122,791,496) (480,555,665)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(5,837,349) 21,416,873 (36,119,558) (35,307,189) (122,791,496) (408,071,604)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(3,679,596) 16,760,730 (32,239,397) (43,166,766) (17,733,552) (610,553,745)
22,369,774 5,609,044 43,798,476 86,965,242 471,055,888 1,081,609,633
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 18,690,178 $ 22,369,774 $ 11,559,079 $ 43,798,476 $ 453,322,336 $ 471,055,888
================ ================ ================ ================ ================ ================
839,928 189,928 1,850,002 2,550,002 8,450,002 14,150,002
-- 1,000,000 50,000 1,300,000 -- 900,000
(200,000) (350,000) (1,450,000) (2,000,000) (1,950,000) (6,600,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
639,928 839,928 450,002 1,850,002 6,500,002 8,450,002
================ ================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 99
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIRST TRUST
S-NETWORK FUTURE FIRST TRUST
VEHICLES & TECHNOLOGY CLOUD COMPUTING
ETF ETF
(CARZ) (SKYY)
----------------------------------- -----------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED
(UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022
---------------- ---------------- ---------------- ----------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income (loss)............................ $ 253,592 $ 1,669,415 $ (987,169) $ 46,431,490
Net realized gain (loss)................................ (2,574,390) (2,822,496) (601,336,161) (276,788,774)
Net change in unrealized appreciation (depreciation).... 12,348,577 (18,396,263) 880,807,566 (2,264,731,256)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from operations...................................... 10,027,779 (19,549,344) 278,484,236 (2,495,088,540)
---------------- ---------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................... (314,321) (1,776,897) -- (47,254,977)
---------------- ---------------- ---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................... -- 38,858,818 84,865,054 946,949,156
Cost of shares redeemed................................. (9,299,302) (41,107,013) (556,578,320) (1,689,481,713)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions........................ (9,299,302) (2,248,195) (471,713,266) (742,532,557)
---------------- ---------------- ---------------- ----------------
Total increase (decrease) in net assets................. 414,156 (23,574,436) (193,229,030) (3,284,876,074)
NET ASSETS:
Beginning of period..................................... 40,414,924 63,989,360 2,954,573,069 6,239,449,143
---------------- ---------------- ---------------- ----------------
End of period........................................... $ 40,829,080 $ 40,414,924 $ 2,761,344,039 $ 2,954,573,069
================ ================ ================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period................. 1,000,002 1,100,002 49,000,002 59,200,002
Shares sold............................................. -- 650,000 1,400,000 10,000,000
Shares redeemed......................................... (200,000) (750,000) (9,150,000) (20,200,000)
---------------- ---------------- ---------------- ----------------
Shares outstanding, end of period....................... 800,002 1,000,002 41,250,002 49,000,002
================ ================ ================ ================
</TABLE>
Page 100 See Notes to Financial Statements
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
INTERNATIONAL FIRST TRUST IPOX(R) EUROPE
EQUITY NASDAQ EQUITY
OPPORTUNITIES ETF CYBERSECURITY ETF OPPORTUNITIES ETF
(FPXI) (CIBR) (FPXE)
----------------------------------- ----------------------------------- -----------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED 3/31/2023 YEAR ENDED
(UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022 (UNAUDITED) 9/30/2022
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
$ 646,126 $ 4,766,765 $ 11,175,015 $ 34,366,684 $ 23,031 $ 111,291
(22,254,325) (231,818,512) (155,143,315) (11,789,081) (55,602) (3,117,820)
60,880,526 (133,525,530) 640,988,676 (1,344,839,444) 1,453,455 (1,554,377)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
39,272,327 (360,577,277) 497,020,376 (1,322,261,841) 1,420,884 (4,560,906)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(786,861) (4,260,436) (11,261,970) (33,554,011) (9,780) (115,891)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
-- 35,411,414 28,117,393 2,858,661,276 -- 1,384,468
(112,516,488) (512,411,220) (393,284,329) (1,542,060,355) (1,079,503) (2,268,546)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(112,516,488) (476,999,806) (365,166,936) 1,316,600,921 (1,079,503) (884,078)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(74,031,022) (841,837,519) 120,591,470 (39,214,931) 331,601 (5,560,875)
321,421,284 1,163,258,803 4,731,082,633 4,770,297,564 5,131,054 10,691,929
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 247,390,262 $ 321,421,284 $ 4,851,674,103 $ 4,731,082,633 $ 5,462,655 $ 5,131,054
================ ================ ================ ================ ================ ================
9,000,002 18,150,002 122,700,002 97,750,002 300,002 350,002
-- 700,000 700,000 58,400,000 -- 50,000
(2,950,000) (9,850,000) (9,900,000) (33,450,000) (50,000) (100,000)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
6,050,002 9,000,002 113,500,002 122,700,002 250,002 300,002
================ ================ ================ ================ ================ ================
</TABLE>
See Notes to Financial Statements Page 101
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
FIRST TRUST
DOW JONES
INTERNATIONAL
INTERNET ETF
(FDNI)
-----------------------------------
SIX MONTHS ENDED
3/31/2023 YEAR ENDED
(UNAUDITED) 9/30/2022
---------------- ----------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss).................................................................. $ 129,046 $ 1,565
Net realized gain (loss)...................................................................... (14,705,154) (11,260,348)
Net change in unrealized appreciation (depreciation).......................................... 21,157,405 (25,653,568)
---------------- ----------------
Net increase (decrease) in net assets resulting
from operations............................................................................ 6,581,297 (36,912,351)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations......................................................................... (121,095) --
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold..................................................................... 5,152,332 3,599,371
Cost of shares redeemed....................................................................... (8,096,508) (41,357,597)
---------------- ----------------
Net increase (decrease) in net assets resulting
from shareholder transactions.............................................................. (2,944,176) (37,758,226)
---------------- ----------------
Total increase (decrease) in net assets....................................................... 3,516,026 (74,670,577)
NET ASSETS:
Beginning of period........................................................................... 29,232,165 103,902,742
---------------- ----------------
End of period................................................................................. $ 32,748,191 $ 29,232,165
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period....................................................... 1,500,002 2,600,002
Shares sold................................................................................... 200,000 150,000
Shares redeemed............................................................................... (350,000) (1,250,000)
---------------- ----------------
Shares outstanding, end of period............................................................. 1,350,002 1,500,002
================ ================
</TABLE>
Page 102 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST STOXX(R) EUROPEAN SELECT DIVIDEND INDEX FUND (FDD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.39 $ 13.88 $ 10.27 $ 12.75 $ 13.12 $ 13.61
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.24 0.73 0.52 0.52 0.66 0.59
Net realized and unrealized gain (loss) 2.10 (4.52) 3.61 (2.50) (0.37) (0.49)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 2.34 (3.79) 4.13 (1.98) 0.29 0.10
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.08) (0.70) (0.52) (0.50) (0.66) (0.59)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 11.65 $ 9.39 $ 13.88 $ 10.27 $ 12.75 $ 13.12
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 24.94% (27.88)% 40.19% (15.64)% 2.35% 0.74%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 187,559 $ 161,050 $ 286,031 $ 180,227 $ 293,918 $ 454,824
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.61% (b) 0.58% 0.58% 0.57% 0.58% 0.57%
Ratio of net expenses to average net
assets 0.60% (b) 0.58% 0.58% 0.57% 0.58% 0.57%
Ratio of net investment income (loss) to
average net assets 4.29% (b) 5.36% 4.06% 3.84% 4.84% 4.25%
Portfolio turnover rate (c) 45% 57% 58% 98% 24% 35%
</TABLE>
FIRST TRUST ALERIAN DISRUPTIVE TECHNOLOGY REAL ESTATE ETF (DTRE)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 37.45 $ 50.11 $ 38.82 $ 49.44 $ 45.07 $ 44.96
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.55 0.89 0.89 0.62 1.25 1.48
Net realized and unrealized gain (loss) 2.88 (11.90) 10.74 (9.27) 4.55 0.31
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 3.43 (11.01) 11.63 (8.65) 5.80 1.79
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.56) (1.65) (0.34) (1.97) (1.43) (1.68)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 40.32 $ 37.45 $ 50.11 $ 38.82 $ 49.44 $ 45.07
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 9.18% (22.72)% 29.95% (18.12)% 13.19% 3.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 25,867 $ 24,030 $ 34,657 $ 32,671 $ 56,436 $ 45,074
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.60% (b) 0.96% 0.92% 0.85% 0.89% 0.85%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 2.75% (b) 2.08% 2.21% 2.52% 2.61% 3.48%
Portfolio turnover rate (c) 22% 70% (d) 11% 7% 7% 9%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(d) The variation in the portfolio turnover rate is due to the change in the
Fund's underlying index effective September 30, 2022, which resulted in a
complete rebalance of the Fund's portfolio.
See Notes to Financial Statements Page 103
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST DOW JONES GLOBAL SELECT DIVIDEND INDEX FUND (FGD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 18.56 $ 24.97 $ 17.85 $ 22.90 $ 25.16 $ 25.73
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.66 1.33 1.22 1.30 1.39 1.15
Net realized and unrealized gain (loss) 3.41 (6.38) 7.10 (5.04) (2.24) (0.58)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 4.07 (5.05) 8.32 (3.74) (0.85) 0.57
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.50) (1.36) (1.20) (1.31) (1.41) (1.14)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 22.13 $ 18.56 $ 24.97 $ 17.85 $ 22.90 $ 25.16
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 21.92% (20.98)% 46.94% (16.33)% (3.21)% 2.26%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 673,795 $ 495,576 $ 504,454 $ 344,489 $ 532,532 $ 484,280
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.57% (b) 0.56% 0.57% 0.57% 0.59% 0.58%
Ratio of net expenses to average net
assets 0.57% (b) 0.56% 0.57% 0.57% 0.59% 0.58%
Ratio of net investment income (loss) to
average net assets 6.00% (b) 5.74% 5.11% 6.16% 6.20% 4.48%
Portfolio turnover rate (c) 36% 35% 38% 67% 31% 31%
</TABLE>
FIRST TRUST GLOBAL WIND ENERGY ETF (FAN)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 15.15 $ 20.92 $ 17.45 $ 13.13 $ 12.50 $ 13.13
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08 0.25 0.28 0.26 0.30 0.28
Net realized and unrealized gain (loss) 2.77 (5.75) 3.52 4.33 0.64 (0.66)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 2.85 (5.50) 3.80 4.59 0.94 (0.38)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.08) (0.27) (0.33) (0.27) (0.31) (0.25)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 17.92 $ 15.15 $ 20.92 $ 17.45 $ 13.13 $ 12.50
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 18.85% (26.43)% 21.76% 35.42% 7.58% (2.92)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 285,796 $ 243,931 $ 385,920 $ 205,075 $ 75,502 $ 79,362
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.64% (b) 0.61% 0.62% 0.66% 0.71% 0.68%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.96% (b) 1.28% 1.34% 1.86% 2.32% 2.21%
Portfolio turnover rate (c) 15% 21% 31% 42% 30% 22%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 104 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST ALERIAN U.S. NEXTGEN INFRASTRUCTURE ETF (RBLD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 43.42 $ 53.95 $ 42.07 $ 47.05 $ 56.78 $ 56.89
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.37 1.01 0.87 1.28 0.87 0.79
Net realized and unrealized gain (loss) 6.46 (10.50) 11.79 (4.93) (9.71) 0.16
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 6.83 (9.49) 12.66 (3.65) (8.84) 0.95
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.33) (1.04) (0.78) (1.33) (0.89) (1.06)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 49.92 $ 43.42 $ 53.95 $ 42.07 $ 47.05 $ 56.78
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 15.74% (17.80)% 30.19% (7.52)% (15.64)% 1.67%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 7,487 $ 8,685 $ 10,790 $ 6,310 $ 9,409 $ 14,194
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.65% (b) 0.86% 1.42% 1.43% 1.21% 0.88%
Ratio of net expenses to average net
assets 0.65% (b) 0.69% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.52% (b) 1.68% 1.81% 2.68% 1.64% 1.45%
Portfolio turnover rate (c) 17% 92% (d) 18% 20% 14% 16%
</TABLE>
FIRST TRUST NASDAQ(R) CLEAN EDGE(R) SMART GRID INFRASTRUCTURE INDEX FUND (GRID)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 75.30 $ 92.48 $ 62.87 $ 49.51 $ 47.62 $ 49.00
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.49 0.93 0.64 0.58 0.67 0.52
Net realized and unrealized gain (loss) 22.20 (17.24) 29.73 13.27 1.84 (1.32)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 22.69 (16.31) 30.37 13.85 2.51 (0.80)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.35) (0.87) (0.76) (0.49) (0.62) (0.58)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 97.64 $ 75.30 $ 92.48 $ 62.87 $ 49.51 $ 47.62
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 30.18% (17.70)% 48.35% 28.10% 5.32% (1.66)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 722,516 $ 538,430 $ 550,262 $ 56,579 $ 27,232 $ 33,333
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.58% (b) 0.58% 0.63% 0.75% 0.82% 0.74%
Ratio of net expenses to average net
assets 0.58% (b) 0.58% 0.63% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.11% (b) 1.02% 1.11% 1.30% 1.40% 1.10%
Portfolio turnover rate (c) 11% 33% 20% 53% 31% 60%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year. The total returns would have been lower if certain
fees had not been waived and expenses reimbursed by the investment
advisor.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(d) The variation in the portfolio turnover rate is due to the change in the
Fund's underlying index effective July 29, 2022, which resulted in a
complete rebalance of the Fund's portfolio.
See Notes to Financial Statements Page 105
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST INDXX GLOBAL NATURAL RESOURCES INCOME ETF (FTRI)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.22 $ 12.97 $ 9.57 $ 11.47 $ 12.73 $ 11.88
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.31 1.17 0.80 0.53 0.72 0.48
Net realized and unrealized gain (loss) 1.10 (0.67) 3.29 (a) (1.86) (1.28) 0.83
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 1.41 0.50 4.09 (1.33) (0.56) 1.31
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.34) (1.25) (0.69) (0.57) (0.70) (0.46)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 13.29 $ 12.22 $ 12.97 $ 9.57 $ 11.47 $ 12.73
========== ========== ========== ========== ========== ==========
TOTAL RETURN (b) 11.53% 3.27% 42.87% (11.80)% (4.42)% 11.12%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 293,047 $ 199,747 $ 36,312 $ 5,740 $ 7,452 $ 8,908
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 5.02% (c) 11.85% 9.06% 4.94% 5.95% 3.74%
Portfolio turnover rate (d) 13% 69% 99% 66% 84% 50%
</TABLE>
FIRST TRUST INDXX GLOBAL AGRICULTURE ETF (FTAG)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 26.63 $ 29.53 $ 21.73 $ 22.87 $ 26.21 $ 26.96
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.23 0.56 0.45 0.45 0.51 0.44
Net realized and unrealized gain (loss) 2.52 (2.97) 7.78 (1.20) (3.17) (0.83)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 2.75 (2.41) 8.23 (0.75) (2.66) (0.39)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.17) (0.49) (0.43) (0.39) (0.64) (0.36)
Return of capital -- -- -- -- (0.04) --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.17) (0.49) (0.43) (0.39) (0.68) (0.36)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 29.21 $ 26.63 $ 29.53 $ 21.73 $ 22.87 $ 26.21
========== ========== ========== ========== ========== ==========
TOTAL RETURN (b) 10.35% (8.28)% 37.94% (3.19)% (10.16)% (1.46)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 18,690 $ 22,370 $ 5,609 $ 3,040 $ 3,200 $ 4,979
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.37% (c) 2.50% 1.84% 2.16% 1.93% 1.56%
Portfolio turnover rate (d) 8% 26% 12% 17% 20% 30%
</TABLE>
(a) The per share amount does not correlate with the aggregate realized and
unrealized gain (loss) due to the timing of the Fund share sales and
repurchases in relation to market value fluctuation of the underlying
investments.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 106 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST BICK INDEX FUND (BICK)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 23.67 $ 34.10 $ 29.02 $ 25.61 $ 26.48 $ 28.77
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.35 0.90 0.30 0.08 0.33 0.40
Net realized and unrealized gain (loss) 2.03 (10.36) 5.01 3.53 (0.80) (2.34)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 2.38 (9.46) 5.31 3.61 (0.47) (1.94)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.36) (0.97) (0.23) (0.20) (0.40) (0.35)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 25.69 $ 23.67 $ 34.10 $ 29.02 $ 25.61 $ 26.48
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 10.12% (28.39)% 18.28% 14.07% (1.76)% (6.82)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 11,559 $ 43,798 $ 86,965 $ 60,937 $ 116,503 $ 190,648
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.64% (b) 0.64% 0.64% 0.64% 0.64% 0.64%
Ratio of net expenses to average net
assets 0.64% (b) 0.64% 0.64% 0.64% 0.64% 0.64%
Ratio of net investment income (loss) to
average net assets 1.38% (b) 2.43% 0.83% 0.60% 1.25% 1.33%
Portfolio turnover rate (c) 17% 126% 92% 58% 66% 65%
</TABLE>
FIRST TRUST INDXX NEXTG ETF (NXTG)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 55.75 $ 76.44 $ 59.05 $ 50.26 $ 49.63 $ 50.52
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.42 1.72 0.95 0.69 0.37 0.72
Net realized and unrealized gain (loss) 13.82 (20.13) 17.10 8.79 0.50 (0.60)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 14.24 (18.41) 18.05 9.48 0.87 0.12
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.25) (1.88) (0.62) (0.69) (0.24) (1.01)
Net realized gain -- (0.40) (0.04) -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.25) (2.28) (0.66) (0.69) (0.24) (1.01)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 69.74 $ 55.75 $ 76.44 $ 59.05 $ 50.26 $ 49.63
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 25.61% (24.71)% 30.62% 18.97% 1.78% 0.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 453,322 $ 471,056 $1,081,610 $ 590,535 $ 196,015 $ 17,370
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.24% (b) 2.12% 1.42% 1.52% 1.73% 1.34%
Portfolio turnover rate (c) 7% 21% 27% 30% 59% 80%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 107
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST S-NETWORK FUTURE VEHICLES & TECHNOLOGY ETF (CARZ)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 40.41 $ 58.17 $ 39.00 $ 32.04 $ 36.33 $ 40.25
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.29 1.38 0.60 0.34 1.02 0.98
Net realized and unrealized gain (loss) 10.68 (17.67) 19.04 7.07 (4.28) (3.98)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 10.97 (16.29) 19.64 7.41 (3.26) (3.00)
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.34) (1.47) (0.47) (0.45) (1.03) (0.92)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 51.04 $ 40.41 $ 58.17 $ 39.00 $ 32.04 $ 36.33
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 27.30% (28.66)% 50.43% 23.33% (8.97)% (7.57)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 40,829 $ 40,415 $ 63,989 $ 29,246 $ 17,623 $ 18,167
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (b) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 1.19% (b) 2.57% 1.17% 1.09% 3.19% 2.44%
Portfolio turnover rate (c) 19% 133% (d) 42% 36% 24% 16%
</TABLE>
FIRST TRUST CLOUD COMPUTING ETF (SKYY)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 60.30 $ 105.40 $ 78.48 $ 56.39 $ 56.71 $ 41.88
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02) 0.79 0.15 0.16 0.59 0.14
Net realized and unrealized gain (loss) 6.66 (45.08) 26.95 22.10 (0.31) 14.84
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 6.64 (44.29) 27.10 22.26 0.28 14.98
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income -- (0.81) (0.18) (0.17) (0.60) (0.15)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 66.94 $ 60.30 $ 105.40 $ 78.48 $ 56.39 $ 56.71
========== ========== ========== ========== ========== ==========
TOTAL RETURN (a) 11.01% (42.32)% 34.55% 39.54% 0.57% 35.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $2,761,344 $2,954,573 $6,239,449 $4,963,825 $2,168,198 $2,067,140
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.60% (b) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets (0.07)% (b) 0.96% 0.16% 0.24% 1.02% 0.28%
Portfolio turnover rate (c) 19% 42% 33% 35% 85% 7%
</TABLE>
(a) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(b) Annualized.
(c) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(d) The variation in the portfolio turnover rate is due to the change in the
Fund's underlying index effective January 26, 2022, which resulted in a
complete rebalance of the Fund's portfolio.
Page 108 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST INTERNATIONAL EQUITY OPPORTUNITIES ETF (FPXI)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 35.71 $ 64.09 $ 56.64 $ 36.39 $ 35.10 $ 34.51
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.13 0.54 0.40 0.11 0.30 0.49
Net realized and unrealized gain (loss) 5.17 (28.51) 7.39 20.32 (a) 1.29 0.66
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 5.30 (27.97) 7.79 20.43 1.59 1.15
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.12) (0.41) (0.34) (0.18) (0.30) (0.56)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 40.89 $ 35.71 $ 64.09 $ 56.64 $ 36.39 $ 35.10
========== ========== ========== ========== ========== ==========
TOTAL RETURN (b) 14.86% (43.78)% 13.73% 56.24% (a) 4.60% 3.35%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 247,390 $ 321,421 $1,163,259 $ 356,803 $ 30,931 $ 26,322
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% 0.70%
Ratio of net investment income (loss) to
average net assets 0.47% (c) 0.74% 0.76% 0.38% 0.86% 1.42%
Portfolio turnover rate (d) 70% 119% 118% 114% 98% 83%
</TABLE>
FIRST TRUST NASDAQ CYBERSECURITY ETF (CIBR)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
3/31/2023 ------------------------------------------------------------------------
(UNAUDITED) 2022 2021 2020 2019 2018
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 38.56 $ 48.80 $ 34.78 $ 27.63 $ 28.49 $ 21.85
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.10 0.31 0.04 0.50 0.06 0.02
Net realized and unrealized gain (loss) 4.19 (10.25) 14.04 7.16 (0.86) 6.64
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 4.29 (9.94) 14.08 7.66 (0.80) 6.66
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.10) (0.30) (0.06) (0.51) (0.06) (0.02)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 42.75 $ 38.56 $ 48.80 $ 34.78 $ 27.63 $ 28.49
========== ========== ========== ========== ========== ==========
TOTAL RETURN (b) 11.11% (20.53)% 40.50% 28.27% (2.78)% 30.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $4,851,674 $4,731,083 $4,770,298 $2,178,988 $ 979,650 $ 847,673
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.59% (c) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net expenses to average net
assets 0.59% (c) 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net investment income (loss) to
average net assets 0.47% (c) 0.63% 0.07% 1.54% 0.20% 0.04%
Portfolio turnover rate (d) 17% 54% 35% 46% 58% 56%
</TABLE>
(a) The Fund received a payment from the advisor in the amount of $806, which
represents less than $0.01 per share. Since the advisor reimbursed the
Fund, there was no effect on the Fund's total return.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 109
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST IPOX(R) EUROPE EQUITY OPPORTUNITIES ETF (FPXE)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, PERIOD
3/31/2023 ------------------------------------------ ENDED
(UNAUDITED) 2022 2021 2020 9/30/2019 (a)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.10 $ 30.55 $ 24.88 $ 19.66 $ 19.70
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08 0.36 0.25 0.22 0.33
Net realized and unrealized gain (loss) 4.70 (13.43) 5.75 5.30 (0.06)
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.78 (13.07) 6.00 5.52 0.27
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.03) (0.38) (0.33) (0.30) (0.31)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 21.85 $ 17.10 $ 30.55 $ 24.88 $ 19.66
========== ========== ========== ========== ==========
TOTAL RETURN (b) 27.99% (42.95)% 24.19% 28.33% 1.32%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 5,463 $ 5,131 $ 10,692 $ 2,488 $ 1,966
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.70% (c) 0.70% 0.70% 0.70% 0.70% (c)
Ratio of net investment income (loss) to
average net assets 0.81% (c) 1.31% 0.51% 0.74% 1.77% (c)
Portfolio turnover rate (d) 71% 118% 118% 63% 67%
</TABLE>
FIRST TRUST DOW JONES INTERNATIONAL INTERNET ETF (FDNI)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30, PERIOD
3/31/2023 --------------------------------------------- ENDED
(UNAUDITED) 2022 2021 2020 9/30/2019 (a)
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.49 $ 39.96 $ 39.08 $ 21.02 $ 19.69
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.10 0.00 (e)(f) (0.18) (0.03) 0.75
Net realized and unrealized gain (loss) 4.76 (20.47) 1.13 (g) 18.40 1.04
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.86 (20.47) 0.95 18.37 1.79
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.09) -- (0.07) (0.31) (0.46)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 24.26 $ 19.49 $ 39.96 $ 39.08 $ 21.02
========== ========== ========== ========== ==========
TOTAL RETURN (b) 24.93% (51.23)% 2.42% 88.27% 9.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 32,748 $ 29,232 $ 103,903 $ 48,850 $ 4,204
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net
assets 0.65% (c) 0.65% 0.65% 0.65% 0.65% (c)
Ratio of net investment income (loss) to
average net assets 0.83% (c) 0.00% (h) (0.55)% (0.50)% 4.42% (c)
Portfolio turnover rate (d) 51% 29% 34% 23% 61%
</TABLE>
(a) Inception dates for FPXE and FDNI are October 4, 2018 and November 5,
2018, respectively, which are consistent with the respective Fund's
commencement of investment operations and are the dates the initial
creation units were established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
(e) Based on average shares outstanding.
(f) Amount is less than $0.01.
(g) The per share amount does not correlate with the aggregate realized and
unrealized gain (loss) due to the timing of the Fund share sales and
repurchases in relation to market value fluctuation of the underlying
investments.
(h) Amount is less than 0.01%.
Page 110 See Notes to Financial Statements
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund II (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on July 6, 2006,
and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of nineteen exchange-traded funds. This report
covers the sixteen funds (each a "Fund" and collectively, the "Funds") listed
below:
First Trust STOXX(R) European Select Dividend Index Fund - (NYSE Arca,
Inc. ("NYSE Arca") ticker "FDD")
First Trust Alerian Disruptive Technology Real Estate ETF - (NYSE Arca
ticker "DTRE")
First Trust Dow Jones Global Select Dividend Index Fund - (NYSE Arca
ticker "FGD")
First Trust Global Wind Energy ETF - (NYSE Arca ticker "FAN")
First Trust Alerian U.S. NextGen Infrastructure ETF - (NYSE Arca ticker
"RBLD")
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index
Fund - (The Nasdaq Stock Market LLC ("Nasdaq") ticker "GRID")
First Trust Indxx Global Natural Resources Income ETF - (Nasdaq ticker
"FTRI")
First Trust Indxx Global Agriculture ETF - (Nasdaq ticker "FTAG")
First Trust BICK Index Fund - (Nasdaq ticker "BICK")
First Trust Indxx NextG ETF - (Nasdaq ticker "NXTG")
First Trust S-Network Future Vehicles & Technology ETF - (Nasdaq ticker
"CARZ") First Trust Cloud Computing ETF - (Nasdaq ticker "SKYY")
First Trust International Equity Opportunities ETF - (Nasdaq ticker
"FPXI")
First Trust Nasdaq Cybersecurity ETF - (Nasdaq ticker "CIBR")
First Trust IPOX(R) Europe Equity Opportunities ETF - (Nasdaq ticker
"FPXE")
First Trust Dow Jones International Internet ETF - (Nasdaq ticker
"FDNI")
Each Fund represents a separate series of shares of beneficial interest in the
Trust. Unlike conventional mutual funds, each Fund issues and redeems shares on
a continuous basis, at net asset value ("NAV"), only in large blocks of shares
known as "Creation Units." 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:
<TABLE>
<CAPTION>
FUND INDEX
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund STOXX(R) Europe Select Dividend 30 Index
First Trust Alerian Disruptive Technology Real Estate ETF Alerian Disruptive Technology Real Estate Index
First Trust Dow Jones Global Select Dividend Index Fund Dow Jones Global Select Dividend Index
First Trust Global Wind Energy ETF ISE Clean Edge Global Wind Energy(TM) Index
First Trust Alerian U.S. NextGen Infrastructure ETF Alerian U.S. NextGen Infrastructure Index
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund Nasdaq Clean Edge Smart Grid Infrastructure(TM)
Index
First Trust Indxx Global Natural Resources Income ETF Indxx Global Natural Resources Income Index
First Trust Indxx Global Agriculture ETF Indxx Global Agriculture Index
First Trust BICK Index Fund ISE BICK(TM) Index
First Trust Indxx NextG ETF Indxx 5G & NextG Thematic Index(SM)
First Trust S-Network Future Vehicles & Technology ETF S-Network Electric & Future Vehicle Ecosystem
Index
First Trust Cloud Computing ETF ISE CTA Cloud Computing(TM) Index
First Trust International Equity Opportunities ETF IPOX(R) International Index
First Trust Nasdaq Cybersecurity ETF Nasdaq CTA Cybersecurity(TM) Index
First Trust IPOX(R) Europe Equity Opportunities ETF IPOX(R)-100 Europe Index
First Trust Dow Jones International Internet ETF Dow Jones International Internet Index
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are each considered an investment company and follow accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." 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.
Page 111
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
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. If the NYSE closes early on a valuation day, the
NAV is determined as of that time. Foreign securities are priced using data
reflecting the earlier closing of the principal markets for those securities.
Each Fund's NAV is calculated by dividing the value of all assets of each 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. Market
value prices represent readily available market quotations such as last sale or
official closing prices from a national or foreign exchange (i.e., a regulated
market) and are primarily obtained from third-party pricing services. Fair value
prices represent any prices not considered market value prices and are either
obtained from a third-party pricing service or are determined by the Pricing
Committee of the Funds' investment advisor, First Trust Advisors L.P. ("First
Trust" or the "Advisor"), in accordance with valuation procedures approved by
the Trust's Board of Trustees, and in accordance with provisions of the 1940 Act
and rules thereunder. Investments valued by the Advisor's Pricing Committee, if
any, are footnoted as such in the footnotes to the Portfolio of Investments.
Each Fund's investments are valued as follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the primary exchange for such securities.
Securities trading on foreign exchanges or over-the-counter markets that
close prior to the NYSE close may be valued using a systematic fair
valuation model provided by a third-party pricing service. If these
foreign securities meet certain criteria in relation to the valuation
model, their valuation is systematically adjusted to reflect the impact of
movement in the U.S. market after the close of the foreign markets.
Shares of open-end funds are valued based on NAV per share.
Securities traded in an over-the-counter market are valued at the mean of
their most recent bid and asked price, if available, and otherwise at
their last trade price.
Overnight repurchase agreements are valued at amortized cost when it
represents the most appropriate reflection of fair market value.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Advisor's Pricing Committee 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
third-party pricing service is unable to provide a market price; securities
whose trading has been formally suspended; a security whose market or fair value
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 third-party 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. When
fair value prices are used, generally they will differ from market quotations or
official closing prices on the applicable exchanges. A variety of factors may be
considered in determining the fair value of such securities, including, but not
limited to, the following:
1) the last sale price on the exchange on which they are principally
traded or, for Nasdaq and AIM securities, the official closing
price;
2) the type of security;
3) the size of the holding;
4) the initial cost of the security;
5) transactions in comparable securities;
6) price quotes from dealers and/or third-party pricing services;
7) relationships among various securities;
8) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
9) an analysis of the issuer's financial statements;
10) the existence of merger proposals or tender offers that might affect
the value of the security; and
11) other relevant factors.
Page 112
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) closed-end fund or exchange-traded fund trading of similar
securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur;
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions; and
9) other relevant factors.
In addition, differences between the prices used to calculate a Fund's NAV and
the prices used by such Fund's corresponding index could result in a difference
between a Fund's performance and the performance of its underlying index.
Because foreign markets may be open on different days than the days during which
investors may transact in the shares of a Fund, the value of the Fund's
securities may change on the days when investors are not able to transact in the
shares of the Fund. The value of securities denominated in foreign currencies is
converted into U.S. dollars using exchange rates determined daily as of the
close of regular trading on the NYSE. Any use of a different rate from the rates
used by a relevant index may adversely affect the Fund's ability to track the
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
investment.
The inputs or methodologies 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 each Fund's investments as of March 31, 2023, 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.
Withholding taxes and tax reclaims on foreign dividends have been provided for
in accordance with each Fund's understanding of the applicable country's tax
rules and rates.
Distributions received from a Fund's investments in master limited partnerships
("MLPs") generally are comprised of return of capital and investment income. A
Fund records estimated return of capital and investment income based on
historical information available from each MLP. These estimates may subsequently
be revised based on information received from the MLPs after their tax reporting
periods are concluded.
Distributions received from a Fund's investments in real estate investment
trusts ("REITs") 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 REITs' fiscal year end. A Fund records the character of
distributions received from the REITs during the year based on estimates
available. The characterization of distributions received by a Fund may be
subsequently revised based on information received from the REITs after their
tax reporting periods conclude.
Page 113
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
C. OFFSETTING ON THE STATEMENTS OF ASSETS AND LIABILITIES
Offsetting assets and liabilities requires entities to disclose both gross and
net information about instruments and transactions eligible for offset on the
Statements of Assets and Liabilities and disclose instruments and transactions
subject to master netting or similar agreements. These disclosure requirements
are intended to help investors and other financial statement users better assess
the effect or potential effect of offsetting arrangements on a Fund's financial
position. The transactions subject to offsetting disclosures are derivative
instruments, repurchase agreements and reverse repurchase agreements, and
securities borrowing and securities lending transactions.
This disclosure, if applicable, is included within each Fund's Portfolio of
Investments under the heading "Offsetting Assets and Liabilities." For financial
reporting purposes, the Funds do not offset financial assets and financial
liabilities that are subject to master netting arrangements ("MNAs") or similar
agreements on the Statements of Assets and Liabilities. MNAs provide the right,
in the event of default (including bankruptcy and insolvency), for the
non-defaulting counterparty to liquidate the collateral and calculate the net
exposure to the defaulting party or request additional collateral.
D. FOREIGN CURRENCY
The books and records of the Funds are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investments and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses on assets and liabilities, other than investments in securities, which
result from changes in foreign currency exchange rates have been included in
"Net change in unrealized appreciation (depreciation) on foreign currency
translation" on the Statements of Operations. Unrealized gains and losses on
investments in securities which result from changes in foreign exchange rates
are included with fluctuations arising from changes in market price and are
shown in "Net change in unrealized appreciation (depreciation) on investments"
on the Statements of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received and are included in "Net
realized gain (loss) on foreign currency transactions" on the Statements of
Operations. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase settlement date and
subsequent sale trade date is included in "Net realized gain (loss) on
investments" on the Statements of Operations.
E. SECURITIES LENDING
The Funds may lend securities representing up to 33 1/3% 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. The collateral amount is valued at the beginning of each
business day and is compared to the market value of the loaned securities from
the prior business day to determine if additional collateral is required. If
additional collateral is required, a request is sent to the borrower. 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 Funds.
Under the Funds' Securities Lending Agency Agreement, the securities lending
agent will generally bear the risk that a borrower may default on its obligation
to return loaned securities. Brown Brothers Harriman & Co. ("BBH") acts as each
Fund's securities lending agent and is responsible for executing the lending of
the portfolio securities to creditworthy borrowers with the exception of FAN.
The Bank of New York Mellon ("BNYM") acts as FAN's securities lending agent and
is responsible for executing the lending of the portfolio securities to
creditworthy borrowers. 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. Compensation can be
in the form of fees received from the securities lending agent or dividends or
interest earned from the investment of cash collateral. The fees received from
the securities lending agent are accrued daily. The dividend and interest earned
on the securities loaned is accounted for in the same manner as other dividend
and interest income. At March 31, 2023, FAN, GRID, FTRI, BICK, NXTG, CARZ, SKYY,
FPXI, CIBR and FPXE had securities in the securities lending program. During the
six months ended March 31, 2023, FAN, RBLD, GRID, FTRI, BICK, NXTG, CARZ, SKYY,
FPXI, CIBR, and FPXE participated in the securities lending program.
In the event of a default by a borrower with respect to any loan, BBH or BNYM
will exercise any and all remedies provided under the applicable borrower
agreement to make the Funds whole. These remedies include purchasing replacement
securities by applying the collateral held from the defaulting broker against
the purchase cost of the replacement securities. If, despite such efforts by BBH
and BNYM to exercise these remedies, a Fund sustains losses as a result of a
Page 114
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
borrower's default, BBH or BNYM will indemnify the Fund by purchasing
replacement securities at its own expense, or paying the Fund an amount equal to
the market value of the replacement securities, subject to certain limitations
which are set forth in detail in the Securities Lending Agency Agreement between
the Trust on behalf of the Funds and BBH or BNYM.
F. REPURCHASE AGREEMENTS
Repurchase agreements involve the purchase of securities subject to the seller's
agreement to repurchase the securities at a mutually agreed upon date and price,
under the terms of a Master Repurchase Agreement ("MRA"). During the term of a
repurchase agreement, the value of the underlying securities held as collateral
on behalf of a Fund, including accrued interest, is required to exceed the value
of the repurchase agreement, including accrued interest. The underlying
securities for all repurchase agreements are held at the Funds' custodian or
designated sub-custodians under tri-party repurchase agreements.
MRAs govern transactions between a Fund and select counterparties. The MRAs
contain provisions for, among other things, initiation, income payments, events
of default, and maintenance of collateral for repurchase agreements.
Repurchase agreements received for lending securities are collateralized by U.S.
Treasury securities. The U.S. Treasury securities are held in a joint custody
account at BBH or BNYM on behalf of the Funds participating in the securities
lending program. In the event the counterparty defaults on the repurchase
agreement, the U.S. Treasury securities can either be maintained as part of a
Fund's portfolio or sold for cash. A Fund could suffer a loss to the extent that
the proceeds from the sale of the underlying collateral held by the Fund is less
than the repurchase price and the Fund's costs associated with the delay and
enforcement of the MRA.
While the Funds may invest in repurchase agreements, any repurchase agreements
held by the Funds during the six months ended March 31, 2023, were received as
collateral for lending securities.
G. DIVIDENDS AND DISTRIBUTIONS 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 gains earned by each Fund, if any, are distributed
at least annually. A Fund may also designate a portion of the amount paid to
redeeming shareholders as a distribution for tax purposes.
Distributions from net investment income and realized capital gains are
determined in accordance with federal 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 significantly modified portfolio securities
held by the Funds 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 fiscal year
ended September 30, 2022 was as follows:
<TABLE>
<CAPTION>
Distributions Distributions Distributions
paid from paid from paid from
Ordinary Capital Return of
Income Gains Capital
----------------- -------------- --------------
<S> <C> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 13,077,255 $ -- $ --
First Trust Alerian Disruptive Technology Real Estate ETF 1,182,167 -- --
First Trust Dow Jones Global Select Dividend Index Fund 33,007,963 -- --
First Trust Global Wind Energy ETF 4,523,536 -- --
First Trust Alerian U.S. NextGen Infrastructure ETF 174,012 -- --
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 6,402,097 -- --
First Trust Indxx Global Natural Resources Income ETF 14,042,378 -- --
First Trust Indxx Global Agriculture ETF 278,287 -- --
First Trust BICK Index Fund 755,321 -- --
First Trust Indxx NextG ETF 21,161,695 4,454,950 --
First Trust S-Network Future Vehicles & Technology ETF 1,776,897 -- --
First Trust Cloud Computing ETF 47,254,977 -- --
First Trust International Equity Opportunities ETF 4,260,436 -- --
First Trust Nasdaq Cybersecurity ETF 33,554,011 -- --
First Trust IPOX(R) Europe Equity Opportunities ETF 115,891 -- --
First Trust Dow Jones International Internet ETF -- -- --
</TABLE>
Page 115
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
As of September 30, 2022, the components of distributable earnings on a tax
basis for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
----------------- -------------- --------------
<S> <C> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 318,040 $ (70,213,661) $ (57,482,744)
First Trust Alerian Disruptive Technology Real Estate ETF (353,747) (7,386,506) (269,380)
First Trust Dow Jones Global Select Dividend Index Fund 2,432,960 (174,119,735) (167,470,932)
First Trust Global Wind Energy ETF 368,144 (68,984,173) (70,152,209)
First Trust Alerian U.S. NextGen Infrastructure ETF -- (8,989,529) (1,110,653)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 560,260 (45,761,808) (94,584,124)
First Trust Indxx Global Natural Resources Income ETF 906,239 (68,386,405) (47,072,885)
First Trust Indxx Global Agriculture ETF 88,972 (20,071,117) (5,180,381)
First Trust BICK Index Fund 62,567 (34,443,676) (7,130,200)
First Trust Indxx NextG ETF -- -- (123,848,000)
First Trust S-Network Future Vehicles & Technology ETF 117,402 (12,270,499) (15,588,893)
First Trust Cloud Computing ETF -- (806,662,690) (1,274,586,686)
First Trust International Equity Opportunities ETF 758,414 (329,849,523) (39,863,658)
First Trust Nasdaq Cybersecurity ETF 463,929 (384,198,734) (602,008,009)
First Trust IPOX(R) Europe Equity Opportunities ETF -- (3,590,694) (868,225)
First Trust Dow Jones International Internet ETF (4,757) (9,782,902) (34,204,082)
</TABLE>
H. INCOME AND OTHER TAXES
Each Fund intends to continue 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 each Fund's taxable income
exceeds the distributions from such taxable income for the calendar year.
Certain countries assess a capital gains tax on securities sold in their local
markets. This tax is accrued as the securities in these foreign markets
appreciate in value and is paid at the time of sale to the extent a capital gain
is realized. Taxes accrued on securities in an unrealized appreciation position
are included in "Net change in unrealized appreciation (depreciation) on
deferred foreign capital gains tax" on the Statements of Operations. The capital
gains tax paid on securities sold, if any, is included in "Net realized gain
(loss) on foreign capital gains tax" on the Statements of Operations.
India's Finance Bill, 2018 ("Finance Bill, 2018") was enacted into law on March
29, 2018 and amongst other provisions, it introduced a long-term capital gains
tax beginning April 1, 2018. Long-term capital gains on the sale of listed
shares in excess of INR 0.1 million are taxed at the rate of 10% (plus
applicable surcharge and cess (which is a type of tax)) subject to satisfaction
of certain conditions. Long-term capital gains accruing as of January 31, 2018
are considered exempt due to a grandfather clause in the provision. The
aforesaid exemption from long-term capital gains tax is available with respect
to shares acquired between October 1, 2004 and March 31, 2018 only if on such
acquisitions Securities Transaction Tax ("STT") was chargeable. Certain
exceptions in this regard, such as acquisition of shares in a public offer,
bonus, rights issued, etc. for which the condition of chargeability of STT on
acquisition is not applicable, have been notified.
In the case of the sale of listed shares held by a Fund for one year or less,
the income is classified as short-term capital gains and is taxable at 15% (plus
applicable surcharge and cess) provided the shares are sold on the stock
exchange and subjected to STT. For above purposes, the applicable rate of
surcharge is 2% or 5% (depending on the level of income of the Fund). The
Finance Bill, 2018 increases the cess imposed on the sum of tax and surcharge
from 3% to 4%. The cess 4% rate is applied to the capital gains tax, resulting
in a higher effective rate of capital gains tax.
Where the sale of shares is outside the stock exchange and not subject to STT,
the long-term capital gains are taxed at 10% (plus applicable surcharge and
cess) and short-term capital gains are taxed at 30% (plus applicable surcharge
and cess). The Finance Bill, 2018, approves the carry forward of long-term
capital losses to be offset against long-term capital gains. Short-term losses
can be netted against both short-term gains and long-term gains.
Until March 31, 2020, dividends received by the Fund from Indian companies were
exempt from tax in India because Indian companies were required to pay dividend
distribution tax. The Indian Finance Act, 2020 has amended the dividend taxation
framework effective April 1, 2020 and accordingly dividends would now be taxable
in the hands of the shareholders at 20%, plus applicable surcharge and cess.
Subsequent to the Indian Finance Act, 2020, "The Taxation and Other Laws
Page 116
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
(Relaxation and Amendment of Certain Provisions) Bill, 2020" (the "Bill") was
enacted into law and is effective retroactively to April 1, 2020. The Bill caps
the maximum surcharge at 15% of the tax on dividend income earned by the Fund.
The highest effective tax rate proposed for non-corporate entities on dividends
will be 23.92%. Note the Fund will not obtain relief under the US-India tax
treaty as the treaty rate of 25% is higher than the domestic rate. Any excess
taxes withheld can be offset against capital gains tax liability during the year
or claimed as a refund in the annual tax return.
Please note that the above description is based on current provisions of Indian
law, and any change or modification made by subsequent legislation, regulation,
or administrative or judicial decision could increase the Indian tax liability
of a Fund and thus reduce the return to a Fund's shareholders. There can be no
assurance that the Indian tax authorities and/or regulators will not take a
position contrary to the views expressed herein. If the Indian tax authorities
and/or regulators take a position contrary to the views expressed herein,
adverse unpredictable consequences may follow.
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. Taxable years ended 2019, 2020,
2021, and 2022 remain open to federal and state audit. As of March 31, 2023,
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.
Each Fund intends to utilize provisions of the federal income tax laws, which
allow it to carry a realized capital loss forward indefinitely following the
year of the loss and offset such loss against any future realized capital gains.
Each Fund is 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. At September 30, 2022, for
federal income tax purposes, each applicable Fund had a capital loss
carryforward available that is shown in the table below, to the extent provided
by regulations, to offset future capital gains. To the extent that these loss
carryforwards are used to offset future capital gains, it is probable that the
capital gains so offset will not be distributed to each applicable Fund's
shareholders.
<TABLE>
<CAPTION>
Non-Expiring
Capital Loss
Carryforward
---------------------
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 70,213,661
First Trust Alerian Disruptive Technology Real Estate ETF* 7,386,506
First Trust Dow Jones Global Select Dividend Index Fund 174,119,735
First Trust Global Wind Energy ETF 68,984,173
First Trust Alerian U.S. NextGen Infrastructure ETF 8,989,529
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 45,761,808
First Trust Indxx Global Natural Resources Income ETF 68,386,405
First Trust Indxx Global Agriculture ETF 20,071,117
First Trust BICK Index Fund 34,443,676
First Trust Indxx NextG ETF --
First Trust S-Network Future Vehicles & Technology ETF 12,270,499
First Trust Cloud Computing ETF 806,662,690
First Trust International Equity Opportunities ETF 329,849,523
First Trust Nasdaq Cybersecurity ETF 384,198,734
First Trust IPOX(R) Europe Equity Opportunities ETF 3,590,694
First Trust Dow Jones International Internet ETF 9,782,902
</TABLE>
* $75,097 of First Trust Alerian Disruptive Technology Real Estate ETF's
non-expiring net capital losses is subject to loss limitation resulting
from reorganization activity. This limitation generally reduces the
utilization of these losses to a maximum of $34,965 per year.
During the taxable year ended September 30, 2022, the following Fund utilized
non-expiring capital loss carryforwards in the following amounts:
<TABLE>
<CAPTION>
Capital Loss
Carryforward
Utilized
---------------------
<S> <C>
First Trust Dow Jones Global Select Dividend Index Fund $ 14,051,962
</TABLE>
Page 117
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal year ended September 30, 2022, the following
Funds incurred and elected to defer late year ordinary or capital losses as
follows:
<TABLE>
<CAPTION>
Qualified Late Year Losses
------------------------------------------
Ordinary Losses Capital Losses
--------------- --------------
<S> <C> <C>
First Trust Alerian Disruptive Technology Real Estate ETF $ 372,647 $ --
First Trust Dow Jones International Internet ETF 4,757 --
</TABLE>
As of March 31, 2023, the aggregate cost, gross unrealized appreciation, gross
unrealized depreciation, and net unrealized appreciation/(depreciation) on
investments (including short positions and derivatives, if any) for federal
income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Unrealized Unrealized Appreciation
Tax Cost Appreciation (Depreciation) (Depreciation)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Trust STOXX(R) European Select
Dividend Index Fund $ 190,752,470 $ 11,878,375 $ (17,718,868) $ (5,840,493)
First Trust Alerian Disruptive Technology
Real Estate ETF 24,312,586 2,528,989 (1,053,884) 1,475,105
First Trust Dow Jones Global Select Dividend
Index Fund 696,551,592 23,671,823 (59,276,974) (35,605,151)
First Trust Global Wind Energy ETF 319,424,898 21,135,686 (40,872,621) (19,736,935)
First Trust Alerian U.S. NextGen
Infrastructure ETF 7,255,207 577,409 (371,914) 205,495
First Trust NASDAQ(R) Clean Edge(R) Smart
Grid Infrastructure Index Fund 665,393,298 72,020,979 (10,173,311) 61,847,668
First Trust Indxx Global Natural Resources
Income ETF 311,197,623 3,773,227 (22,200,917) (18,427,690)
First Trust Indxx Global Agriculture ETF 20,759,896 465,489 (2,655,877) (2,190,388)
First Trust BICK Index Fund 12,266,173 1,250,031 (1,695,900) (445,869)
First Trust Indxx NextG ETF 459,988,884 49,724,791 (54,566,258) (4,841,467)
First Trust S-Network Future Vehicles &
Technology ETF 46,158,524 3,177,438 (6,048,991) (2,871,553)
First Trust Cloud Computing ETF 3,131,929,616 297,794,830 (643,343,489) (345,548,659)
First Trust International Equity
Opportunities ETF 231,341,628 26,951,353 (3,040,051) 23,911,302
First Trust Nasdaq Cybersecurity ETF 4,689,048,752 614,857,399 (448,455,485) 166,401,914
First Trust IPOX(R) Europe Equity
Opportunities ETF 4,854,979 741,803 (115,073) 626,730
First Trust Dow Jones International
Internet ETF 43,020,587 1,453,127 (11,880,373) (10,427,246)
</TABLE>
I. EXPENSES
Expenses that are directly related to one of the Funds are charged directly to
the respective Fund, except for First Trust Alerian Disruptive Technology Real
Estate ETF, First Trust Alerian U.S. NextGen Infrastructure ETF, First Trust
Indxx Global Natural Resources Income ETF, First Trust Indxx Global Agriculture
ETF, First Trust BICK Index Fund, First Trust Indxx NextG ETF, First Trust
S-Network Future Vehicles & Technology ETF, First Trust Cloud Computing ETF,
First Trust International Equity Opportunities ETF, First Trust Nasdaq
Cybersecurity ETF, First Trust IPOX(R) Europe Equity Opportunities ETF, and
First Trust Dow Jones International Internet ETF (the "Unitary Fee Funds"), for
which expenses other than excluded expenses (discussed in Note 3) are paid by
the Advisor. General expenses of the Trust are allocated to all the Funds based
upon the net assets of each Fund.
Page 118
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
First Trust has entered into licensing agreements with each of the following
"Licensors" for the respective Funds:
<TABLE>
<CAPTION>
FUND LICENSOR
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund STOXX Limited
First Trust Alerian Disruptive Technology Real Estate ETF VettaFi LLC
First Trust Dow Jones Global Select Dividend Index Fund S&P Dow Jones Indices LLC
First Trust Global Wind Energy ETF Nasdaq, Inc.
First Trust Alerian U.S. NextGen Infrastructure ETF VettaFi LLC
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund Nasdaq, Inc.
First Trust Indxx Global Natural Resources Income ETF Indxx, Inc.
First Trust Indxx Global Agriculture ETF Indxx, Inc.
First Trust BICK Index Fund Nasdaq, Inc.
First Trust Indxx NextG ETF Indxx, Inc.
First Trust S-Network Future Vehicles & Technology ETF VettaFi LLC
First Trust Cloud Computing ETF Nasdaq, Inc.
First Trust International Equity Opportunities ETF IPOX(R) Schuster LLC
First Trust Nasdaq Cybersecurity ETF Nasdaq, Inc.
First Trust IPOX(R) Europe Equity Opportunities ETF IPOX(R) Schuster LLC
First Trust Dow Jones International Internet ETF S&P Dow Jones Indices LLC
</TABLE>
The respective license agreements allow for the use of each Fund's respective
index and of certain trademarks and trade names of the respective Licensors. The
Funds are sub-licensees to the applicable license agreements. The Funds, except
for the Unitary Fee Funds, are required to pay licensing fees, which are shown
on the Statements of Operations. The licensing fees for the Unitary Fee Funds
are paid by First Trust from the unitary investment advisory fees it receives
from each of these Funds.
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.
For the Unitary Fee Funds, First Trust is paid an annual unitary management fee
based on a percentage of each Fund's average daily net assets and is responsible
for the expenses of each Fund including the cost of transfer agency, custody,
fund administration, legal, audit, license and other services, and excluding fee
payments under the Investment Management Agreement, distribution and service
fees pursuant to a Rule 12b-1 plan, if any, brokerage expenses, acquired fund
fees and expenses, taxes, interest, and extraordinary expenses. Effective
November 1, 2022, the annual unitary management fee payable by each Fund to
First Trust for these services will be reduced at certain levels of each Fund's
net assets ("breakpoints") and calculated pursuant to the schedules below:
<TABLE>
<CAPTION>
Breakpoints RBLD SKYY CIBR
--------------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Fund net assets up to and including $2.5 billion 0.65000% 0.600% 0.600%
Fund net assets greater than $2.5 billion up to and
including $5 billion 0.63375% 0.585% 0.585%
Fund net assets greater than $5 billion up to and
including $7.5 billion 0.61750% 0.570% 0.570%
Fund net assets greater than $7.5 billion up to and
including $10 billion 0.60125% 0.555% 0.555%
Fund net assets greater than $10 billion up to and
including $15 billion 0.58500% 0.540% 0.540%
Fund net assets greater than $15 billion 0.55250% 0.510% 0.510%
</TABLE>
<TABLE>
<CAPTION>
Breakpoints DTRE FTRI FTAG BICK NXTG
--------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Fund net assets up to and including $2.5 billion 0.600% 0.7000% 0.7000% 0.640% 0.7000%
Fund net assets greater than $2.5 billion up to and
including $5 billion 0.585% 0.6825% 0.6825% 0.624% 0.6825%
Fund net assets greater than $5 billion up to and
including $7.5 billion 0.570% 0.6650% 0.6650% 0.608% 0.6650%
Fund net assets greater than $7.5 billion up to and
including $10 billion 0.555% 0.6475% 0.6475% 0.592% 0.6475%
Fund net assets greater than $10 billion 0.540% 0.6300% 0.6300% 0.576% 0.6300%
</TABLE>
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
Breakpoints CARZ FPXI FPXE FDNI
--------------------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Fund net assets up to and including $2.5 billion 0.7000% 0.7000% 0.7000% 0.65000%
Fund net assets greater than $2.5 billion up to and
including $5 billion 0.6825% 0.6825% 0.6825% 0.63375%
Fund net assets greater than $5 billion up to and
including $7.5 billion 0.6650% 0.6650% 0.6650% 0.61750%
Fund net assets greater than $7.5 billion up to and
including $10 billion 0.6475% 0.6475% 0.6475% 0.60125%
Fund net assets greater than $10 billion 0.6300% 0.6300% 0.6300% 0.58500%
</TABLE>
Prior to November 1, 2022, First Trust was paid an annual unitary management fee
at the specified rate based on each Fund's average daily net assets at the
following rates:
<TABLE>
<CAPTION>
<S> <C>
First Trust Alerian Disruptive Technology Real Estate ETF 0.60%
First Trust Alerian U.S. NextGen Infrastructure ETF 0.65%
First Trust Indxx Global Natural Resources Income ETF 0.70%
First Trust Indxx Global Agriculture ETF 0.70%
First Trust BICK Index Fund 0.64%
First Trust Indxx NextG ETF 0.70%
First Trust S-Network Future Vehicles & Technology ETF 0.70%
First Trust Cloud Computing ETF 0.60%
First Trust International Equity Opportunities ETF 0.70%
First Trust Nasdaq Cybersecurity ETF 0.60%
First Trust IPOX(R) Europe Equity Opportunities ETF 0.70%
First Trust Dow Jones International Internet ETF 0.65%
</TABLE>
Effective November 1, 2022, for the First Trust STOXX(R) European Select
Dividend Index Fund, First Trust Dow Jones Global Select Dividend Index Fund,
First Trust Global Wind Energy ETF, and First Trust NASDAQ(R) Clean Edge(R)
Smart Grid Infrastructure Index Fund (such Funds, the "Expense Cap Funds"),
First Trust is paid an annual management fee based on a percentage of each
Fund's average daily net assets and calculated pursuant to the schedule below:
<TABLE>
<CAPTION>
Breakpoints
-------------------------------------------------------------------------
<S> <C>
Fund net assets up to and including $2.5 billion 0.40%
Fund net assets greater than $2.5 billion up to and including $5 billion 0.39%
Fund net assets greater than $5 billion up to and including $7.5 billion 0.38%
Fund net assets greater than $7.5 billion up to and including $10 billion 0.37%
Fund net assets greater than $10 billion 0.36%
</TABLE>
Prior to November 1, 2022, First Trust was paid an annual management fee of
0.40% of each Fund's average daily net assets.
For the Expense Cap Funds, the Trust and First Trust have entered into an
Expense Reimbursement, Fee Waiver and Recovery Agreement ("Recovery Agreement")
in which First Trust has agreed to waive fees and/or reimburse Fund expenses to
the extent that the operating expenses of each such Fund (excluding interest
expense, brokerage commissions and other trading expenses, acquired fund fees
and expenses, taxes and extraordinary expenses) exceed the following amount as a
percentage of average daily net assets per year (the "Expense Cap") at least
through January 31, 2024.
<TABLE>
<CAPTION>
Expense Cap
-------------
<S> <C>
First Trust STOXX(R) European Select Dividend Index Fund 0.60%
First Trust Dow Jones Global Select Dividend Index Fund 0.60%
First Trust Global Wind Energy ETF 0.60%
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 0.70%
</TABLE>
Prior to November 1, 2022, expenses reimbursed and fees waived by First Trust
under the Recovery Agreement were subject to recovery by First Trust for up to
three years from the date the fee or expense was incurred, but no reimbursement
payment would be made by a Fund if it resulted in the Fund exceeding (i) the
applicable expense limitation in place for the most recent fiscal year for which
such expense limitation was in place, (ii) the applicable expense limitation in
place at the time the fees were waived, or (iii) the current expense limitation.
These amounts would be included in "Expenses previously waived or reimbursed" on
the Statements of Operations. First Trust did not recover expenses from any
Funds during the six months ended March 31, 2023. Effective November 1, 2022, in
connection with the introduction of breakpoints discussed above, First Trust has
agreed to remove its ability to recover previous expenses borne and fees waived
under the Recovery Agreement.
Page 120
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
The Trust has multiple service agreements with BNYM. Under the service
agreements, BNYM performs custodial, fund accounting, certain administrative
services, and transfer agency services for each Fund. As custodian, BNYM is
responsible for custody of each Fund's assets. As fund accountant and
administrator, BNYM is responsible for maintaining the books and records of each
Fund's securities and cash. As transfer agent, BNYM is responsible for
maintaining shareholder records for each Fund. BNYM is a subsidiary of The Bank
of New York Mellon Corporation, a financial holding company.
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 that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a target outcome fund or an index fund.
Additionally, the Lead Independent Trustee and the Chairs of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee Chairs
rotate every three years. The officers and "Interested" Trustee receive no
compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the six months ended March 31, 2023, the cost of purchases and proceeds from
sales of investments for each Fund, excluding short-term investments and in-kind
transactions, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
---------------- --------------
<S> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 80,796,660 $ 78,604,053
First Trust Alerian Disruptive Technology Real Estate ETF 5,683,495 5,633,015
First Trust Dow Jones Global Select Dividend Index Fund 224,153,558 205,178,286
First Trust Global Wind Energy ETF 43,690,688 41,491,672
First Trust Alerian U.S. NextGen Infrastructure ETF 1,318,579 1,317,763
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 74,316,534 71,471,916
First Trust Indxx Global Natural Resources Income ETF 35,944,461 33,643,373
First Trust Indxx Global Agriculture ETF 1,940,457 2,830,199
First Trust BICK Index Fund 4,531,680 19,114,888
First Trust Indxx NextG ETF 32,833,669 57,002,893
First Trust S-Network Future Vehicles & Technology ETF 8,171,805 9,243,258
First Trust Cloud Computing ETF 542,339,795 533,341,377
First Trust International Equity Opportunities ETF 192,781,674 208,353,595
First Trust Nasdaq Cybersecurity ETF 848,873,189 830,665,485
First Trust IPOX(R) Europe Equity Opportunities ETF 4,047,779 4,037,426
First Trust Dow Jones International Internet ETF 16,487,278 15,578,959
</TABLE>
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
For the six months ended March 31, 2023, the cost of in-kind purchases and
proceeds from in-kind sales for each Fund were as follows:
<TABLE>
<CAPTION>
Purchases Sales
---------------- --------------
<S> <C> <C>
First Trust STOXX(R) European Select Dividend Index Fund $ 9,623,831 $ 18,909,882
First Trust Alerian Disruptive Technology Real Estate ETF -- --
First Trust Dow Jones Global Select Dividend Index Fund 108,547,997 40,765,367
First Trust Global Wind Energy ETF 15,390,570 18,408,950
First Trust Alerian U.S. NextGen Infrastructure ETF -- 2,145,764
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund 97,366,820 76,254,551
First Trust Indxx Global Natural Resources Income ETF 87,767,994 13,317,971
First Trust Indxx Global Agriculture ETF -- 4,929,465
First Trust BICK Index Fund 574,415 22,258,911
First Trust Indxx NextG ETF -- 98,567,360
First Trust S-Network Future Vehicles & Technology ETF -- 8,295,712
First Trust Cloud Computing ETF 84,626,833 555,195,229
First Trust International Equity Opportunities ETF -- 98,440,261
First Trust Nasdaq Cybersecurity ETF 27,892,890 390,996,343
First Trust IPOX(R) Europe Equity Opportunities ETF -- 1,077,597
First Trust Dow Jones International Internet ETF 3,814,002 7,555,558
</TABLE>
5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES
Each Fund generally issues and redeems its shares in primary market transactions
through a creation and redemption mechanism and does not sell or redeem
individual shares. Instead, financial entities known as "Authorized
Participants" have contractual arrangements with a Fund or one of the Fund's
service providers to purchase and redeem Fund shares directly with the Fund in
large blocks of shares known as "Creation Units." Prior to the start of trading
on every business day, a Fund publishes through the National Securities Clearing
Corporation ("NSCC") the "basket" of securities, cash or other assets that it
will accept in exchange for a Creation Unit of the Fund's shares. An Authorized
Participant that wishes to effectuate a creation of a Fund's shares deposits
with the Fund the "basket" of securities, cash or other assets identified by the
Fund that day, and then receives the Creation Unit of the Fund's shares in
return for those assets. After purchasing a Creation Unit, the Authorized
Participant may continue to hold the Fund's shares or sell them in the secondary
market. The redemption process is the reverse of the purchase process: the
Authorized Participant redeems a Creation Unit of a Fund's shares for a basket
of securities, cash or other assets. The combination of the creation and
redemption process with secondary market trading in a Fund's shares and
underlying securities provides arbitrage opportunities that are designed to help
keep the market price of a Fund's shares at or close to the NAV per share of the
Fund.
Each Fund imposes fees in connection with the purchase of Creation Units. These
fees may vary based upon various fact-based circumstances, including, but not
limited to, the composition of the securities included in the Creation Unit or
the countries in which the transactions are settled. The price for each Creation
Unit will equal the daily NAV per share of a Fund 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, stamp taxes and part
or all of the spread between the expected bid and offer side of the market
related to the securities comprising the creation basket.
Each Fund also imposes fees in connection with the redemption of Creation Units.
These fees may vary based upon various fact- based circumstances, including, but
not limited to, the composition of the securities included in the Creation Unit
or the countries in which the transactions are settled. The price received for
each Creation Unit will equal the daily NAV per share of a Fund times the number
of shares in a Creation Unit, minus the fees described above and, if applicable,
any 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 the securities comprising the redemption basket. Investors who use
the services of a broker or other such intermediary in addition to an Authorized
Participant to effect a redemption of a Creation Unit may also be assessed an
amount to cover the cost of such services. The redemption fee charged by a Fund
will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no
more than 2% of the value of the shares redeemed.
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
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
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, no 12b-1 fees will be paid any time before September 30, 2024 for
DTRE and January 31, 2024 for each other Fund.
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 that
there were no subsequent events requiring recognition or disclosure in the
financial statements that have not already been disclosed.
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ADDITIONAL INFORMATION
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (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 voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
RISK CONSIDERATIONS
RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE
APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS
RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW
APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT
IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY
FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE,
RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT
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.
CONCENTRATION RISK. To the extent that a fund is able to invest a significant
percentage of its assets in a single asset class or the securities of issuers
within the same country, state, region, industry or sector, an adverse economic,
business or political development may affect the value of the fund's investments
more than if the fund were more broadly diversified. A fund that tracks an index
will be concentrated to the extent the fund's corresponding index is
concentrated. A concentration makes a fund more susceptible to any single
occurrence and may subject the fund to greater market risk than a fund that is
more broadly diversified.
CREDIT 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.
CYBER SECURITY RISK. The funds are susceptible to potential operational risks
through breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional events that may cause a fund to lose proprietary
information, suffer data corruption or lose operational capacity. Such events
could cause a fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial
loss. In addition, cyber security breaches of a fund's third-party service
providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the fund invests, can also subject a fund to
many of the same risks associated with direct cyber security breaches.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
DERIVATIVES RISK. To the extent a fund uses derivative instruments such as
futures contracts, options contracts and swaps, the fund may experience losses
because of adverse movements in the price or value of the underlying asset,
index or rate, which may be magnified by certain features of the derivative.
These risks are heightened when a fund's portfolio managers use derivatives to
enhance the fund's return or as a substitute for a position or security, rather
than solely to hedge (or offset) the risk of a position or security held by the
fund.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the
value of the fund's shares will fluctuate with changes in the value of the
equity securities. Equity securities prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, such as market
volatility, or when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase. Equity
securities may decline significantly in price over short or extended periods of
time, and such declines may occur in the equity market as a whole, or they may
occur in only a particular country, company, industry or sector of the market.
ETF RISK. The shares of an ETF trade like common stock and represent an interest
in a portfolio of securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities, although lack of liquidity in an ETF
could result in it being more volatile and ETFs have management fees that
increase their costs. Shares of an ETF trade on an exchange at market prices
rather than net asset value, which may cause the shares to trade at a price
greater than net asset value (premium) or less than net asset value (discount).
In times of market stress, decisions by market makers to reduce or step away
from their role of providing a market for an ETF's shares, or decisions by an
ETF's authorized participants that they are unable or unwilling to proceed with
creation and/or redemption orders of an ETF's shares, could result in shares of
the ETF trading at a discount to net asset value and in greater than normal
intraday bid-ask spreads.
FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income
securities, the fund will be subject to credit risk, income risk, interest rate
risk, liquidity risk and prepayment risk. Income risk is the risk that income
from a fund's fixed income investments could decline during periods of falling
interest rates. Interest rate risk is the risk that the value of a fund's fixed
income securities will decline because of rising interest rates. Liquidity risk
is the risk that a security cannot be purchased or sold at the time desired, or
cannot be purchased or sold without adversely affecting the price. Prepayment
risk is the risk that the securities will be redeemed or prepaid by the issuer,
resulting in lower interest payments received by the fund. In addition to these
risks, high yield securities, or "junk" bonds, are subject to greater market
fluctuations and risk of loss than securities with higher ratings, and the
market for high yield securities is generally smaller and less liquid than that
for investment grade securities.
INDEX OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. As a result, such a fund may be included in one or
more index-tracking exchange-traded funds or mutual funds. Being a component
security of such a vehicle could greatly affect the trading activity involving a
fund, the size of the fund and the market volatility of the fund. Inclusion in
an index could increase demand for the fund and removal from an index could
result in outsized selling activity in a relatively short period of time. As a
result, a fund's net asset value could be negatively impacted and the fund's
market price may be significantly below its net asset value during certain
periods. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject
to Index Provider Risk. There is no assurance that the Index Provider will
compile the Index accurately, or that the Index will be determined, maintained,
constructed, reconstituted, rebalanced, composed, calculated or disseminated
accurately. To correct any such error, the Index Provider may carry out an
unscheduled rebalance or other modification of the Index constituents or
weightings, which may increase the fund's costs. The Index Provider does not
provide any representation or warranty in relation to the quality, accuracy or
completeness of data in the Index, and it does not guarantee that the Index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any Index Provider errors generally will be borne by the fund
and its shareholders.
INVESTMENT COMPANIES RISK. To the extent a fund invests in the securities of
other investment vehicles, the fund will incur additional fees and expenses that
would not be present in a direct investment in those investment vehicles.
Furthermore, the fund's investment performance and risks are directly related to
the investment performance and risks of the investment vehicles in which the
fund invests.
LIBOR RISK. To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as a reference
interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial
Conduct Authority, which regulates LIBOR has ceased making LIBOR available as a
reference rate over a phase-out period that began December 31, 2021. There is no
assurance that any alternative reference rate, including the Secured Overnight
Financing Rate ("SOFR") will be similar to or produce the same value or economic
equivalence as LIBOR or that instruments using an alternative rate will have the
same volume or liquidity. The unavailability or replacement of LIBOR may affect
the value, liquidity or return on certain fund investments and may result in
costs incurred in connection with closing out positions and entering into new
trades. Any potential effects of the transition away from LIBOR on the fund or
on certain instruments in which the fund invests can be difficult to ascertain,
and they may vary depending on a variety of factors, and they could result in
losses to the fund.
MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to
management risk. In managing an actively-managed fund's investment portfolio,
the fund's portfolio managers will apply investment techniques and risk analyses
that may not have the desired result. There can be no guarantee that a fund will
meet its investment objective.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
MARKET RISK. Market risk is the risk that a particular security, or shares of a
fund in general, may fall in value. Securities held by a fund, as well as shares
of a fund itself, are subject to market fluctuations caused by factors such as
general economic conditions, political events, regulatory or market
developments, changes in interest rates and perceived trends in securities
prices. Shares of a fund could decline in value or underperform other
investments as a result of the risk of loss associated with these market
fluctuations. In addition, local, regional or global events such as war, acts of
terrorism, spread of infectious diseases or other public health issues,
recessions, or other events could have a significant negative impact on a fund
and its investments. Such events may affect certain geographic regions,
countries, sectors and industries more significantly than others. In February
2022, Russia invaded Ukraine which has caused and could continue to cause
significant market disruptions and volatility within the markets in Russia,
Europe, and the United States. The hostilities and sanctions resulting from
those hostilities could have a significant impact on certain fund investments as
well as fund performance. The COVID-19 global pandemic and the ensuing policies
enacted by governments and central banks have caused and may continue to cause
significant volatility and uncertainty in global financial markets. While the
U.S. has resumed "reasonably" normal business activity, many countries continue
to impose lockdown measures. Additionally, there is no guarantee that vaccines
will be effective against emerging variants of the disease. These events also
adversely affect the prices and liquidity of a fund's portfolio securities or
other instruments and could result in disruptions in the trading markets. Any of
such circumstances could have a materially negative impact on the value of a
fund's shares and result in increased market volatility. During any such events,
a fund's shares may trade at increased premiums or discounts to their net asset
value and the bid/ask spread on a fund's shares may widen.
NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities,
it is subject to additional risks not associated with securities of domestic
issuers. Non-U.S. securities are subject to higher volatility than securities of
domestic issuers due to: possible adverse political, social or economic
developments; restrictions on foreign investment or exchange of securities;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
OPERATIONAL RISK. Each fund is subject to risks arising from various operational
factors, including, but not limited to, human error, processing and
communication errors, errors of a fund's service providers, counterparties or
other third-parties, failed or inadequate processes and technology or systems
failures. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment advisor seek to reduce these operational
risks through controls and procedures, there is no way to completely protect
against such risks.
PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund
will invest in the securities included in, or representative of, the index
regardless of their investment merit. A fund generally will not attempt to take
defensive positions in declining markets.
PREFERRED SECURITIES RISK. Preferred securities combine some of the
characteristics of both common stocks and bonds. Preferred securities are
typically subordinated to bonds and other debt securities in a company's capital
structure in terms of priority to corporate income, subjecting them to greater
credit risk than those debt securities. Generally, holders of preferred
securities have no voting rights with respect to the issuing company unless
preferred dividends have been in arrears for a specified number of periods, at
which time the preferred security holders may obtain limited rights. In certain
circumstances, an issuer of preferred securities may defer payment on the
securities and, in some cases, redeem the securities prior to a specified date.
Preferred securities may also be substantially less liquid than other
securities, including common stock.
VALUATION RISK. The valuation of certain securities may carry more risk than
that of common stock. Uncertainties in the conditions of the financial markets,
unreliable reference data, lack of transparency and inconsistency of valuation
models and processes may lead to inaccurate asset pricing. A fund may hold
investments in sizes smaller than institutionally sized round lot positions
(sometimes referred to as odd lots). However, third-party pricing services
generally provide evaluations on the basis of institutionally-sized round lots.
If a fund sells certain of its investments in an odd lot transaction, the sale
price may be less than the value at which such securities have been held by the
fund. Odd lots often trade at lower prices than institutional round lots. There
is no assurance that the fund will be able to sell a portfolio security at the
price established by the pricing service, which could result in a loss to the
fund.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
Page 126
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
ADVISORY AGREEMENTS
BOARD CONSIDERATIONS REGARDING APPROVAL OF AMENDMENTS TO THE INVESTMENT
MANAGEMENT AGREEMENTS
UNITARY FEE FUNDS
The Board of Trustees of First Trust Exchange-Traded Fund II (the "Trust"),
including the Independent Trustees, unanimously approved the amendment (as
applicable to a specific Fund, the "Amendment" and collectively, the
"Amendments") of the Investment Management Agreements (as applicable to a
specific Fund, the "Agreement" and collectively, the "Agreements") with First
Trust Advisors L.P. (the "Advisor") on behalf of the following twelve series of
the Trust (each a "Fund" and collectively, the "Funds"):
First Trust Indxx Global Natural Resources Income ETF (FTRI)
First Trust Indxx Global Agriculture ETF (FTAG)
First Trust Alerian Disruptive Technology Real Estate ETF (DTRE)
First Trust BICK Index Fund (BICK)
First Trust Indxx NextG ETF (NXTG)
First Trust S-Network Future Vehicles & Technology ETF (CARZ)
First Trust Cloud Computing ETF (SKYY)
First Trust International Equity Opportunities ETF (FPXI)
First Trust Nasdaq Cybersecurity ETF (CIBR)
First Trust IPOX(R) Europe Equity Opportunities ETF (FPXE)
First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD)
First Trust Dow Jones International Internet ETF (FDNI)
The Board approved the Amendment for each Fund at a meeting held on October 24,
2022. As part of the review process, the Board reviewed information and had
preliminary discussions with the Advisor regarding the proposed Amendments at
meetings held on April 18, 2022, June 12-13, 2022 and September 18-19, 2022.
Following those preliminary discussions, the Board requested and received
information from the Advisor regarding the proposed Amendments, and that
information was considered at an executive session of the Independent Trustees
and their counsel held prior to the October 24, 2022 meeting, as well as at the
October meeting.
In reviewing the Amendment for each Fund, the Board considered that the purpose
of the Amendments is to modify the unitary fee rate for each Fund under the
applicable Agreement by introducing a breakpoint schedule pursuant to which the
unitary fee rate paid by each Fund to the Advisor will be reduced as assets of
such Fund meet certain thresholds. The Board noted the Advisor's representations
that the quality and quantity of the services provided to each Fund by the
Advisor under the applicable Agreement will not be reduced or modified as a
result of the applicable Amendment, and that the obligations of the Advisor
under each Agreement will remain the same in all respects.
The Board noted that it, including the Independent Trustees, last approved the
continuation of the applicable Agreement for each Fund other than RBLD and DTRE
for a one-year period ending June 30, 2023 at a meeting held on June 12-13,
2022. The Board noted that in connection with its approval it had determined for
each Fund, based upon the information provided, that the terms of the applicable
Agreement were fair and reasonable and that the continuation of the applicable
Agreement was in the best interests of the Fund in light of the nature, extent
and quality of the services provided and such other matters as the Board
considered to be relevant in the exercise of its business judgment.
The Board also noted that it, including the Independent Trustees, approved the
applicable Agreement for RBLD and DTRE for an initial two-year period ending
August 1, 2024 and October 3, 2024, respectively, at a meeting held on April 26,
2021 and that shareholders of each of RBLD and DTRE approved the applicable
Agreement for their respective Fund at meetings held on July 25, 2022 and
September 1, 2022, respectively. The Board noted that in connection with its
approval it had determined for each Fund, based upon the information provided,
that the terms of the applicable Agreement were fair and reasonable and that the
approval of the applicable Agreement was in the best interests of the Fund in
light of the nature, extent and quality of the services expected to be provided
and such other matters as the Board considered to be relevant in the exercise of
its business judgment.
Based on all of the information considered, the Board, including the Independent
Trustees, unanimously determined that the terms of the Amendments are fair and
reasonable and that the Amendments are in the best interests of each Fund.
Page 127
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
BOARD CONSIDERATIONS REGARDING APPROVAL OF AMENDMENT TO THE INVESTMENT
MANAGEMENT AGREEMENT
NON-UNITARY FEE FUNDS
The Board of Trustees of First Trust Exchange-Traded Fund II (the "Trust"),
including the Independent Trustees, unanimously approved the amendment (the
"Amendment") of the Investment Management Agreement (the "Agreement") with First
Trust Advisors L.P. (the "Advisor") on behalf of the following four series of
the Trust (each a "Fund" and collectively, the "Funds"):
First Trust STOXX(R) European Select Dividend Index Fund (FDD)
First Trust Dow Jones Global Select Dividend Index Fund (FGD)
First Trust Global Wind Energy ETF (FAN)
First Trust NASDAQ(R) Clean Edge(R) Smart Grid Infrastructure Index Fund
(GRID)
The Board approved the Amendment for each Fund at a meeting held on October 24,
2022. As part of the review process, the Board reviewed information and had
preliminary discussions with the Advisor regarding the proposed Amendment at
meetings held on April 18, 2022, June 12-13, 2022 and September 18-19, 2022.
Following those preliminary discussions, the Board requested and received
information from the Advisor regarding the proposed Amendment, and that
information was considered at an executive session of the Independent Trustees
and their counsel held prior to the October 24, 2022 meeting, as well as at the
October meeting.
In reviewing the Amendment for each Fund, the Board considered that the purpose
of the Amendment is to modify the advisory fee rate for each of the Funds under
the Agreement by introducing a breakpoint schedule pursuant to which the
advisory fee rate paid by each Fund to the Advisor will be reduced as assets of
such Fund meet certain thresholds. The Board noted the Advisor's representations
that the quality and quantity of the services provided to each Fund by the
Advisor under the Agreement will not be reduced or modified as a result of the
Amendment, and that the obligations of the Advisor under the Agreement will
remain the same in all respects.
The Board noted that it, including the Independent Trustees, last approved the
continuation of the Agreement for each Fund for a one-year period ending June
30, 2023 at a meeting held on June 12-13, 2022. The Board noted that in
connection with such approval it had determined for each Fund, based upon the
information provided, that the terms of the Agreement were fair and reasonable
and that the continuation of the Agreement was in the best interests of the Fund
in light of the nature, extent and quality of the services provided and such
other matters as the Board considered to be relevant in the exercise of its
business judgment.
The Board noted that with respect to the Funds, the Advisor had previously
agreed to waive management fees and reimburse certain expenses for a specified
period to prevent each Fund's expense ratio from exceeding a particular expense
cap, that the expense cap for each Fund would continue following entry into the
Amendment, and that under the current terms of the expense caps, expenses
reimbursed and fees waived are subject to recovery by the Advisor for up to
three years from the date the fee was waived or expense was incurred under
certain conditions. The Board noted that in connection with the Amendment, the
Advisor agreed to amend the terms of the expense caps to eliminate its ability
to recover any fees waived or expenses reimbursed.
Based on all of the information considered, the Board, including the Independent
Trustees, unanimously determined that the terms of the Amendment are fair and
reasonable and that the Amendment is in the best interests of each Fund.
Page 128
FIRST TRUST
First Trust Exchange-Traded Fund II
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR, CUSTODIAN,
FUND ACCOUNTANT &
TRANSFER AGENT
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
320 South Canal Street
Chicago, IL 60606
[BLANK BACK COVER]
FIRST TRUST
First Trust Exchange-Traded Fund II
--------------------------------------------------------------------------------
Book 2
First Trust Nasdaq Lux Digital Health Solutions ETF (EKG)
First Trust Indxx Metaverse ETF (ARVR)
First Trust Bloomberg Emerging Market Democracies ETF (EMDM)
----------------------------
Semi-Annual Report
For the Period Ended
March 31, 2023
----------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2023
Shareholder Letter ......................................................... 2
Market Overview ............................................................ 3
Fund Performance Overview
First Trust Nasdaq Lux Digital Health Solutions ETF (EKG) ............ 4
First Trust Indxx Metaverse ETF (ARVR) ............................... 6
First Trust Bloomberg Emerging Market Democracies ETF (EMDM) ......... 8
Notes to Fund Performance Overview ......................................... 10
Understanding Your Fund Expenses ........................................... 11
Portfolio of Investments
First Trust Nasdaq Lux Digital Health Solutions ETF (EKG) ............ 12
First Trust Indxx Metaverse ETF (ARVR) ............................... 14
First Trust Bloomberg Emerging Market Democracies ETF (EMDM) ......... 16
Statements of Assets and Liabilities ....................................... 19
Statements of Operations ................................................... 20
Statements of Changes in Net Assets ........................................ 21
Financial Highlights ....................................................... 23
Notes to Financial Statements .............................................. 25
Additional Information ..................................................... 31
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 II (the "Trust") described in
this report (each such 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 described in this report 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's shares may therefore be less than what you paid
for them. Accordingly, you can lose money by investing in a Fund. See "Risk
Considerations" in the Additional Information section of this report for a
discussion of certain 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
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.
The Advisor may also periodically provide additional information on Fund
performance on each Fund's webpage at www.ftportfolios.com.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about each Fund and presents data and analysis that provide
insight into each Fund's performance and investment approach.
By reading the market overview 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 material risks of investing in each
Fund are spelled out in its prospectus, statement of additional information, and
other Fund regulatory filings.
Page 1
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SHAREHOLDER LETTER
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
MARCH 31, 2023
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for certain
series of the First Trust Exchange-Traded Fund II (the "Funds"), which contains
detailed information about the Funds for the six months ended March 31, 2023.
Please note that the First Trust Bloomberg Emerging Market Democracies ETF was
incepted on March 2, 2023, so information in this letter and the report prior to
that date will not apply to this Fund.
I am constantly amazed by the depth and breadth of innovation that occurs when
people from different geographic, economic, cultural, and educational
backgrounds come together to solve problems. Many of the greatest companies to
ever exist found their humble beginnings in the simple premise that problems are
best solved through ingenuity and cooperation. That idea is still alive and well
today, in my opinion. Take, as examples, the recent flood of interest sparked by
artificial intelligence programs, advances in robotics, new medicines, more
fuel-efficient gasoline engines, electric and hybrid vehicles, quantum
computing, developments in wind and solar power; the list goes on and on. That
said, the global economy is facing serious issues such as stubborn inflation and
the specter of slowing economic growth to name a few.
As many investors know, the global financial system is currently navigating the
fallout of the banking crisis that took lending markets by storm in March 2023.
The turmoil that started in the U.S. with the failure of Silicon Valley Bank
quickly spread around the globe, leading the Swiss government to broker the
merger of two of Switzerland's largest banks. In the U.S., the Federal Reserve
(the "Fed") created the Bank Term Funding Program, which allocated capital to
help assure that banks can meet the needs of their depositors. Furthermore,
inflation remains elevated on a global scale. Each of the countries that
comprise the so-called Group of Ten is currently battling levels of inflation
that are higher than the targets set by their central banks, according to data
from Bloomberg. Additionally, political unrest stemming from the war between
Russia and Ukraine remains a significant factor, with the potential to disturb
global fuel and energy supplies as well as provoke interference from other
foreign powers.
In the U.S., inflation, as measured by the trailing 12-month rate on the
Consumer Price Index, stood at 5.0% as of March 31, 2023, well above the Fed's
stated goal of 2.0%. Despite signals pointing to a potential slowdown in
economic growth in the U.S., the Fed stayed the course with regards to interest
rate policy. Since February 28, 2022, the Fed raised the Federal Funds target
rate (upper bound) a total of nine times, increasing the rate from 0.25%, where
it stood on February 28, 2022, to 5.00% as of March 31, 2023.
Global markets have been resilient over time, and the S&P 500(R) Index has never
failed to recover from a bear market. While the issues plaguing the U.S. and
global economies are severe, they are not insurmountable, in my view. As Brian
Wesbury, Chief Economist at First Trust, recently wrote: "what made America
strong is ... its human resources and freedom." We will continue to work the
problems before us with ingenuity and resolve, as we always have.
Thank you for giving First Trust the opportunity to play a role in your
financial future. We value our relationship with you and will report on the
Funds again in six months.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
Page 2
--------------------------------------------------------------------------------
MARKET OVERVIEW
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
SEMI-ANNUAL REPORT
MARCH 31, 2023
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 more than 30 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 latest global growth forecast from the International Monetary Fund ("IMF")
released in April 2023 sees real gross domestic product growth rising by 2.8%
worldwide in 2023, down from its 2.9% projection in January 2023. The IMF is
calling for a 1.6% growth rate for the U.S., up from its January 2023 estimate
of 1.4%. Emerging Market and Developing Economies are expected to grow by 3.9%
this year, down from the IMF's 4.0% estimate in January 2023. The IMF notes that
risks to their global outlook are squarely to the downside, especially given the
recent turmoil in the Financials sector as well as stubbornly high inflation.
In the U.S., inflation, as measured by the Consumer Price Index ("CPI"), stood
at 5.0% on a trailing 12-month basis at the end of March 2023, according to the
U.S. Bureau of Labor Statistics. While this is significantly lower than the most
recent high of 9.1% in June 2022, the CPI remains above its 30-year average of
2.5% as of March 31, 2023, and even further from the Federal Reserve's (the
"Fed") target of 2.0%.
PERFORMANCE OF GLOBAL STOCKS AND BONDS
The major U.S. stock indices delivered positive results over the past six
months. The S&P 500(R) (the "Index"), S&P MidCap 400(R) and S&P SmallCap 600(R)
Indices posted total returns of 15.62%, 15.00% and 12.00%, respectively, for the
six-month period ended March 31, 2023. Each of the 11 major sectors that
comprise the Index were up on a total return basis. The top performer was the
Information Technology sector, up 27.59%, while the worst showing came from the
Consumer Discretionary sector, up 4.31%.
A Bloomberg survey of twenty-four equity strategists found that their average
2023 year-end price target for the Index was 4,025, as of April 19, 2023,
according to its own release. The highest and lowest estimates were 4,750 and
3,225, respectively. Brian Wesbury, Chief Economist at First Trust, announced in
December 2022 that his 2023 year-end price target stood at 3,900. The Index
closed trading on March 31, 2023, at 4,109. The outlook for corporate earnings
in 2023 has turned negative. Bloomberg's consensus year-over-year earnings
growth rate estimates for the Index for the 2023 and 2024 calendar years stood
at -2.67% and 11.56%, respectively, as of April 21, 2023.
The broader foreign stock indices posted positive total returns over the past
six months. Between September 30, 2022, and March 31, 2023, the MSCI World ex
USA and MSCI Emerging Markets equity indices posted total returns of 25.50%
(USD) and 14.04% (USD), respectively, according to Bloomberg. The major foreign
bond indices were also up over the same period. The Bloomberg Global Aggregate
Index of higher quality debt posted a total return of 7.69% (USD), while the
Bloomberg EM Hard Currency Aggregate Index of emerging markets debt increased by
9.87% (USD), according to Bloomberg. The U.S. dollar fell by 8.57% over the past
six months against a basket of major currencies, as measured by the U.S. Dollar
Index (DXY). The sizable decline in the dollar provided a boost to the
performance of both foreign stock and bond indices, in our opinion.
Results were also positive in the U.S. bond market over the period. The top
performing major debt group we track was long-term municipal bonds. The
Bloomberg Municipal Bond: Long Bond (22+ Years) Index posted a total return of
9.68% for the six-month period ended March 31, 2023. The worst-performing U.S.
debt group that we track was intermediate U.S. Treasuries. The Bloomberg U.S.
Treasury: Intermediate Index posted a total return of 3.31%. The yield on the
benchmark 10-Year Treasury Note ("T-Note") fell by 36 basis points in the period
to close at 3.47% on March 31, 2023, according to Bloomberg. For comparative
purposes, the average yield on the 10-Year T-Note was 2.19% for the 10-year
period ended March 31, 2023.
Page 3
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FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ LUX DIGITAL HEALTH SOLUTIONS ETF (EKG)
The First Trust Nasdaq Lux Digital Health Solutions ETF (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 Lux Health
Tech(TM) Index (the "Index"). The shares of the Fund are listed and trade on The
Nasdaq Stock Market LLC under the ticker symbol "EKG." The Fund will normally
invest at least 80% of its net assets (plus any borrowings for investment
purposes) in the common stocks and depositary receipts that comprise the Index.
The Index is developed, maintained and sponsored by Nasdaq, Inc. the ("Index
Provider"). According to the Index Provider, the Index is designed to measure
the performance of a selection of companies that are primarily engaged in and
involved at the intersection of healthcare and technology, as classified by Lux
Capital based on analysis of the products and services offered by those
companies.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL CUMULATIVE
TOTAL RETURNS TOTAL RETURNS
Inception Inception
6 Months Ended 1 Year Ended (3/22/22) (3/22/22)
3/31/23 3/31/23 to 3/31/23 to 3/31/23
<S> <C> <C> <C> <C>
FUND PERFORMANCE
NAV 21.38% -17.59% -15.50% -15.85%
Market Price 20.58% -18.17% -15.93% -16.29%
INDEX PERFORMANCE
Nasdaq Lux Health Tech(TM) Index 21.77% -17.11% -15.00% -15.34%
S&P Composite 1500 Health Care Index 7.69% -4.40% -4.07% -4.16%
------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
-----------------------------
Nasdaq(R) and Nasdaq Lux Health Tech(TM) Index are registered trademarks and
service marks of Nasdaq, Inc. (together with its affiliates hereinafter referred
to as the "Corporations") and are licensed for use by First Trust. 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 (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST NASDAQ LUX DIGITAL HEALTH SOLUTIONS ETF (EKG) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Health Care 100.0%
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Illumina, Inc. 9.0%
Intuitive Surgical, Inc. 8.6
Dexcom, Inc. 8.0
ResMed, Inc. 7.9
IQVIA Holdings, Inc. 7.3
Insulet Corp. 4.4
Veeva Systems, Inc., Class A 4.3
Exact Sciences Corp. 4.2
Align Technology, Inc. 4.2
Hologic, Inc. 3.9
------
Total 61.8%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 22, 2022 - MARCH 31, 2023
First Trust Nasdaq Lux Digital Nasdaq Lux Health S&P Composite 1500
Health Solutions ETF Tech(TM) Index Health Care Index
------------------------------ ----------------- ------------------
<S> <C> <C> <C>
3/22/22 $10,000 $10,000 $10,000
3/31/22 10,210 10,214 10,025
9/30/22 6,932 6,952 8,899
3/31/23 8,415 8,466 9,584
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 5
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FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX METAVERSE ETF (ARVR)
The First Trust Indxx Metaverse ETF (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 Indxx Metaverse Index (the "Index"). The
shares of the Fund are listed and trade on The Nasdaq Stock Market LLC under the
ticker symbol "ARVR." Under normal market conditions, the Fund will invest at
least 80% of its net assets (plus any borrowings for investment purposes) in the
common stocks and depositary receipts that comprise the Index. The Index is
developed, maintained and sponsored by Indxx, Inc. (the "Index Provider"). The
Index Provider is not affiliated with the Fund, the Fund's investment advisor or
the Fund's distributor. According to the Index Provider, the Index is a
rules-based index, however, the Index Provider reserves the right to use
qualitative judgment to include, exclude, adjust, or postpone the inclusion of a
stock in the Index. The Index is comprised of companies that provide services
and products that support the infrastructure and applications of the Metaverse.
"Metaverse" is a term used to describe the next generation of the Internet,
which has the potential to allow creators to build the next chapter of human
interaction through immersive experiences in three-dimensional virtual spaces.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
6 Months Ended (4/19/22)
3/31/23 to 3/31/23
<S> <C> <C>
FUND PERFORMANCE
NAV 31.91% -2.45%
Market Price 31.77% -2.25%
INDEX PERFORMANCE
Indxx Metaverse Index 32.32% -1.65%
MSCI ACWI Index 17.78% -5.21%
------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
-----------------------------
Indxx and Indxx Metaverse Index ("Index") are trademarks of Indxx, Inc.
("Indxx") and have been licensed for use for certain purposes by First Trust.
The Fund is not sponsored, endorsed, sold or promoted by Indxx and Indxx makes
no representation regarding the advisability of trading in such product. The
Index is determined, composed and calculated by Indxx without regard to First
Trust or the Fund.
Page 6
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST INDXX METAVERSE ETF (ARVR) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 55.9%
Communication Services 38.9
Consumer Discretionary 3.0
Health Care 1.1
Industrials 1.1
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
NVIDIA Corp. 4.5%
Meta Platforms, Inc., Class A 4.1
Advanced Micro Devices, Inc. 3.7
ROBLOX Corp., Class A 3.5
STMicroelectronics N.V. 3.4
Apple, Inc. 3.2
Microsoft Corp. 3.1
Sony Group Corp. 3.1
Snap, Inc., Class A 3.0
Synopsys, Inc. 3.0
------
Total 34.6%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
APRIL 19, 2022 - MARCH 31, 2023
First Trust Indxx Indxx Metaverse
Metaverse ETF Index MSCI ACWI Index
-------------------------- ----------------- ------------------
<S> <C> <C> <C>
4/19/22 $10,000 $10,000 $10,000
9/30/22 7,395 7,433 8,048
3/31/23 9,755 9,835 9,479
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 7
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM)
The First Trust Bloomberg Emerging Market Democracies ETF (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 Bloomberg Emerging
Market Democracies Index (the "Index"). The shares of the Fund are listed and
trade on the NYSE Arca, Inc. under the ticker symbol "EMDM." The Fund will
normally invest at least 80% of its net assets (plus any borrowings for
investment purposes) in the common stocks, depositary receipts, preferred
shares, real estate investment trusts ("REITs") and other securities that
comprise the Index. The Index is developed, maintained and sponsored by
Bloomberg Index Services Limited (the "Index Provider"). The Index Provider is
not affiliated with the Fund, the Fund's investment advisor or the Fund's
distributor. According to the Index Provider, the Index is constructed to track
the performance of companies within emerging market countries as determined by
the Index Provider, that meet minimum political rights and civil liberties
standards to qualify as Electoral Democracies according to Freedom House, a
non-profit, majority U.S. government funded organization in Washington D.C. that
conducts research and advocacy on democracy, political freedom, and human
rights. According to the Index Provider, to be eligible for inclusion in the
Index, a security must be a constituent of the Bloomberg Emerging Markets Large
& Mid Cap universe, meet the market capitalization and liquidity standards of
the Index and belong to a country that is classified as an Electoral Democracy
according to data from Freedom House.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
PERFORMANCE
------------------------------------------------------------------------------------------------------------------------
CUMULATIVE
TOTAL RETURNS
Inception
(3/2/23)
to 3/31/23
<S> <C>
FUND PERFORMANCE
NAV 1.41%
Market Price 1.97%
INDEX PERFORMANCE
Bloomberg Emerging Market Democracies Index 1.43%
MSCI Emerging Markets Index 1.34%
------------------------------------------------------------------------------------------------------------------------
</TABLE>
(See Notes to Fund Performance Overview on page 10.)
-----------------------------
"Bloomberg(R)" and Bloomberg Emerging Market Democracies Index licensed herein
(the "Indices") are service marks of Bloomberg Finance L.P. and its affiliates,
including Bloomberg Index Services Limited ("BISL"), the administrator of the
Indices (collectively, "Bloomberg") and have been licensed for use for certain
purposes by First Trust Advisors L.P. (the "Licensee"). Bloomberg is not
affiliated with the Licensee, and Bloomberg does not approve, endorse, review,
or recommend the financial products referenced herein (the "Financial
Products"). Bloomberg does not guarantee the timeliness, accurateness, or
completeness of any data or information relating to the Indices or the Financial
Products.
Page 8
--------------------------------------------------------------------------------
FUND PERFORMANCE OVERVIEW (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM) (CONTINUED)
-----------------------------------------------------------
% OF TOTAL
SECTOR CLASSIFICATION LONG-TERM INVESTMENTS
-----------------------------------------------------------
Information Technology 25.5%
Financials 24.6
Materials 19.5
Communication Services 7.8
Consumer Staples 7.7
Consumer Discretionary 6.8
Industrials 3.5
Energy 3.5
Health Care 1.0
Utilities 0.1
------
Total 100.0%
======
-----------------------------------------------------------
% OF TOTAL
TOP TEN HOLDINGS LONG-TERM INVESTMENTS
-----------------------------------------------------------
Taiwan Semiconductor Manufacturing
Co., Ltd. 9.3%
Samsung Electronics Co., Ltd. 9.1
Sociedad Quimica y Minera de Chile S.A.
(Preference Shares), Series B, Class B 4.4
Naspers Ltd., Class N 4.4
Grupo Mexico SAB de CV, Series B 4.1
America Movil SAB de CV, Series B 4.0
Grupo Financiero Banorte SAB de CV,
Class O 3.3
Vale S.A. 3.2
Fomento Economico Mexicano SAB de CV 2.8
Wal-Mart de Mexico SAB de CV 2.8
------
Total 47.4%
======
<TABLE>
<CAPTION>
PERFORMANCE OF A $10,000 INITIAL INVESTMENT
MARCH 2, 2023 - MARCH 31, 2023
First Trust Bloomberg Bloomberg Emerging
Emerging Market Market Democracies MSCI Emerging
Democracies ETF Index Markets Index
-------------------------- ----------------- ------------------
<S> <C> <C> <C>
3/2/23 $10,000 $10,000 $10,000
3/31/232 10,141 10,143 10,134
</TABLE>
Performance figures assume reinvestment of all 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
Information showing the number of days the market price of the Fund's shares was
greater (at a premium) and less (at a discount) than the Fund's net asset value
for the most recently completed year, and the most recently completed calendar
quarters since that year (or life of the Fund, if shorter) is available at
https://www.ftportfolios.com/Retail/etf/home.aspx.
Page 9
--------------------------------------------------------------------------------
NOTES TO FUND PERFORMANCE OVERVIEW (UNAUDITED)
--------------------------------------------------------------------------------
Total returns for the periods since inception are calculated from the inception
date of each Fund. "Average Annual Total Returns" represent the average annual
change in value of an investment over the periods indicated. "Cumulative Total
Returns" represent the total change in value of an investment over the periods
indicated.
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 of the national best bid and offer price ("NBBO") as of
the time that the Fund's NAV is calculated. Under SEC rules, the NBBO consists
of the highest displayed buy and lowest sell prices among the various exchanges
trading the Fund at the time 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 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 10
FIRST TRUST EXCHANGE-TRADED FUND II
UNDERSTANDING YOUR FUND EXPENSES
MARCH 31, 2023 (UNAUDITED)
As a shareholder of First Trust Nasdaq Lux Digital Health Solutions ETF, First
Trust Indxx Metaverse ETF, or First Trust Bloomberg Emerging Market Democracies
ETF (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 (12b-1) fees, if any, and other Fund expenses. This
Example is intended to help you understand your ongoing costs 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 March 31, 2023.
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 this six-month (or
shorter) 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.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED
EXPENSE RATIO EXPENSES PAID
BEGINNING ENDING BASED ON THE DURING THE
ACCOUNT VALUE ACCOUNT VALUE SIX-MONTH SIX-MONTH
OCTOBER 1, 2022 MARCH 31, 2023 PERIOD PERIOD (a)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST NASDAQ LUX DIGITAL HEALTH SOLUTIONS ETF (EKG)
Actual $1,000.00 $1,213.80 0.65% $3.59
Hypothetical (5% return before expenses) $1,000.00 $1,021.69 0.65% $3.28
FIRST TRUST INDXX METAVERSE ETF (ARVR)
Actual $1,000.00 $1,319.10 0.70% $4.05
Hypothetical (5% return before expenses) $1,000.00 $1,021.44 0.70% $3.53
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
ANNUALIZED EXPENSES PAID
EXPENSE RATIO DURING THE PERIOD
BEGINNING ENDING BASED ON THE MARCH 2, 2023 (b)
ACCOUNT VALUE ACCOUNT VALUE NUMBER OF DAYS TO
MARCH 2, 2023 (b) MARCH 31, 2023 IN THE PERIOD MARCH 31, 2023 (c)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM)
Actual $1,000.00 $1,014.10 0.75% $0.62
Hypothetical (5% return before expenses) $1,000.00 $1,021.19 0.75% $3.78
</TABLE>
(a) Expenses are equal to the annualized expense ratio as indicated in the
table multiplied by the average account value over the period (October 1,
2022 through March 31, 2023), multiplied by 182/365 (to reflect the
six-month period).
(b) Inception date.
(c) Actual expenses are equal to the annualized expense ratio as indicated in
the table multiplied by the average account value over the period (March
2, 2023 through March 31, 2023), multiplied by 30/365. Hypothetical
expenses are assumed for the most recent six-month period.
Page 11
FIRST TRUST NASDAQ LUX DIGITAL HEALTH SOLUTIONS ETF (EKG)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS -- 100.0%
BIOTECHNOLOGY -- 8.8%
162 CareDx, Inc. (a) $ 1,481
530 Exact Sciences Corp. (a) 35,939
270 Myriad Genetics, Inc. (a) 6,272
449 Natera, Inc. (a) 24,928
169 Twist Bioscience Corp. (a) 2,549
217 Veracyte, Inc. (a) 4,839
--------------
76,008
--------------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 52.1%
107 Align Technology, Inc. (a) 35,753
348 Alphatec Holdings, Inc. (a) 5,429
186 Axonics, Inc. (a) 10,148
595 Dexcom, Inc. (a) 69,127
86 Establishment Labs Holdings,
Inc. (a) 5,826
256 Globus Medical, Inc.,
Class A (a) 14,500
415 Hologic, Inc. (a) 33,491
108 Inspire Medical Systems,
Inc. (a) 25,280
119 Insulet Corp. (a) 37,956
288 Intuitive Surgical, Inc. (a) 73,575
102 iRhythm Technologies, Inc. (a) 12,651
136 Masimo Corp. (a) 25,097
115 Outset Medical, Inc. (a) 2,116
153 QuidelOrtho Corp. (a) 13,631
310 ResMed, Inc. 67,887
184 Tandem Diabetes Care, Inc. (a) 7,472
100 TransMedics Group, Inc. (a) 7,573
--------------
447,512
--------------
HEALTH CARE PROVIDERS &
SERVICES -- 4.9%
213 Accolade, Inc. (a) 3,063
98 Castle Biosciences, Inc. (a) 2,226
69 Fulgent Genetics, Inc. (a) 2,154
321 Guardant Health, Inc. (a) 7,524
492 Hims & Hers Health, Inc. (a) 4,881
424 NeoGenomics, Inc. (a) 7,382
260 Privia Health Group, Inc. (a) 7,179
248 Progyny, Inc. (a) 7,966
--------------
42,375
--------------
HEALTH CARE TECHNOLOGY -- 8.9%
834 American Well Corp.,
Class A (a) 1,968
175 Definitive Healthcare Corp. (a) 1,808
438 Doximity, Inc., Class A (a) 14,183
206 Health Catalyst, Inc. (a) 2,404
190 Schrodinger, Inc. (a) 5,003
567 Teladoc Health, Inc. (a) 14,685
199 Veeva Systems, Inc.,
Class A (a) 36,574
--------------
76,625
--------------
LIFE SCIENCES TOOLS & SERVICES
-- 25.3%
320 10X Genomics, Inc., Class A (a) 17,853
494 Adaptive Biotechnologies
Corp. (a) 4,362
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES
(CONTINUED)
446 Cytek Biosciences, Inc. (a) $ 4,099
331 Illumina, Inc. (a) 76,974
317 IQVIA Holdings, Inc. (a) 63,048
472 Olink Holding AB, ADR (a) 10,634
627 Pacific Biosciences of
California, Inc. (a) 7,260
718 QIAGEN N.V. (a) 32,978
--------------
217,208
--------------
TOTAL COMMON STOCKS
-- 100.0% 859,728
(Cost $996,590) --------------
MONEY MARKET FUNDS -- 0.1%
673 Morgan Stanley Institutional
Liquidity Funds - Treasury
Portfolio - Institutional
Class 4.65% (b) 673
(Cost $673) --------------
TOTAL INVESTMENTS -- 100.1% 860,401
(Cost $997,263)
NET OTHER ASSETS AND
LIABILITIES -- (0.1)% (460)
--------------
NET ASSETS -- 100.0% $ 859,941
==============
(a) Non-income producing security.
(b) Rate shown reflects yield as of March 31, 2023.
ADR - American Depositary Receipt
Page 12 See Notes to Financial Statements
FIRST TRUST NASDAQ LUX DIGITAL HEALTH SOLUTIONS ETF (EKG)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stocks*.................................. $ 859,728 $ 859,728 $ -- $ --
Money Market Funds.............................. 673 673 -- --
-----------------------------------------------------------------------
Total Investments............................... $ 860,401 $ 860,401 $ -- $ --
=======================================================================
</TABLE>
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 13
FIRST TRUST INDXX METAVERSE ETF (ARVR)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS -- 99.8%
AEROSPACE & DEFENSE -- 1.1%
305 Maxar Technologies, Inc. $ 15,573
--------------
ELECTRONIC EQUIPMENT,
INSTRUMENTS & COMPONENTS
-- 6.4%
469 Amphenol Corp., Class A 38,327
29,793 AUO Corp. (TWD) (a) 18,100
3,102 Sunny Optical Technology Group
Co., Ltd. (HKD) (a) 37,431
--------------
93,858
--------------
ENTERTAINMENT -- 31.7%
491 Activision Blizzard, Inc. 42,025
516 Capcom Co., Ltd. (JPY) (a) 18,424
1,230 DeNA Co., Ltd. (JPY) (a) 16,769
300 Electronic Arts, Inc. 36,135
982 GungHo Online Entertainment,
Inc. (JPY) (a) 17,947
936 Koei Tecmo Holdings Co., Ltd.
(JPY) (a) 16,877
862 Mixi, Inc. (JPY) (a) 17,299
2,342 NetEase, Inc. (HKD) (a) 41,343
116 Netflix, Inc. (b) 40,076
358 Netmarble Corp.
(KRW) (a) (b) (c) (d) 18,354
1,612 Nexon Co., Ltd. (JPY) (a) 38,401
940 Nintendo Co., Ltd. (JPY) (a) 36,425
1,149 ROBLOX Corp., Class A (b) 51,682
310 Square Enix Holdings Co., Ltd.
(JPY) (a) 14,862
359 Take-Two Interactive Software,
Inc. (b) 42,829
610 Ubisoft Entertainment S.A.
(EUR) (a) (b) 16,288
--------------
465,736
--------------
HEALTH CARE TECHNOLOGY -- 1.1%
619 Teladoc Health, Inc. (b) 16,032
--------------
HOUSEHOLD DURABLES -- 3.0%
494 Sony Group Corp. (JPY) (a) 44,889
--------------
INTERACTIVE MEDIA & SERVICES
-- 7.1%
285 Meta Platforms, Inc.,
Class A (b) 60,403
3,915 Snap, Inc., Class A (b) 43,887
--------------
104,290
--------------
IT SERVICES -- 1.1%
456 Keywords Studios PLC (GBP) (a) 15,584
--------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 28.2%
548 Advanced Micro Devices,
Inc. (b) 53,709
1,267 Intel Corp. 41,393
502 Microchip Technology, Inc. 42,058
651 Micron Technology, Inc. 39,281
236 NVIDIA Corp. 65,554
319 QUALCOMM, Inc. 40,698
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT (CONTINUED)
941 STMicroelectronics N.V.
(EUR) (a) $ 50,201
462 Taiwan Semiconductor
Manufacturing Co., Ltd., ADR 42,975
211 Texas Instruments, Inc. 39,248
--------------
415,117
--------------
SOFTWARE -- 14.3%
110 Adobe, Inc. (b) 42,391
160 Microsoft Corp. 46,128
113 Synopsys, Inc. (b) 43,646
1,161 Unity Software, Inc. (b) 37,663
540 Zoom Video Communications,
Inc., Class A (b) 39,873
--------------
209,701
--------------
TECHNOLOGY HARDWARE, STORAGE &
PERIPHERALS -- 5.8%
283 Apple, Inc. 46,667
25,224 Xiaomi Corp., Class B
(HKD) (a) (b) (c) (d) 38,818
--------------
85,485
--------------
TOTAL INVESTMENTS -- 99.8% 1,466,265
(Cost $1,521,603)
NET OTHER ASSETS AND
LIABILITIES -- 0.2% 3,509
--------------
NET ASSETS -- 100.0% $ 1,469,774
==============
(a) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $458,012 or 31.2% of net assets. Certain of these securities
are fair valued using a factor provided by a third-party pricing service
due to the change in value between the foreign markets' close and the New
York Stock Exchange close exceeding a certain threshold. On days when this
threshold is not exceeded, these securities are typically valued at the
last sale price on the exchange on which they are principally traded.
(b) Non-income producing security.
(c) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
ADR - American Depositary Receipt
Page 14 See Notes to Financial Statements
FIRST TRUST INDXX METAVERSE ETF (ARVR)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------------------------------------
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-----------------------------------------------------------
USD 68.8%
JPY 15.1
HKD 8.0
EUR 4.5
KRW 1.3
TWD 1.2
GBP 1.1
------
Total 100.0%
======
Currency Abbreviations:
EUR - Euro
GBP - British Pound Sterling
HKD - Hong Kong Dollar
JPY - Japanese Yen
KRW - South Korean Won
TWD - New Taiwan Dollar
USD - United States Dollar
-----------------------------------------------------------
% OF TOTAL
COUNTRY ALLOCATION* INVESTMENTS
-----------------------------------------------------------
United States 65.8%
Japan 15.1
Cayman Islands 8.0
Taiwan 4.2
Netherlands 3.4
South Korea 1.3
France 1.1
United Kingdom 1.1
------
Total 100.0%
======
* Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of the
Fund's underlying index.
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stocks:
Electronic Equipment, Instruments &
Components................................ $ 93,858 $ 38,327 $ 55,531 $ --
Entertainment................................ 465,736 212,747 252,989 --
Household Durables........................... 44,889 -- 44,889 --
IT Services.................................. 15,584 -- 15,584 --
Semiconductors & Semiconductor Equipment..... 415,117 364,916 50,201 --
Technology Hardware, Storage & Peripherals... 85,485 46,667 38,818 --
Other Industry Categories*................... 345,596 345,596 -- --
-----------------------------------------------------------------------
Total Investments............................... $ 1,466,265 $ 1,008,253 $ 458,012 $ --
=======================================================================
</TABLE>
* See Portfolio of Investments for industry breakout.
See Notes to Financial Statements Page 15
FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM)
PORTFOLIO OF INVESTMENTS
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (A) -- 99.6%
BERMUDA -- 2.0%
152 Credicorp Ltd. $ 20,123
--------------
BRAZIL -- 12.4%
2,194 Ambev S.A. 6,220
3,012 B3 S.A. - Brasil Bolsa Balcao 6,139
3,206 Banco Bradesco S.A. (Preference
Shares) 8,356
1,361 Banco BTG Pactual S.A 5,263
708 Banco do Brasil S.A. 5,467
1,969 Banco Santander Brasil S.A. 10,439
2,263 Hapvida Participacoes e
Investimentos S.A.
(b) (c) (d) 1,174
2,590 Itau Unibanco Holding S.A.
(Preference Shares) 12,698
2,996 Itausa S.A. (Preference Shares) 4,859
876 Klabin S.A. 3,128
4,312 Petroleo Brasileiro S.A.
(Preference Shares) 19,908
392 Suzano S.A. 3,223
1,994 Vale S.A. 31,513
751 WEG S.A. 6,001
--------------
124,388
--------------
CAYMAN ISLANDS -- 0.2%
323 Chailease Holding Co., Ltd. (e) 2,376
--------------
CHILE -- 4.4%
551 Sociedad Quimica y Minera de
Chile S.A. (Preference
Shares), Class B 44,225
--------------
INDIA -- 13.0%
82 Adani Green Energy Ltd. (c) (e) 880
111 Asian Paints Ltd. (e) 3,740
41 Avenue Supermarts
Ltd. (b) (c) (d) (e) 1,701
464 Axis Bank Ltd. (e) 4,861
44 Bajaj Finance Ltd. (e) 3,019
91 Bajaj Finserv Ltd. (e) 1,408
395 Bharti Airtel Ltd. (e) 3,602
173 HCL Technologies Ltd. (e) 2,297
755 HDFC Bank Ltd. (e) 14,850
213 Hindalco Industries Ltd. (e) 1,056
139 Hindustan Unilever Ltd. (e) 4,341
298 Housing Development Finance
Corp., Ltd. (e) 9,556
1,101 ICICI Bank Ltd. (e) 11,766
578 Infosys Ltd. (e) 10,105
1,265 ITC Ltd. (e) 5,919
178 JSW Steel Ltd. (e) 1,495
222 Kotak Mahindra Bank Ltd. (e) 4,692
175 Larsen & Toubro Ltd. (e) 4,619
179 Mahindra & Mahindra Ltd. (e) 2,530
21 Maruti Suzuki India Ltd. (e) 2,124
520 Reliance Industries Ltd. (e) 14,786
554 State Bank of India (e) 3,542
174 Sun Pharmaceutical Industries
Ltd. (e) 2,085
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
INDIA (CONTINUED)
156 Tata Consultancy Services
Ltd. (e) $ 6,115
324 Tata Motors Ltd. (c) (e) 1,669
1,198 Tata Steel Ltd. (e) 1,530
100 Tech Mahindra Ltd. (e) 1,348
66 Titan Co., Ltd. (e) 2,027
19 UltraTech Cement Ltd. (e) 1,766
228 Wipro Ltd. (e) 1,017
--------------
130,446
--------------
MEXICO -- 17.0%
37,882 America Movil SAB de CV,
Series B 39,942
2,957 Fomento Economico Mexicano
SAB de CV 28,151
3,945 Grupo Financiero Banorte SAB
de CV, Class O 33,215
8,609 Grupo Mexico SAB de CV,
Series B 40,723
1,894 Sitios Latinoamerica SAB de
CV (c) 781
7,045 Wal-Mart de Mexico SAB de CV 28,149
--------------
170,961
--------------
PHILIPPINES -- 2.2%
1,309 SM Investments Corp. (e) 21,486
--------------
SOUTH AFRICA -- 15.4%
114 Capitec Bank Holdings Ltd. 10,806
6,838 FirstRand Ltd. (e) 23,177
1,282 Gold Fields Ltd. (e) 17,173
1,251 Impala Platinum Holdings
Ltd. (e) 11,515
2,523 MTN Group Ltd. (e) 18,076
236 Naspers Ltd., Class N (e) 43,729
809 Sasol Ltd. (e) 10,932
1,933 Standard Bank Group Ltd. (e) 18,742
--------------
154,150
--------------
SOUTH KOREA -- 16.9%
31 Celltrion, Inc. (e) 3,583
86 Hana Financial Group, Inc. (e) 2,693
18 Hyundai Mobis Co., Ltd. (e) 2,989
39 Hyundai Motor Co. (e) 5,549
91 Kakao Corp. 4,271
106 KB Financial Group, Inc. (e) 3,871
74 Kia Corp. (e) 4,618
14 LG Chem Ltd. (e) 7,689
32 LG Electronics, Inc. (e) 2,856
43 NAVER Corp. (e) 6,738
23 POSCO Holdings, Inc. (e) 6,507
6 Samsung Biologics Co.,
Ltd. (b) (c) (d) (e) 3,637
1,839 Samsung Electronics Co.,
Ltd. (e) 90,940
16 Samsung SDI Co., Ltd. (e) 9,089
149 Shinhan Financial Group Co.,
Ltd. (e) 4,048
161 SK Hynix, Inc. (e) 11,018
--------------
170,096
--------------
Page 16 See Notes to Financial Statements
FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
SHARES DESCRIPTION VALUE
-------------------------------------------------------------
COMMON STOCKS (a) (CONTINUED)
TAIWAN -- 16.1%
740 ASE Technology Holding Co.,
Ltd. (e) $ 2,746
1,719 Cathay Financial Holding Co.,
Ltd. (e) 2,367
3,754 China Development Financial
Holding Corp. (e) 1,553
2,560 China Steel Corp. (e) 2,601
1,141 Chunghwa Telecom Co., Ltd. (e) 4,485
4,120 CTBC Financial Holding Co.,
Ltd. (e) 2,967
420 Delta Electronics, Inc. (e) 4,167
2,854 E.Sun Financial Holding Co.,
Ltd. (e) 2,377
363 Evergreen Marine Corp. Taiwan
Ltd. (e) 1,901
2,334 First Financial Holding Co.,
Ltd. (e) 2,032
1,059 Formosa Plastics Corp. (e) 3,197
1,598 Fubon Financial Holding Co.,
Ltd. (e) 2,974
2,595 Hon Hai Precision Industry Co.,
Ltd. (e) 8,883
331 MediaTek, Inc. (e) 8,582
2,327 Mega Financial Holding Co.,
Ltd. (e) 2,522
1,072 Nan Ya Plastics Corp. (e) 2,731
2,108 Taiwan Cooperative Financial
Holding Co., Ltd. (e) 1,810
5,284 Taiwan Semiconductor
Manufacturing Co., Ltd. (e) 92,600
261 Unimicron Technology Corp. (e) 1,273
1,053 Uni-President Enterprises
Corp. (e) 2,489
2,639 United Microelectronics
Corp. (e) 4,618
499 Yang Ming Marine Transport
Corp. (e) 1,059
2,642 Yuanta Financial Holding Co.,
Ltd. (e) 1,943
--------------
161,877
--------------
TOTAL INVESTMENTS -- 99.6% 1,000,128
(Cost $989,093)
NET OTHER ASSETS AND
LIABILITIES -- 0.4% 4,422
--------------
NET ASSETS -- 100.0% $ 1,004,550
==============
(a) Portfolio securities are categorized based upon their country of
incorporation, which can be different from the country categorization of
the Fund's underlying index. For a breakdown of the portfolio securities
by sector, please see the Fund Performance Overview.
(b) This security is exempt from registration upon resale under Rule 144A of
the Securities Act of 1933, as amended (the "1933 Act") and may be resold
in transactions exempt from registration, normally to qualified
institutional buyers. This security is not restricted on the foreign
exchange where it trades freely without any additional registration. As
such, it does not require the additional disclosure required of restricted
securities.
(c) Non-income producing security.
(d) This security may be resold to qualified foreign investors and foreign
institutional buyers under Regulation S of the 1933 Act.
(e) This security is fair valued by the Advisor's Pricing Committee in
accordance with procedures approved by the Trust's Board of Trustees, and
in accordance with provisions of the Investment Company Act of 1940 and
rules thereunder, as amended. At March 31, 2023, securities noted as such
are valued at $625,354 or 62.3% of net assets. Certain of these securities
are fair valued using a factor provided by a third-party pricing service
due to the change in value between the foreign markets' close and the New
York Stock Exchange close exceeding a certain threshold. On days when this
threshold is not exceeded, these securities are typically valued at the
last sale price on the exchange on which they are principally traded.
-----------------------------------------------------------
% OF TOTAL
CURRENCY EXPOSURE DIVERSIFICATION INVESTMENTS
-----------------------------------------------------------
Mexican Peso 17.1%
South Korean Won 17.0
New Taiwan Dollar 16.4
South African Rand 15.4
Indian Rupee 13.1
Brazilian Real 12.4
Chilean Peso 4.4
Philippine Peso 2.2
United States Dollar 2.0
------
Total 100.0%
======
See Notes to Financial Statements Page 17
FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM)
PORTFOLIO OF INVESTMENTS (CONTINUED)
MARCH 31, 2023 (UNAUDITED)
-----------------------------
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of March 31,
2023 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
<TABLE>
<CAPTION>
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
3/31/2023 PRICES INPUTS INPUTS
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stocks:
Bermuda...................................... $ 20,123 $ 20,123 $ -- $ --
Brazil....................................... 124,388 124,388 -- --
Chile........................................ 44,225 44,225 -- --
Mexico....................................... 170,961 170,961 -- --
South Africa................................. 154,150 10,806 143,344 --
South Korea.................................. 170,096 4,271 165,825 --
Other Country Categories*.................... 316,185 -- 316,185 --
-----------------------------------------------------------------------
Total Investments............................... $ 1,000,128 $ 374,774 $ 625,354 $ --
=======================================================================
</TABLE>
* See Portfolio of Investments for country breakout.
Page 18 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST
FIRST TRUST BLOOMBERG
NASDAQ LUX FIRST TRUST EMERGING
DIGITAL HEALTH INDXX MARKET
SOLUTIONS ETF METAVERSE ETF DEMOCRACIES ETF
(EKG) (ARVR) (EMDM)
---------------- ---------------- ----------------
ASSETS:
<S> <C> <C> <C>
Investments, at value ................................................. $ 860,401 $ 1,466,265 $ 1,000,128
Cash .................................................................. -- 2,621 2,962
Foreign currency, at value ............................................ -- -- 761
Receivables:
Dividends .......................................................... 1 1,711 1,735
Reclaims ........................................................... -- -- 83
---------------- ---------------- ----------------
Total Assets ....................................................... 860,402 1,470,597 1,005,669
---------------- ---------------- ----------------
LIABILITIES:
Due to custodian foreign currency ..................................... -- 1 --
Payables:
Investment advisory fees ........................................... 461 822 582
Investment securities purchased .................................... -- -- 537
---------------- ---------------- ----------------
Total Liabilities .................................................. 461 823 1,119
---------------- ---------------- ----------------
NET ASSETS $ 859,941 $ 1,469,774 $ 1,004,550
================ ================ ================
NET ASSETS CONSIST OF:
Paid-in capital ....................................................... $ 1,005,815 $ 1,589,560 $ 993,788
Par value ............................................................. 500 500 500
Accumulated distributable earnings (loss) ............................. (146,374) (120,286) 10,262
---------------- ---------------- ----------------
NET ASSETS ............................................................ $ 859,941 $ 1,469,774 $ 1,004,550
================ ================ ================
NET ASSET VALUE, per share ............................................ $ 17.20 $ 29.39 $ 20.09
================ ================ ================
Number of shares outstanding (unlimited number of shares
authorized, par value $0.01 per share) ............................. 50,002 50,002 50,002
================ ================ ================
Investments, at cost .................................................. $ 997,263 $ 1,521,603 $ 989,093
================ ================ ================
Foreign currency, at cost (proceeds) .................................. $ -- $ (1) $ 738
================ ================ ================
</TABLE>
See Notes to Financial Statements Page 19
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 2023 (UNAUDITED)
<TABLE>
<CAPTION>
FIRST TRUST
FIRST TRUST BLOOMBERG
NASDAQ LUX FIRST TRUST EMERGING
DIGITAL HEALTH INDXX MARKET
SOLUTIONS ETF METAVERSE ETF DEMOCRACIES ETF
(EKG) (ARVR) (EMDM) (a)
---------------- ---------------- ----------------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends.............................................................. $ 258 $ 8,071 $ 3,713
Foreign withholding tax................................................ -- (380) (459)
---------------- ---------------- ----------------
Total investment income............................................. 258 7,691 3,254
---------------- ---------------- ----------------
EXPENSES:
Investment advisory fees............................................... 2,646 4,458 582
---------------- ---------------- ----------------
Total expenses...................................................... 2,646 4,458 582
---------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS)........................................... (2,388) 3,233 2,672
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments......................................................... (24,670) (44,829) --
In-kind redemptions................................................. 34,583 -- --
Foreign currency transactions....................................... -- 120 (3,487)
---------------- ---------------- ----------------
Net realized gain (loss)............................................... 9,913 (44,709) (3,487)
---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation) on:
Investments......................................................... 156,953 397,302 11,035
Foreign currency translations....................................... -- (3) 42
---------------- ---------------- ----------------
Net change in unrealized appreciation (depreciation)................... 156,953 397,299 11,077
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN (LOSS)................................ 166,866 352,590 7,590
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS..................................................... $ 164,478 $ 355,823 $ 10,262
================ ================ ================
</TABLE>
(a) Inception date is March 2, 2023, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 20 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST
NASDAQ LUX
DIGITAL HEALTH
SOLUTIONS ETF
(EKG)
-----------------------------------
SIX MONTHS
ENDED PERIOD
3/31/2023 ENDED
(UNAUDITED) 9/30/2022 (a)
---------------- ----------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss)............................................................. $ (2,388) $ (4,916)
Net realized gain (loss)................................................................. 9,913 (254,104)
Net change in unrealized appreciation (depreciation)..................................... 156,953 (293,815)
---------------- ----------------
Net increase (decrease) in net assets resulting from operations.......................... 164,478 (552,835)
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations.................................................................... -- --
---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold................................................................ 824,516 2,043,810
Cost of shares redeemed.................................................................. (837,447) (782,581)
---------------- ----------------
Net increase (decrease) in net assets resulting from shareholder transactions............ (12,931) 1,261,229
---------------- ----------------
Total increase (decrease) in net assets.................................................. 151,547 708,394
NET ASSETS:
Beginning of period...................................................................... 708,394 --
---------------- ----------------
End of period............................................................................ $ 859,941 $ 708,394
================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period.................................................. 50,002 --
Shares sold.............................................................................. 50,000 100,002
Shares redeemed.......................................................................... (50,000) (50,000)
---------------- ----------------
Shares outstanding, end of period........................................................ 50,002 50,002
================ ================
</TABLE>
(a) Inception date is March 22, 2022, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
See Notes to Financial Statements Page 21
FIRST TRUST EXCHANGE-TRADED FUND II
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FIRST TRUST
BLOOMBERG
FIRST TRUST EMERGING
INDXX MARKET
METAVERSE ETF DEMOCRACIES ETF
(ARVR) (EMDM)
----------------------------------- ----------------
SIX MONTHS PERIOD
ENDED PERIOD ENDED
3/31/2023 ENDED 3/31/2023
(UNAUDITED) 9/30/2022 (b) (UNAUDITED) (c)
---------------- ---------------- ----------------
OPERATIONS:
<S> <C> <C> <C>
Net investment income (loss).......................................... $ 3,233 $ 3,121 $ 2,672
Net realized gain (loss).............................................. (44,709) (190,428) (3,487)
Net change in unrealized appreciation (depreciation).................. 397,299 (452,641) 11,077
---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from operations....... 355,823 (639,948) 10,262
---------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations................................................. (3,270) -- --
---------------- ---------------- ----------------
SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold............................................. -- 3,024,808 994,288
Cost of shares redeemed............................................... -- (1,267,639) --
---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from shareholder
transactions....................................................... -- 1,757,169 994,288
---------------- ---------------- ----------------
Total increase (decrease) in net assets............................... 352,553 1,117,221 1,004,550
NET ASSETS:
Beginning of period................................................... 1,117,221 -- --
---------------- ---------------- ----------------
End of period......................................................... $ 1,469,774 $ 1,117,221 $ 1,004,550
================ ================ ================
CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period............................... 50,002 -- --
Shares sold........................................................... -- 100,002 50,002
Shares redeemed....................................................... -- (50,000) --
---------------- ---------------- ----------------
Shares outstanding, end of period..................................... 50,002 50,002 50,002
================ ================ ================
</TABLE>
(b) Inception date is April 19, 2022, which is consistent with the
commencement of investment operations and is the date the initial creation
units were established.
(c) Inception date is March 2, 2023, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
Page 22 See Notes to Financial Statements
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FIRST TRUST NASDAQ LUX DIGITAL HEALTH SOLUTIONS ETF (EKG)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
3/31/2023 ENDED
(UNAUDITED) 9/30/2022 (a)
--------------- ---------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 14.17 $ 20.44
--------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... (0.05) (0.10)
Net realized and unrealized gain (loss)........................ 3.08 (6.17)
--------- ---------
Total from investment operations............................... 3.03 (6.27)
--------- ---------
Net asset value, end of period................................. $ 17.20 $ 14.17
========= =========
TOTAL RETURN (b)............................................... 21.38% (30.68)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 860 $ 708
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.65% (c) 0.65% (c)
Ratio of net investment income (loss) to average net assets ... (0.59)% (c) (0.61)% (c)
Portfolio turnover rate (d).................................... 7% 5%
FIRST TRUST INDXX METAVERSE ETF (ARVR)
SIX MONTHS
ENDED PERIOD
3/31/2023 ENDED
(UNAUDITED) 9/30/2022 (a)
--------------- ---------------
<S> <C> <C>
Net asset value, beginning of period........................... $ 22.34 $ 30.21
--------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... 0.07 0.06
Net realized and unrealized gain (loss)........................ 7.05 (7.93)
--------- ---------
Total from investment operations............................... 7.12 (7.87)
--------- ---------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income.......................................... (0.07) --
--------- ---------
Net asset value, end of period................................. $ 29.39 $ 22.34
========= =========
TOTAL RETURN (b)............................................... 31.91% (26.05)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 1,470 $ 1,117
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.70% (c) 0.70% (c)
Ratio of net investment income (loss) to average net assets ... 0.51% (c) 0.28% (c)
Portfolio turnover rate (d).................................... 17% 11%
</TABLE>
(a) Inception dates for EKG and ARVR are March 22, 2022 and April 19, 2022,
respectively, which are consistent with the respective Fund's commencement
of investment operations and are the dates the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
distributions at net asset value during the period, and redemption at net
asset value on the last day of the period. 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. Total return is
calculated for the time period presented and is not annualized for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
See Notes to Financial Statements Page 23
FIRST TRUST EXCHANGE-TRADED FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM)
<TABLE>
<CAPTION>
PERIOD
ENDED
3/31/2023 (a)
(UNAUDITED)
---------------
<S> <C>
Net asset value, beginning of period........................... $ 19.81
---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................................... 0.05
Net realized and unrealized gain (loss)........................ 0.23
---------
Total from investment operations............................... 0.28
---------
Net asset value, end of period................................. $ 20.09
=========
TOTAL RETURN (b)............................................... 1.41%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)........................... $ 1,005
RATIOS TO AVERAGE NET ASSETS:
Ratio of total expenses to average net assets.................. 0.75% (c)
Ratio of net investment income (loss) to average net assets.... 3.44% (c)
Portfolio turnover rate (d).................................... 0%
</TABLE>
(a) Inception date is March 2, 2023, which is consistent with the commencement
of investment operations and is the date the initial creation units were
established.
(b) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all
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 for periods
of less than a year.
(c) Annualized.
(d) Portfolio turnover is calculated for the time period presented and is not
annualized for periods of less than a year and does not include securities
received or delivered from processing creations or redemptions and in-kind
transactions.
Page 24 See Notes to Financial Statements
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
1. ORGANIZATION
First Trust Exchange-Traded Fund II (the "Trust") is an open-end management
investment company organized as a Massachusetts business trust on July 6, 2006,
and is registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Trust currently consists of nineteen exchange-traded funds. This report
covers the three funds (each a "Fund" and collectively, the "Funds") listed
below:
First Trust Nasdaq Lux Digital Health Solutions ETF - (the Nasdaq Stock
Market LLC ("Nasdaq") ticker "EKG")
First Trust Indxx Metaverse ETF - (Nasdaq ticker "ARVR")
First Trust Bloomberg Emerging Market Democracies ETF - (NYSE Arca, Inc.
ticker "EMDM")(1)
(1) Commenced investment operations on March 2, 2023.
Each Fund represents a separate series of shares of beneficial interest in the
Trust. Unlike conventional mutual funds, each Fund issues and redeems shares on
a continuous basis, at net asset value ("NAV"), only in large blocks of shares
known as "Creation Units." 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:
<TABLE>
<CAPTION>
<S> <C>
FUND INDEX
First Trust Nasdaq Lux Digital Health Solutions ETF Nasdaq Lux Health Tech(TM) Index
First Trust Indxx Metaverse ETF Indxx Metaverse Index
First Trust Bloomberg Emerging Market Democracies ETF Bloomberg Emerging Market Democracies Index
</TABLE>
2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are each considered an investment company and follow accounting and
reporting guidance under Financial Accounting Standards Board Accounting
Standards Codification Topic 946, "Financial Services-Investment Companies." 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. If the NYSE closes early on a valuation day, the
NAV is determined as of that time. Foreign securities are priced using data
reflecting the earlier closing of the principal markets for those securities.
Each Fund's NAV is calculated by dividing the value of all assets of each 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. Market
value prices represent readily available market quotations such as last sale or
official closing prices from a national or foreign exchange (i.e., a regulated
market) and are primarily obtained from third-party pricing services. Fair value
prices represent any prices not considered market value prices and are either
obtained from a third-party pricing service or are determined by the Pricing
Committee of the Funds' investment advisor, First Trust Advisors L.P. ("First
Trust" or the "Advisor"), in accordance with valuation procedures approved by
the Trust's Board of Trustees, and in accordance with provisions of the 1940 Act
and rules thereunder. Investments valued by the Advisor's Pricing Committee, if
any, are footnoted as such in the footnotes to the Portfolio of Investments.
Each Fund's investments are valued as follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding Nasdaq and the London Stock Exchange
Alternative Investment Market ("AIM")) are valued at the last sale price
on the exchange on which they are principally traded or, for Nasdaq and
AIM securities, the official closing price. Securities traded on more than
one securities exchange are valued at the last sale price or official
closing price, as applicable, at the close of the securities exchange
representing the primary exchange for such securities.
Securities trading on foreign exchanges or over-the-counter markets that
close prior to the NYSE close may be valued using a systematic fair
valuation model provided by a third-party pricing service. If these
foreign securities meet certain criteria in relation to the valuation
model, their valuation is systematically adjusted to reflect the impact of
movement in the U.S. market after the close of the foreign markets.
Shares of open-end funds are valued based on NAV per share.
Page 25
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
Securities traded in an over-the-counter market are valued at the mean of
their most recent bid and asked price, if available, and otherwise at
their last trade price.
Certain securities may not be able to be priced by pre-established pricing
methods. Such securities may be valued by the Advisor's Pricing Committee 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
third-party pricing service is unable to provide a market price; securities
whose trading has been formally suspended; a security whose market or fair value
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 third-party 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. When
fair value prices are used, generally they will differ from market quotations or
official closing prices on the applicable exchanges. A variety of factors may be
considered in determining the fair value of such securities, including, but not
limited to, the following:
1) the last sale price on the exchange on which they are principally
traded or, for Nasdaq and AIM securities, the official closing
price;
2) the type of security;
3) the size of the holding;
4) the initial cost of the security;
5) transactions in comparable securities;
6) price quotes from dealers and/or third-party pricing services;
7) relationships among various securities;
8) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
9) an analysis of the issuer's financial statements;
10) the existence of merger proposals or tender offers that might affect
the value of the security; and
11) other relevant factors.
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign
markets;
2) ADR trading of similar securities;
3) closed-end fund or exchange-traded fund trading of similar
securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur;
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions; and
9) other relevant factors.
In addition, differences between the prices used to calculate a Fund's NAV and
the prices used by such Fund's corresponding index could result in a difference
between a Fund's performance and the performance of its underlying index.
Because foreign markets may be open on different days than the days during which
investors may transact in the shares of a Fund, the value of the Fund's
securities may change on the days when investors are not able to transact in the
shares of the Fund. The value of securities denominated in foreign currencies is
converted into U.S. dollars using exchange rates determined daily as of the
close of regular trading on the NYSE. Any use of a different rate from the rates
used by a relevant index may adversely affect the Fund's ability to track the
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).
Page 26
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
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
investment.
The inputs or methodologies 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 each Fund's investments as of March 31, 2023, 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.
C. FOREIGN CURRENCY
The books and records of the Funds are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investments and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses on assets and liabilities, other than investments in securities, which
result from changes in foreign currency exchange rates have been included in
"Net change in unrealized appreciation (depreciation) on foreign currency
translation" on the Statements of Operations. Unrealized gains and losses on
investments in securities which result from changes in foreign exchange rates
are included with fluctuations arising from changes in market price and are
shown in "Net change in unrealized appreciation (depreciation) on investments"
on the Statements of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received and are included in "Net
realized gain (loss) on foreign currency transactions" on the Statements of
Operations. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase settlement date and
subsequent sale trade date is included in "Net realized gain (loss) on
investments" on the Statements of Operations.
D. DIVIDENDS AND DISTRIBUTIONS 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 gains earned by each Fund, if any, are distributed
at least annually. A Fund may also designate a portion of the amount paid to
redeeming shareholders as a distribution for tax purposes.
Distributions from net investment income and realized capital gains are
determined in accordance with federal 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 significantly modified portfolio securities
held by the Funds 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 Funds did not pay a distribution during the fiscal period ended September
30, 2022.
As of September 30, 2022, the components of distributable earnings on a tax
basis for each Fund were as follows:
<TABLE>
<CAPTION>
Accumulated Net
Undistributed Capital and Unrealized
Ordinary Other Appreciation
Income Gain (Loss) (Depreciation)
--------------- --------------- ---------------
<S> <C> <C> <C>
First Trust Nasdaq Lux Digital Health Solutions ETF $ -- $ (17,037) $ (293,815)
First Trust Indxx Metaverse ETF 482 (20,680) (452,641)
</TABLE>
E. INCOME TAXES
Each Fund intends to qualify or continue 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 each 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 taxable period ended 2022
remains open to federal and state audit for EKG and ARVR. As of March 31, 2023,
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 27
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
Each Fund intends to utilize provisions of the federal income tax laws, which
allow it to carry a realized capital loss forward indefinitely following the
year of the loss and offset such loss against any future realized capital gains.
Each Fund is 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. At September 30, 2022, for
federal income tax purposes, each applicable Fund had a capital loss
carryforward available that is shown in the table below, to the extent provided
by regulations, to offset future capital gains. To the extent that these loss
carryforwards are used to offset future capital gains, it is probable that the
capital gains so offset will not be distributed to each applicable Fund's
shareholders.
<TABLE>
<CAPTION>
Non-Expiring
Capital Loss
Carryforward
---------------
<S> <C>
First Trust Nasdaq Lux Digital Health Solutions ETF $ 17,037
First Trust Indxx Metaverse ETF 20,680
</TABLE>
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal period ended September 30, 2022, the Funds
had no net late year ordinary or capital losses.
As of March 31, 2023, the aggregate cost, gross unrealized appreciation, gross
unrealized depreciation, and net unrealized appreciation/(depreciation) on
investments (including short positions and derivatives, if any) for federal
income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Unrealized Unrealized Appreciation
Tax Cost Appreciation (Depreciation) (Depreciation)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
First Trust Nasdaq Lux Digital Health
Solutions ETF $ 997,263 $ 20,053 $ (156,915) $ (136,862)
First Trust Indxx Metaverse ETF 1,521,603 105,136 (160,474) (55,338)
First Trust Bloomberg Emerging Market
Democracies ETF 989,093 27,145 (16,110) 11,035
</TABLE>
F. EXPENSES
Expenses, other than the investment advisory fee and other excluded expenses,
are paid by the Advisor (see Note 3).
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.
Pursuant to the Investment Management Agreement between the Trust and the
Advisor, First Trust manages the investment of the Funds' assets and is
responsible for the expenses of each Fund including the cost of transfer agency,
custody, fund administration, legal, audit and other services, but excluding fee
payments under the Investment Management Agreement, interest, taxes, if any,
brokerage commissions and other expenses connected with the execution of
portfolio transactions, distribution and service fees payable pursuant to a Rule
12b-1 plan, if any, acquired fund fees and expenses, and extraordinary expenses,
which are paid by each respective Fund. Effective November 1, 2022, the annual
unitary management fee payable by each Fund to First Trust for these services
will be reduced at certain levels of each Fund's net assets ("breakpoints") and
calculated pursuant to the following schedule:
<TABLE>
<CAPTION>
Breakpoints EKG ARVR EMDM
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fund net assets up to and including $2.5 billion 0.65000% 0.7000% 0.75000%
Fund net assets greater than $2.5 billion up to and including $5 billion 0.63375% 0.6825% 0.73125%
Fund net assets greater than $5 billion up to and including $7.5 billion 0.61750% 0.6650% 0.71250%
Fund net assets greater than $7.5 billion up to and including $10 billion 0.60125% 0.6475% 0.69375%
Fund net assets greater than $10 billion 0.58500% 0.6300% 0.67500%
</TABLE>
Prior to November 1, 2022, EKG and ARVR each paid First Trust an annual unitary
management fee equal to 0.65% and 0.70%, respectively, of its average daily net
assets.
Page 28
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
The Trust has multiple service agreements with The Bank of New York Mellon
("BNYM"). Under the service agreements, BNYM performs custodial, fund
accounting, certain administrative services, and transfer agency services for
each Fund. As custodian, BNYM is responsible for custody of each Fund's assets.
As fund accountant and administrator, BNYM is responsible for maintaining the
books and records of each Fund's securities and cash. As transfer agent, BNYM is
responsible for maintaining shareholder records for each Fund. BNYM is a
subsidiary of The Bank of New York Mellon Corporation, a financial holding
company.
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 that is allocated equally among each fund in the First Trust Fund
Complex. Each Independent Trustee is also paid an annual per fund fee that
varies based on whether the fund is a closed-end or other actively managed fund,
a target outcome fund or an index fund.
Additionally, the Lead Independent Trustee and the Chairs of the Audit
Committee, Nominating and Governance Committee and Valuation Committee are paid
annual fees to serve in such capacities, with such compensation allocated pro
rata among each fund in the First Trust Fund Complex based on net assets.
Independent Trustees are reimbursed for travel and out-of-pocket expenses in
connection with all meetings. The Lead Independent Trustee and Committee Chairs
rotate every three years. The officers and "Interested" Trustee receive no
compensation from the Trust for acting in such capacities.
4. PURCHASES AND SALES OF SECURITIES
For the period ended March 31, 2023, the cost of purchases and proceeds from
sales of investments for each Fund, excluding short-term investments and in-kind
transactions, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------------- ---------------
<S> <C> <C>
First Trust Nasdaq Lux Digital Health Solutions ETF $ 59,657 $ 62,189
First Trust Indxx Metaverse ETF 220,222 218,231
First Trust Bloomberg Emerging Market Democracies ETF 624,728 --
</TABLE>
For the period ended March 31, 2023, the cost of in-kind purchases and proceeds
from in-kind sales for each Fund were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------------- ---------------
<S> <C> <C>
First Trust Nasdaq Lux Digital Health Solutions ETF $ 824,356 $ 836,972
First Trust Indxx Metaverse ETF -- --
First Trust Bloomberg Emerging Market Democracies ETF 364,365 --
</TABLE>
5. CREATIONS, REDEMPTIONS AND TRANSACTION FEES
Each Fund generally issues and redeems its shares in primary market transactions
through a creation and redemption mechanism and does not sell or redeem
individual shares. Instead, financial entities known as "Authorized
Participants" have contractual arrangements with a Fund or one of the Fund's
service providers to purchase and redeem Fund shares directly with the Fund in
large blocks of shares known as "Creation Units." Prior to the start of trading
on every business day, a Fund publishes through the National Securities Clearing
Corporation ("NSCC") the "basket" of securities, cash or other assets that it
will accept in exchange for a Creation Unit of the Fund's shares. An Authorized
Participant that wishes to effectuate a creation of a Fund's shares deposits
with the Fund the "basket" of securities, cash or other assets identified by the
Fund that day, and then receives the Creation Unit of the Fund's shares in
return for those assets. After purchasing a Creation Unit, the Authorized
Participant may continue to hold the Fund's shares or sell them in the secondary
market. The redemption process is the reverse of the purchase process: the
Authorized Participant redeems a Creation Unit of a Fund's shares for a basket
of securities, cash or other assets. The combination of the creation and
redemption process with secondary market trading in a Fund's shares and
underlying securities provides arbitrage opportunities that are designed to help
keep the market price of a Fund's shares at or close to the NAV per share of the
Fund.
Each Fund imposes fees in connection with the purchase of Creation Units. These
fees may vary based upon various fact-based circumstances, including, but not
limited to, the composition of the securities included in the Creation Unit or
the countries in which the transactions are settled. The price for each Creation
Unit will equal the daily NAV per share of a Fund 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, stamp taxes and part
or all of the spread between the expected bid and offer side of the market
related to the securities comprising the creation basket.
Each Fund also imposes fees in connection with the redemption of Creation Units.
These fees may vary based upon various fact- based circumstances, including, but
not limited to, the composition of the securities included in the Creation Unit
or the countries in which the transactions are settled. The price received for
each Creation Unit will equal the daily NAV per share of a Fund times the number
of shares in a Creation Unit, minus the fees described above and, if applicable,
any 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
Page 29
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
related to the securities comprising the redemption basket. Investors who use
the services of a broker or other such intermediary in addition to an Authorized
Participant to effect a redemption of a Creation Unit may also be assessed an
amount to cover the cost of such services. The redemption fee charged by a Fund
will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no
more than 2% of the value of the shares redeemed.
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, no 12b-1 fees will be paid any time before March 7, 2024 for EKG,
April 13, 2024 for ARVR and February 28, 2025 for EMDM.
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 that
there were no subsequent events requiring recognition or disclosure in the
financial statements that have not already been disclosed.
Page 30
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ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (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 voted proxies relating to
its portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
each Fund's website at www.ftportfolios.com; and (3) on the Securities and
Exchange Commission's ("SEC") website at www.sec.gov.
PORTFOLIO HOLDINGS
Each Fund files portfolio holdings information for each month in a fiscal
quarter within 60 days after the end of the relevant fiscal quarter on Form
N-PORT. Portfolio holdings information for the third month of each fiscal
quarter will be publicly available on the SEC's website at www.sec.gov. Each
Fund's complete schedule of portfolio holdings for the second and fourth
quarters of each fiscal year is included in the semi-annual and annual reports
to shareholders, respectively, and is filed with the SEC on Form N-CSR. The
semi-annual and annual report for each Fund is available to investors within 60
days after the period to which it relates. Each Fund's Forms N-PORT and Forms
N-CSR are available on the SEC's website listed above.
RISK CONSIDERATIONS
RISKS ARE INHERENT IN ALL INVESTING. CERTAIN GENERAL RISKS THAT MAY BE
APPLICABLE TO A FUND ARE IDENTIFIED BELOW, BUT NOT ALL OF THE MATERIAL RISKS
RELEVANT TO EACH FUND ARE INCLUDED IN THIS REPORT AND NOT ALL OF THE RISKS BELOW
APPLY TO EACH FUND. THE MATERIAL RISKS OF INVESTING IN EACH FUND ARE SPELLED OUT
IN ITS PROSPECTUS, STATEMENT OF ADDITIONAL INFORMATION AND OTHER REGULATORY
FILINGS. BEFORE INVESTING, YOU SHOULD CONSIDER EACH FUND'S INVESTMENT OBJECTIVE,
RISKS, CHARGES AND EXPENSES, AND READ EACH FUND'S PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION CAREFULLY. YOU CAN DOWNLOAD EACH FUND'S PROSPECTUS AT
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.
CONCENTRATION RISK. To the extent that a fund is able to invest a significant
percentage of its assets in a single asset class or the securities of issuers
within the same country, state, region, industry or sector, an adverse economic,
business or political development may affect the value of the fund's investments
more than if the fund were more broadly diversified. A fund that tracks an index
will be concentrated to the extent the fund's corresponding index is
concentrated. A concentration makes a fund more susceptible to any single
occurrence and may subject the fund to greater market risk than a fund that is
more broadly diversified.
CREDIT 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.
CYBER SECURITY RISK. The funds are susceptible to potential operational risks
through breaches in cyber security. A breach in cyber security refers to both
intentional and unintentional events that may cause a fund to lose proprietary
information, suffer data corruption or lose operational capacity. Such events
could cause a fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial
loss. In addition, cyber security breaches of a fund's third-party service
providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the fund invests, can also subject a fund to
many of the same risks associated with direct cyber security breaches.
DEFINED OUTCOME FUNDS RISK. To the extent a fund's investment strategy is
designed to deliver returns tied to the price performance of an underlying ETF,
an investor may not realize the returns the fund seeks to achieve if that
investor does not hold shares for the entire target outcome period. In the event
an investor purchases shares after the first day of the target outcome period or
sells shares prior to the end of the target outcome period, the buffer that the
fund seeks to provide against a decline in the value of the underlying ETF may
not be available, the enhanced returns that the fund seeks to provide (if any)
may not be available and the investor may not participate in a gain in the value
of the underlying ETF up to the cap for the investor's investment period.
Additionally, the fund will not participate in gains of the underlying ETF above
the cap and a shareholder may lose their entire investment. If the fund seeks
enhanced returns, there are certain time periods when the value of the fund may
fall faster than the value of the underlying ETF, and it is very unlikely that,
on any given day during which the underlying ETF share price increases in value,
the fund's share price will increase at the same rate as the enhanced returns
sought by the fund, which is designed for an entire target outcome period.
Trading flexible exchange options involves risks different from, or possibly
greater than, the risks associated with investing directly in securities, such
as less liquidity and correlation and valuation risks. A fund may experience
substantial downside from specific flexible exchange option positions and
certain positions may expire worthless.
DERIVATIVES RISK. To the extent a fund uses derivative instruments such as
futures contracts, options contracts and swaps, the fund may experience losses
because of adverse movements in the price or value of the underlying asset,
index or rate, which may be magnified by certain features of the derivative.
These risks are heightened when a fund's portfolio managers use derivatives to
enhance the fund's return or as a substitute for a position or security, rather
than solely to hedge (or offset) the risk of a position or security held by the
fund.
Page 31
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
EQUITY SECURITIES RISK. To the extent a fund invests in equity securities, the
value of the fund's shares will fluctuate with changes in the value of the
equity securities. Equity securities prices fluctuate for several reasons,
including changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, such as market
volatility, or when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase. Equity
securities may decline significantly in price over short or extended periods of
time, and such declines may occur in the equity market as a whole, or they may
occur in only a particular country, company, industry or sector of the market.
ETF RISK. The shares of an ETF trade like common stock and represent an interest
in a portfolio of securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities, although lack of liquidity in an ETF
could result in it being more volatile and ETFs have management fees that
increase their costs. Shares of an ETF trade on an exchange at market prices
rather than net asset value, which may cause the shares to trade at a price
greater than net asset value (premium) or less than net asset value (discount).
In times of market stress, decisions by market makers to reduce or step away
from their role of providing a market for an ETF's shares, or decisions by an
ETF's authorized participants that they are unable or unwilling to proceed with
creation and/or redemption orders of an ETF's shares, could result in shares of
the ETF trading at a discount to net asset value and in greater than normal
intraday bid-ask spreads.
FIXED INCOME SECURITIES RISK. To the extent a fund invests in fixed income
securities, the fund will be subject to credit risk, income risk, interest rate
risk, liquidity risk and prepayment risk. Income risk is the risk that income
from a fund's fixed income investments could decline during periods of falling
interest rates. Interest rate risk is the risk that the value of a fund's fixed
income securities will decline because of rising interest rates. Liquidity risk
is the risk that a security cannot be purchased or sold at the time desired, or
cannot be purchased or sold without adversely affecting the price. Prepayment
risk is the risk that the securities will be redeemed or prepaid by the issuer,
resulting in lower interest payments received by the fund. In addition to these
risks, high yield securities, or "junk" bonds, are subject to greater market
fluctuations and risk of loss than securities with higher ratings, and the
market for high yield securities is generally smaller and less liquid than that
for investment grade securities.
INDEX OR MODEL CONSTITUENT RISK. Certain funds may be a constituent of one or
more indices or ETF models. As a result, such a fund may be included in one or
more index-tracking exchange-traded funds or mutual funds. Being a component
security of such a vehicle could greatly affect the trading activity involving a
fund, the size of the fund and the market volatility of the fund. Inclusion in
an index could increase demand for the fund and removal from an index could
result in outsized selling activity in a relatively short period of time. As a
result, a fund's net asset value could be negatively impacted and the fund's
market price may be significantly below its net asset value during certain
periods. In addition, index rebalances may potentially result in increased
trading activity in a fund's shares.
INDEX PROVIDER RISK. To the extent a fund seeks to track an index, it is subject
to Index Provider Risk. There is no assurance that the Index Provider will
compile the Index accurately, or that the Index will be determined, maintained,
constructed, reconstituted, rebalanced, composed, calculated or disseminated
accurately. To correct any such error, the Index Provider may carry out an
unscheduled rebalance or other modification of the Index constituents or
weightings, which may increase the fund's costs. The Index Provider does not
provide any representation or warranty in relation to the quality, accuracy or
completeness of data in the Index, and it does not guarantee that the Index will
be calculated in accordance with its stated methodology. Losses or costs
associated with any Index Provider errors generally will be borne by the fund
and its shareholders.
INVESTMENT COMPANIES RISK. To the extent a fund invests in the securities of
other investment vehicles, the fund will incur additional fees and expenses that
would not be present in a direct investment in those investment vehicles.
Furthermore, the fund's investment performance and risks are directly related to
the investment performance and risks of the investment vehicles in which the
fund invests.
LIBOR RISK. To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as a reference
interest rate, it is subject to LIBOR Risk. The United Kingdom's Financial
Conduct Authority, which regulates LIBOR has ceased making LIBOR available as a
reference rate over a phase-out period that began December 31, 2021. There is no
assurance that any alternative reference rate, including the Secured Overnight
Financing Rate ("SOFR") will be similar to or produce the same value or economic
equivalence as LIBOR or that instruments using an alternative rate will have the
same volume or liquidity. The unavailability or replacement of LIBOR may affect
the value, liquidity or return on certain fund investments and may result in
costs incurred in connection with closing out positions and entering into new
trades. Any potential effects of the transition away from LIBOR on the fund or
on certain instruments in which the fund invests can be difficult to ascertain,
and they may vary depending on a variety of factors, and they could result in
losses to the fund.
MANAGEMENT RISK. To the extent that a fund is actively managed, it is subject to
management risk. In managing an actively-managed fund's investment portfolio,
the fund's portfolio managers will apply investment techniques and risk analyses
that may not have the desired result. There can be no guarantee that a fund will
meet its investment objective.
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
MARKET RISK. Market risk is the risk that a particular security, or shares of a
fund in general, may fall in value. Securities held by a fund, as well as shares
of a fund itself, are subject to market fluctuations caused by factors such as
general economic conditions, political events, regulatory or market
developments, changes in interest rates and perceived trends in securities
prices. Shares of a fund could decline in value or underperform other
investments as a result of the risk of loss associated with these market
fluctuations. In addition, local, regional or global events such as war, acts of
terrorism, spread of infectious diseases or other public health issues,
recessions, or other events could have a significant negative impact on a fund
and its investments. Such events may affect certain geographic regions,
countries, sectors and industries more significantly than others. In February
2022, Russia invaded Ukraine which has caused and could continue to cause
significant market disruptions and volatility within the markets in Russia,
Europe, and the United States. The hostilities and sanctions resulting from
those hostilities could have a significant impact on certain fund investments as
well as fund performance. The COVID-19 global pandemic and the ensuing policies
enacted by governments and central banks have caused and may continue to cause
significant volatility and uncertainty in global financial markets. While the
U.S. has resumed "reasonably" normal business activity, many countries continue
to impose lockdown measures. Additionally, there is no guarantee that vaccines
will be effective against emerging variants of the disease. These events also
adversely affect the prices and liquidity of a fund's portfolio securities or
other instruments and could result in disruptions in the trading markets. Any of
such circumstances could have a materially negative impact on the value of a
fund's shares and result in increased market volatility. During any such events,
a fund's shares may trade at increased premiums or discounts to their net asset
value and the bid/ask spread on a fund's shares may widen.
NON-U.S. SECURITIES RISK. To the extent a fund invests in non-U.S. securities,
it is subject to additional risks not associated with securities of domestic
issuers. Non-U.S. securities are subject to higher volatility than securities of
domestic issuers due to: possible adverse political, social or economic
developments; restrictions on foreign investment or exchange of securities;
capital controls; lack of liquidity; currency exchange rates; excessive
taxation; government seizure of assets; the imposition of sanctions by foreign
governments; different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries. Investments in
non-U.S. securities may involve higher costs than investments in U.S.
securities, including higher transaction and custody costs, as well as
additional taxes imposed by non-U.S. governments. These risks may be heightened
for securities of companies located, or with significant operations, in emerging
market countries.
OPERATIONAL RISK. Each fund is subject to risks arising from various operational
factors, including, but not limited to, human error, processing and
communication errors, errors of a fund's service providers, counterparties or
other third-parties, failed or inadequate processes and technology or systems
failures. Each fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service
providers may affect a fund's ability to meet its investment objective. Although
the funds and the funds' investment advisor seek to reduce these operational
risks through controls and procedures, there is no way to completely protect
against such risks.
PASSIVE INVESTMENT RISK. To the extent a fund seeks to track an index, the fund
will invest in the securities included in, or representative of, the index
regardless of their investment merit. A fund generally will not attempt to take
defensive positions in declining markets.
PREFERRED SECURITIES RISK. Preferred securities combine some of the
characteristics of both common stocks and bonds. Preferred securities are
typically subordinated to bonds and other debt securities in a company's capital
structure in terms of priority to corporate income, subjecting them to greater
credit risk than those debt securities. Generally, holders of preferred
securities have no voting rights with respect to the issuing company unless
preferred dividends have been in arrears for a specified number of periods, at
which time the preferred security holders may obtain limited rights. In certain
circumstances, an issuer of preferred securities may defer payment on the
securities and, in some cases, redeem the securities prior to a specified date.
Preferred securities may also be substantially less liquid than other
securities, including common stock.
VALUATION RISK. The valuation of certain securities may carry more risk than
that of common stock. Uncertainties in the conditions of the financial markets,
unreliable reference data, lack of transparency and inconsistency of valuation
models and processes may lead to inaccurate asset pricing. A fund may hold
investments in sizes smaller than institutionally sized round lot positions
(sometimes referred to as odd lots). However, third-party pricing services
generally provide evaluations on the basis of institutionally-sized round lots.
If a fund sells certain of its investments in an odd lot transaction, the sale
price may be less than the value at which such securities have been held by the
fund. Odd lots often trade at lower prices than institutional round lots. There
is no assurance that the fund will be able to sell a portfolio security at the
price established by the pricing service, which could result in a loss to the
fund.
NOT FDIC INSURED NOT BANK GUARANTEED MAY LOSE VALUE
Page 33
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
ADVISORY AGREEMENTS
BOARD CONSIDERATIONS REGARDING APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
The Board of Trustees of First Trust Exchange-Traded Fund II (the "Trust"),
including the Independent Trustees, approved the Investment Management Agreement
(the "Agreement") with First Trust Advisors L.P. (the "Advisor"), on behalf of
First Trust Bloomberg Emerging Market Democracies ETF (the "Fund"), for an
initial two-year term at a meeting held on December 12, 2022. The Board
determined that the Agreement is in the best interests of the Fund in light of
the nature, extent and quality of the services expected to be provided and such
other matters as the Board considered to be relevant in the exercise of its
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 for
the Fund, the Independent Trustees received a report from the Advisor in advance
of the Board meeting responding to a request for information from counsel to the
Independent Trustees, submitted on behalf of the Independent Trustees, that,
among other things, outlined: the services to be provided by the Advisor to the
Fund (including the relevant personnel responsible for these services and their
experience); the proposed unitary fee rate schedule payable by the Fund as
compared to fees charged to a peer group of funds (the "Expense Group") and a
broad peer universe of funds (the "Expense Universe"), each assembled by
Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and
as compared to fees charged to other exchange-traded funds ("ETFs") managed by
the Advisor; the estimated expense ratio of the Fund as compared to expense
ratios of the funds in the Fund's Expense Group and Expense Universe; the nature
of expenses to be incurred in providing services to the Fund and the potential
for the Advisor to realize economies of scale, if any; profitability and other
financial data for the Advisor; any indirect benefits to the Advisor and its
affiliate, First Trust Portfolios L.P. ("FTP"); and information on the Advisor's
compliance program. The Independent Trustees and their counsel also met
separately to discuss the information provided by the Advisor. The Board applied
its business judgment to determine whether the arrangement between the Trust and
the Advisor is a reasonable business arrangement from the Fund's perspective.
In evaluating whether to approve the Agreement for the Fund, the Board
considered the nature, extent and quality of the services to be provided by the
Advisor under the Agreement and considered that employees of the Advisor provide
management services to other ETFs and to other funds in the First Trust Fund
Complex with diligence and care. The Board considered that the Advisor will be
responsible for the overall management and administration of the Fund and
reviewed all of the services to be provided by the Advisor to the Fund. The
Board also considered the background and experience of the persons who will be
responsible for the day-to-day management of the Fund's investments. In
reviewing the services to be provided, the Board noted the compliance program
that had been developed by the Advisor and considered that it includes a robust
program for monitoring the Advisor's and the Fund's compliance with the 1940
Act, as well as the Fund's compliance with its investment objective, policies
and restrictions. Because the Fund had yet to commence investment operations,
the Board could not consider the historical investment performance of the Fund.
Because the Fund is an index ETF that is designed to track the performance of an
underlying index, the Board considered reports it receives on a quarterly basis
showing the correlation and tracking error between other ETFs for which the
Advisor 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 the services to be provided to
the Fund by the Advisor under the Agreement are expected to be satisfactory.
The Board considered the proposed unitary fee rate schedule payable by the Fund
under the Agreement for the services to be provided. The Board noted that, under
the unitary fee arrangement, the Fund would pay the Advisor a unitary fee
starting at an annual rate of 0.75% of its average daily net assets, subject to
a breakpoint schedule pursuant to which the unitary fee rate would be reduced as
assets of the Fund meet certain thresholds. The Board noted that the Advisor
would be responsible for the Fund's expenses, including the cost of transfer
agency, custody, fund administration, legal, audit and other services and
license fees, if any, but excluding the fee payment under the Agreement and
interest, taxes, acquired fund fees and expenses, if any, brokerage commissions
and other expenses connected with the execution of portfolio transactions,
distribution and service fees pursuant to a Rule 12b-1 plan, if any, and
extraordinary expenses, if any. The Board received and reviewed information
showing the fee rates and expense ratios of the peer funds in the Expense Group,
as well as advisory and unitary fee rates charged by the Advisor to other ETFs.
Because the Fund will pay a unitary fee, the Board determined that expense
ratios were the most relevant comparative data point. Based on the information
provided, the Board noted that the unitary fee rate for the Fund was above the
median total (net) expense ratio of the peer funds in the Expense Group. With
respect to the Expense Group, the Board discussed with representatives of the
Advisor how the Expense Group was assembled and how the Fund compared and
Page 34
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
differed from the peer funds. The Board took this information into account in
considering the peer data. With respect to fees charged to other ETFs managed by
the Advisor, the Board considered the Advisor's statement that the Fund will be
most comparable to three other index ETFs managed by the Advisor, each of which
has a unitary fee rate schedule starting at an annual rate of 0.75% or 0.80% of
its average daily net assets, given each strategy's focus on emerging market
equity exposure through a unique, alpha-seeking index methodology. In light of
the information considered and the nature, extent and quality of the services
expected to be provided to the Fund under the Agreement, the Board determined
that the proposed unitary fee was fair and reasonable.
The Board considered whether there are any potential economies of scale to be
achieved in connection with the Advisor providing investment advisory services
to the Fund and whether the Fund may benefit from any economies of scale. The
Board noted that the proposed unitary fee rate schedule for the Fund includes
breakpoints pursuant to which the unitary fee rate would be reduced as assets of
the Fund meet certain thresholds. The Board considered that the Advisor has
continued to build infrastructure and add new staff to improve the services to
the funds in the First Trust Fund Complex. The Board also noted that under the
unitary fee structure, any reduction in expenses associated with the management
and operations of the Fund generally would benefit the Advisor, but that the
unitary fee structure provides a level of certainty in expenses for shareholders
of the Fund. The Board concluded that the proposed unitary fee rate schedule for
the Fund reflects an appropriate level of sharing of any economies of scale that
may be realized in the management of the Fund at reasonably foreseeable future
asset levels. The Board took into consideration the types of costs to be borne
by the Advisor in connection with its services to be performed for the Fund
under the Agreement. The Board considered the Advisor's estimate of the asset
level for the Fund at which the Advisor expects the Agreement to be profitable
to the Advisor and the Advisor's estimate of the profitability of the Agreement
if the Fund's assets reach $100 million. The Board noted the inherent
limitations in the profitability analysis and concluded that, based on the
information provided, the Advisor's estimated profitability level for the Fund
was not unreasonable. The Board considered indirect benefits described by the
Advisor that may be realized from its relationship with the Fund. The Board
considered that the Advisor had identified as an indirect benefit to the Advisor
and FTP their exposure to investors and brokers who, absent their exposure to
the Fund, may have had no dealings with the Advisor or FTP. The Board also noted
that the Advisor will not utilize soft dollars in connection with the Fund. The
Board concluded that the character and amount of potential indirect benefits to
the Advisor were not unreasonable.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreement are fair and reasonable and that the approval of the Agreement is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.
BOARD CONSIDERATIONS REGARDING APPROVAL OF AMENDMENT TO INVESTMENT MANAGEMENT
AGREEMENT
The Board of Trustees of First Trust Exchange-Traded Fund II (the "Trust"),
including the Independent Trustees, unanimously approved the amendment (the
"Amendment") of the Investment Management Agreement (the "Agreement") with First
Trust Advisors L.P. (the "Advisor") on behalf of the First Trust Nasdaq Lux
Digital Health Solutions ETF (the "Fund").
The Board approved the Amendment at a meeting held on October 24, 2022. As part
of the review process, the Board reviewed information and had preliminary
discussions with the Advisor regarding the proposed Amendment at meetings held
on April 18, 2022, June 12-13, 2022 and September 18-19, 2022. Following those
preliminary discussions, the Board requested and received information from the
Advisor regarding the proposed Amendment, and that information was considered at
an executive session of the Independent Trustees and their counsel held prior to
the October 24, 2022 meeting, as well as at the October meeting.
In reviewing the Amendment, the Board considered that the purpose of the
Amendment is to modify the unitary fee rate for the Fund under the Agreement by
introducing a breakpoint schedule pursuant to which the unitary fee rate paid by
the Fund to the Advisor will be reduced as assets of the Fund meet certain
thresholds. The Board noted the Advisor's representations that the quality and
quantity of the services provided to the Fund by the Advisor under the Agreement
will not be reduced or modified as a result of the Amendment, and that the
obligations of the Advisor under the Agreement will remain the same in all
respects.
The Board noted that it, including the Independent Trustees, approved the
Agreement for an initial two-year period ending March 7, 2024 at a meeting held
on January 24, 2022. The Board noted that in connection with such approval it
had determined, based upon the information provided, that the terms of the
Agreement were fair and reasonable and that the approval of the Agreement was in
the best interests of the Fund in light of the nature, extent and quality of the
services expected to be provided and such other matters as the Board considered
to be relevant in the exercise of its business judgment.
Based on all of the information considered, the Board, including the Independent
Trustees, unanimously determined that the terms of the Amendment are fair and
reasonable and that the Amendment is in the best interests of the Fund.
Page 35
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ADDITIONAL INFORMATION (CONTINUED)
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FIRST TRUST EXCHANGE-TRADED FUND II
MARCH 31, 2023 (UNAUDITED)
BOARD CONSIDERATIONS REGARDING APPROVAL OF AMENDMENT TO INVESTMENT MANAGEMENT
AGREEMENT
The Board of Trustees of First Trust Exchange-Traded Fund II (the "Trust"),
including the Independent Trustees, unanimously approved the amendment (the
"Amendment") of the Investment Management Agreement (the "Agreement") with First
Trust Advisors L.P. (the "Advisor") on behalf of the First Trust Indxx Metaverse
ETF (the "Fund").
The Board approved the Amendment at a meeting held on October 24, 2022. As part
of the review process, the Board reviewed information and had preliminary
discussions with the Advisor regarding the proposed Amendment at meetings held
on April 18, 2022, June 12-13, 2022 and September 18-19, 2022. Following those
preliminary discussions, the Board requested and received information from the
Advisor regarding the proposed Amendment, and that information was considered at
an executive session of the Independent Trustees and their counsel held prior to
the October 24, 2022 meeting, as well as at the October meeting.
In reviewing the Amendment, the Board considered that the purpose of the
Amendment is to modify the unitary fee rate for the Fund under the Agreement by
introducing a breakpoint schedule pursuant to which the unitary fee rate paid by
the Fund to the Advisor will be reduced as assets of the Fund meet certain
thresholds. The Board noted the Advisor's representations that the quality and
quantity of the services provided to the Fund by the Advisor under the Agreement
will not be reduced or modified as a result of the Amendment, and that the
obligations of the Advisor under the Agreement will remain the same in all
respects.
The Board noted that it, including the Independent Trustees, approved the
Agreement for an initial two-year period ending March 4, 2024 at a meeting held
on January 24, 2022. The Board noted that in connection with such approval it
had determined, based upon the information provided, that the terms of the
Agreement were fair and reasonable and that the approval of the Agreement was in
the best interests of the Fund in light of the nature, extent and quality of the
services expected to be provided and such other matters as the Board considered
to be relevant in the exercise of its business judgment.
Based on all of the information considered, the Board, including the Independent
Trustees, unanimously determined that the terms of the Amendment are fair and
reasonable and that the Amendment is in the best interests of the Fund.
Page 36
FIRST TRUST
First Trust Exchange-Traded Fund II
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
ADMINISTRATOR, CUSTODIAN,
FUND ACCOUNTANT &
TRANSFER AGENT
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
320 South Canal Street
Chicago, IL 60606
[BLANK BACK COVER]
| (b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
| (a) | Schedules of Investments in securities of unaffiliated issuers as of the close of the reporting period are 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.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
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 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
| (a) | Not applicable. |
| (b) | Not applicable. |
Item 13. Exhibits.
| (a)(1) | Not applicable. |
| (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. |
| (a)(4) | 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 II |
| By (Signature and Title)* | /s/ James M. Dykas | |
| James M. Dykas, President and Chief Executive Officer (principal executive officer) |
| Date: | June 9, 2023 |
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/ James M. Dykas | |
| James M. Dykas, President and Chief Executive Officer (principal executive officer) |
| Date: | June 9, 2023 |
| By (Signature and Title)* | /s/ Donald P. Swade | |
| Donald P. Swade, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) |
| Date: | June 9, 2023 |
| This ‘N-CSRS’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 2/28/25 | ||||
| 10/3/24 | ||||
| 9/30/24 | ||||
| 8/1/24 | ||||
| 4/13/24 | ||||
| 3/7/24 | ||||
| 3/4/24 | ||||
| 1/31/24 | ||||
| 6/30/23 | ||||
| Filed on / Effective on: | 6/9/23 | |||
| 4/21/23 | ||||
| 4/19/23 | ||||
| For Period end: | 3/31/23 | NPORT-P | ||
| 3/2/23 | 497J, 497K | |||
| 2/1/23 | 485BPOS, 497, 497K | |||
| 12/12/22 | N-CEN | |||
| 11/1/22 | 497, 497K | |||
| 10/24/22 | ||||
| 10/1/22 | ||||
| 9/30/22 | 24F-2NT, 485BPOS, 497J, 497K, N-CEN, N-CSR, NPORT-P | |||
| 9/1/22 | ||||
| 7/29/22 | 485BPOS, 497J, 497K | |||
| 7/25/22 | ||||
| 4/19/22 | 497J, 497K, 8-A12B, CERT | |||
| 4/18/22 | ||||
| 3/22/22 | 485BXT, 497, 497K, CERT | |||
| 2/28/22 | CORRESP | |||
| 1/26/22 | 497J, 497K | |||
| 1/24/22 | 485BPOS | |||
| 12/31/21 | NPORT-P | |||
| 5/11/21 | ||||
| 4/30/21 | ||||
| 4/26/21 | ||||
| 4/1/20 | ||||
| 3/31/20 | N-CSRS, NPORT-P | |||
| 6/24/19 | ||||
| 5/30/19 | 485BPOS, 497, 497K | |||
| 1/1/19 | ||||
| 11/5/18 | ||||
| 10/4/18 | ||||
| 4/1/18 | ||||
| 3/31/18 | N-CSRS, NSAR-A | |||
| 3/29/18 | ||||
| 1/31/18 | ||||
| 12/18/15 | 24F-2NT, 497, 497K, 8-A12B/A, EFFECT | |||
| 7/6/15 | 8-A12B, EFFECT | |||
| 6/1/15 | ||||
| 11/4/14 | ||||
| 9/30/12 | 24F-2NT, N-CSR, NSAR-B | |||
| 7/6/06 | ||||
| 10/1/04 | ||||
| List all Filings | ||||