Document/Exhibit Description Pages Size
1: 487 Form S-6 to Effective Amendment 206± 869K
2: EX-99 Memorandum of Changes 1 6K
4: EX-99.2A Opinion Regarding Legality 2± 8K
3: EX-99.A1 Trust Agreement 49± 180K
7: EX-99.C2 Consent of Evaluator 1 6K
5: EX-99.C4A Opinion Regarding Federal Tax Status 4± 17K
6: EX-99.C4B Opinion Regarding New York Tax Status 2± 9K
8: EX-99.C4C Opinion Regarding U.K. Tax Status 6± 20K
Registration No. 333-153812
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 1900
B. Name of depositor:
FIRST TRUST PORTFOLIOS L.P.
C. Complete address of depositor's principal executive offices:
120 East Liberty Drive
Wheaton, Illinois 60187
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o First Trust Portfolios L.P. c/o Chapman and Cutler LLP
120 East Liberty Drive 111 West Monroe Street
Wheaton, Illinois 60187 Chicago, Illinois 60603
E. Title of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on December 31, 2008 at 2:00 p.m. pursuant to Rule 487.
________________________________
Dow(R) Target 5 1Q '09 - Term 3/31/10
Dow(R) Target Dvd. 1Q '09 - Term 3/31/10
Global Target 15 1Q '09 - Term 3/31/10
MSCI EAFE Target 20 1Q '09 - Term 3/31/10
Nasdaq(R) Target 15 1Q '09 - Term 3/31/10
NYSE(R) Intl. Target 25 1Q '09 - Term 3/31/10
S&P Target 24 1Q '09 - Term 3/31/10
S&P Target SMid 60 1Q '09 - Term 3/31/10
Target 50/50 1Q '09 - Term 3/31/10
Target Divsd. Dvd. 1Q '09 - Term 3/31/10
Target Dvd. Multi-Strat. 1Q '09 - Term 3/31/10
Target Dbl. Play 1Q '09 - Term 3/31/10
Target Growth 1Q '09 - Term 3/31/10
Target Long-Term Growth 1Q '09 - Term 3/31/10
Target Mega-Cap 1Q '09 - Term 3/31/10
Target Small-Cap 1Q '09 - Term 3/31/10
Target VIP Cons. Eqty. 1Q '09 - Term 3/31/10
Value Line(R) Divsd. Target 40 1Q '09 - Term 3/31/10
Value Line(R) Target 25 1Q '09 - Term 3/31/10
FT 1900
FT 1900 is a series of a unit investment trust, the FT Series. FT 1900
consists of 19 separate portfolios listed above (each, a "Trust," and
collectively, the "Trusts"). Each Trust invests in a portfolio of common
stocks ("Securities") selected by applying a specialized strategy. The
objective of each Trust is to provide the potential for an above-average
total return.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FIRST TRUST (R)
1-800-621-1675
The date of this prospectus is December 31, 2008
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 9
Report of Independent Registered Public Accounting Firm 14
Statements of Net Assets 15
Schedules of Investments 21
The FT Series 53
Portfolios 54
Risk Factors 62
Hypothetical Performance Information 66
Public Offering 74
Distribution of Units 76
The Sponsor's Profits 78
The Secondary Market 78
How We Purchase Units 78
Expenses and Charges 78
Tax Status 79
Retirement Plans 82
Rights of Unit Holders 83
Income and Capital Distributions 83
Redeeming Your Units 84
Investing in a New Trust 85
Removing Securities from a Trust 86
Amending or Terminating the Indenture 86
Information on the Sponsor, Trustee,
FTPS Unit Servicing Agent and Evaluator 87
Other Information 88
Page 2
Summary of Essential Information
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
FTPS Unit Servicing Agent: FTP Services LLC
Evaluator: First Trust Advisors L.P.
[Enlarge/Download Table]
The Dow (R) The Dow (R) Global MSCI EAFE
Target 5 Target Dividend Target 15 Target 20
Portfolio, 1st Portfolio, 1st Portfolio, 1st Portfolio, 1st
Quarter 2009 Quarter 2009 Quarter 2009 Quarter 2009
Series Series Series Series
______________ ______________ ______________ ______________
Initial Number of Units (1) 14,470 17,946 15,130 15,240
Fractional Undivided Interest in the Trust per Unit (1) 1/14,470 1/17,946 1/15,130 1/15,240
Public Offering Price:
Public Offering Price per Unit (2) $ 10.000 $ 10.000 $10.000 $10.000
Less Initial Sales Charge per Unit (3) (.100) (.100) (.100) (.100)
__________ __________ __________ __________
Aggregate Offering Price Evaluation of Securities per Unit (4) 9.900 9.900 9.900 9.900
Less Deferred Sales Charge per Unit (3) (.145) (.145) (.145) (.145)
__________ __________ __________ __________
Redemption Price per Unit (5) 9.755 9.755 9.755 9.755
Less Creation and Development Fee per Unit (3)(5) (.050) (.050) (.050) (.050)
Less Organization Costs per Unit (5) (.029) (.025) (.029) (.029)
__________ __________ __________ __________
Net Asset Value per Unit $ 9.676 $ 9.680 $ 9.676 $ 9.676
========== ========== ========== ==========
Estimated Net Annual Distribution per Unit (6) $ .6948 $ .5491 $ .8120 $ .4385
Cash CUSIP Number 30276B 109 30275Y 779 30276B 208 30276B 257
Reinvestment CUSIP Number 30276B 117 30275Y 787 30276B 216 30276B 265
Fee Accounts Cash CUSIP Number 30276B 125 30275Y 795 30276B 224 30276B 273
Fee Accounts Reinvestment CUSIP Number 30276B 133 30275Y 803 30276B 232 30276B 281
FTPS CUSIP Number 30276B 141 30275Y 811 30276B 240 30276B 299
Security Code 054029 053984 053992 053996
Ticker Symbol FVEQTX FDQFAX FGVFTX FMEAQX
[Enlarge/Download Table]
First Settlement Date January 6, 2009
Mandatory Termination Date (7) March 31, 2010
Rollover Notification Date (8) March 15, 2010
Special Redemption and Liquidation Period (8) March 15, 2010 to March 31, 2010
Distribution Record Date Tenth day of each month, commencing January 10, 2009.
Distribution Date (6) Twenty-fifth day of each month, commencing January 25, 2009.
____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
Page 3
Summary of Essential Information
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
FTPS Unit Servicing Agent: FTP Services LLC
Evaluator: First Trust Advisors L.P.
[Enlarge/Download Table]
NYSE (R)
The Nasdaq (R) International The S&P S&P
Target 15 Target 25 Target 24 Target SMid 60
Portfolio, 1st Portfolio, 1st Portfolio, 1st Portfolio, 1st
Quarter 2009 Quarter 2009 Quarter 2009 Quarter 2009
Series Series Series Series
______________ ______________ ______________ ______________
Initial Number of Units (1) 16,859 14,517 13,242 16,915
Fractional Undivided Interest in the Trust per Unit (1) 1/16,859 1/14,517 1/13,242 1/16,915
Public Offering Price:
Public Offering Price per Unit (2) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Less Initial Sales Charge per Unit (3) (.100) (.100) (.100) (.100)
__________ __________ __________ __________
Aggregate Offering Price Evaluation of Securities per Unit (4) 9.900 9.900 9.900 9.900
Less Deferred Sales Charge per Unit (3) (.145) (.145) (.145) (.145)
__________ ___________ __________ __________
Redemption Price per Unit (5) 9.755 9.755 9.755 9.755
Less Creation and Development Fee per Unit (3)(5) (.050) (.050) (.050) (.050)
Less Organization Costs per Unit (5) (.029) (.025) (.029) (.029)
__________ __________ __________ __________
Net Asset Value per Unit $ 9.676 $ 9.680 $ 9.676 $ 9.676
========== ========== ========== ==========
Estimated Net Annual Distribution per Unit (6) $ .0598 $ .3675 $ .2103 $ .1148
Cash CUSIP Number 30276B 307 30276B 356 30276B 406 30276B 455
Reinvestment CUSIP Number N/A 30276B 364 N/A N/A
Fee Accounts Cash CUSIP Number 30276B 323 30276B 372 30276B 422 30276B 471
Fee Accounts Reinvestment CUSIP Number N/A 30276B 380 N/A N/A
FTPS CUSIP Number 30276B 349 30276B 398 30276B 448 30276B 497
Security Code 054035 054132 054136 054038
Ticker Symbol FQJANX FINTFX FTTYFX FSITYX
[Enlarge/Download Table]
First Settlement Date January 6, 2009
Mandatory Termination Date (7) March 31, 2010
Rollover Notification Date (8) March 15, 2010
Special Redemption and Liquidation Period (8) March 15, 2010 to March 31, 2010
Distribution Record Date Tenth day of each month, commencing January 10, 2009.
Distribution Date (6) Twenty-fifth day of each month, commencing January 25, 2009.
____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
Page 4
Summary of Essential Information
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
FTPS Unit Servicing Agent: FTP Services LLC
Evaluator: First Trust Advisors L.P.
[Enlarge/Download Table]
Target
Diversified Target Dividend Target Double
Target 50/50 Dividend Multi-Strategy Play
Portfolio, 1st Portfolio, 1st Portfolio, 1st Portfolio, 1st
Quarter 2009 Quarter 2009 Quarter 2009 Quarter 2009
Series Series Series Series
______________ ______________ ______________ ______________
Initial Number of Units (1) 25,566 17,335 25,731 17,005
Fractional Undivided Interest in the Trust per Unit (1) 1/25,566 1/17,335 1/25,731 1/17,005
Public Offering Price:
Public Offering Price per Unit (2) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Less Initial Sales Charge per Unit (3) (.100) (.100) (.100) (.100)
__________ __________ __________ __________
Aggregate Offering Price Evaluation of Securities per Unit (4) 9.900 9.900 9.900 9.900
Less Deferred Sales Charge per Unit (3) (.145) (.145) (.145) (.145)
__________ __________ __________ __________
Redemption Price per Unit (5) 9.755 9.755 9.755 9.755
Less Creation and Development Fee per Unit (3)(5) (.050) (.050) (.050) (.050)
Less Organization Costs per Unit (5) (.029) (.029) (.029) (.025)
__________ __________ __________ __________
Net Asset Value per Unit $ 9.676 $ 9.676 $ 9.676 $ 9.680
========== ========== ========== ==========
Estimated Net Annual Distribution per Unit (6) $ .4048 $ .6634 $ .6893 $ .3424
Cash CUSIP Number 30276B 505 30276B 554 30276B 604 30275Y 829
Reinvestment CUSIP Number N/A 30276B 562 N/A N/A
Fee Accounts Cash CUSIP Number 30276B 521 30276B 570 30276B 620 30275Y 845
Fee Accounts Reinvestment CUSIP Number N/A 30276B 588 N/A N/A
FTPS CUSIP Number 30276B 547 30276B 596 30276B 646 30275Y 860
Security Code 054041 054138 053908 053988
Ticker Symbol FLSJFX FPIMDX FNICGX FBLYQX
[Enlarge/Download Table]
First Settlement Date January 6, 2009
Mandatory Termination Date (7) March 31, 2010
Rollover Notification Date (8) March 15, 2010
Special Redemption and Liquidation Period (8) March 15, 2010 to March 31, 2010
Distribution Record Date Tenth day of each month, commencing January 10, 2009.
Distribution Date (6) Twenty-fifth day of each month, commencing January 25, 2009.
____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
Page 5
Summary of Essential Information
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
FTPS Unit Servicing Agent: FTP Services LLC
Evaluator: First Trust Advisors L.P.
[Enlarge/Download Table]
Target Long-Term Target
Target Growth Growth Mega-Cap Target Small-Cap
Portfolio, 1st Portfolio, 1st Portfolio, 1st Portfolio, 1st
Quarter 2009 Quarter 2009 Quarter 2009 Quarter 2009
Series Series Series Series
______________ ________________ ______________ ________________
Initial Number of Units (1) 17,392 26,641 24,257 15,080
Fractional Undivided Interest in the Trust per Unit (1) 1/17,392 1/26,641 1/24,257 1/15,080
Public Offering Price:
Public Offering Price per Unit (2) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Less Initial Sales Charge per Unit (3) (.100) (.100) (.100) (.100)
__________ __________ __________ __________
Aggregate Offering Price Evaluation of Securities per Unit (4) 9.900 9.900 9.900 9.900
Less Deferred Sales Charge per Unit (3) (.145) (.145) (.145) (.145)
__________ __________ __________ __________
Redemption Price per Unit (5) 9.755 9.755 9.755 9.755
Less Creation and Development Fee per Unit (3)(5) (.050) (.050) (.050) (.050)
Less Organization Costs per Unit (5) (.029) (.029) (.029) (.029)
__________ __________ __________ __________
Net Asset Value per Unit $ 9.676 $ 9.676 $ 9.676 $ 9.676
========== ========== ========== ==========
Estimated Net Annual Distribution per Unit (6) $ .1494 $ .1672 $ .2340 $ .0850
Cash CUSIP Number 30276B 653 30276B 703 30276B 752 30276B 802
Reinvestment CUSIP Number N/A N/A N/A N/A
Fee Accounts Cash CUSIP Number 30276B 679 30276B 729 30276B 778 30276B 828
Fee Accounts Reinvestment CUSIP Number N/A N/A N/A N/A
FTPS CUSIP Number 30276B 695 30276B 745 30276B 794 30276B 844
Security Code 053910 053912 053915 053918
Ticker Symbol FGWQJX FLNGAX FMGAKX FTPBQX
[Enlarge/Download Table]
First Settlement Date January 6, 2009
Mandatory Termination Date (7) March 31, 2010
Rollover Notification Date (8) March 15, 2010
Special Redemption and Liquidation Period (8) March 15, 2010 to March 31, 2010
Distribution Record Date Tenth day of each month, commencing January 10, 2009.
Distribution Date (6) Twenty-fifth day of each month, commencing January 25, 2009.
____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
</FN>
Page 6
Summary of Essential Information
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
FTPS Unit Servicing Agent: FTP Services LLC
Evaluator: First Trust Advisors L.P.
[Enlarge/Download Table]
Target VIP Value Line (R)
Conservative Diversified Value Line (R)
Equity Target 40 Target 25
Portfolio, 1st Portfolio, 1st Portfolio, 1st
Quarter 2009 Quarter 2009 Quarter 2009
Series Series Series
______________ ______________ ______________
Initial Number of Units (1) 24,967 16,612 16,731
Fractional Undivided Interest in the Trust per Unit (1) 1/24,967 1/16,612 1/16,731
Public Offering Price:
Public Offering Price per Unit (2) $ 10.000 $ 10.000 $ 10.000
Less Initial Sales Charge per Unit (3) (.100) (.100) (.100)
__________ __________ __________
Aggregate Offering Price Evaluation of Securities per Unit (4) 9.900 9.900 9.900
Less Deferred Sales Charge per Unit (3) (.145) (.145) (.145)
__________ __________ __________
Redemption Price per Unit (5) 9.755 9.755 9.755
Less Creation and Development Fee per Unit (3)(5) (.050) (.050) (.050)
Less Organization Costs per Unit (5) (.029) (.029) (.025)
__________ __________ __________
Net Asset Value per Unit $ 9.676 $ 9.676 $ 9.680
========== ========== ==========
Estimated Net Annual Distribution per Unit (6) $ .3027 $ .1196 $ .1369
Cash CUSIP Number 30276C 107 30276C 156 30276A 556
Reinvestment CUSIP Number N/A N/A N/A
Fee Accounts Cash CUSIP Number 30276C 123 30276C 172 30276A 572
Fee Accounts Reinvestment CUSIP Number N/A N/A N/A
FTPS CUSIP Number 30276C 149 30276C 198 30276A 598
Security Code 053921 053923 054130
Ticker Symbol FETYQX FLINFX FDENFX
[Enlarge/Download Table]
First Settlement Date January 6, 2009
Mandatory Termination Date (7) March 31, 2010
Rollover Notification Date (8) March 15, 2010
Special Redemption and Liquidation Period (8) March 15, 2010 to March 31, 2010
Distribution Record Date Tenth day of each month, commencing January 10, 2009.
Distribution Date (6) Twenty-fifth day of each month, commencing January 25, 2009.
____________
<FN>
See "Notes to Summary of Essential Information" on page 8.
Page 7
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on January 2, 2009, we may adjust the
number of Units of a Trust so that the Public Offering Price per Unit
will equal approximately $10.00. If we make such an adjustment, the
fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit, the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(3) You will pay a maximum sales charge of 2.95% of the Public Offering
Price per Unit (equivalent to 2.98% of the net amount invested) which
consists of an initial sales charge, a deferred sales charge and a
creation and development fee. The sales charges are described in the
"Fee Table."
(4) Each listed Security is valued at its last closing sale price on the
relevant stock exchange at the Evaluation Time on the business day prior
to the Initial Date of Deposit. If a Security is not listed, or if no
closing sale price exists, it is generally valued at its closing ask
price on such date. See "Public Offering-The Value of the Securities."
The value of foreign Securities trading in non-U.S. currencies is
determined by converting the value of such Securities to their U.S.
dollar equivalent based on the currency exchange rate for the currency
in which a Security is generally denominated at the Evaluation Time on
the business day prior to the Initial Date of Deposit. Evaluations for
purposes of determining the purchase, sale or redemption price of Units
are made as of the close of trading on the New York Stock Exchange
("NYSE") (generally 4:00 p.m. Eastern time) on each day on which it is
open (the "Evaluation Time").
(5) The creation and development fee and estimated organization costs
per Unit will be deducted from the assets of a Trust at the end of the
initial offering period. If Units are redeemed prior to the close of the
initial offering period, these fees will not be deducted from the
redemption proceeds. See "Redeeming Your Units."
(6) We base our estimate of the dividends a Trust will receive from the
Securities by annualizing the most recent dividends declared by the
issuers of the Securities (such figure adjusted to reflect any change in
dividend policy announced subsequent to the most recently declared
dividend). There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time. Due to this, and various
other factors, actual dividends received from the Securities may be less
than their most recent annualized dividends. In this case, the actual
net annual distribution you receive will be less than the estimated
amount set forth above. The actual net annual distribution per Unit you
receive will also vary from that set forth above with changes in a
Trust's fees and expenses, currency exchange rates, foreign withholding
and with the sale of Securities. See "Fee Table" and "Expenses and
Charges." The Trustee will distribute money from the Income and Capital
Accounts, as determined at the monthly Record Date, monthly on the
twenty-fifth day of each month to Unit holders of record on the tenth
day of such month provided the aggregate amount, exclusive of sale
proceeds, in the Income and Capital Accounts available for distribution
equals at least 0.1% of the net asset value of a Trust. Undistributed
money in the Income and Capital Accounts will be distributed in the next
month in which the aggregate amount available for distribution,
exclusive of sale proceeds, equals or exceeds 0.1% of the net asset
value of a Trust. Distributions of sale proceeds from the Capital
Account will be made monthly on the twenty-fifth day of the month to
Unit holders of record on the tenth day of such month if the amount
available for distribution equals at least $1.00 per 100 Units. See
"Income and Capital Distributions." At the rollover date for Rollover
Unit holders or upon termination of a Trust for remaining Unit holders,
amounts in the Income Account (which consist of dividends on the
Securities) will be included in amounts distributed to Unit holders.
(7) See "Amending or Terminating the Indenture."
(8) See "Investing in a New Trust."
</FN>
Page 8
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of a Trust. See "Public
Offering" and "Expenses and Charges." Although the Trusts have a term of
approximately 15 months and are unit investment trusts rather than
mutual funds, this information allows you to compare fees.
[Enlarge/Download Table]
The Dow(R) The Dow(R) Global
Target 5 Portfolio Target Dividend Portfolio Target 15 Portfolio
1st Quarter 2009 Series 1st Quarter 2009 Series 1st Quarter 2009 Series
----------------------- ----------------------- -----------------------
Amount Amount Amount
per Unit per Unit per Unit
-------- -------- --------
UNIT HOLDER SALES FEES
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
MAXIMUM SALES CHARGE
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.45%(b) $.145 1.45%(b) $.145 1.45%(b) $.145
Creation and development fee 0.50%(c) $.050 0.50%(c) $.050 0.50%(c) $.050
----- ------ ----- ------ ----- ------
Maximum sales charge
(including creation and development fee) 2.95% $.295 2.95% $.295 2.95% $.295
===== ====== ===== ====== ===== ======
ORGANIZATION COSTS
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
Estimated organization costs .290%(d) $.0290 .250%(d) $.0250 .290%(d) $.0290
===== ====== ===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(E)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Portfolio supervision, bookkeeping,
administrative, evaluation and
FTPS Unit servicing fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .144%(f) $.0144 .144%(f) $.0144 .214%(f) $.0214
----- ------ ----- ------ ----- ------
Total .204% $.0204 .204% $.0204 .274% $.0274
===== ====== ===== ====== ===== ======
[Enlarge/Download Table]
MSCI EAFE Target 20 The Nasdaq(R) Target 15 NYSE(R) International
Portfolio Portfolio Target 25 Portfolio
1st Quarter 2009 Series 1st Quarter 2009 Series 1st Quarter 2009 Series
----------------------- ----------------------- -----------------------
Amount Amount Amount
per Unit per Unit per Unit
-------- -------- --------
UNIT HOLDER SALES FEES
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
MAXIMUM SALES CHARGE
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.45%(b) $.145 1.45%(b) $.145 1.45%(b) $.145
Creation and development fee 0.50%(c) $.050 0.50%(c) $.050 0.50%(c) $.050
----- ------ ----- ------ ----- ------
Maximum sales charge
(including creation and development fee) 2.95% $.295 2.95% $.295 2.95% $.295
===== ====== ===== ====== ===== ======
ORGANIZATION COSTS
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
Estimated organization costs .290%(d) $.0290 .290%(d) $.0290 .250%(d) $.0250
===== ====== ===== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(E)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Portfolio supervision, bookkeeping,
administrative, evaluation and
FTPS Unit servicing fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .514%(f) $.0514 .154%(f) $.0154 .154%(f) $.0154
----- ------ ----- ------ ----- ------
Total .574% $.0574 .214% $.0214 .214% $.0214
===== ====== ===== ====== ===== ======
Page 9
[Enlarge/Download Table]
The S&P Target 24 S&P Target SMid 60 Target 50/50
Portfolio Portfolio Portfolio
1st Quarter 2009 Series 1st Quarter 2009 Series 1st Quarter 2009 Series
----------------------- ----------------------- -----------------------
Amount Amount Amount
per Unit per Unit per Unit
-------- -------- --------
UNIT HOLDER SALES FEES
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
MAXIMUM SALES CHARGE
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.45%(b) $.145 1.45%(b) $.145 1.45%(b) $.145
Creation and development fee 0.50%(c) $.050 0.50%(c) $.050 0.50%(c) $.050
----- ------ ----- ------ ----- ------
Maximum sales charge
(including creation and development fee) 2.95% $.295 2.95% $.295 2.95% $.295
===== ====== ===== ====== ===== ======
ORGANIZATION COSTS
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
Estimated organization costs .290%(d) $.0290 .290%(d) $.0290 .290%(d) $.0290
===== ====== ===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(E)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Portfolio supervision, bookkeeping,
administrative, evaluation and
FTPS Unit servicing fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .164%(f) $.0164 .149%(f) $.0149 .305%(f) .0305
----- ------ ----- ------ ----- ------
Total .224% $.0224 .209% $.0209 .365% $.0365
===== ====== ===== ====== ===== ======
[Enlarge/Download Table]
Target Diversified Target Dividend Target Double Play
Dividend Portfolio Multi-Strategy Portfolio Portfolio
1st Quarter 2009 Series 1st Quarter 2009 Series 1st Quarter 2009 Series
----------------------- ----------------------- -----------------------
Amount Amount Amount
per Unit per Unit per Unit
-------- -------- --------
UNIT HOLDER SALES FEES
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
MAXIMUM SALES CHARGE
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.45%(b) $.145 1.45%(b) $.145 1.45%(b) $.145
Creation and development fee 0.50%(c) $.050 0.50%(c) $.050 0.50%(c) $.050
----- ------ ----- ------ ----- ------
Maximum sales charge
(including creation and development fee) 2.95% $.295 2.95% $.295 2.95% $.295
===== ====== ===== ====== ===== ======
ORGANIZATION COSTS
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
Estimated organization costs .290%(d) $.0290 .290%(d) $.0290 .250%(d) $.0250
===== ====== ===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(E)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Portfolio supervision, bookkeeping,
administrative, evaluation and
FTPS Unit servicing fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .114%(f) $.0114 .429%(f) $.0429 .179%(f) $.0179
----- ------ ----- ------ ----- ------
Total .174% $.0174 .489% $.0489 .239% $.0239
===== ====== ===== ====== ===== ======
Page 10
[Enlarge/Download Table]
Target Growth Target Long-Term Growth Target
Portfolio Portfolio Mega-Cap Portfolio
1st Quarter 2009 Series 1st Quarter 2009 Series 1st Quarter 2009 Series
----------------------- ----------------------- -----------------------
Amount Amount Amount
per Unit per Unit per Unit
-------- -------- --------
UNIT HOLDER SALES FEES
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
MAXIMUM SALES CHARGE
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.45%(b) $.145 1.45%(b) $.145 1.45%(b) $.145
Creation and development fee 0.50%(c) $.050 0.50%(c) $.050 0.50%(c) $.050
----- ------ ----- ------ ----- ------
Maximum sales charge
(including creation and development fee) 2.95% $.295 2.95% $.295 2.95% $.295
===== ====== ===== ====== ===== ======
ORGANIZATION COSTS
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
Estimated organization costs .290%(d) $.0290 .290%(d) $.0290 .290%(d) $.0290
===== ====== ===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(E)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Portfolio supervision, bookkeeping,
administrative, evaluation and
FTPS Unit servicing fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .114%(f) $.0114 .145%(f) $.0145 .114%(f) $.0114
----- ------ ----- ------ ----- ------
Total .174% $.0174 .205% $.0205 .174% $.0174
===== ====== ===== ====== ===== ======
[Enlarge/Download Table]
Target VIP
Target Small-Cap Conservative Equity
Portfolio Portfolio
1st Quarter 2009 Series 1st Quarter 2009 Series
----------------------- -----------------------
Amount Amount
per Unit per Unit
-------- --------
UNIT HOLDER SALES FEES
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
MAXIMUM SALES CHARGE
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.45%(b) $.145 1.45%(b) $.145
Creation and development fee 0.50%(c) $.050 0.50%(c) $.050
----- ------ ----- ------
Maximum sales charge
(including creation and development fee) 2.95% $.295 2.95% $.295
===== ====== ===== ======
ORGANIZATION COSTS
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
Estimated organization costs .290%(d) $.0290 .290%(d) $.0290
===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(E)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Portfolio supervision, bookkeeping,
administrative, evaluation and
FTPS Unit servicing fees .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .114%(f) $.0114 .491%(f) $.0491
----- ------ ----- ------
Total .174% $.0174 .551% $.0551
===== ====== ===== ======
Page 11
[Enlarge/Download Table]
Value Line(R) Diversified Value Line(R)
Target 40 Portfolio Target 25 Portfolio
1st Quarter 2009 Series 1st Quarter 2009 Series
------------------------- -----------------------
Amount Amount
per Unit per Unit
-------- --------
UNIT HOLDER SALES FEES
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
MAXIMUM SALES CHARGE
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.45%(b) $.145 1.45%(b) $.145
Creation and development fee 0.50%(c) $.050 0.50%(c) $.050
----- ------ ----- ------
Maximum sales charge
(including creation and development fee) 2.95% $.295 2.95% $.295
===== ====== ===== ======
ORGANIZATION COSTS
(AS A PERCENTAGE OF PUBLIC OFFERING PRICE)
Estimated organization costs .290%(d) $.0290 .250%(d) $.0250
===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(E)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Portfolio supervision, bookkeeping,
administrative, evaluation and
FTPS Unit servicing fees .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .264%(f) $.0264 .214%(f) $.0214
----- ------ ----- ------
Total .324% $.0324 .274% $.0274
===== ====== ===== ======
Page 12
Example
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust, the principal amount
and distributions are rolled every 15 months into a New Trust, you are
subject to a reduced transactional sales charge, and you sell your Units
at the end of the periods shown. The example also assumes a 5% return on
your investment each year and that a Trust's operating expenses stay the
same. The example does not take into consideration transaction fees
which may be charged by certain broker/dealers for processing redemption
requests. Although your actual costs may vary, based on these
assumptions your costs, assuming you held your Units for the periods
shown, would be:
[Enlarge/Download Table]
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
The Dow(R) Target 5 Portfolio, 1st Quarter 2009 Series $344 $847 $1,131 $2,322
The Dow(R) Target Dividend Portfolio, 1st Quarter 2009 Series 340 835 1,115 2,290
Global Target 15 Portfolio, 1st Quarter 2009 Series 351 868 1,166 2,395
MSCI EAFE Target 20 Portfolio, 1st Quarter 2009 Series 381 957 1,316 2,698
The Nasdaq(R) Target 15 Portfolio, 1st Quarter 2009 Series 345 850 1,136 2,333
NYSE(R) International Target 25 Portfolio, 1st Quarter 2009 Series 341 838 1,120 2,300
The S&P Target 24 Portfolio, 1st Quarter 2009 Series 346 853 1,141 2,343
S&P Target SMid 60 Portfolio, 1st Quarter 2009 Series 345 849 1,133 2,328
Target 50/50 Portfolio, 1st Quarter 2009 Series 361 895 1,212 2,488
Target Diversified Dividend Portfolio, 1st Quarter 2009 Series 341 838 1,115 2,291
Target Dividend Multi-Strategy Portfolio, 1st Quarter 2009 Series 373 932 1,274 2,613
Target Double Play Portfolio, 1st Quarter 2009 Series 344 846 1,132 2,326
Target Growth Portfolio, 1st Quarter 2009 Series 341 838 1,115 2,291
Target Long-Term Growth Portfolio, 1st Quarter 2009 Series 345 847 1,131 2,324
Target Mega-Cap Portfolio, 1st Quarter 2009 Series 341 838 1,115 2,291
Target Small-Cap Portfolio, 1st Quarter 2009 Series 341 838 1,115 2,291
Target VIP Conservative Equity Portfolio, 1st Quarter 2009 Series 379 950 1,305 2,675
Value Line(R) Diversified Target 40 Portfolio, 1st Quarter 2009 Series 356 883 1,191 2,446
Value Line(R) Target 25 Portfolio, 1st Quarter 2009 Series 347 856 1,150 2,362
_____________
<FN>
(a) The combination of the initial and deferred sales charge comprises
what we refer to as the "transactional sales charge." The initial sales
charge is actually equal to the difference between the maximum sales
charge of 2.95% and the sum of any remaining deferred sales charge and
creation and development fee.
(b) The deferred sales charge is a fixed dollar amount equal to $.145 per
Unit which, as a percentage of the Public Offering Price, will vary over
time. The deferred sales charge will be deducted in three monthly
installments commencing April 20, 2009.
(c) The creation and development fee compensates the Sponsor for creating
and developing the Trusts. The creation and development fee is a charge
of $.050 per Unit collected at the end of the initial offering period
which is expected to be approximately three months from the Initial Date
of Deposit. If the price you pay for your Units exceeds $10 per Unit,
the creation and development fee will be less than 0.50%; if the price
you pay for your Units is less than $10 per Unit, the creation and
development fee will exceed 0.50%.
(d) Estimated organization costs will be deducted from the assets of
each Trust at the end of the initial offering period. Estimated
organization costs are assessed on a fixed dollar amount per Unit basis
which, as a percentage of average net assets, will vary over time.
(e) Each of the fees listed herein is assessed on a fixed dollar amount
per Unit basis which, as a percentage of average net assets, will vary
over time.
(f) Other operating expenses for certain Trusts include estimated per
Unit costs associated with a license fee as described in "Expenses and
Charges," but do not include brokerage costs and other portfolio
transaction fees for any of the Trusts. In certain circumstances the
Trusts may incur additional expenses not set forth above. See "Expenses
and Charges."
</FN>
Page 13
Report of Independent
Registered Public Accounting Firm
The Sponsor, First Trust Portfolios L.P., and Unit Holders
FT 1900
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 1900, comprising Dow(R) Target 5 1Q '09 -
Term 3/31/10 (The Dow(R) Target 5 Portfolio, 1st Quarter 2009 Series);
Dow(R) Target Dvd. 1Q '09 - Term 3/31/10 (The Dow(R) Target Dividend
Portfolio, 1st Quarter 2009 Series ); Global Target 15 1Q '09 - Term
3/31/10 (Global Target 15 Portfolio, 1st Quarter 2009 Series); MSCI EAFE
Target 20 1Q '09 - Term 3/31/10 (MSCI EAFE Target 20 Portfolio, 1st
Quarter 2009 Series); Nasdaq(R) Target 15 1Q '09 - Term 3/31/10 (The
Nasdaq(R) Target 15 Portfolio, 1st Quarter 2009 Series); NYSE(R) Intl.
Target 25 1Q '09 - Term 3/31/10 (NYSE(R) International Target 25
Portfolio, 1st Quarter 2009 Series); S&P Target 24 1Q '09 - Term 3/31/10
(The S&P Target 24 Portfolio, 1st Quarter 2009 Series); S&P Target SMid
60 1Q '09 - Term 3/31/10 (S&P Target SMid 60 Portfolio, 1st Quarter 2009
Series); Target 50/50 1Q '09 - Term 3/31/10 (Target 50/50 Portfolio, 1st
Quarter 2009 Series); Target Divsd. Dvd. 1Q '09 - Term 3/31/10 (Target
Diversified Dividend Portfolio, 1st Quarter 2009 Series); Target Dvd.
Multi-Strat. 1Q '09 - Term 3/31/10 (Target Dividend Multi-Strategy
Portfolio, 1st Quarter 2009 Series); Target Dbl. Play 1Q '09 - Term
3/31/10 (Target Double Play Portfolio, 1st Quarter 2009 Series); Target
Growth 1Q '09 - Term 3/31/10 (Target Growth Portfolio, 1st Quarter 2009
Series); Target Long-Term Growth 1Q '09 - Term 3/31/10 (Target Long-Term
Growth Portfolio, 1st Quarter 2009 Series); Target Mega-Cap 1Q '09 - Term
3/31/10 (Target Mega-Cap Portfolio, 1st Quarter 2009 Series); Target
Small-Cap 1Q '09 - Term 3/31/10 (Target Small-Cap Portfolio, 1st Quarter
2009 Series); Target VIP Cons. Eqty. 1Q '09 - Term 3/31/10 (Target VIP
Conservative Equity Portfolio, 1st Quarter 2009 Series); Value Line(R)
Divsd. Target 40 1Q '09 - Term 3/31/10 (Value Line(R) Diversified Target
40 Portfolio, 1st Quarter 2009 Series) and Value Line(R) Target 25 1Q '09
- Term 3/31/10 (Value Line(R) Target 25 Portfolio, 1st Quarter 2009
Series) (collectively, the "Trusts"), as of the opening of business on
December 31, 2008 (Initial Date of Deposit). These statements of net
assets are the responsibility of the Trusts' Sponsor. Our responsibility
is to express an opinion on these statements of net assets based on our
audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the statements of net assets are free of
material misstatement. The Trusts are not required to have, nor were we
engaged to perform, an audit of the Trusts' internal control over
financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Trusts'
internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statements of net
assets, assessing the accounting principles used and significant
estimates made by the Trusts' Sponsor, as well as evaluating the overall
presentation of the statements of net assets. Our procedures included
confirmation of the irrevocable letter of credit held by The Bank of New
York Mellon, the Trustee, and allocated among the Trusts for the
purchase of Securities, as shown in the statements of net assets, as of
the opening of business on December 31, 2008, by correspondence with the
Trustee. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of FT 1900,
comprising the above-mentioned Trusts, as of the opening of business on
December 31, 2008 (Initial Date of Deposit) in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December 31, 2008
Page 14
Statements of Net Assets
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
The Dow(R) The Dow(R) Global MSCI EAFE
Target 5 Target Dividend Target 15 Target 20
Portfolio Portfolio Portfolio Portfolio
1st Quarter 1st Quarter 1st Quarter 1st Quarter
2009 Series 2009 Series 2009 Series 2009 Series
___________ _______________ ___________ ___________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $143,250 $177,667 $ 149,790 $150,875
Less liability for reimbursement to Sponsor
for organization costs (3) (420) (449) (439) (442)
Less liability for deferred sales charge (4) (2,098) (2,602) (2,194) (2,210)
Less liability for creation and development fee (5) (724) (897) (756) (762)
________ ________ ________ ________
Net assets $140,008 $173,719 $146,401 $147,461
======== ======== ======== ========
Units outstanding 14,470 17,946 15,130 15,240
Net asset value per Unit (6) $ 9.676 $ 9.680 $ 9.676 $ 9.676
ANALYSIS OF NET ASSETS
Cost to investors (7) $144,697 $179,462 $151,303 $152,399
Less maximum sales charge (7) (4,269) (5,294) (4,463) (4,496)
Less estimated reimbursement to Sponsor
for organization costs (3) (420) (449) (439) (442)
________ ________ ________ ________
Net assets $140,008 $173,719 $146,401 $147,461
======== ======== ======== ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 20.
</FN>
Page 15
Statements of Net Assets
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
The Nasdaq (R) NYSE (R) The S&P
Target 15 International Target 24 S&P
Portfolio Target 25 Portfolio Target SMid 60
1st Quarter Portfolio, 1st 1st Quarter Portfolio, 1st
2009 Series Quarter 2009 Series 2009 Series Quarter 2009 Series
_____________ ___________________ ___________ ___________________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $166,905 $143,718 $131,096 $167,458
Less liability for reimbursement to Sponsor
for organization costs (3) (489) (363) (384) (491)
Less liability for deferred sales charge (4) (2,445) (2,105) (1,920) (2,453)
Less liability for creation and development fee (5) (843) (726) (662) (846)
________ ________ ________ ________
Net assets $163,128 $140,524 $128,130 $163,668
======== ======== ======== ========
Units outstanding 16,859 14,517 13,242 16,915
Net asset value per Unit (6) $ 9.676 $ 9.680 $ 9.676 $ 9.676
ANALYSIS OF NET ASSETS
Cost to investors (7) $168,590 $145,170 $132,420 $169,149
Less maximum sales charge (7) (4,973) (4,283) (3,906) (4,990)
Less estimated reimbursement to Sponsor
for organization costs (3) (489) (363) (384) (491)
________ ________ ________ ________
Net assets $163,128 $140,524 $128,130 $163,668
======== ======== ======== ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 20.
</FN>
Page 16
Statements of Net Assets
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Target Dividend Target
Target 50/50 Target Diversified Multi-Strategy Double Play
Portfolio Dividend Portfolio Portfolio Portfolio
1st Quarter 1st Quarter 1st Quarter 1st Quarter
2009 Series 2009 Series 2009 Series 2009 Series
____________ __________________ _______________ ___________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $253,100 $171,615 $254,734 $168,351
Less liability for reimbursement to Sponsor
for organization costs (3) (741) (503) (746) (425)
Less liability for deferred sales charge (4) (3,707) (2,514) (3,731) (2,466)
Less liability for creation and development fee (5) (1,278) (867) (1,287) (850)
________ ________ ________ ________
Net assets $247,374 $167,731 $248,970 $164,610
======== ======== ======== ========
Units outstanding 25,566 17,335 25,731 17,005
Net asset value per Unit (6) $ 9.676 $ 9.676 $ 9.676 $ 9.680
ANALYSIS OF NET ASSETS
Cost to investors (7) $255,657 $173,348 $257,307 $170,051
Less maximum sales charge (7) (7,542) (5,114) (7,591) (5,016)
Less estimated reimbursement to Sponsor
for organization costs (3) (741) (503) (746) (425)
________ ________ ________ ________
Net assets $247,374 $167,731 $248,970 $164,610
======== ======== ======== ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 20.
</FN>
Page 17
Statements of Net Assets
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Target Growth Target Long-Term Target Mega-Cap Target Small-Cap
Portfolio Growth Portfolio Portfolio Portfolio
1st Quarter 1st Quarter 1st Quarter 1st Quarter
2009 Series 2009 Series 2009 Series 2009 Series
_____________ _____________ _____________ _____________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $172,182 $263,745 $240,148 $149,295
Less liability for reimbursement to Sponsor
for organization costs (3) (504) (773) (703) (437)
Less liability for deferred sales charge (4) (2,522) (3,863) (3,517) (2,187)
Less liability for creation and development fee (5) (870) (1,332) (1,213) (754)
________ ________ ________ ________
Net assets $168,286 $257,777 $234,715 $145,917
======== ======== ======== ========
Units outstanding 17,392 26,641 24,257 15,080
Net asset value per Unit (6) $ 9.676 $ 9.676 $ 9.676 $ 9.676
ANALYSIS OF NET ASSETS
Cost to investors (7) $173,921 $266,409 $242,574 $150,803
Less maximum sales charge (7) (5,131) (7,859) (7,156) (4,449)
Less estimated reimbursement to Sponsor
for organization costs (3) (504) (773) (703) (437)
________ ________ ________ ________
Net assets $168,286 $257,777 $234,715 $145,917
======== ======== ======== ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 20.
</FN>
Page 18
Statements of Net Assets
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Target VIP Value Line(R)
Conservative Diversified Value Line(R)
Equity Target 40 Target 25
Portfolio, 1st Portfolio, 1st Portfolio, 1st
Quarter 2009 Quarter 2009 Quarter 2009
Series Series Series
______________ ______________ ______________
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $247,170 $164,462 $165,640
Less liability for reimbursement to Sponsor
for organization costs (3) (724) (482) (418)
Less liability for deferred sales charge (4) (3,620) (2,409) (2,426)
Less liability for creation and development fee (5) (1,248) (831) (837)
________ ________ ________
Net assets $241,578 $160,740 $161,959
======== ======== ========
Units outstanding 24,967 16,612 16,731
Net asset value per Unit (6) $ 9.676 $ 9.676 $ 9.680
ANALYSIS OF NET ASSETS
Cost to investors (7) $249,667 $166,123 $167,313
Less maximum sales charge (7) (7,365) (4,901) (4,936)
Less estimated reimbursement to Sponsor for organization costs (3) (724) (482) (418)
________ ________ ________
Net assets $241,578 $160,740 $161,959
======== ======== ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 20.
Page 19
NOTES TO STATEMENTS OF NET ASSETS
The Sponsor is responsible for the preparation of financial statements
in accordance with accounting principles generally accepted in the
United States which require the Sponsor to make estimates and
assumptions that affect amounts reported herein. Actual results could
differ from those estimates.
(1) Each Trust invests in a diversified portfolio of common stocks.
Aggregate cost of the Securities listed under "Schedule of Investments"
for each Trust is based on their aggregate underlying value. Each Trust
has a Mandatory Termination Date of March 31, 2010.
(2) An irrevocable letter of credit for approximately $5,300,000, issued
by The Bank of New York Mellon (approximately $200,000 will be allocated
to each of The Dow(R) Target 5 Portfolio, 1st Quarter 2009 Series; The
Dow(R) Target Dividend Portfolio, 1st Quarter 2009 Series; Global Target 15
Portfolio, 1st Quarter 2009 Series; MSCI EAFE Target 20 Portfolio, 1st
Quarter 2009 Series; The Nasdaq(R) Target 15 Portfolio, 1st Quarter 2009
Series; NYSE(R) International Target 25 Portfolio, 1st Quarter 2009
Series; The S&P Target 24 Portfolio, 1st Quarter 2009 Series; S&P Target
SMid 60 Portfolio, 1st Quarter 2009 Series; Target Diversified Dividend
Portfolio, 1st Quarter 2009 Series; Target Double Play Portfolio, 1st
Quarter 2009 Series; Target Growth Portfolio, 1st Quarter 2009 Series;
Target Small-Cap Portfolio, 1st Quarter 2009 Series; Value Line(R)
Diversified Target 40 Portfolio, 1st Quarter 2009 Series and Value
Line(R) Target 25 Portfolio, 1st Quarter 2009 Series; and approximately
$500,000 will be allocated to each of Target 50/50 Portfolio, 1st Quarter
2009 Series; Target Dividend Multi-Strategy Portfolio, 1st Quarter 2009
Series; Target Long-Term Growth Portfolio, 1st Quarter 2009 Series;
Target Mega-Cap Portfolio, 1st Quarter 2009 Series and Target VIP
Conservative Equity Portfolio, 1st Quarter 2009 Series), has been
deposited with the Trustee as collateral, covering the monies necessary
for the purchase of the Securities according to their purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. The per Unit costs have been estimated as set
forth in the Fee Table. A payment will be made at the end of the initial
offering period to an account maintained by the Trustee from which the
obligation of the investors to the Sponsor will be satisfied. To the
extent that actual organization costs of a Trust are greater than the
estimated amount, only the estimated organization costs added to the
Public Offering Price will be reimbursed to the Sponsor and deducted
from the assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions of $.145 per Unit, payable to the Sponsor in three
approximately equal monthly installments beginning on April 20, 2009 and
on the twentieth day of each month thereafter (or if such date is not a
business day, on the preceding business day) through June 19, 2009. If
Unit holders redeem Units before June 19, 2009 they will have to pay the
remaining amount of the deferred sales charge applicable to such Units
when they redeem them.
(5) The creation and development fee ($.050 per Unit for each Trust) is
payable by a Trust on behalf of Unit holders out of assets of a Trust at
the end of a Trust's initial offering period. If Units are redeemed
prior to the close of the initial offering period, the fee will not be
deducted from the proceeds.
(6) Net asset value per Unit is calculated by dividing a Trust's net
assets by the number of Units outstanding. This figure includes
organization costs and the creation and development fee, which will only
be assessed to Units outstanding at the close of the initial offering
period.
(7) The aggregate cost to investors in a Trust includes a maximum sales
charge (comprised of an initial and a deferred sales charge and the
creation and development fee) computed at the rate of 2.95% of the
Public Offering Price (equivalent to 2.98% of the net amount invested,
exclusive of the deferred sales charge and the creation and development
fee), assuming no reduction of the maximum sales charge as set forth
under "Public Offering."
</FN>
Page 20
Schedule of Investments
The Dow(R) Target 5 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of Current
Ticker Symbol and Offering of Value per Securities to Dividend
Name of Issuer of Securities (1) Price Shares Share the Trust (2) Yield (3)
________________________________ ____________ ______ _________ _____________ _________
COMMON STOCKS (100%):
Financials (20%):
BAC Bank of America Corporation 20% 2,164 $13.24 $ 28,651 9.67%
Health Care (20%):
PFE Pfizer Inc. 20% 1,614 17.75 28,649 7.21%
Industrials (20%):
GE General Electric Company 20% 1,811 15.82 28,650 7.84%
Materials (40%):
AA Alcoa Inc. 20% 2,680 10.69 28,649 6.36%
DD E.I. du Pont de Nemours and Company 20% 1,141 25.11 28,651 6.53%
____ ________
Total Investments 100% $143,250
==== ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 21
Schedule of Investments
The Dow(R) Target
Dividend Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of Current
Ticker Symbol and Offering of Value per Securities to Dividend
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2) Yield (3)
___________________________________ ____________ ______ _________ ____________ _________
COMMON STOCKS (100%):
Consumer Staples (5%):
UVV Universal Corporation 5% 293 $ 30.34 $ 8,890 6.06%
Financials (40%):
BBT BB&T Corporation 5% 334 26.60 8,884 7.07%
FNB F.N.B. Corporation 5% 695 12.78 8,882 7.51%
FBP First BanCorp. + 5% 807 11.01 8,885 2.54%
FNFG First Niagara Financial Group, Inc. 5% 554 16.04 8,886 3.49%
FULT Fulton Financial Corporation 5% 959 9.26 8,880 6.48%
RF Regions Financial Corporation 5% 1,126 7.89 8,884 5.07%
STI SunTrust Banks, Inc. 5% 308 28.86 8,889 7.48%
ZION Zions Bancorporation 5% 388 22.89 8,881 5.59%
Industrials (20%):
BGG Briggs & Stratton Corporation 5% 530 16.76 8,883 5.25%
RRD R. R. Donnelley & Sons Company 5% 659 13.48 8,883 7.72%
TXT Textron, Inc. 5% 689 12.89 8,881 7.14%
TKR The Timken Company 5% 465 19.09 8,877 3.77%
Materials (15%):
EMN Eastman Chemical Company 5% 291 30.51 8,879 5.77%
MWV MeadWestvaco Corporation 5% 831 10.69 8,883 8.61%
SXT Sensient Technologies Corporation 5% 386 23.02 8,886 3.30%
Utilities (20%):
AEP American Electric Power Company, Inc. 5% 277 32.05 8,878 5.12%
NI NiSource Inc. 5% 812 10.94 8,883 8.41%
PNW Pinnacle West Capital Corporation 5% 278 31.96 8,885 6.57%
TE TECO Energy, Inc. 5% 750 11.85 8,888 6.75%
____ ________
Total Investments 100% $177,667
==== ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 22
Schedule of Investments
Global Target 15 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Cost of
of Aggregate Number Market Securities Current
Ticker Symbol and Offering of Value per to the Dividend
Name of Issuer of Securities (1)(4)(5) Price Shares Share Trust (2) Yield (3)
______________________________________ ____________ ______ _________ _________ _________
COMMON STOCKS (100.00%):
Hong Kong (33.47%):
23 HK The Bank of East Asia, Ltd. # 6.81% 4,778 $ 2.13 $ 10,194 8.53%
2388 HK BOC Hong Kong (Holdings) Limited # 6.56% 8,739 1.12 9,823 10.62%
293 HK Cathay Pacific Airways Limited # 6.62% 8,922 1.11 9,913 7.20%
267 HK CITIC Pacific Limited # 6.70% 9,277 1.08 10,031 13.13%
1199 HK Cosco Pacific Limited # 6.78% 9,978 1.02 10,157 7.35%
United Kingdom (33.24%):
BT/A LN BT Group Plc # 6.76% 5,092 1.99 10,131 12.72%
GKN LN GKN Plc # 6.71% 7,082 1.42 10,046 15.46%
ITV LN ITV Plc # 6.60% 16,684 0.59 9,887 6.69%
LAD LN Ladbrokes Plc # 6.48% 3,690 2.63 9,709 8.61%
LOG LN LogicaCMG Plc # 6.69% 10,301 0.97 10,027 9.71%
United States (33.29%):
AA Alcoa Inc. 6.65% 932 10.69 9,963 6.36%
BAC Bank of America Corporation 6.66% 754 13.24 9,983 9.67%
DD E.I. du Pont de Nemours and Company 6.66% 397 25.11 9,969 6.53%
GE General Electric Company 6.66% 631 15.82 9,982 7.84%
PFE Pfizer Inc. 6.66% 562 17.75 9,975 7.21%
_______ ________
Total Investments 100.00% $149,790
======= ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 23
Schedule of Investments
MSCI EAFE Target 20 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4)(5) # Price Shares Share the Trust (2)
________________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Belgium (5.00%):
BELG BB Belgacom S.A. 5.00% 193 $39.07 $ 7,541
France (20.13%):
SGO FP Compagnie de Saint-Gobain S.A. 5.08% 162 47.30 7,662
FTE FP France Telecom S.A. 5.03% 265 28.66 7,595
BN FP Groupe Danone S.A. 5.00% 122 61.79 7,538
VIV FP Vivendi S.A. 5.02% 228 33.23 7,576
Germany (10.05%):
BMW GY Bayerische Motoren Werke (BMW) AG 4.96% 245 30.57 7,490
PAH3 GY Porsche Automobil Holding SE 5.09% 99 77.59 7,682
Hong Kong (4.91%):
66 HK MTR Corporation Limited 4.91% 3,169 2.34 7,409
Ireland (4.87%):
CRH ID CRH Plc 4.87% 287 25.57 7,340
Italy (15.08%):
ENEL IM Enel SpA 5.05% 1,182 6.45 7,621
ENI IM Eni SpA 5.08% 320 23.95 7,662
TIT IM Telecom Italia SpA 4.95% 4,550 1.64 7,472
Japan (10.12%):
5108 JP Bridgestone Corp. 5.16% 523 14.89 7,787
9508 JP Kyushu Electric Power Company, Incorporated 4.96% 282 26.56 7,490
The Netherlands (14.93%):
EAD FP European Aeronautic Defence and Space Company 4.94% 448 16.62 7,447
PHIA NA Koninklijke (Royal) Philips Electronics N.V. 4.98% 378 19.89 7,519
RDSB LN Royal Dutch Shell Plc 5.01% 300 25.19 7,557
Spain (5.03%):
REP SM Repsol YPF, S.A. 5.03% 354 21.45 7,592
United Kingdom (9.88%):
BP/ LN BP Plc 5.00% 991 7.61 7,539
CNA LN Centrica Plc 4.88% 1,941 3.79 7,356
_______ ________
Total Investments 100.00% $150,875
======= ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 24
Schedule of Investments
The Nasdaq(R) Target 15 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Market Cost of
Ticker Symbol and of Aggregate Number Value per Securities to
Name of Issuer of Securities (1)(4) Offering Price of Shares Share the Trust (2)
___________________________________ ______________ _________ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (18.02%):
APOL Apollo Group, Inc. (Class A) * 4.92% 106 $77.46 $ 8,211
BBBY Bed Bath & Beyond Inc. * 2.58% 170 25.34 4,308
DTV The DIRECTV Group, Inc. * 9.02% 672 22.41 15,060
ROST Ross Stores, Inc. 1.50% 85 29.52 2,509
Consumer Staples (1.01%):
HANS Hansen Natural Corporation * 1.01% 49 34.35 1,683
Health Care (45.02%):
AMGN Amgen Inc. * 24.47% 709 57.59 40,831
CEPH Cephalon, Inc. * 2.13% 46 77.33 3,557
GILD Gilead Sciences, Inc. * 18.42% 599 51.33 30,747
Industrials (7.44%):
CHRW C.H. Robinson Worldwide, Inc. 3.48% 109 53.31 5,811
CTAS Cintas Corporation 1.00% 73 22.87 1,670
FAST Fastenal Company 1.95% 97 33.56 3,255
JBHT J.B. Hunt Transport Services, Inc. 1.01% 66 25.38 1,675
Information Technology (28.51%):
ALTR Altera Corporation 1.92% 191 16.75 3,199
CHKP Check Point Software Technologies Ltd. +* 1.61% 142 18.96 2,692
MSFT Microsoft Corporation 24.98% 2,156 19.34 41,697
_______ ________
Total Investments 100.00% $166,905
======= ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 25
Schedule of Investments
NYSE(R) International Target 25 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4)(5) + Price Shares Share the Trust (2)
________________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100%):
Canada (12%):
BMO Bank of Montreal 4% 227 $25.30 $ 5,743
PCZ Petro-Canada 4% 264 21.80 5,755
TD The Toronto-Dominion Bank 4% 165 34.88 5,755
France (8%):
AXA AXA S.A. (ADR) 4% 258 22.28 5,748
VE Veolia Environnement (ADR) 4% 182 31.63 5,757
Germany (12%):
AZ Allianz AG (ADR) 4% 536 10.72 5,746
DAI Daimler AG 4% 151 38.05 5,745
DB Deutsche Bank AG 4% 142 40.52 5,754
Greece (4%):
NBG National Bank of Greece S.A. (ADR) 4% 1,452 3.96 5,750
Italy (4%):
TI Telecom Italia SpA (ADR) 4% 356 16.13 5,742
Japan (16%):
HIT Hitachi, Ltd. (ADR) 4% 148 38.81 5,744
HMC Honda Motor Co., Ltd. (ADR) 4% 270 21.29 5,748
NTT Nippon Telegraph & Telephone Corporation (ADR) 4% 211 27.23 5,745
SNE Sony Corporation (ADR) 4% 267 21.55 5,754
The Netherlands (8%):
MT ArcelorMittal (ADR) 4% 237 24.26 5,750
ING ING Groep N.V. (ADR) (6) 4% 529 10.86 5,745
Russia (4%):
VIP Vimpel-Communications (VimpelCom) (ADR) 4% 780 7.37 5,749
South Korea (4%):
KEP Korea Electric Power Corporation (ADR) 4% 501 11.47 5,746
Spain (4%):
REP Repsol YPF, S.A. (ADR) 4% 268 21.42 5,741
Switzerland (8%):
CS Credit Suisse Group (ADR) 4% 209 27.52 5,752
UBS UBS AG * 4% 409 14.05 5,746
United Kingdom (16%):
BCS Barclays Plc (ADR) (6) 4% 656 8.76 5,747
LYG Lloyds TSB Group Plc (ADR) (6) 4% 776 7.41 5,750
RTP Rio Tinto Plc (ADR) 4% 66 87.17 5,753
RBS Royal Bank of Scotland Group Plc (ADR) (6) 4% 402 14.31 5,753
____ ________
Total Investments 100% $143,718
==== ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 26
Schedule of Investments
The S&P Target 24 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1) Price Shares Share the Trust (2)
________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (8.99%):
AZO AutoZone, Inc. * 0.84% 8 $137.25 $ 1,098
COH Coach, Inc. * 0.71% 46 20.36 936
MCD McDonald's Corporation 7.44% 158 61.74 9,755
Consumer Staples (15.29%):
CPB Campbell Soup Company 1.24% 55 29.50 1,622
CL Colgate-Palmolive Company 4.05% 78 68.02 5,306
PEP PepsiCo, Inc. 10.00% 239 54.88 13,116
Energy (14.18%):
CVX Chevron Corporation 12.43% 222 73.38 16,290
ESV ENSCO International Incorporated 0.34% 16 27.55 441
EOG EOG Resources, Inc. 1.41% 28 65.82 1,843
Financials (13.61%):
MCO Moody's Corporation 1.53% 100 20.07 2,007
PSA Public Storage (7) 3.89% 68 75.07 5,105
TRV The Travelers Companies, Inc. 8.19% 239 44.93 10,738
Health Care (15.71%):
AMGN Amgen Inc. * 8.39% 191 57.59 11,000
FRX Forest Laboratories, Inc. * 1.02% 53 25.20 1,336
GILD Gilead Sciences, Inc. * 6.30% 161 51.33 8,264
Industrials (11.30%):
DOV Dover Corporation 4.21% 172 32.06 5,514
DNB The Dun & Bradstreet Corporation 2.89% 51 74.31 3,790
GWW W.W. Grainger, Inc. 4.20% 71 77.49 5,502
Information Technology (16.63%):
ALTR Altera Corporation 7.78% 609 16.75 10,201
LXK Lexmark International, Inc. * 3.36% 166 26.58 4,412
MCHP Microchip Technology Incorporated 5.49% 374 19.23 7,192
Utilities (4.29%):
SRE Sempra Energy 1.05% 33 41.67 1,375
SO The Southern Company 2.98% 107 36.53 3,909
TE TECO Energy, Inc. 0.26% 29 11.85 344
_______ ________
Total Investments 100.00% $131,096
======= ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 27
Schedule of Investments
S&P Target SMid 60 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1) Price Shares Share the Trust (2)
________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (4.44%):
CAB Cabela's Incorporated * 1.11% 350 $ 5.31 $ 1,859
LYV Live Nation Inc. * 1.11% 376 4.95 1,861
RGS Regis Corporation 2.22% 276 13.48 3,720
Consumer Staples (1.11%):
GAP The Great Atlantic & Pacific Tea Company, Inc. * 1.11% 325 5.73 1,862
Energy (26.67%):
XEC Cimarex Energy Co. 2.22% 140 26.53 3,714
EXH Exterran Holdings Inc. * 2.22% 181 20.55 3,720
FST Forest Oil Corporation * 2.23% 232 16.05 3,724
HOS Hornbeck Offshore Services, Inc. * 1.11% 120 15.50 1,860
IO ION Geophysical Corporation * 1.11% 631 2.95 1,861
ME Mariner Energy Inc. * 2.22% 378 9.85 3,723
NFX Newfield Exploration Company * 2.22% 193 19.28 3,721
OSG Overseas Shipholding Group, Inc. 2.23% 91 40.97 3,728
PXP Plains Exploration & Production Company * 2.23% 165 22.59 3,727
PDE Pride International, Inc. * 2.22% 237 15.70 3,721
KWK Quicksilver Resources Inc. * 2.22% 695 5.35 3,718
SGY Stone Energy Corporation * 1.11% 180 10.33 1,859
SFY Swift Energy Company * 1.11% 113 16.49 1,863
UNT Unit Corporation * 2.22% 142 26.17 3,716
Financials (8.88%):
CDR Cedar Shopping Centers Inc. (7) 1.11% 273 6.82 1,862
DRH DiamondRock Hospitality Company (6)(7) 1.11% 409 4.55 1,861
LAB LaBranche & Co Inc. * 1.11% 422 4.41 1,861
MPW Medical Properties Trust Inc. (7) 1.11% 301 6.18 1,860
PLFE Presidential Life Corporation 1.11% 193 9.62 1,857
STSA Sterling Financial Corporation 1.11% 236 7.88 1,860
UCBH UCBH Holdings, Inc. 1.11% 281 6.63 1,863
WTFC Wintrust Financial Corporation 1.11% 94 19.80 1,861
Health Care (11.11%):
EYE Advanced Medical Optics, Inc. * 2.23% 592 6.29 3,724
COO The Cooper Companies, Inc. 1.11% 113 16.49 1,863
CCRN Cross Country Healthcare, Inc. * 1.11% 216 8.61 1,860
KND Kindred Healthcare, Inc. * 2.22% 305 12.19 3,718
LPNT LifePoint Hospitals, Inc. * 2.22% 168 22.12 3,716
WCG WellCare Health Plans Inc. * 2.22% 289 12.88 3,722
Page 28
Schedule of Investments (cont'd.)
S&P Target SMid 60 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1) Price Shares Share the Trust (2)
________________________________ ____________ ______ _________ _____________
Industrials (15.56%):
AIN Albany International Corp. (Class A) 1.11% 152 $ 12.24 $ 1,860
ROCK Gibraltar Industries Inc. 1.11% 167 11.15 1,862
MPS MPS Group, Inc. * 2.22% 509 7.31 3,721
NCS NCI Building Systems, Inc. * 1.11% 113 16.44 1,858
SCHS School Specialty, Inc. * 1.12% 103 18.14 1,868
TEX Terex Corporation * 2.22% 225 16.54 3,722
TKR The Timken Company 2.22% 195 19.09 3,723
TRN Trinity Industries, Inc. 2.22% 248 15.00 3,720
URI United Rentals, Inc. * 2.23% 427 8.72 3,723
Information Technology (20.01%):
AVT Avnet Inc. * 2.23% 209 17.84 3,729
BHE Benchmark Electronics, Inc. * 1.12% 151 12.35 1,865
BBOX Black Box Corporation 1.11% 76 24.46 1,859
CELL Brightpoint, Inc. * 1.11% 462 4.03 1,862
CKP Checkpoint Systems, Inc. * 1.11% 191 9.72 1,857
CBR CIBER, Inc. * 1.11% 407 4.57 1,860
FCS Fairchild Semiconductor International, Inc. * 2.22% 792 4.70 3,722
IM Ingram Micro Inc. * 2.22% 285 13.06 3,722
IDTI Integrated Device Technology, Inc. * 2.22% 667 5.58 3,722
ISIL Intersil Corporation 2.22% 410 9.07 3,719
SNX SYNNEX Corporation * 1.12% 165 11.30 1,865
TECD Tech Data Corporation * 2.22% 216 17.19 3,713
Materials (7.77%):
OMG OM Group, Inc. * 1.11% 92 20.21 1,859
POL PolyOne Corporation * 1.11% 642 2.90 1,862
RS Reliance Steel & Aluminum Co. 2.22% 189 19.70 3,723
RTI RTI International Metals, Inc. * 1.11% 138 13.45 1,856
TIN Temple-Inland Inc. 2.22% 820 4.54 3,723
Utilities (4.45%):
GXP Great Plains Energy Incorporated 2.22% 195 19.04 3,713
NVE NV Energy Inc. 2.23% 386 9.65 3,725
_______ ________
Total Investments 100.00% $167,458
======= ========
__________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 29
Schedule of Investments
Target 50/50 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (8.07%):
APOL Apollo Group, Inc. (Class A) * 0.77% 25 $ 77.46 $1,937
AZO AutoZone, Inc. * 0.27% 5 137.25 686
BBBY Bed Bath & Beyond Inc. * 0.21% 21 25.34 532
COH Coach, Inc. * 0.06% 7 20.36 143
DAI GY Daimler AG # 0.42% 28 37.77 1,058
DV DeVry, Inc. 0.11% 5 57.82 289
DTV The DIRECTV Group, Inc. * 0.75% 85 22.41 1,905
DLTR Dollar Tree, Inc. * 0.11% 7 40.83 286
FDO Family Dollar Stores, Inc. 0.09% 9 25.51 230
HOTT Hot Topic, Inc. * 0.11% 31 9.03 280
ESI ITT Educational Services, Inc. * 0.11% 3 93.80 281
JOSB Jos. A. Bank Clothiers, Inc. * 0.09% 9 24.76 223
MCD McDonald's Corporation 4.29% 176 61.74 10,865
NFLX Netflix Inc. * 0.09% 8 28.66 229
PNRA Panera Bread Company (Class A) * 0.10% 5 50.22 251
PETS PetMed Express, Inc. * 0.11% 16 18.00 288
ROST Ross Stores, Inc. 0.13% 11 29.52 325
STRA Strayer Education, Inc. 0.08% 1 212.25 212
TSCO Tractor Supply Company * 0.09% 7 33.86 237
WTSLA The Wet Seal, Inc. (Class A) * 0.08% 72 2.74 197
Consumer Staples (4.80%):
ABI BB Anheuser-Busch InBev NV # 0.39% 44 22.58 993
CPB Campbell Soup Company 0.11% 9 29.50 265
CL Colgate-Palmolive Company 0.35% 13 68.02 884
HANS Hansen Natural Corporation * 0.10% 7 34.35 240
NAFC Nash Finch Company 0.09% 5 44.36 222
PEP PepsiCo, Inc. 0.82% 38 54.88 2,085
SPTN Spartan Stores, Inc. 0.09% 10 23.10 231
THS TreeHouse Foods, Inc. * 0.34% 31 27.23 844
UVV Universal Corporation 2.51% 209 30.34 6,341
Energy (4.96%):
BP/ LN BP Plc # 0.42% 138 7.61 1,050
CVX Chevron Corporation 1.04% 36 73.38 2,642
CWEI Clayton Williams Energy, Inc. * 0.14% 8 42.90 343
ENI IM Eni SpA # 0.42% 44 23.95 1,054
ESV ENSCO International Incorporated 0.03% 3 27.55 83
EOG EOG Resources, Inc. 0.10% 4 65.82 263
XOM Exxon Mobil Corporation 1.68% 54 78.59 4,244
GDP Goodrich Petroleum Corporation * 0.30% 26 29.45 766
STL NO StatoilHydro ASA # 0.42% 64 16.47 1,054
EGY VAALCO Energy, Inc. * 0.11% 40 6.70 268
INT World Fuel Services Corporation 0.30% 20 38.46 769
Page 30
Schedule of Investments (cont'd.)
Target 50/50 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
Financials (27.85%):
ALV GY Allianz AG # 0.42% 10 $106.10 $ 1,061
AV/ LN Aviva Plc # 0.41% 177 5.91 1,047
CS FP AXA S.A. # 0.43% 49 22.32 1,094
BBVA SM Banco Bilbao Vizcaya Argentaria, S.A. # 0.42% 86 12.32 1,059
BBT BB&T Corporation 2.50% 238 26.60 6,331
BNP FP BNP Paribas S.A. # 0.40% 24 42.64 1,023
CBU Community Bank System, Inc. 0.22% 23 23.70 545
ACA FP Credit Agricole S.A. # 0.41% 90 11.50 1,035
CSGN VX Credit Suisse Group # 0.41% 38 27.52 1,046
DBK GY Deutsche Bank AG # 0.42% 27 39.37 1,063
EZPW EZCORP, Inc. * 0.17% 29 14.81 429
FNB F.N.B. Corporation 2.50% 496 12.78 6,339
FBP First BanCorp. + 2.50% 575 11.01 6,331
FCFS First Cash Financial Services, Inc. * 0.16% 22 18.00 396
FFIN First Financial Bankshares, Inc. 0.33% 15 54.99 825
FNFG First Niagara Financial Group, Inc. 2.50% 395 16.04 6,336
FULT Fulton Financial Corporation 2.50% 684 9.26 6,334
HSBA LN HSBC Holdings Plc # 0.42% 112 9.39 1,052
IPCC Infinity Property & Casualty Corporation 0.20% 11 46.31 509
MCO Moody's Corporation 0.13% 16 20.07 321
ONB Old National Bancorp 0.33% 46 17.86 822
PSA Public Storage (7) 0.33% 11 75.07 826
RF Regions Financial Corporation 2.50% 803 7.89 6,336
STBA S&T Bancorp, Inc. 0.27% 20 34.70 694
SAN SM Santander Central Hispano S.A. # 0.42% 110 9.56 1,051
SF Stifel Financial Corp. * 0.32% 18 45.40 817
STI SunTrust Banks, Inc. 2.47% 217 28.86 6,263
RUKN VX Swiss Re # 0.44% 23 48.28 1,111
SWS SWS Group, Inc. 0.14% 19 18.16 345
TRV The Travelers Companies, Inc. 0.67% 38 44.93 1,707
ZION Zions Bancorporation 2.51% 277 22.89 6,341
Health Care (10.93%):
AMGN Amgen Inc. * 4.56% 200 57.59 11,518
CEPH Cephalon, Inc. * 0.18% 6 77.33 464
CPSI Computer Programs and Systems, Inc. 0.08% 8 26.49 212
CYBX Cyberonics, Inc. * 0.13% 20 16.18 324
FRX Forest Laboratories, Inc. * 0.08% 8 25.20 202
GTIV Gentiva Health Services, Inc. * 0.23% 21 28.01 588
GILD Gilead Sciences, Inc. * 2.07% 102 51.33 5,236
GB Greatbatch Inc. * 0.26% 26 25.85 672
HGR Hanger Orthopedic Group, Inc. * 0.13% 23 14.48 333
JNJ Johnson & Johnson 2.08% 89 59.17 5,266
LHCG LHC Group Inc. * 0.18% 13 34.63 450
LMNX Luminex Corporation * 0.25% 31 20.60 639
MMSI Merit Medical Systems, Inc. * 0.14% 20 17.35 347
MYGN Myriad Genetics, Inc. * 0.10% 4 65.91 264
QCOR Questcor Pharmaceuticals, Inc. * 0.16% 45 9.05 407
VPHM ViroPharma Incorporated * 0.30% 57 13.46 767
Page 31
Schedule of Investments (cont'd.)
Target 50/50 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
Industrials (16.98%):
AVAV Aerovironment Inc. * 0.21% 15 $35.41 $ 531
ALGT Allegiant Travel Company * 0.29% 15 48.50 727
ASEI American Science and Engineering, Inc. 0.17% 6 70.82 425
ABFS Arkansas Best Corporation 0.21% 18 29.03 523
AXYS Axsys Technologies, Inc. * 0.26% 13 51.08 664
BECN Beacon Roofing Supply, Inc. * 0.17% 31 13.80 428
BGG Briggs & Stratton Corporation 2.50% 378 16.76 6,335
CHRW C.H. Robinson Worldwide, Inc. 0.30% 14 53.31 746
CAT Caterpillar Inc. 1.67% 97 43.66 4,235
CTAS Cintas Corporation 0.09% 10 22.87 229
DPW GY Deutsche Post AG # 0.42% 63 16.85 1,061
DOV Dover Corporation 0.36% 28 32.06 898
DNB The Dun & Bradstreet Corporation 0.23% 8 74.31 594
FAST Fastenal Company 0.16% 12 33.56 403
GE General Electric Company 1.67% 267 15.82 4,224
GWR Genesee & Wyoming Inc. (Class A) * 0.26% 23 28.85 664
HA Hawaiian Holdings, Inc. * 0.08% 34 6.29 214
JBHT J.B. Hunt Transport Services, Inc. 0.09% 9 25.38 228
RRD R. R. Donnelley & Sons Company 2.50% 470 13.48 6,336
TXT Textron, Inc. 2.50% 491 12.89 6,329
TKR The Timken Company 2.50% 332 19.09 6,338
GWW W.W. Grainger, Inc. 0.34% 11 77.49 852
Information Technology (4.49%):
ALTR Altera Corporation 0.81% 122 16.75 2,043
CHKP Check Point Software Technologies Ltd. +* 0.14% 18 18.96 341
CSGS CSG Systems International, Inc. * 0.17% 25 17.06 426
LXK Lexmark International, Inc. * 0.28% 27 26.58 718
MANT ManTech International Corporation * 0.08% 4 53.44 214
MCHP Microchip Technology Incorporated 0.46% 60 19.23 1,154
MSFT Microsoft Corporation 2.08% 272 19.34 5,260
QSII Quality Systems, Inc. 0.36% 21 43.63 916
SAI SAIC, Inc. * 0.11% 15 19.33 290
Page 32
Schedule of Investments (cont'd.)
Target 50/50 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
Materials (8.13%):
CMP Compass Minerals International, Inc. 0.09% 4 $57.99 $ 232
EMN Eastman Chemical Company 2.47% 205 30.51 6,255
IPHS Innophos Holdings, Inc. 0.11% 14 20.12 282
MWV MeadWestvaco Corporation 2.50% 592 10.69 6,328
RKT Rock-Tenn Company (Class A) 0.46% 33 34.65 1,144
SXT Sensient Technologies Corporation 2.50% 275 23.02 6,330
Telecommunication Services (2.48%):
T AT&T Inc. 1.65% 148 28.23 4,178
BT/A LN BT Group Plc # 0.42% 530 1.99 1,054
TLSN SS TeliaSonera AB # 0.41% 205 5.05 1,036
Utilities (11.31%):
AEP American Electric Power Company, Inc. 2.48% 196 32.05 6,282
CWT California Water Service Group 0.27% 15 45.97 690
ENEL IM Enel SpA # 0.42% 164 6.45 1,057
LG The Laclede Group, Inc. 0.29% 16 45.94 735
NI NiSource Inc. 2.50% 579 10.94 6,334
PNW Pinnacle West Capital Corporation 2.50% 198 31.96 6,328
SRE Sempra Energy 0.08% 5 41.67 208
SO The Southern Company 0.25% 17 36.53 621
TE TECO Energy, Inc. 2.52% 539 11.85 6,387
_______ ________
Total Investments 100.00% $253,100
======= ========
______________________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 33
Schedule of Investments
Target Diversified Dividend Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (10.00%):
AM American Greetings Corporation 2.50% 618 $ 6.94 $ 4,289
BKS Barnes & Noble, Inc. 2.50% 308 13.95 4,297
M Macy's, Inc. 2.50% 456 9.41 4,291
PAG Penske Automotive Group, Inc. 2.50% 609 7.05 4,293
Consumer Staples (9.98%):
CALM Cal-Maine Foods, Inc. 2.50% 147 29.19 4,291
RAI Reynolds American Inc. 2.49% 105 40.78 4,282
SVU SUPERVALU INC. 2.50% 317 13.53 4,289
UVV Universal Corporation 2.49% 141 30.34 4,278
Energy (10.01%):
OSG Overseas Shipholding Group, Inc. 2.51% 105 40.97 4,302
PTEN Patterson-UTI Energy, Inc. 2.50% 381 11.25 4,286
TK Teekay Corporation + 2.50% 229 18.71 4,285
TNP Tsakos Energy Navigation Ltd. + 2.50% 240 17.87 4,289
Financials (10.00%):
COF Capital One Financial Corporation 2.50% 139 30.86 4,290
DB Deutsche Bank AG + 2.50% 106 40.52 4,295
HIG The Hartford Financial Services Group, Inc. 2.50% 263 16.32 4,292
STSA Sterling Financial Corporation 2.50% 544 7.88 4,287
Health Care (10.01%):
BVF Biovail Corporation + 2.50% 465 9.23 4,292
BMY Bristol-Myers Squibb Company 2.51% 188 22.87 4,300
LLY Eli Lilly and Company 2.50% 108 39.67 4,284
PFE Pfizer Inc. 2.50% 242 17.75 4,295
Industrials (10.00%):
GNK Genco Shipping & Trading Ltd. + 2.50% 339 12.65 4,288
NC NACCO Industries, Inc. 2.50% 125 34.38 4,297
OSK Oshkosh Corporation 2.50% 518 8.29 4,294
TXT Textron, Inc. 2.50% 333 12.89 4,292
Page 34
Schedule of Investments (cont'd.)
Target Diversified Dividend Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
Information Technology (10.00%):
CGNX Cognex Corporation 2.50% 295 $14.52 $ 4,283
ISIL Intersil Corporation 2.50% 473 9.07 4,290
MXIM Maxim Integrated Products, Inc. 2.50% 376 11.42 4,294
MOLX Molex Incorporated 2.50% 308 13.92 4,287
Materials (10.00%):
AA Alcoa Inc. 2.50% 401 10.69 4,287
CMC Commercial Metals Company 2.50% 372 11.53 4,289
DOW The Dow Chemical Company 2.50% 276 15.55 4,292
MEOH Methanex Corporation + 2.50% 383 11.19 4,286
Telecommunication Services (10.00%):
T AT&T Inc. 2.50% 152 28.23 4,291
CTL CenturyTel, Inc. 2.50% 160 26.86 4,298
TU TELUS Corporation + 2.50% 151 28.47 4,299
VZ Verizon Communications Inc. 2.50% 129 33.23 4,287
Utilities (10.00%):
DTE DTE Energy Company 2.50% 120 35.79 4,295
POM Pepco Holdings, Inc. 2.50% 245 17.49 4,285
PNW Pinnacle West Capital Corporation 2.50% 134 31.96 4,283
WR Westar Energy, Inc. 2.50% 215 19.96 4,291
________ ________
Total Investments 100.00% $171,615
======== ========
______________________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 35
Schedule of Investments
Target Dividend Multi-Strategy Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (8.63%):
AM American Greetings Corporation 0.63% 232 $ 6.94 $ 1,610
BKS Barnes & Noble, Inc. 0.63% 115 13.95 1,604
DAI GY Daimler AG # 1.26% 85 37.77 3,211
GKN LN GKN Plc # 1.64% 2,951 1.42 4,186
ITV LN ITV Plc # 1.62% 6,951 0.59 4,119
LAD LN Ladbrokes Plc # 1.59% 1,537 2.63 4,044
M Macy's, Inc. 0.63% 171 9.41 1,609
PAG Penske Automotive Group, Inc. 0.63% 228 7.05 1,607
Consumer Staples (4.94%):
ABI BB Anheuser-Busch InBev NV # 1.17% 132 22.58 2,980
CALM Cal-Maine Foods, Inc. 0.63% 55 29.19 1,605
RAI Reynolds American Inc. 0.62% 39 40.78 1,590
SVU SUPERVALU INC. 0.63% 119 13.53 1,610
UVV Universal Corporation 1.89% 159 30.34 4,824
Energy (6.24%):
BP/ LN BP Plc # 1.23% 413 7.61 3,142
ENI IM Eni SpA # 1.25% 133 23.95 3,185
OSG Overseas Shipholding Group, Inc. 0.63% 39 40.97 1,598
PTEN Patterson-UTI Energy, Inc. 0.63% 143 11.25 1,609
STL NO StatoilHydro ASA # 1.24% 191 16.47 3,145
TK Teekay Corporation + 0.63% 86 18.71 1,609
TNP Tsakos Energy Navigation Ltd. + 0.63% 90 17.87 1,608
Financials (31.26%):
ALV GY Allianz AG # 1.21% 29 106.10 3,077
AV/ LN Aviva Plc # 1.23% 531 5.91 3,140
CS FP AXA S.A. # 1.29% 147 22.32 3,281
BBVA SM Banco Bilbao Vizcaya Argentaria, S.A. # 1.25% 258 12.32 3,177
BAC Bank of America Corporation 1.68% 324 13.24 4,290
23 HK The Bank of East Asia, Ltd. # 1.67% 1,991 2.13 4,248
BBT BB&T Corporation 1.26% 121 26.60 3,219
BNP FP BNP Paribas S.A. # 1.22% 73 42.64 3,113
2388 HK BOC Hong Kong (Holdings) Limited # 1.61% 3,641 1.12 4,092
COF Capital One Financial Corporation 0.63% 52 30.86 1,605
ACA FP Credit Agricole S.A. # 1.22% 271 11.50 3,115
CSGN VX Credit Suisse Group # 1.24% 115 27.52 3,165
DBK GY Deutsche Bank AG # 1.25% 81 39.37 3,189
DB Deutsche Bank AG + 0.64% 40 40.52 1,621
FNB F.N.B. Corporation 1.27% 252 12.78 3,221
FBP First BanCorp. + 1.26% 292 11.01 3,215
FNFG First Niagara Financial Group, Inc. 1.26% 200 16.04 3,208
FULT Fulton Financial Corporation 1.26% 347 9.26 3,213
Page 36
Schedule of Investments (cont'd.)
Target Dividend Multi-Strategy Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
Financials (cont'd.):
HIG The Hartfotrd Financial Services Group, Inc. 0.63% 98 $16.32 $ 1,599
HSBA LN HSBC Holdings Plc # 1.24% 335 9.39 3,146
RF Regions Financial Corporation 1.26% 408 7.89 3,219
SAN SM Santander Central Hispano S.A. # 1.24% 329 9.56 3,145
STSA Sterling Financial Corporation 0.63% 204 7.88 1,608
STI SunTrust Banks, Inc. 1.26% 111 28.86 3,203
RUKN VX Swiss Re # 1.29% 68 48.28 3,283
ZION Zions Bancorporation 1.26% 140 22.89 3,205
Health Care (4.20%):
BVF Biovail Corporation + 0.63% 174 9.23 1,606
BMY Bristol-Myers Squibb Company 0.63% 70 22.87 1,601
LLY Eli Lilly and Company 0.62% 40 39.67 1,587
PFE Pfizer Inc. 2.32% 333 17.75 5,911
Industrials (15.43%):
BGG Briggs & Stratton Corporation 1.26% 192 16.76 3,218
293 HK Cathay Pacific Airways Limited # 1.62% 3,717 1.11 4,130
267 HK CITIC Pacific Limited # 1.64% 3,866 1.08 4,180
1199 HK Cosco Pacific Limited # 1.66% 4,157 1.02 4,231
DPW GY Deutsche Post AG # 1.26% 190 16.85 3,201
GNK Genco Shipping & Trading Ltd. + 0.63% 127 12.65 1,607
GE General Electric Company 1.68% 271 15.82 4,287
NC NACCO Industries, Inc. 0.63% 47 34.38 1,616
OSK Oshkosh Corporation 0.63% 194 8.29 1,608
RRD R. R. Donnelley & Sons Company 1.27% 239 13.48 3,222
TXT Textron, Inc. 1.89% 374 12.89 4,821
TKR The Timken Company 1.26% 168 19.09 3,207
INFORMATION TECHNOLOGY (4.16%):
CGNX Cognex Corporation 0.63% 111 14.52 1,612
ISIL Intersil Corporation 0.63% 177 9.07 1,605
LOG LN LogicaCMG Plc # 1.64% 4,292 0.97 4,178
MXIM Maxim Integrated Products, Inc. 0.63% 141 11.42 1,610
MOLX Molex Incorporated 0.63% 115 13.92 1,601
MATERIALS (9.68%):
AA Alcoa Inc. 2.31% 551 10.69 5,891
CMC Commercial Metals Company 0.63% 139 11.53 1,603
DOW The Dow Chemical Company 0.63% 103 15.55 1,602
DD E.I. du Pont de Nemours and Company 1.69% 171 25.11 4,294
EMN Eastman Chemical Company 1.26% 105 30.51 3,204
MWV MeadWestvaco Corporation 1.26% 301 10.69 3,218
MEOH Methanex Corporation + 0.63% 144 11.19 1,611
SXT Sensient Technologies Corporation 1.27% 140 23.02 3,223
Page 37
Schedule of Investments (cont'd.)
Target Dividend Multi-Strategy Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1)(4) Price Shares Share the Trust (2)
___________________________________ ____________ ______ _________ _____________
Telecommunication Services (6.64%):
T AT&T Inc. 0.63% 57 $ 28.23 $ 1,609
BT/A LN BT Group Plc # 2.90% 3,713 1.99 7,387
CTL CenturyTel, Inc. 0.63% 60 26.86 1,612
TLSN SS TeliaSonera AB # 1.22% 615 5.05 3,107
TU TELUS Corporation + 0.63% 56 28.47 1,594
VZ Verizon Communications Inc. 0.63% 48 33.23 1,595
Utilities (8.82%):
AEP American Electric Power Company, Inc. 1.26% 100 32.05 3,205
DTE DTE Energy Company 0.63% 45 35.79 1,611
ENEL IM Enel SpA # 1.25% 493 6.45 3,178
NI NiSource Inc. 1.26% 294 10.94 3,216
POM Pepco Holdings, Inc. 0.63% 92 17.49 1,609
PNW Pinnacle West Capital Corporation 1.90% 151 31.96 4,826
TE TECO Energy, Inc. 1.26% 271 11.85 3,211
WR Westar Energy, Inc. 0.63% 80 19.96 1,597
________ ________
Total Investments 100.00% $254,734
======== ========
______________________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 38
Schedule of Investments
Target Double Play Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value per Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (20.93%):
APOL Apollo Group, Inc. (Class A) * 2.21% 48 $ 77.46 $ 3,718
AZO AutoZone, Inc. * 1.39% 17 137.25 2,333
DV DeVry, Inc. 0.75% 22 57.82 1,272
DLTR Dollar Tree, Inc. * 0.68% 28 40.83 1,143
FDO Family Dollar Stores, Inc. 0.50% 33 25.51 842
ESI ITT Educational Services, Inc. * 0.67% 12 93.80 1,126
JOSB Jos. A. Bank Clothiers, Inc. * 0.50% 34 24.76 842
MCD McDonald's Corporation 12.21% 333 61.74 20,559
NFLX Netflix Inc. * 0.51% 30 28.66 860
PNRA Panera Bread Company (Class A) * 0.51% 17 50.22 854
STRA Strayer Education, Inc. 0.50% 4 212.25 849
TSCO Tractor Supply Company * 0.50% 25 33.86 846
Consumer Staples (4.00%):
NAFC Nash Finch Company 0.50% 19 44.36 843
SPTN Spartan Stores, Inc. 0.51% 37 23.10 855
THS TreeHouse Foods, Inc. * 0.50% 31 27.23 844
UVV Universal Corporation 2.49% 138 30.34 4,187
Financials (19.97%):
BBT BB&T Corporation 2.50% 158 26.60 4,203
FNB F.N.B. Corporation 2.50% 329 12.78 4,205
FBP First BanCorp. + 2.49% 381 11.01 4,195
FNFG First Niagara Financial Group, Inc. 2.50% 262 16.04 4,202
FULT Fulton Financial Corporation 2.50% 454 9.26 4,204
RF Regions Financial Corporation 2.49% 532 7.89 4,197
STI SunTrust Banks, Inc. 2.50% 146 28.86 4,214
ZION Zions Bancorporation 2.49% 183 22.89 4,189
Health Care (24.91%):
AMGN Amgen Inc. * 10.91% 319 57.59 18,371
CPSI Computer Programs and Systems, Inc. 0.50% 32 26.49 848
GB Greatbatch Inc. * 0.51% 33 25.85 853
JNJ Johnson & Johnson 12.48% 355 59.17 21,005
MYGN Myriad Genetics, Inc. * 0.51% 13 65.91 857
Industrials (10.51%):
AXYS Axsys Technologies, Inc. * 0.52% 17 51.08 868
BGG Briggs & Stratton Corporation 2.50% 251 16.76 4,207
RRD R. R. Donnelley & Sons Company 2.50% 312 13.48 4,206
TXT Textron, Inc. 2.50% 326 12.89 4,202
TKR The Timken Company 2.49% 220 19.09 4,200
Page 39
Schedule of Investments (cont'd.)
Target Double Play Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value per Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
Information Technology (1.21%):
MANT ManTech International Corporation * 0.51% 16 $53.44 $ 855
SAI SAIC, Inc. * 0.70% 61 19.33 1,179
Materials (8.51%):
CMP Compass Minerals International, Inc. 0.52% 15 57.99 870
EMN Eastman Chemical Company 2.50% 138 30.51 4,210
MWV MeadWestvaco Corporation 2.49% 393 10.69 4,201
RKT Rock-Tenn Company (Class A) 0.51% 25 34.65 866
SXT Sensient Technologies Corporation 2.49% 182 23.02 4,190
Utilities (9.96%):
AEP American Electric Power Company, Inc. 2.49% 131 32.05 4,198
NI NiSource Inc. 2.49% 384 10.94 4,201
PNW Pinnacle West Capital Corporation 2.49% 131 31.96 4,187
TE TECO Energy, Inc. 2.49% 354 11.85 4,195
_______ ________
Total Investments 100.00% $168,351
======= ========
______________________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 40
Schedule of Investments
Target Growth Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value per Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (20.02%):
APOL Apollo Group, Inc. (Class A) * 3.33% 74 $ 77.46 $ 5,732
AZO AutoZone, Inc. * 3.35% 42 137.25 5,765
COH Coach, Inc. * 3.33% 282 20.36 5,742
HRB H&R Block, Inc. 3.33% 257 22.33 5,739
MCD McDonald's Corporation 3.34% 93 61.74 5,742
YUM Yum! Brands, Inc. 3.34% 186 30.91 5,749
Consumer Staples (13.32%):
CL Colgate-Palmolive Company 3.32% 84 68.02 5,714
HNZ H.J. Heinz Company 3.33% 151 37.98 5,735
K Kellogg Company 3.34% 133 43.19 5,744
LO Lorillard, Inc. 3.33% 103 55.60 5,727
Energy (19.97%):
CVX Chevron Corporation 3.32% 78 73.38 5,724
EOG EOG Resources, Inc. 3.33% 87 65.82 5,726
XOM Exxon Mobil Corporation 3.33% 73 78.59 5,737
IMO Imperial Oil Limited + 3.33% 170 33.75 5,737
OXY Occidental Petroleum Corporation 3.33% 98 58.44 5,727
SWN Southwestern Energy Company * 3.33% 193 29.67 5,726
Financials (6.66%):
SCHW The Charles Schwab Corporation 3.33% 370 15.50 5,735
AMTD TD Ameritrade Holding Corporation * 3.33% 428 13.41 5,739
Health Care (20.02%):
ABT Abbott Laboratories 3.33% 108 53.16 5,741
AMGN Amgen Inc. * 3.34% 100 57.59 5,759
BAX Baxter International Inc. 3.34% 109 52.73 5,748
ESRX Express Scripts, Inc. * 3.33% 100 57.36 5,736
FRX Forest Laboratories, Inc. * 3.34% 228 25.20 5,746
GILD Gilead Sciences, Inc. * 3.34% 112 51.33 5,749
Industrials (6.67%):
CHRW C.H. Robinson Worldwide, Inc. 3.34% 108 53.31 5,757
LMT Lockheed Martin Corporation 3.33% 68 84.29 5,732
Information Technology (10.01%):
ACN Accenture Ltd. + 3.33% 177 32.43 5,740
HPQ Hewlett-Packard Company 3.34% 159 36.19 5,754
MSFT Microsoft Corporation 3.34% 297 19.34 5,744
Telecommunication Services (3.33%):
RCI Rogers Communications, Inc. (Class B) + 3.33% 191 30.03 5,736
_______ ________
Total Investments 100.00% $172,182
======= ========
___________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 41
Schedule of Investments
Target Long-Term Growth Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares per Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (12.59%):
APOL Apollo Group, Inc. (Class A) * 1.50% 51 $ 77.46 $ 3,950
AZO AutoZone, Inc. * 1.51% 29 137.25 3,980
CAB Cabela's Incorporated * 0.44% 221 5.31 1,174
COH Coach, Inc. * 1.50% 194 20.36 3,950
DAI Daimler AG + 0.61% 42 38.05 1,598
HRB H&R Block, Inc. 1.50% 177 22.33 3,952
HMC Honda Motor Co., Ltd. (ADR) + 0.60% 74 21.29 1,575
LYV Live Nation Inc. * 0.44% 237 4.95 1,173
MCD McDonald's Corporation 1.50% 64 61.74 3,951
RGS Regis Corporation 0.89% 174 13.48 2,346
SNE Sony Corporation (ADR) + 0.60% 73 21.55 1,573
YUM Yum! Brands, Inc. 1.50% 128 30.91 3,956
Consumer Staples (6.46%):
CL Colgate-Palmolive Company 1.50% 58 68.02 3,945
GAP The Great Atlantic & Pacific Tea Company, Inc. * 0.45% 205 5.73 1,175
HNZ H.J. Heinz Company 1.50% 104 37.98 3,950
K Kellogg Company 1.51% 92 43.19 3,973
LO Lorillard, Inc. 1.50% 71 55.60 3,948
Energy (20.88%):
CVX Chevron Corporation 1.50% 54 73.38 3,963
XEC Cimarex Energy Co. 0.89% 88 26.53 2,335
EOG EOG Resources, Inc. 1.50% 60 65.82 3,949
EXH Exterran Holdings Inc. * 0.89% 114 20.55 2,343
XOM Exxon Mobil Corporation 1.49% 50 78.59 3,929
FST Forest Oil Corporation * 0.89% 146 16.05 2,343
HOS Hornbeck Offshore Services, Inc. * 0.45% 76 15.50 1,178
IMO Imperial Oil Limited + 1.50% 117 33.75 3,949
IO ION Geophysical Corporation * 0.44% 397 2.95 1,171
ME Mariner Energy Inc. * 0.89% 238 9.85 2,344
NFX Newfield Exploration Company * 0.89% 122 19.28 2,352
OXY Occidental Petroleum Corporation 1.51% 68 58.44 3,974
OSG Overseas Shipholding Group, Inc. 0.89% 57 40.97 2,335
PCZ Petro-Canada + 0.60% 73 21.80 1,591
PXP Plains Exploration & Production Company * 0.89% 104 22.59 2,349
PDE Pride International, Inc. * 0.89% 149 15.70 2,339
KWK Quicksilver Resources Inc. * 0.89% 438 5.35 2,343
REP Repsol YPF, S.A. (ADR) + 0.60% 74 21.42 1,585
SWN Southwestern Energy Company * 1.50% 133 29.67 3,946
SGY Stone Energy Corporation * 0.45% 114 10.33 1,178
SFY Swift Energy Company * 0.44% 71 16.49 1,171
UNT Unit Corporation * 0.89% 90 26.17 2,355
Page 42
Schedule of Investments (cont'd.)
Target Long-Term Growth Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares per Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
Financials (13.73%):
AZ Allianz AG (ADR) + 0.60% 148 $ 10.72 $ 1,587
AXA AXA S.A. (ADR) + 0.60% 71 22.28 1,582
BMO Bank of Montreal + 0.60% 63 25.30 1,594
BCS Barclays Plc (ADR) (6) + 0.60% 181 8.76 1,586
CDR Cedar Shopping Centers Inc. (7) 0.44% 172 6.82 1,173
SCHW The Charles Schwab Corporation 1.50% 255 15.50 3,952
CS Credit Suisse Group (ADR) + 0.61% 58 27.52 1,596
DB Deutsche Bank AG + 0.60% 39 40.52 1,580
DRH DiamondRock Hospitality Company (6)(7) 0.44% 258 4.55 1,174
ING ING Groep N.V. (ADR) (6) + 0.60% 146 10.86 1,586
LAB LaBranche & Co Inc. * 0.44% 266 4.41 1,173
LYG Lloyds TSB Group Plc (ADR) (6) + 0.60% 214 7.41 1,586
MPW Medical Properties Trust Inc. (7) 0.44% 190 6.18 1,174
NBG National Bank of Greece S.A. (ADR) + 0.60% 400 3.96 1,584
PLFE Presidential Life Corporation 0.44% 122 9.62 1,174
RBS Royal Bank of Scotland Group Plc (ADR) (6) + 0.60% 111 14.31 1,588
STSA Sterling Financial Corporation 0.44% 149 7.88 1,174
AMTD TD Ameritrade Holding Corporation * 1.50% 295 13.41 3,956
TD The Toronto-Dominion Bank + 0.60% 45 34.88 1,570
UBS UBS AG +* 0.60% 113 14.05 1,588
UCBH UCBH Holdings, Inc. 0.44% 177 6.63 1,174
WTFC Wintrust Financial Corporation 0.44% 59 19.80 1,168
Health Care (13.44%):
ABT Abbott Laboratories 1.49% 74 53.16 3,934
EYE Advanced Medical Optics, Inc. * 0.89% 373 6.29 2,346
AMGN Amgen Inc. * 1.51% 69 57.59 3,974
BAX Baxter International Inc. 1.50% 75 52.73 3,955
COO The Cooper Companies, Inc. 0.44% 71 16.49 1,171
CCRN Cross Country Healthcare, Inc. * 0.44% 136 8.61 1,171
ESRX Express Scripts, Inc. * 1.50% 69 57.36 3,958
FRX Forest Laboratories, Inc. * 1.50% 157 25.20 3,956
GILD Gilead Sciences, Inc. * 1.50% 77 51.33 3,952
KND Kindred Healthcare, Inc. * 0.89% 192 12.19 2,340
LPNT LifePoint Hospitals, Inc. * 0.89% 106 22.12 2,345
WCG WellCare Health Plans Inc. * 0.89% 182 12.88 2,344
Industrials (9.23%):
AIN Albany International Corp. (Class A) 0.45% 96 12.24 1,175
CHRW C.H. Robinson Worldwide, Inc. 1.50% 74 53.31 3,945
ROCK Gibraltar Industries Inc. 0.44% 105 11.15 1,171
LMT Lockheed Martin Corporation 1.50% 47 84.29 3,962
MPS MPS Group, Inc. * 0.89% 321 7.31 2,347
NCS NCI Building Systems, Inc. * 0.44% 71 16.44 1,167
SCHS School Specialty, Inc. * 0.45% 65 18.14 1,179
TEX Terex Corporation * 0.89% 142 16.54 2,349
TKR The Timken Company 0.89% 123 19.09 2,348
TRN Trinity Industries, Inc. 0.89% 156 15.00 2,340
URI United Rentals, Inc. * 0.89% 269 8.72 2,346
Page 43
Schedule of Investments (cont'd.)
Target Long-Term Growth Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares per Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
Information Technology (13.10%):
ACN Accenture Ltd. + 1.50% 122 $ 32.43 $ 3,956
AVT Avnet Inc. * 0.89% 131 17.84 2,337
BHE Benchmark Electronics, Inc. * 0.44% 95 12.35 1,173
BBOX Black Box Corporation 0.44% 48 24.46 1,174
CELL Brightpoint, Inc. * 0.44% 291 4.03 1,173
CKP Checkpoint Systems, Inc. * 0.45% 121 9.72 1,176
CBR CIBER, Inc. * 0.44% 256 4.57 1,170
FCS Fairchild Semiconductor International, Inc. * 0.89% 499 4.70 2,345
HPQ Hewlett-Packard Company 1.50% 109 36.19 3,945
HIT Hitachi, Ltd. (ADR) + 0.60% 41 38.81 1,591
IM Ingram Micro Inc. * 0.89% 180 13.06 2,351
IDTI Integrated Device Technology, Inc. * 0.89% 420 5.58 2,344
ISIL Intersil Corporation 0.89% 258 9.07 2,340
MSFT Microsoft Corporation 1.50% 205 19.34 3,965
SNX SYNNEX Corporation * 0.45% 104 11.30 1,175
TECD Tech Data Corporation * 0.89% 136 17.19 2,338
Materials (4.29%):
MT ArcelorMittal (ADR) + 0.60% 65 24.26 1,577
OMG OM Group, Inc. * 0.44% 58 20.21 1,172
POL PolyOne Corporation * 0.44% 404 2.90 1,172
RS Reliance Steel & Aluminum Co. 0.89% 119 19.70 2,344
RTP Rio Tinto Plc (ADR) + 0.59% 18 87.17 1,569
RTI RTI International Metals, Inc. * 0.44% 87 13.45 1,170
TIN Temple-Inland Inc. 0.89% 516 4.54 2,343
Telecommunication Services (3.30%):
NTT Nippon Telegraph & Telephone Corporation (ADR) + 0.60% 58 27.23 1,579
RCI Rogers Communications, Inc. (Class B) + 1.50% 132 30.03 3,964
TI Telecom Italia SpA (ADR) + 0.60% 98 16.13 1,581
VIP Vimpel-Communications (VimpelCom) (ADR) + 0.60% 215 7.37 1,585
Utilities (2.98%):
GXP Great Plains Energy Incorporated 0.89% 123 19.04 2,342
KEP Korea Electric Power Corporation (ADR) + 0.60% 138 11.47 1,583
NVE NV Energy Inc. 0.89% 243 9.65 2,345
VE Veolia Environnement (ADR) + 0.60% 50 31.63 1,581
_______ ________
Total Investments 100.00% $263,745
======= ========
___________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 44
Schedule of Investments
Target Mega-Cap Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Market Cost of
Ticker Symbol and of Aggregate Number Value per Securities to
Name of Issuer of Securities (1)(4) Offering Price of Shares Share the Trust (2)
___________________________________ ______________ _________ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (20.00%):
CMCSA Comcast Corporation (Class A) 3.33% 486 $ 16.46 $ 8,000
HD The Home Depot, Inc. 3.33% 346 23.11 7,996
LOW Lowe's Companies, Inc. 3.33% 372 21.52 8,005
MCD McDonald's Corporation 3.34% 130 61.74 8,026
NKE NIKE, Inc. (Class B) 3.33% 161 49.69 8,000
TWC Time Warner Cable, Inc. * 3.34% 368 21.76 8,008
Consumer Staples (6.67%):
CL Colgate-Palmolive Company 3.34% 118 68.02 8,026
PG The Procter & Gamble Company 3.33% 131 61.12 8,007
Energy (20.00%):
APA Apache Corporation 3.34% 109 73.64 8,027
CVX Chevron Corporation 3.33% 109 73.38 7,998
DVN Devon Energy Corporation 3.33% 122 65.49 7,990
XOM Exxon Mobil Corporation 3.34% 102 78.59 8,016
LUKOY LUKOIL (ADR) + 3.33% 247 32.35 7,990
OXY Occidental Petroleum Corporation 3.33% 137 58.44 8,006
Financials (6.67%):
CB The Chubb Corporation 3.34% 159 50.37 8,009
TRV The Travelers Companies, Inc. 3.33% 178 44.93 7,998
Health Care (20.00%):
AMGN Amgen Inc. * 3.33% 139 57.59 8,005
BDX Becton, Dickinson and Company 3.33% 118 67.71 7,990
GILD Gilead Sciences, Inc. * 3.34% 156 51.33 8,007
JNJ Johnson & Johnson 3.33% 135 59.17 7,988
PFE Pfizer Inc. 3.33% 451 17.75 8,005
RHHBY Roche Holding AG (ADR) + 3.34% 104 77.00 8,008
Industrials (6.66%):
MMM 3M Company 3.33% 140 57.17 8,004
RTN Raytheon Company 3.33% 158 50.67 8,006
Information Technology (6.66%):
QCOM QUALCOMM Inc. 3.33% 229 34.94 8,001
TSM Taiwan Semiconductor Manufacturing Company 3.33% 1,007 7.95 8,006
Ltd. (ADR) +
Telecommunication Services (10.00%):
CHT Chunghwa Telecom Co., Ltd. (ADR) + 3.33% 515 15.53 7,998
NTT Nippon Telegraph & Telephone Corporation (ADR) + 3.33% 294 27.23 8,006
DCM NTT DoCoMo, Inc. (ADR) + 3.34% 407 19.69 8,014
Utilities (3.34%):
DUK Duke Energy Corporation 3.34% 536 14.94 8,008
________ ________
Total Investments 100.00% $240,148
======== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 45
Schedule of Investments
Target Small-Cap Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value per Securities to
Name of Issuer of Securities (1) Offering Price Shares Share the Trust (2)
________________________________ ______________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (3.63%):
HOTT Hot Topic, Inc. * 1.31% 217 $ 9.03 $ 1,960
PETS PetMed Express, Inc. * 1.39% 115 18.00 2,070
WTSLA The Wet Seal, Inc. (Class A) * 0.93% 507 2.74 1,389
Consumer Staples (2.92%):
THS TreeHouse Foods, Inc. * 2.92% 160 27.23 4,357
Energy (10.30%):
CWEI Clayton Williams Energy, Inc. * 1.67% 58 42.90 2,488
GDP Goodrich Petroleum Corporation * 3.67% 186 29.45 5,478
EGY VAALCO Energy, Inc. * 1.28% 286 6.70 1,916
INT World Fuel Services Corporation 3.68% 143 38.46 5,500
Financials (25.44%):
CBU Community Bank System, Inc. 2.62% 165 23.70 3,910
EZPW EZCORP, Inc. * 2.02% 204 14.81 3,021
FCFS First Cash Financial Services, Inc. * 1.86% 154 18.00 2,772
FFIN First Financial Bankshares, Inc. 3.94% 107 54.99 5,884
IPCC Infinity Property & Casualty Corporation 2.33% 75 46.31 3,473
ONB Old National Bancorp 3.92% 328 17.86 5,858
STBA S&T Bancorp, Inc. 3.28% 141 34.70 4,893
SF Stifel Financial Corp. * 3.83% 126 45.40 5,720
SWS SWS Group, Inc. 1.64% 135 18.16 2,452
Health Care (20.37%):
CYBX Cyberonics, Inc. * 1.52% 140 16.18 2,265
GTIV Gentiva Health Services, Inc. * 2.76% 147 28.01 4,117
GB Greatbatch Inc. * 2.04% 118 25.85 3,050
HGR Hanger Orthopedic Group, Inc. * 1.57% 162 14.48 2,346
LHCG LHC Group Inc. * 2.18% 94 34.63 3,255
LMNX Luminex Corporation * 2.99% 217 20.60 4,470
MMSI Merit Medical Systems, Inc. * 1.70% 146 17.35 2,533
QCOR Questcor Pharmaceuticals, Inc. * 1.93% 319 9.05 2,887
VPHM ViroPharma Incorporated * 3.68% 408 13.46 5,492
Industrials (18.67%):
AVAV Aerovironment Inc. * 2.56% 108 35.41 3,824
ALGT Allegiant Travel Company * 3.48% 107 48.50 5,189
ASEI American Science and Engineering, Inc. 2.13% 45 70.82 3,187
ABFS Arkansas Best Corporation 2.47% 127 29.03 3,687
AXYS Axsys Technologies, Inc. * 1.85% 54 51.08 2,758
BECN Beacon Roofing Supply, Inc. * 2.02% 219 13.80 3,022
GWR Genesee & Wyoming Inc. (Class A) * 3.13% 162 28.85 4,674
HA Hawaiian Holdings, Inc. * 1.03% 244 6.29 1,535
Information Technology (6.35%):
CSGS CSG Systems International, Inc. * 2.05% 179 17.06 3,054
QSII Quality Systems, Inc. 4.30% 147 43.63 6,414
Materials (5.61%):
IPHS Innophos Holdings, Inc. 1.29% 96 20.12 1,932
RKT Rock-Tenn Company (Class A) 4.32% 186 34.65 6,445
Utilities (6.71%):
CWT California Water Service Group 3.20% 104 45.97 4,781
LG The Laclede Group, Inc. 3.51% 114 45.94 5,237
_______ ________
Total Investments 100.00% $149,295
======= ========
___________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 46
Schedule of Investments
Target VIP Conservative Equity Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares per Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (16.64%):
APOL Apollo Group, Inc. (Class A) * 0.44% 14 $ 77.46 $ 1,084
AZO AutoZone, Inc. * 0.72% 13 137.25 1,784
COH Coach, Inc. * 0.35% 43 20.36 876
DV DeVry, Inc. 0.14% 6 57.82 347
DLTR Dollar Tree, Inc. * 0.13% 8 40.83 327
FDO Family Dollar Stores, Inc. 0.10% 10 25.51 255
GKN LN GKN Plc # 0.68% 1,180 1.42 1,674
ESI ITT Educational Services, Inc. * 0.11% 3 93.80 281
ITV LN ITV Plc # 0.67% 2,780 0.59 1,647
JOSB Jos. A. Bank Clothiers, Inc. * 0.10% 10 24.76 248
LAD LN Ladbrokes Plc # 0.65% 615 2.63 1,618
MCD McDonald's Corporation 9.15% 366 61.74 22,598
NFLX Netflix Inc. * 0.10% 9 28.66 258
PNRA Panera Bread Company (Class A) * 0.10% 5 50.22 251
STRA Strayer Education, Inc. 0.09% 1 212.25 212
TSCO Tractor Supply Company * 0.11% 8 33.86 271
DIS The Walt Disney Company 3.00% 330 22.48 7,418
Consumer Staples (10.93%):
CPB Campbell Soup Company 0.61% 51 29.50 1,505
CL Colgate-Palmolive Company 2.01% 73 68.02 4,965
KFT Kraft Foods Inc. 2.99% 278 26.60 7,395
NAFC Nash Finch Company 0.11% 6 44.36 266
PEP PepsiCo, Inc. 5.00% 225 54.88 12,348
SPTN Spartan Stores, Inc. 0.10% 11 23.10 254
THS TreeHouse Foods, Inc. * 0.11% 10 27.23 272
Energy (10.05%):
CVX Chevron Corporation 6.20% 209 73.38 15,336
ESV ENSCO International Incorporated 0.17% 15 27.55 413
EOG EOG Resources, Inc. 0.69% 26 65.82 1,711
XOM Exxon Mobil Corporation 2.99% 94 78.59 7,387
Financials (11.80%):
BAC Bank of America Corporation 3.66% 684 13.24 9,056
23 HK The Bank of East Asia, Ltd. # 0.69% 796 2.13 1,698
2388 HK BOC Hong Kong (Holdings) Limited # 0.66% 1,456 1.12 1,637
MCO Moody's Corporation 0.76% 94 20.07 1,887
PSA Public Storage (7) 1.94% 64 75.07 4,804
TRV The Travelers Companies, Inc. 4.09% 225 44.93 10,109
Page 47
Schedule of Investments (cont'd.)
Target VIP Conservative Equity Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage Number Market Cost of
Ticker Symbol and of Aggregate of Value Securities to
Name of Issuer of Securities (1)(4) Offering Price Shares per Share the Trust (2)
___________________________________ ______________ ______ _________ _____________
Health Care (13.53%):
AMGN Amgen Inc. * 6.38% 274 $ 57.59 $ 15,779
CPSI Computer Programs and Systems, Inc. 0.11% 10 26.49 265
FRX Forest Laboratories, Inc. * 0.51% 50 25.20 1,260
GILD Gilead Sciences, Inc. * 3.16% 152 51.33 7,802
GB Greatbatch Inc. * 0.10% 10 25.85 259
JNJ Johnson & Johnson 2.49% 104 59.17 6,154
MYGN Myriad Genetics, Inc. * 0.11% 4 65.91 264
PFE Pfizer Inc. 0.67% 93 17.75 1,651
Industrials (17.43%):
AXYS Axsys Technologies, Inc. * 0.10% 5 51.08 255
BA The Boeing Company 2.99% 179 41.25 7,384
CAT Caterpillar Inc. 3.00% 170 43.66 7,422
293 HK Cathay Pacific Airways Limited # 0.67% 1,487 1.11 1,652
267 HK CITIC Pacific Limited # 0.68% 1,546 1.08 1,672
1199 HK Cosco Pacific Limited # 0.69% 1,663 1.02 1,693
DOV Dover Corporation 2.10% 162 32.06 5,194
DNB The Dun & Bradstreet Corporation 1.44% 48 74.31 3,567
GE General Electric Company 3.66% 571 15.82 9,033
GWW W.W. Grainger, Inc. 2.10% 67 77.49 5,192
Information Technology (9.25%):
ALTR Altera Corporation 3.89% 574 16.75 9,615
LXK Lexmark International, Inc. * 1.68% 156 26.58 4,147
LOG LN LogicaCMG Plc # 0.68% 1,717 0.97 1,671
MANT ManTech International Corporation * 0.11% 5 53.44 267
MCHP Microchip Technology Incorporated 2.75% 353 19.23 6,788
SAI SAIC, Inc. * 0.14% 18 19.33 348
Materials (4.56%):
AA Alcoa Inc. 3.66% 845 10.69 9,033
CMP Compass Minerals International, Inc. 0.12% 5 57.99 290
DD E.I. du Pont de Nemours and Company 0.67% 66 25.11 1,657
RKT Rock-Tenn Company (Class A) 0.11% 8 34.65 277
Telecommunication Services (3.67%):
T AT&T Inc. 2.99% 262 28.23 7,396
BT/A LN BT Group Plc # 0.68% 849 1.99 1,689
Utilities (2.14%):
SRE Sempra Energy 0.52% 31 41.67 1,292
SO The Southern Company 1.49% 101 36.53 3,690
TE TECO Energy, Inc. 0.13% 27 11.85 320
_______ ________
Total Investments 100.00% $247,170
======= ========
______________________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 48
Schedule of Investments
Value Line(R) Diversified Target 40 Portfolio, 1st Quarter 2009 Series
FT 1900
At the Opening of Business on the Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1) Price Shares Share the Trust (2)
________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (19.99%):
AAP Advance Auto Parts, Inc. 2.51% 125 $ 33.01 $ 4,126
AZO AutoZone, Inc. * 2.50% 30 137.25 4,117
COH Coach, Inc. * 2.50% 202 20.36 4,113
DTV The DIRECTV Group, Inc. * 2.49% 183 22.41 4,101
OMC Omnicom Group Inc. 2.50% 156 26.32 4,106
PETM PetSmart, Inc. 2.50% 229 17.98 4,117
ROST Ross Stores, Inc. 2.49% 139 29.52 4,103
YUM Yum! Brands, Inc. 2.50% 133 30.91 4,111
Consumer Staples (9.99%):
HNZ H.J. Heinz Company 2.49% 108 37.98 4,102
KR The Kroger Co. 2.50% 158 26.04 4,114
PAS PepsiAmericas, Inc. 2.50% 202 20.39 4,119
SYY SYSCO Corporation 2.50% 181 22.69 4,107
Energy (12.49%):
APA Apache Corporation 2.51% 56 73.64 4,124
CVX Chevron Corporation 2.50% 56 73.38 4,109
DVN Devon Energy Corporation 2.51% 63 65.49 4,126
XOM Exxon Mobil Corporation 2.48% 52 78.59 4,087
OXY Occidental Petroleum Corporation 2.49% 70 58.44 4,091
Health Care (7.52%):
ABC AmerisourceBergen Corporation 2.50% 116 35.39 4,105
DVA DaVita, Inc. * 2.51% 84 49.09 4,124
MCK McKesson Corporation 2.51% 107 38.52 4,122
Industrials (15.00%):
ATK Alliant Techsystems Inc. * 2.50% 49 83.86 4,109
CSX CSX Corporation 2.49% 130 31.54 4,100
GD General Dynamics Corporation 2.50% 73 56.41 4,118
JBHT J.B. Hunt Transport Services, Inc. 2.50% 162 25.38 4,112
LECO Lincoln Electric Holdings, Inc. 2.50% 84 48.90 4,108
LMT Lockheed Martin Corporation 2.51% 49 84.29 4,130
Information Technology (17.51%):
ACS Affiliated Computer Services, Inc. (Class A) * 2.50% 91 45.22 4,115
ADS Alliance Data Systems Corporation * 2.49% 89 46.00 4,094
HEW Hewitt Associates, Inc. * 2.50% 150 27.44 4,116
HPQ Hewlett-Packard Company 2.51% 114 36.19 4,126
IBM International Business Machines Corporation 2.49% 49 83.55 4,094
MTD Mettler-Toledo International Inc. * 2.52% 62 66.79 4,141
SAI SAIC, Inc. * 2.50% 213 19.33 4,117
Materials (12.50%):
ARG Airgas, Inc. 2.51% 104 39.68 4,127
BLL Ball Corporation 2.49% 100 40.92 4,092
CCK Crown Holdings, Inc. * 2.50% 218 18.85 4,109
FMC FMC Corporation 2.50% 92 44.64 4,107
LZ The Lubrizol Corporation 2.50% 117 35.12 4,109
Utilities (5.00%):
CNP CenterPoint Energy, Inc. 2.50% 332 12.38 4,110
UGI UGI Corporation 2.50% 171 24.00 4,104
_______ ________
Total Investments 100.00% $164,462
======= ========
______________________
<FN>
See "Notes to Schedules of Investments" on page 51.
</FN>
Page 49
Schedule of Investments
Value Line(R) Target 25 Portfolio, 1st, Quarter 2009 Series
FT 1900
At the Opening of Business on the
Initial Date of Deposit-December 31, 2008
[Enlarge/Download Table]
Percentage
of Aggregate Number Market Cost of
Ticker Symbol and Offering of Value per Securities to
Name of Issuer of Securities (1) Price Shares Share the Trust (2)
________________________________ ____________ ______ _________ _____________
COMMON STOCKS (100.00%):
Consumer Discretionary (41.68%):
APOL Apollo Group, Inc. (Class A) * 4.40% 94 $ 77.46 $ 7,281
AZO AutoZone, Inc. * 2.73% 33 137.25 4,529
DV DeVry, Inc. 1.47% 42 57.82 2,428
DLTR Dollar Tree, Inc. * 1.33% 54 40.83 2,205
FDO Family Dollar Stores, Inc. 1.00% 65 25.51 1,658
ESI ITT Educational Services, Inc. * 1.30% 23 93.80 2,157
JOSB Jos. A. Bank Clothiers, Inc. * 1.00% 67 24.76 1,659
MCD McDonald's Corporation 24.42% 655 61.74 40,440
NFLX Netflix Inc. * 1.00% 58 28.66 1,662
PNRA Panera Bread Company (Class A) * 1.00% 33 50.22 1,657
STRA Strayer Education, Inc. 1.03% 8 212.25 1,698
TSCO Tractor Supply Company * 1.00% 49 33.86 1,659
Consumer Staples (3.02%):
NAFC Nash Finch Company 1.02% 38 44.36 1,686
SPTN Spartan Stores, Inc. 1.00% 72 23.10 1,663
THS TreeHouse Foods, Inc. * 1.00% 61 27.23 1,661
Health Care (49.86%):
AMGN Amgen Inc. * 21.84% 628 57.59 36,166
CPSI Computer Programs and Systems, Inc. 1.01% 63 26.49 1,669
GB Greatbatch Inc. * 1.01% 65 25.85 1,680
JNJ Johnson & Johnson 24.97% 699 59.17 41,360
MYGN Myriad Genetics, Inc. * 1.03% 26 65.91 1,714
Industrials (1.02%):
AXYS Axsys Technologies, Inc. * 1.02% 33 51.08 1,686
Information Technology (2.40%):
MANT ManTech International Corporation * 1.00% 31 53.44 1,657
SAI SAIC, Inc. * 1.40% 120 19.33 2,320
Materials (2.02%):
CMP Compass Minerals International, Inc. 1.02% 29 57.99 1,682
RKT Rock-Tenn Company (Class A) 1.00% 48 34.65 1,663
_______ ________
Total Investments 100.00% $165,640
======= ========
___________
<FN>
See "Notes to Schedules of Investments" on page 51.
Page 50
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. The Sponsor entered into purchase contracts
for the Securities on December 30, 2008 and December 31, 2008. Such
purchase contracts are expected to settle within three business days.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired-generally
determined by the closing sale prices of the Securities on the
applicable exchange (where applicable, converted into U.S. dollars at
the exchange rate at the Evaluation Time) at the Evaluation Time on the
business day prior to the Initial Date of Deposit. The Evaluator, at its
discretion, may make adjustments to the prices of Securities held by a
Trust if an event occurs after the close of the market on which a
Security normally trades but before the Evaluation Time, depending on
the nature and significance of the event, consistent with applicable
regulatory guidance relating to fair value pricing. The valuation of the
Securities has been determined by the Evaluator, an affiliate of the
Sponsor. In accordance with Statement of Financial Accounting Standards
No. 157 "Fair Value Measurements," each Trust's investments are
classified as Level 1, which refers to securities traded in an active
market. The cost of the Securities to the Sponsor and the Sponsor's
profit or loss (which is the difference between the cost of the
Securities to the Sponsor and the cost of the Securities to a Trust) are
set forth below:
Cost of Securities Profit
to Sponsor (Loss)
___________ ________
The Dow(R) Target 5 Portfolio, 1st Quarter 2009 Series $142,738 $ 512
The Dow R) Target Dividend Portfolio, 1st Quarter 2009 Series 178,567 (900)
Global Target 15 Portfolio, 1st Quarter 2009 Series 149,149 641
MSCI EAFE Target 20 Portfolio, 1st Quarter 2009 Series 150,323 552
The Nasdaq(R) Target 15 Portfolio, 1st Quarter 2009 Series 167,215 (310)
NYSE(R) International Target 25 Portfolio, 1st Quarter 2009 Series 142,967 751
The S&P Target 24 Portfolio, 1st Quarter 2009 Series 131,263 (167)
S&P Target SMid 60 Portfolio, 1st Quarter 2009 Series 168,173 (715)
Target 50/50 Portfolio, 1st Quarter 2009 Series 253,843 (743)
Target Diversified Dividend Portfolio, 1st Quarter 2009 Series 172,336 (721)
Target Dividend Multi-Strategy Portfolio, 1st Quarter 2009 Series 254,896 (162)
Target Double Play Portfolio, 1st Quarter 2009 Series 168,907 (556)
Target Growth Portfolio, 1st Quarter 2009 Series 172,247 (65)
Target Long-Term Growth Portfolio, 1st Quarter 2009 Series 264,032 (287)
Target Mega-Cap Portfolio, 1st Quarter 2009 Series 239,962 186
Target Small-Cap Portfolio, 1st Quarter 2009 Series 149,534 (239)
Target VIP Conservative Equity Portfolio, 1st Quarter 2009 Series 247,504 (334)
Value Line(R) Diversified Target 40 Portfolio, 1st Quarter 2009 Series 164,608 (146)
Value Line(R) Target 25 Portfolio, 1st Quarter 2009 Series 165,896 (256)
(3) Current Dividend Yield for each Security was calculated by dividing
the most recent annualized ordinary dividend declared or paid on a
Security (such figure adjusted to reflect any change in dividend policy
announced subsequent to the most recently declared dividend) by that
Security's closing sale price at the Evaluation Time on the business day
prior to the Initial Date of Deposit, without consideration of foreign
withholding or changes in currency exchange rates, if applicable.
(4) Common stocks of companies headquartered or incorporated outside the
United States comprise the percentage of the investments of the Trusts
as indicated:
The Dow(R) Target Dividend Portfolio, 1st Quarter 2009 Series, 5.00%
Global Target 15 Portfolio, 1st Quarter 2009 Series, 66.71%
MSCI EAFE Target 20 Portfolio, 1st Quarter 2009 Series, 100.00%
The Nasdaq(R) Target 15 Portfolio, 1st Quarter 2009 Series, 1.61%
NYSE(R) International Target 25 Portfolio, 1st Quarter 2009 Series, 100.00%
Target 50/50 Portfolio, 1st Quarter 2009 Series, 10.98%
Target Diversified Dividend Portfolio, 1st Quarter 2009 Series, 17.50%
Target Dividend Multi-Strategy Portfolio, 1st Quarter 2009 Series, 46.83%
Target Double Play Portfolio, 1st Quarter 2009 Series, 2.49%
Target Growth Portfolio, 1st Quarter 2009 Series, 9.99%
Target Long-Term Growth Portfolio, 1st Quarter 2009 Series, 19.51%
Target Mega-Cap Portfolio, 1st Quarter 2009 Series, 20.00%
Target VIP Conservative Equity Portfolio, 1st Quarter 2009 Series, 6.75%
Page 51
(5) Securities of companies in the following sectors comprise the
percentage of the investments of the Trusts as indicated:
Global Target 15 Portfolio, 1st Quarter 2009 Series:
Consumer Discretionary, 19.79%; Financials, 20.03%; Health Care, 6.66%;
Industrials, 26.76%; Information Technology, 6.69%; Materials, 13.31%;
Telecommunication Services, 6.76%
MSCI EAFE Target 20 Portfolio, 1st Quarter 2009 Series:
Consumer Discretionary, 20.23%; Consumer Staples, 5.00%; Energy, 20.12%;
Industrials, 19.91%; Materials, 4.87%; Telecommunication Services,
14.98%; Utilities, 14.89%
NYSE(R) International Target 25 Portfolio, 4th Quarter 2008 Series:
Consumer Discretionary, 12.00%; Energy, 8.00%; Financials, 48.00%;
Information Technology, 4.00%; Materials, 8.00%; Telecommunication
Services, 12.00%; Utilities, 8.00%
(6) As of the Initial Date of Deposit, this Security has suspended paying
dividends.
(7) This Security represents the common stock of a Real Estate Investment
Trust ("REIT").
+ This Security represents the common stock of a foreign company which
trades directly, or through an American Depositary Receipt ("ADR"), on a
U.S. national securities exchange.
# This Security represents the common stock of a foreign company which
trades directly on a foreign securities exchange.
* This Security has not paid a cash dividend during the 12 months prior
to the Initial Date of Deposit.
</FN>
Page 52
The FT Series
The FT Series Defined.
We, First Trust Portfolios L.P. (the "Sponsor"), have created hundreds
of similar yet separate series of a unit investment trust which we have
named the FT Series. The series to which this prospectus relates, FT
1900, consists of 19 separate portfolios set forth below:
- Dow(R) Target 5 1Q '09 - Term 3/31/10
(The Dow(R) Target 5 Portfolio, 1st Quarter 2009 Series)
- Dow(R) Target Dvd. 1Q '09 - Term 3/31/10
(The Dow(R) Target Dividend Portfolio, 1st Quarter
2009 Series )
- Global Target 15 1Q '09 - Term 3/31/10
(Global Target 15 Portfolio, 1st Quarter 2009 Series)
- MSCI EAFE Target 20 1Q '09 - Term 3/31/10
(MSCI EAFE Target 20 Portfolio, 1st Quarter 2009 Series)
- Nasdaq(R) Target 15 1Q '09 - Term 3/31/10
(The Nasdaq(R) Target 15 Portfolio, 1st Quarter 2009 Series)
- NYSE(R) Intl. Target 25 1Q '09 - Term 3/31/10
(NYSE (R) International Target 25 Portfolio, 1st Quarter
2009 Series)
- S&P Target 24 1Q '09 - Term 3/31/10
(The S&P Target 24 Portfolio, 1st Quarter 2009 Series)
- S&P Target SMid 60 1Q '09 - Term 3/31/10
(S&P Target SMid 60 Portfolio, 1st Quarter 2009 Series)
- Target 50/50 1Q '09 - Term 3/31/10
(Target 50/50 Portfolio, 1st Quarter 2009 Series)
- Target Divsd. Dvd. 1Q '09 - Term 3/31/10
(Target Diversified Dividend Portfolio, 1st Quarter 2009
Series)
- Target Dvd. Multi-Strat. 1Q '09 - Term 3/31/10
(Target Dividend Multi-Strategy Portfolio, 1st Quarter
2009 Series)
- Target Dbl. Play 1Q '09 - Term 3/31/10
(Target Double Play Portfolio, 1st Quarter 2009 Series)
- Target Growth 1Q '09 - Term 3/31/10
(Target Growth Portfolio, 1st Quarter 2009 Series)
- Target Long-Term Growth 1Q '09 - Term 3/31/10
(Target Long-Term Growth Portfolio, 1st Quarter 2009 Series)
- Target Mega-Cap 1Q '09 - Term 3/31/10
(Target Mega-Cap Portfolio, 1st Quarter 2009 Series)
- Target Small-Cap 1Q '09 - Term 3/31/10
(Target Small-Cap Portfolio, 1st Quarter 2009 Series)
- Target VIP Cons. Eqty. 1Q '09 - Term 3/31/10
(Target VIP Conservative Equity Portfolio, 1st Quarter
2009 Series)
- Value Line(R) Divsd. Target 40 1Q '09 - Term 3/31/10
(Value Line(R) Diversified Target 40 Portfolio, 1st
Quarter 2009 Series)
- Value Line(R) Target 25 1Q '09 - Term 3/31/10
(Value Line(R) Target 25 Portfolio, 1st Quarter 2009 Series)
Each Trust was created under the laws of the State of New York by a
Trust Agreement (the "Indenture") dated the Initial Date of Deposit.
This agreement, entered into among First Trust Portfolios L.P., as
Sponsor, The Bank of New York Mellon as Trustee, FTP Services LLC
("FTPS") as FTPS Unit Servicing Agent and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trusts.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
SPONSOR AT 1-800-621-1675, EXT. 1.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited portfolios of common stocks
with the Trustee and in turn, the Trustee delivered documents to us
representing our ownership of the Trusts in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in a Trust, or cash (including a letter of credit or the equivalent)
with instructions to buy more Securities, to create new Units for sale.
If we create additional Units, we will attempt, to the extent
practicable, to maintain the percentage relationship established among
the Securities on the Initial Date of Deposit (as set forth in "Schedule
of Investments" for each Trust), adjusted to reflect the sale,
redemption or liquidation of any of the Securities or any stock split or
a merger or other similar event affecting the issuer of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in a Trust, on a market value basis, will also change daily.
The portion of Securities represented by each Unit will not change as a
result of the deposit of additional Securities or cash in a Trust. If we
deposit cash, you and new investors may experience a dilution of your
investment. This is because prices of Securities will fluctuate between
the time of the cash deposit and the purchase of the Securities, and
because the Trusts pay the associated brokerage fees. To reduce this
dilution, the Trusts will try to buy the Securities as close to the
Evaluation Time and as close to the evaluation price as possible. In
addition, because the Trusts pay the brokerage fees associated with the
creation of new Units and with the sale of Securities to meet redemption
and exchange requests, frequent redemption and exchange activity will
likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for a
Trust to buy Securities. If we or an affiliate of ours act as agent to a
Trust we will be subject to the restrictions under the Investment
Company Act of 1940, as amended (the "1940 Act").
Page 53
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances to satisfy Trust obligations, to meet
redemption requests and, as described in "Removing Securities from a
Trust," to maintain the sound investment character of the Trusts, and
the proceeds from these sales will be used to meet Trust obligations or
distributed to Unit holders, but will not be reinvested. However,
Securities will not be sold to take advantage of market fluctuations or
changes in anticipated rates of appreciation or depreciation, or if they
no longer meet the criteria by which they were selected. You will not be
able to dispose of or vote any of the Securities in the Trusts. As the
holder of the Securities, the Trustee will vote all of the Securities
and will do so based on our instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and transactional sales charge
resulting from the failed contract on the next Distribution Date. Any
Replacement Security a Trust acquires will be identical to those from
the failed contract.
Portfolios
Objective.
When you invest in a Trust you are purchasing a quality portfolio of
attractive common stocks in one convenient purchase. The objective of
each Trust is to provide the potential for an above-average total
return. To achieve this objective, each Trust will invest in the common
stocks of companies which are selected by applying a unique specialized
strategy. While the Trusts seek to provide the potential for above-
average total return, each follows a different investment strategy. We
cannot guarantee that a Trust will achieve its objective or that a Trust
will make money once expenses are deducted.
The Dow(R) Target 5 Portfolio
The Dow (R) Target 5 Portfolio invests in stocks with high dividend
yields. By selecting stocks with the highest dividend yields, the Dow
(R) Target 5 Strategy seeks to uncover stocks that may be out of favor
or undervalued. Investing in stocks with high dividend yields may be
effective in achieving the investment objective of the Trust, because
regular dividends are common for established companies, and dividends
have historically accounted for a large portion of the total return on
stocks. The Dow (R) Target 5 Strategy seeks to amplify this dividend
yield strategy by selecting the five lowest priced stocks of the 10
highest dividend-yielding stocks in the Dow Jones Industrial Average(sm)
("DJIA(sm)").
The Dow (R) Target 5 Strategy stocks are determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA(sm) by dividend
yield as of the business day prior to the date of this prospectus.
Step 2: We then select the 10 highest dividend-yielding stocks from this
group.
Step 3: From the 10 stocks selected in Step 2, we select an equally-
weighted portfolio of the five stocks with the lowest per share stock
price for The Dow (R) Target 5 Strategy.
Based on the composition of the portfolio on the Initial Date of
Deposit, The Dow (R) Target 5 Portfolio is considered to be a Large-Cap
Value Trust.
The Dow(R) Target Dividend Portfolio
The Dow(R) Target Dividend Strategy selects a portfolio of the 20 stocks
from the Dow Jones U.S. Select Dividend Index(sm) with the best overall
ranking on both the change in return on assets over the last 12 months
and price-to-book as a means to achieving its investment objective.
The Dow(R) Target Dividend Strategy stocks are determined as follows:
Step 1: We rank all 100 stocks contained in the Dow Jones U.S. Select
Dividend Index(sm) as of two business days prior to the date of this
prospectus (best [1] to worst [100]) by:
- Greatest change in return on assets over the last 12 months. An
increase in return on assets generally indicates improving business
fundamentals.
- Price-to-book. A lower, but positive, price-to-book ratio is generally
used as an indication of value.
Step 2: We then select an equally-weighted portfolio of the 20 stocks
with the best overall ranking on the two factors for The Dow(R) Target
Dividend Strategy.
Companies which, as of the selection date, Dow Jones has announced will
be removed from the Dow Jones U.S. Select Dividend Index(sm), or that
are likely to be removed, based on Dow Jones selection criteria, from
the Dow Jones U.S. Select Dividend Index(sm) within thirty days from
the selection date, have been removed from the universe of securities
from which The Dow(R) Target Dividend Strategy stocks are selected.
Page 54
Based on the composition of the portfolio on the Initial Date of
Deposit, The Dow(R) Target Dividend Portfolio is considered to be a
Mid-Cap Value Trust.
Global Target 15 Portfolio
The Global Target 15 Portfolio invests in stocks with high dividend
yields. By selecting stocks with the highest dividend yields, the Global
Target 15 Strategy seeks to uncover stocks that may be out of favor or
undervalued. The Trust seeks to amplify this dividend yield strategy by
selecting the five lowest priced stocks of the 10 highest dividend-
yielding stocks in a particular index. The Global Target 15 Strategy
stocks are determined as follows:
Step 1: We rank all stocks contained in the DJIA(sm), the Financial Times
Industrial Ordinary Share Index ("FT Index") and the Hang Seng Index by
dividend yield as of the business day prior to the date of this
prospectus in the case of DJIA(sm) stocks or two business days prior to
the date of this prospectus in the case of FT Index and Hang Seng Index
stocks.
Step 2: We select the 10 highest dividend-yielding stocks in each
respective index.
Step 3: We select an approximately equally-weighted portfolio of the five
stocks with the lowest per share stock price of the 10 highest-dividend
yielding stocks in each respective index as of their respective
selection date for the Global Target 15 Strategy.
MSCI EAFE Target 20 Portfolio
The MSCI EAFE Target 20 Strategy selects 20 common stocks from the MSCI
EAFE Index(R). The MSCI EAFE Target 20 Strategy stocks are determined as
follows:
Step 1: We begin with the stocks that comprise the MSCI EAFE Index(R) as
of three business days prior to the date of this prospectus.
Step 2: We then select the 200 largest by market capitalization that meet
both of the following three-month average daily trading volume liquidity
screens:
- Minimum of $5 million traded.
- Minimum of 100,000 shares traded.
Step 3:The remaining stocks are ranked on four factors:
- Price to cash flow.
- Price to book.
- Return on assets.
- Momentum.
Step 4: We purchase an approximately equally-weighted portfolio of the 20
stocks with the highest combined ranking on the four factors, subject to
a maximum of four stocks from any one of the ten major market sectors
and a maximum of four stocks from any single country.
Based on the composition of the portfolio on the Initial Date of
Deposit, the MSCI EAFE Target 20 Portfolio is considered to be a
Large-Cap Value Trust.
The Nasdaq(R) Target 15 Portfolio
The Nasdaq(R) Target 15 Strategy selects a portfolio of the 15 Nasdaq-
100 Index(R) stocks with the best overall ranking on both 12- and 6-
month price appreciation, return on assets and price to cash flow as a
means to achieving its investment objective. The Nasdaq(R) Target 15
Strategy stocks are determined as follows:
Step 1: We select stocks which are components of the Nasdaq-100 Index(R)
as of two business days prior to the date of this prospectus and
numerically rank them by 12-month price appreciation (best [1] to worst
[100]).
Step 2: We then numerically rank the stocks by six-month price
appreciation.
Step 3: The stocks are then numerically ranked by return on assets ratio.
Step 4: We then numerically rank the stocks by the ratio of cash flow per
share to stock price.
Step 5: We add up the numerical ranks achieved by each company in the
above steps and select the 15 stocks with the lowest sums for The
Nasdaq(R) Target 15 Strategy.
The Securities which comprise The Nasdaq(R) Target 15 Strategy are
weighted by market capitalization subject to the restriction that only
whole shares are purchased and that no stock will comprise less than
approximately 1% or 25% or more of The Nasdaq(R) Target 15 Strategy
portion of the portfolio on the date of this prospectus. The Securities
will be adjusted on a proportionate basis to accommodate this constraint.
Based on the composition of the portfolio on the Initial Date of
Deposit, The Nasdaq(R) Target 15 Portfolio is considered to be a
Large-Cap Growth Trust.
NYSE(R) International Target 25 Portfolio
Incorporating international investments into an overall portfolio can
offer benefits such as diversification, reduced volatility and the
potential for enhanced performance. The NYSE(R) International Target 25
Portfolio provides investors with a way to strategically invest in
foreign companies. The NYSE(R) International Target 25 Strategy stocks
are determined as follows:
Page 55
Step 1: We begin with the stocks that comprise the NYSE International 100
Index(sm) as of two business days prior to the date of this prospectus.
The index consists of the 100 largest non-U.S. stocks trading on the New
York Stock Exchange.
Step 2: We screen for liquidity by eliminating companies with average
daily trading volume below $300,000 for the prior three months.
Step 3: We rank each remaining stock on two factors:
- Price to book; and
- Price to cash flow.
Lower, but positive, price to book and price to cash flow ratios are
generally used as an indication of value.
Step 4: We purchase an approximately equally-weighted portfolio of the 25
stocks with the best overall ranking on the two factors.
Based on the composition of the portfolio on the Initial Date of
Deposit, the NYSE (R) International Target 25 Portfolio is considered to
be a Large-Cap Value Trust.
The S&P Target 24 Portfolio
The S&P Target 24 Strategy selects 24 common stocks from the Standard &
Poor's 500 Composite Stock Price Index ("S&P 500 Index") which are based
on the following steps:
Step 1: All of the economic sectors in the S&P 500 Index are ranked by
market capitalization as of two business days prior to the date of this
prospectus and the eight largest sectors are selected.
Step 2: The stocks in each of those eight sectors are then ranked among
their peers based on three distinct factors:
- Trailing four quarters' return on assets, which is net income divided
by average assets. Those stocks with high return on assets achieve
better rankings.
- Buyback yield, which measures the percentage decrease in common stock
outstanding versus one year earlier. Those stocks with greater
percentage decreases receive better rankings.
- Bullish interest indicator, which compares the number of shares traded
in months in which the stock price rose to the number of shares traded
in months in which the stock price declined. Those stocks with a high
bullish interest indicator achieve better rankings.
Step 3: The three stocks from each of the eight sectors with the highest
combined ranking on these three factors are selected for The S&P Target
24 Strategy. In the event of a tie within a sector, the stock with the
higher market capitalization is selected.
Each stock receives a weighting equivalent to its relative market value
among the three stocks from the individual sector. The combined weight
of the three stocks for a sector is equal to the sector's equivalent
weighting among the eight sectors being selected from.
Based on the composition of the portfolio on the Initial Date of
Deposit, The S&P Target 24 Portfolio is considered to be a Large-Cap
Growth Trust.
S&P Target SMid 60 Portfolio
This small and mid-capitalization strategy is designed to identify
stocks with improving fundamental performance and sentiment. The S&P
Target SMid 60 Strategy focuses on small and mid-size companies because
we believe they are more likely to be in an earlier stage of their
economic life cycle than mature large-cap companies. In addition, the
ability to take advantage of share price discrepancies is likely to be
greater with smaller stocks than with more widely followed large-cap
stocks. The S&P Target SMid 60 Strategy stocks are determined as follows:
Step 1: We begin with the stocks that comprise the Standard & Poor's
MidCap 400 Index ("S&P MidCap 400") and the Standard & Poor's SmallCap
600 Index ("S&P SmallCap 600") (excluding Registered Investment
Companies, Limited Partnerships and Business Development Companies) as
of two business days prior to the date of this prospectus.
Step 2: We rank the stocks in each index by price to book value and
select the best quartile from each index-100 stocks from the S&P MidCap
400 and 150 stocks from the S&P SmallCap 600 with the lowest, but
positive, price to book ratio.
Step 3: We rank each remaining stock on three factors:
- Price to cash flow;
- 12-month change in return on assets; and
- 3-month price appreciation.
Step 4: We eliminate any stock with a market capitalization of less than
$250 million and with average daily trading volume of less than $250,000.
Step 5: The 30 stocks from each index with the highest combined ranking
on the three factors set forth in Step 3 are selected for the S&P Target
SMid 60 Strategy.
Step 6: The stocks selected from the S&P MidCap 400 are given
approximately twice the weight of the stocks selected from the S&P
SmallCap 600.
Based on the composition of the portfolio on the Initial Date of
Deposit, S&P Target SMid 60 Portfolio is considered to be a Small-Cap
Value Trust.
Page 56
Target 50/50 Portfolio
The composition of the Target 50/50 Portfolio on the Initial Date of
Deposit is as follows:
- Approximately 1/2 common stocks which comprise the Dow (R) Target
Dividend Strategy; and
- Approximately 1/2 common stocks which comprise the Target VIP Strategy.
The Securities which comprise The Dow(R) Target Dividend Strategy
portion of the Trust were chosen by applying the same selection criteria
set forth above under the caption "The Dow(R) Target Dividend
Portfolio." The Securities which comprise the Target VIP Strategy
portion of the Trust were selected as follows:
Target VIP Strategy.
The Target VIP Strategy invests in the common stocks of companies which
are selected by applying six separate uniquely specialized strategies.
While each of the underlying strategies included in the Target VIP
Strategy also seeks to provide an above-average total return, each
follows a different investment strategy. The Target VIP Strategy seeks
to outperform the S&P 500 Index. The Target VIP Strategy provides
investors with exposure to both growth and value stocks, as well as
several different sectors of the worldwide economy. We believe this
approach offers investors a better opportunity for investment success
regardless of which investment styles prevail in the market.
The composition of the Target VIP Strategy on the Initial Date of
Deposit is as follows:
- Approximately 1/6 common stocks which comprise The Dow(R) DART 5
Strategy;
- Approximately 1/6 common stocks which comprise the European Target 20
Strategy;
- Approximately 1/6 common stocks which comprise The Nasdaq(R) Target 15
Strategy;
- Approximately 1/6 common stocks which comprise The S&P Target 24
Strategy;
- Approximately 1/6 common stocks which comprise the Target Small-Cap
Strategy; and
- Approximately 1/6 common stocks which comprise the Value Line(R)
Target 25 Strategy.
The Securities which comprise The Nasdaq(R) Target 15 Strategy and The
S&P Target 24 Strategy portion of the Trust were chosen by applying the
same selection criteria set forth above under the captions "The
Nasdaq(R) Target 15 Portfolio" and "The S&P Target 24 Portfolio,"
respectively. The Securities which comprise The Dow(R) DART 5 Strategy,
the European Target 20 Strategy, the Target Small-Cap Strategy and the
Value Line(R) Target 25 Strategy portions of the Trust were selected as
follows:
The Dow(R) Dividend and Repurchase Target ("DART") 5 Strategy.
The Dow(R) DART 5 Strategy selects a portfolio of DJIA(sm) stocks with
high dividend yields and/or high buyback ratios and high return on
assets, as a means to achieving the Dow(R) DART 5 Strategy's investment
objective. By analyzing dividend yields, the Dow(R) DART 5 Strategy
seeks to uncover stocks that may be out of favor or undervalued. More
recently, many companies have turned to stock reduction programs as a
tax efficient way to bolster their stock prices and reward shareholders.
Companies which have reduced their shares through a share buyback
program may provide a strong cash flow position and, in turn, high
quality earnings. Buyback ratio is the ratio of a company's shares of
common stock outstanding 12 months prior to the date of this prospectus
divided by a company's shares outstanding as of the business day prior
to the date of this prospectus, minus "1."
The Dow(R) DART 5 Strategy stocks are determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA(sm) by the sum of
their dividend yield and buyback ratio as of the business day prior to
the date of this prospectus.
Step 2: We then select the 10 stocks with the highest combined dividend
yields and buyback ratios.
Step 3: From the 10 stocks selected in Step 2, we select an
approximately equally-weighted portfolio of the five stocks with the
greatest change in return on assets in the most recent year as compared
to the previous year for The Dow(R) DART 5 Strategy.
European Target 20 Strategy.
The European Target 20 Strategy invests in stocks with high dividend
yields. By selecting stocks with the highest dividend yields, the
European Target 20 Strategy seeks to uncover stocks that may be out of
favor or undervalued. The European Target 20 Strategy stocks are
determined as follows:
Step 1: We rank the 120 largest companies based on market capitalization
which are domiciled in Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland and the United Kingdom by dividend yield as
of three business days prior to the date of this prospectus.
Step 2: We select an approximately equally-weighted portfolio of the 20
highest dividend-yielding stocks for the European Target 20 Strategy.
During the initial offering period, no Trust will invest more than 5% of
Page 57
its portfolio in shares of any one securities-related issuer contained
in the European Target 20 Strategy.
Target Small-Cap Strategy.
The Target Small-Cap Strategy invests in stocks with small market
capitalizations which have recently exhibited certain positive financial
attributes. The Target Small-Cap Strategy stocks are determined as
follows:
Step 1: We select the stocks of all U.S. corporations which trade on the
NYSE, the NYSE Alternext US or The NASDAQ Stock Market(R) ("Nasdaq")
(excluding limited partnerships, ADRs and mineral and oil royalty trusts)
as of two business days prior to the date of this prospectus.
Step 2: We then select companies which have a market capitalization of
between $150 million and $1 billion and whose stock has an average daily
dollar trading volume of at least $500,000.
Step 3: We next select stocks with positive three-year sales growth.
Step 4: From there we select those stocks whose most recent annual
earnings are positive.
Step 5: We eliminate any stock whose price has appreciated by more than
75% in the last 12 months.
Step 6: We select the 40 stocks with the greatest price appreciation in
the last 12 months on a relative market capitalization basis (highest to
lowest) for the Target Small-Cap Strategy.
For purposes of applying the Target Small-Cap Strategy, market
capitalization and average trading volume are based on 1996 dollars
which are periodically adjusted for inflation. All steps apply monthly
and rolling quarterly data instead of annual figures where possible.
The Securities which comprise the Target Small-Cap Strategy are weighted
by market capitalization.
Value Line(R) Target 25 Strategy.
The Value Line(R) Target 25 Strategy invests in 25 of the 100 stocks
that Value Line(R) gives a #1 ranking for Timeliness(TM) which have
recently exhibited certain positive financial attributes. Value Line(R)
ranks 1,700 stocks which represent approximately 95% of the trading
volume on all U.S. stock exchanges. Of these 1,700 stocks, only 100 are
given their #1 ranking for Timeliness(TM), which measures Value Line's
view of their probable price performance during the next six to 12
months relative to the others. Value Line(R) bases their rankings on
various factors, including long-term trend of earnings, prices, recent
earnings, price momentum, and earnings surprise. The Value Line(R)
Target 25 Strategy stocks are determined as follows:
Step 1: We start with the 100 stocks which Value Line(R) as of two
business days prior to the initial date of deposit gives their #1
ranking for Timeliness(TM), remove the stocks of financial companies and
the stocks of companies whose shares are not listed on a U.S. securities
exchange, and apply the following rankings as of two business days prior
to the date of this prospectus.
Step 2: We rank these remaining stocks for consistent growth based on 12-
month and 6-month price appreciation (best [1] to worst [100]).
Step 3: We then rank the stocks for profitability by their return on
assets.
Step 4: Finally, we rank the stocks for value based on their price to
cash flow.
Step 5: We add up the numerical ranks achieved by each company in the
above steps and select the 25 stocks with the lowest sums for the Value
Line Target 25 Strategy.
The Securities which comprise the Value Line(R) Target 25 Strategy are
weighted by market capitalization subject to the restriction that no
stock will comprise less than approximately 1% or 25% or more of the
Value Line(R) Target 25 Strategy portion of the portfolio on the date of
this prospectus. The Securities will be adjusted on a proportionate
basis to accommodate this constraint.
Target Diversified Dividend Portfolio
The Target Diversified Dividend Portfolio seeks to provide the potential
for above-average total return through a combination of capital
appreciation and dividend income by adhering to a simple investment
strategy; however, there is no assurance the objective will be met. The
Target Diversified Dividend Strategy stocks are determined as follows:
Step 1: We begin with all stocks traded on a U.S. exchange as of two
business days prior to the date of this prospectus and screen for the
following:
- Minimum market capitalization of $250 million;
- Minimum three-month average daily trading volume of $1.5 million; and
- Minimum stock price of $5.
Step 2: We eliminate Real Estate Investment Trusts ("REITs"), ADRs,
Registered Investment Companies and Limited Partnerships.
Step 3: We select only those stocks with positive three-year dividend
growth.
Step 4: We rank each remaining stock on three factors:
- Indicated dividend yield - 50%;
- Price to book - 25%; and
- Payout ratio - 25%.
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Step 5: We purchase an approximately equally-weighted portfolio
consisting of four stocks from each of the ten major market sectors with
the highest combined ranking on the three factors.
Target Dividend Multi-Strategy Portfolio
The composition of the Target Dividend Multi-Strategy Portfolio on the
Initial Date of Deposit is as follows:
- Approximately 25% common stocks which comprise The Dow (R) Target
Dividend Strategy;
- Approximately 25% common stocks which comprise the European Target 20
Strategy;
- Approximately 25% common stocks which comprise the Global Target 15
Strategy; and
- Approximately 25% common stocks which comprise the Target Diversified
Dividend Strategy.
The Securities which comprise The Dow(R) Target Dividend Strategy, the
European Target 20 Strategy, the Global Target 15 Strategy and the
Target Diversified Dividend Strategy portions of the Trust were chosen
by applying the same selection criteria set forth above under the
captions "The Dow (R) Target Dividend Strategy," "Target 50/50
Portfolio," "Global Target 15 Portfolio" and "Target Diversified
Dividend Portfolio," respectively.
Target Double Play Portfolio
The Target Double Play Portfolio invests in the common stocks of
companies which are selected by applying two separate uniquely
specialized strategies. While each of the strategies included in the
Target Double Play Portfolio also seeks to provide an above-average
total return, each follows a different investment strategy. The Target
Double Play Portfolio seeks to outperform the S&P 500 Index. Finding the
right mix of investments is a key factor to successful investing.
Because different investments often react differently to economic and
market changes, diversifying among low-correlated investments has the
potential to enhance your returns and help reduce your overall
investment risk. The Target Double Play Portfolio has been developed to
address this purpose.
The composition of the Target Double Play Portfolio on the Initial Date
of Deposit is as follows:
- Approximately 1/2 common stocks which comprise The Dow(R) Target
Dividend Strategy; and
- Approximately 1/2 common stocks which comprise the Value Line(R)
Target 25 Strategy.
The Securities which comprise The Dow(R) Target Dividend Strategy
portion of the Target Double Play Portfolio were chosen by applying the
same selection criteria set forth above under the caption "The Dow(R)
Target Dividend Portfolio." The Securities which comprise the Value
Line(R) Target 25 Strategy portion of the Target Double Play Portfolio
were chosen by applying the same selection criteria set forth above
under the caption "Target 50/50 Portfolio."
Target Growth Portfolio
The Target Growth Portfolio invests in stocks with large market
capitalizations which have recently exhibited certain positive financial
attributes. The Target Growth Strategy stocks are determined as follows:
Step 1: We begin with all stocks traded on a U.S. exchange as of two
business days prior to the date of this prospectus and screen for the
following:
- Minimum market capitalization of $6 billion;
- Minimum three month average daily trading volume of $5 million; and
- Minimum stock price of $5.
Step 2: We eliminate REITs, ADRs, Registered Investment Companies and
Limited Partnerships.
Step 3: We select only those stocks with positive one year sales growth.
Step 4: We rank the remaining stocks on three factors:
- Sustainable growth rate;
- Change in return on assets; and
- Recent price appreciation.
Step 5: We purchase an approximately equally-weighted portfolio of the 30
stocks with the highest combined ranking on the three factors, subject
to a maximum of six stocks from any one of the ten major market sectors.
Based on the composition of the portfolio on the Initial Date of
Deposit, the Target Growth Portfolio is considered to be a Large-Cap
Growth Trust.
Target Long-Term Growth Portfolio
The composition of the Target Long-Term Growth Portfolio on the Initial
Date of Deposit is as follows:
- Approximately 45% common stocks which comprise the Target Growth
Strategy;
- Approximately 40% common stocks which comprise the S&P Target SMid 60
Strategy; and
- Approximately 15% common stocks which comprise the NYSE(R)
International Target 25 Strategy.
The Securities which comprise the Target Growth Strategy, the S&P Target
SMid 60 Strategy, and the NYSE(R) International Target 25 Strategy
portions of the Trust were chosen by applying the same selection
criteria set forth above under the captions "Target Growth Portfolio,"
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"S&P Target SMid 60 Portfolio" and "NYSE(R) International Target 25
Portfolio, " respectively.
Target Mega-Cap Portfolio
The Target Mega-Cap Portfolio invests in some of the largest companies
in the world. These companies are well-known, blue-chip companies that
are widely regarded as leaders in their respective industries.
Step 1: We begin with the largest 200 stocks traded on a U.S. exchange
which have a minimum three-month average daily trading volume of $10
million (excluding Registered Investment Companies and Limited
Partnerships) as of two business days prior to the date of this
prospectus.
Step 2: We rank the stocks on three factors:
- Price to book.
- Return on assets.
- Recent price appreciation.
Step 3: We purchase an approximately equally-weighted portfolio of the 30
stocks with the highest combined ranking on the three factors, subject
to a maximum of six stocks from any one of the ten major market sectors
and a maximum of six foreign companies.
Based on the composition of the portfolio on the Initial Date of
Deposit, the Target Mega-Cap Portfolio is considered to be a Large-Cap
Blend Trust.
Target Small-Cap Portfolio
The Securities which comprise the Target Small-Cap Strategy were chosen
by applying the same selection criteria set forth above under the
caption "Target 50/50 Portfolio."
Based on the composition of the portfolio on the Initial Date of
Deposit, the Target Small-Cap Portfolio is considered to be a Small-Cap
Growth Trust.
Target VIP Conservative Equity Portfolio
The Target VIP Conservative Equity Portfolio invests in the common
stocks of companies which are selected by applying four separate
uniquely specialized strategies. The Target VIP Conservative Equity
Strategy seeks to outperform the S&P 500 Index. The Target VIP
Conservative Equity Portfolio provides investors with exposure to both
growth and value stocks, as well as several different sectors of the
worldwide economy. We believe this approach offers investors a better
opportunity for investment success regardless of which investment styles
prevail in the market. The composition of the Target VIP Conservative
Equity Portfolio on the Initial Date of Deposit is as follows:
- Approximately 30% common stocks which comprise The Dow(R) DART 10
Strategy;
- Approximately 10% common stocks which comprise the Global Target 15
Strategy;
- Approximately 50% common stocks which comprise The S&P Target 24
Strategy; and
- Approximately 10% common stocks which comprise the Value Line(R)
Target 25 Strategy.
The Securities which comprise the Global Target 15 Strategy, The S&P
Target 24 Strategy and the Value Line(R) Target 25 Strategy portions of
the Trust were chosen by applying the same selection criteria set forth
above under the captions "Global Target 15 Portfolio," "S&P Target 24
Portfolio" and "Target 50/50 Portfolio," respectively. The Securities
which comprise The Dow (R) DART 10 Strategy portion of the Trust were
selected as follows:
The Dow(R) DART 10 Strategy.
The Dow (R) DART 10 Strategy selects a portfolio of DJIA(sm) stocks with
high dividend yields and/or high buyback ratios as a means to achieving
the Strategy's investment objective. By analyzing dividend yields, the
Strategy seeks to uncover stocks that may be out of favor or
undervalued. More recently, many companies have turned to stock
reduction programs as a tax efficient way to bolster their stock prices
and reward shareholders. Companies which have reduced their shares
through a share buyback program may provide a strong cash flow position
and, in turn, high quality earnings. Buyback ratio is the ratio of a
company's shares of common stock outstanding 12 months prior to the date
of this prospectus divided by a company's shares outstanding as of the
business day prior to the date of this prospectus, minus "1."
The Dow (R) DART 10 Strategy stocks are determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA(sm) by the sum of
their dividend yield and buyback ratio as of the business day prior to
the date of this prospectus.
Step 2: We then select an approximately equally-weighted portfolio of
the 10 stocks with the highest combined dividend yields and buyback
ratios for The Dow (R) DART 10 Strategy.
Value Line(R) Diversified Target 40 Portfolio
The Value Line(R) Diversified Target 40 Strategy invests in 40 of the
400 stocks that Value Line(R) gives a #1 or #2 ranking for
Timeliness(TM) which have recently exhibited certain positive financial
attributes. Value Line(R) ranks 1,700 stocks, 400 of which are given
their #1 or #2 ranking for Timeliness(TM). Value Line(R) bases their
rankings on various factors, including long-term trend of earnings,
prices, recent earnings, price momentum and earnings surprises. The
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Value Line(R) Diversified Target 40 Strategy stocks are determined as
follows:
Step 1: We start with the 400 stocks which Value Line(R) as of two
business days prior to the initial date of deposit gives their #1 or #2
ranking for Timeliness(TM), remove the stocks of foreign companies and
the stocks of companies with market capitalizations of less than $2
billion, and apply the following rankings as of two business days prior
to the date of this prospectus.
Step 2: We rank these remaining stocks for sustainable growth rate.
Step 3: We then rank the stocks for their price to sales ratios.
Step 4: Finally, we rank the stocks for value based on their price to
cash flow.
Step 5: We add up the numerical ranks achieved by each company in the
above steps and select an approximately equally weighted portfolio of
the 40 stocks with the highest combined ranking on the three factors,
subject to a maximum of eight stocks from any one of the ten major
market sectors. For purposes of selecting stocks and weighting the
market sectors, consumer discretionary and consumer staples are
considered separate sectors.
Based on the composition of the portfolio on the Initial Date of
Deposit, the Value Line(R) Diversified Target 40 Portfolio is
considered to be a Large-Cap Growth Trust.
Value Line(R) Target 25 Portfolio
The Securities which comprise the Value Line(R) Target 25 Strategy were
chosen by applying the same selection criteria set forth above under the
caption "Target 50/50 Portfolio."
Other Considerations.
Please note that we applied the strategy or strategies which make up the
portfolio for each Trust at a particular time. If we create additional
Units of a Trust after the Initial Date of Deposit we will deposit the
Securities originally selected by applying the strategy at such time.
This is true even if a later application of a strategy would have
resulted in the selection of different securities. In addition,
companies which, based on publicly available information as of the date
the Securities were selected, are the subject of an announced business
combination which we expect will happen within six months of the date of
this prospectus have been excluded from the universe of securities from
which each Trust's Securities are selected.
Companies which, on or before their respective selection date, are
subject to any of the limited circumstances which warrant removal of a
Security from a Trust as described under "Removing Securities from a
Trust" have been excluded from the universe of securities from which
each Trust's Securities are selected.
From time to time in the prospectus or in marketing materials we may
identify a portfolio's style and capitalization characteristics to
describe a trust. These characteristics are designed to help you better
understand how the Trust fits into your overall investment plan. These
characteristics are determined by the Sponsor as of the Initial Date of
Deposit and, due to changes in the value of the Securities, may vary
thereafter. In addition, from time to time, analysts and research
professionals may apply different criteria to determine a Security's
style and capitalization characteristics, which may result in
designations which differ from those arrived at by the Sponsor. In
general, growth stocks are those with high relative price-to-book ratios
while value stocks are those with low relative price-to-book ratios. At
least 65% of the stocks in a trust on the trust's initial date of
deposit must fall into either the growth or value category for a trust
itself to receive the designation. Trusts that do not meet this criteria
are designated as blend trusts. In determining market capitalization
characteristics, we analyze the market capitalizations of the 3,000
largest stocks in the United States (excluding foreign securities, ADRs,
limited partnerships and regulated investment companies) on a monthly
basis. Companies with market capitalization among the largest 10% are
considered Large-Cap securities, the next 20% are considered Mid-Cap
securities and the remaining securities are considered Small-Cap
securities. Both the weighted average market capitalization of a trust
and at least half of the Securities in a trust must be classified as
either Large-Cap, Mid-Cap or Small-Cap in order for a trust to be
designated as such. Trusts, however, may contain individual stocks that
do not fall into their stated style or market capitalization designation.
Of course, as with any similar investments, there can be no assurance
that the objective of a Trust will be achieved. See "Risk Factors" for a
discussion of the risks of investing in a Trust.
"Dow Jones Industrial Average(sm)," "Dow(R)," "DJIA(sm)," and
"Dow Jones U.S. Select Dividend Index(sm) ," are trademarks or service
marks of Dow Jones & Company, Inc. ("Dow Jones") and have been licensed
for use for certain purposes by First Trust Advisors L.P., an affiliate
of ours. Dow Jones does not endorse, sell or promote any of the Trusts,
in particular The Dow(R) Target 5 Portfolio, The Dow(R) Target Dividend
Portfolio, Global Target 15 Portfolio, Target 50/50 Portfolio, Target
Dividend Multi-Strategy Portfolio, Target Double Play Portfolio and the
Target VIP Conservative Equity Portfolio. Dow Jones makes no
representation regarding the advisability of investing in such products.
Except as noted herein, Dow Jones has not given us a license to use its
indexes.
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The MSCI EAFE Target 20 Portfolio is not sponsored, endorsed, or
promoted by MSCI, and MSCI bears no liability with respect to the Trust,
the Securities or the index on which such Trust or Securities are based.
Except as noted herein, the publisher has not approved of any of the
information in this prospectus.
"S&P(R)," "S&P 500(R)," "S&P MidCap 400(R)," "S&P SmallCap 600(R)," and
"Standard & Poor's(R)" are trademarks of The McGraw-Hill Companies, Inc.
and have been licensed for use by us. The S&P Target 24 Portfolio, S&P
Target SMid 60 Portfolio, Target 50/50 Portfolio, Target Long-Term
Growth Portfolio and Target VIP Conservative Equity Portfolio are not
sponsored, endorsed, sold or promoted by Standard & Poor's and Standard
& Poor's makes no representation regarding the advisability of investing
in such Portfolios. Please see the Information Supplement which sets
forth certain additional disclaimers and limitations of liabilities on
behalf of Standard & Poor's.
"Value Line(R)" and "Value Line Timeliness(TM) Ranking System" are
registered trademarks of Value Line Securities, Inc. or Value Line
Publishing, Inc. that have been licensed to First Trust Portfolios L.P.
and/or First Trust Advisors L.P. The Target 50/50 Portfolio, Target
Double Play Portfolio, Target VIP Conservative Equity Portfolio, Value
Line(R) Diversified Target 40 Portfolio and Value Line(R) Target 25
Portfolio are not sponsored, recommended, sold or promoted by Value Line
Publishing, Inc., Value Line, Inc. or Value Line Securities, Inc.
("Value Line"). Value Line makes no representation regarding the
advisability of investing in a Trust.
"NYSE" is a registered trademark of, and "NYSE International 100
Index(sm)" is a service mark of, the New York Stock Exchange, Inc.
("NYSE") and have been licensed for use for certain purposes by First
Trust Portfolios L.P. The NYSE International Target 25 Portfolio and
Target Long-Term Growth Portfolio, all or a portion of which are based
on the NYSE International 100 Index(sm), are not sponsored, endorsed,
sold or promoted by NYSE, and NYSE makes no representation regarding the
advisability of investing in such products.
The publishers of the DJIA(sm), FT Index, Hang Seng Index, The Nasdaq-
100 Index(R), the Russell 2000(R) Index, the Russell 3000(R) Index, S&P
500 Index, S&P 1000 Index, S&P MidCap 400 Index, S&P SmallCap 600 Index,
MSCI Europe Index, MSCI EAFE Index(R), and the NYSE International 100
Index(sm) are not affiliated with us and have not participated in
creating the Trusts or selecting the Securities for the Trusts. Except
as noted herein, none of the index publishers have approved of any of
the information in this prospectus.
Risk Factors
Price Volatility. The Trusts invest in common stocks. The value of a
Trust's Units will fluctuate with changes in the value of these common
stocks. Common stock 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
the current 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.
Because the Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time,
especially the relatively short 15-month life of the Trusts, or that you
won't lose money. Units of the Trusts are not deposits of any bank and
are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Trusts which use dividend yield as a selection criterion employ a
contrarian strategy in which the Securities selected share qualities
that have caused them to have lower share prices or higher dividend
yields than other common stocks in their peer group. There is no
assurance that negative factors affecting the share price or dividend
yield of these Securities will be overcome over the life of such Trusts
or that these Securities will increase in value.
Three of the Securities in The Nasdaq (R) Target 15 Portfolio, four of
the Securities in The S&P Target 24 Portfolio, three Securities in the
Target Double Play Portfolio and three of the Securities in the Value
Line(R) Target 25 Portfolio represent approximately 67.87%, 39.01%,
35.60% and 71.23%, respectively, of the value of such Trust. If these
stocks decline in value you may lose a substantial portion of your
investment.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Concentration Risk. When at least 25% of a Trust's portfolio is invested
in securities issued by companies within a single sector, the Trust is
considered to be concentrated in that particular sector. A portfolio
concentrated in a single sector may present more risks than a portfolio
broadly diversified over several sectors.
The Dow(R) Target 5 Portfolio is concentrated in stocks of material
companies. The Dow(R) Target Dividend Portfolio is concentrated in
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stocks of financial companies. The Global Target 15 Portfolio is
concentrated in stocks of industrial companies. The MSCI EAFE Target 20
Portfolio is concentrated in stocks of consumer product companies. The
Nasdaq (R) Target 15 Portfolio is concentrated in stocks of health care
and information technology companies. The NYSE (R) International Target
25 Portfolio is concentrated in stocks of financial companies. The S&P
Target SMid 60 Portfolio is concentrated in stocks of energy companies.
The Target 50/50 Portfolio is concentrated in stocks of financial
companies. The Target Dividend Multi-Strategy Portfolio is concentrated
in stocks of financial companies. The Target Growth Portfolio is
concentrated in stocks of consumer products companies. The Target Mega-
Cap Portfolio is concentrated in stocks of consumer products companies.
The Target Small-Cap Portfolio is concentrated in stocks of financial
companies. The Target VIP Conservative Equity Portfolio is concentrated
in stocks of consumer products companies. The Value Line (R) Diversified
Target 40 Portfolio is concentrated in stocks of consumer products
companies. The Value Line (R) Target 25 Portfolio is concentrated in
stocks of consumer products and health care companies.
Consumer Products. Collectively, consumer discretionary companies and
consumer staples companies are categorized as consumer products
companies. General risks of these companies include cyclicality of
revenues and earnings, economic recession, currency fluctuations,
changing consumer tastes, extensive competition, product liability
litigation and increased governmental regulation. Generally, spending on
consumer products is affected by the economic health of consumers. A
weak economy and its effect on consumer spending would adversely affect
consumer products companies.
Energy. General problems of the petroleum and gas products sector
include volatile fluctuations in price and supply of energy fuels,
international politics, terrorist attacks, reduced demand as a result of
increases in energy efficiency and energy conservation, the success of
exploration projects, clean-up and litigation costs relating to oil
spills and environmental damage, and tax and other regulatory policies
of various governments. Oil production and refining companies are
subject to extensive federal, state and local environmental laws and
regulations regarding air emissions and the disposal of hazardous
materials. In addition, declines in U.S. and Russian crude oil
production will likely lead to a greater world dependence on oil from
OPEC nations which may result in more volatile oil prices.
Financials. Banks, thrifts and their holding companies are especially
subject to the adverse effects of economic recession; decreases in the
availability of capital; volatile interest rates; portfolio
concentrations in geographic markets and in commercial and residential
real estate loans; and competition from new entrants in their fields of
business. Although recently-enacted legislation repealed most of the
barriers which separated the banking, insurance and securities sectors,
these sectors are still extensively regulated at both the federal and
state level and may be adversely affected by increased regulations.
Recent negative developments relating to the subprime mortgage market
have adversely affected credit and capital markets worldwide and reduced
the willingness of lenders to extend credit, thus making borrowing on
favorable terms more difficult. In addition, the liquidity of certain
debt instruments has been reduced or eliminated due to the lack of
available market makers.
Banks and thrifts face increased competition from nontraditional lending
sources as regulatory changes, such as the recently enacted financial-
services overhaul legislation, permit new entrants to offer various
financial products. Technological advances such as the Internet allow
these nontraditional lending sources to cut overhead and permit the more
efficient use of customer data.
Brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies are also financial services providers. These
companies compete with banks and thrifts to provide traditional
financial service products, in addition to their traditional services,
such as brokerage and investment advice. In addition, all financial
service companies face shrinking profit margins due to new competitors,
the cost of new technology and the pressure to compete globally.
Companies involved in the insurance sector are engaged in underwriting,
selling, distributing or placing of property and casualty, life or
health insurance. Insurance company profits are affected by many
factors, including interest rate movements, the imposition of premium
rate caps, competition and pressure to compete globally. Property and
casualty insurance profits may also be affected by weather catastrophes,
acts of terrorism and other disasters. Life and health insurance profits
may be affected by mortality rates. Already extensively regulated,
insurance companies' profits may also be adversely affected by increased
government regulations or tax law changes.
Health Care. General risks of health care companies involve extensive
competition, generic drug sales or the loss of patent protection,
product liability litigation and increased government regulation.
Research and development costs of bringing new drugs to market are
substantial, and there is no guarantee that the product will ever come
to market. Health care facility operators may be affected by the demand
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for services, efforts by government or insurers to limit rates,
restriction of government financial assistance and competition from
other providers.
Industrials. General risks of industrial companies include the general
state of the economy, intense competition, consolidation, domestic and
international politics, excess capacity and consumer spending trends. In
addition, they may also be significantly affected by overall capital
spending levels, economic cycles, technical obsolescence, delays in
modernization, labor relations, government regulations and e-commerce
initiatives.
Industrial companies may also be affected by factors more specific to
their individual industries. Industrial machinery manufacturers may be
subject to declines in consumer demand and the need for modernization.
Aerospace and defense companies may be influenced by decreased demand
for new equipment, aircraft order cancellations, changes in aircraft-
leasing contracts and cutbacks in profitable business travel.
Agricultural equipment businesses may be influenced by fluctuations in
farm income, farm commodity prices, government subsidies and weather
conditions. The number of housing starts, levels of public and non-
residential construction including weakening demand for new office and
retail space, and overall construction spending may adversely affect
construction equipment manufacturers, while overproduction,
consolidation and weakening global economies may lead to deteriorating
sales for auto and truck makers and their suppliers.
Information Technology. Technology companies are generally subject to
the risks of rapidly changing technologies; short product life cycles;
fierce competition; aggressive pricing; frequent introduction of new or
enhanced products; the loss of patent, copyright and trademark
protections; cyclical market patterns; evolving industry standards; and
frequent new product introductions. Technology companies may be smaller
and less experienced companies, with limited product lines, markets or
financial resources. Technology company stocks have experienced extreme
price and volume fluctuations that are often unrelated to their
operating performance, and have lately experienced significant market
declines in their share values. Also, the stocks of many Internet
companies have exceptionally high price-to-earnings ratios with little
or no earnings histories.
Materials. General risks of the basic materials sector include the
general state of the economy, consolidation, domestic and international
politics and excess capacity. In addition, basic materials companies may
also be significantly affected by volatility of commodity prices, import
controls, worldwide competition, liability for environmental damage,
depletion of resources, and mandated expenditures for safety and
pollution control devices.
REITs. Certain of the Securities in certain of the Trusts are issued by
REITs. REITs are financial vehicles that pool investors' capital to
purchase or finance real estate. REITs may concentrate their investments
in specific geographic areas or in specific property types, i.e.,
hotels, shopping malls, residential complexes and office buildings. The
value of the REITs and the ability of the REITs to distribute income may
be adversely affected by several factors, including rising interest
rates, changes in the national, state and local economic climate and
real estate conditions, perceptions of prospective tenants of the
safety, convenience and attractiveness of the properties, the ability of
the owner to provide adequate management, maintenance and insurance, the
cost of complying with the Americans with Disabilities Act, increased
competition from new properties, the impact of present or future
environmental legislation and compliance with environmental laws,
changes in real estate taxes and other operating expenses, adverse
changes in governmental rules and fiscal policies, adverse changes in
zoning laws, and other factors beyond the control of the issuers of the
REITs.
Strategy. Please note that we applied the strategy or strategies which
make up the portfolio for each Trust at a particular time. If we create
additional Units of a Trust after the Initial Date of Deposit we will
deposit the Securities originally selected by applying the strategy at
such time. This is true even if a later application of a strategy would
have resulted in the selection of different securities. There is no
guarantee the investment objective of a Trust will be achieved. The
actual performance of the Trusts will be different than the hypothetical
returns of each Trust's strategy. Because the Trusts are unmanaged and
follow a strategy, the Trustee will not buy or sell Securities in the
event a strategy is not achieving the desired results.
Hong Kong. Approximately 33.47% of the Global Target 15 Portfolio
consists of common stocks issued by companies headquartered in Hong Kong
Special Administrative Region ("Hong Kong"). Certain of the Securities
in certain other Trusts are also issued by companies headquartered in
Hong Kong. Hong Kong issuers are subject to risks related to Hong Kong's
political and economic environment, the volatility of the Hong Kong
stock market, and the concentration of real estate companies in the Hang
Seng Index. Hong Kong reverted to Chinese control on July 1, 1997 and
any increase in uncertainty as to the future economic and political
status of Hong Kong, or a deterioration of the relationship between
China and the United States, could have negative implications on stocks
listed on the Hong Kong stock market. Securities prices on the Hong Kong
Stock Exchange, and specifically the Hang Seng Index, can be highly
Page 64
volatile and are sensitive to developments in Hong Kong and China, as
well as other world markets.
United Kingdom. Approximately 33.24% of the Global Target 15 Portfolio
consists of common stocks issued by companies headquartered in the
United Kingdom. Certain of the Securities in certain other Trusts are
also issued by companies headquartered in the United Kingdom. The United
Kingdom is one of 25 members of the European Union ("EU") which was
formed by the Maastricht Treaty on European Union. The Treaty has had
the effect of eliminating most of the remaining trade barriers between
the member nations and has made Europe one of the largest common markets
in the world. However, the continued implementation of the Treaty
provisions and recent rapid political and social change throughout
Europe make the extent and nature of future economic development in the
United Kingdom and Europe and their effect on Securities issued by U.K.
issuers impossible to predict.
Unlike a majority of EU members, the United Kingdom did not convert its
currency to the common European currency, the euro, on January 1, 1999.
All companies with significant markets or operations in Europe face
strategic challenges as these entities continue to adapt to a single
currency. The ongoing euro conversion process, with or without the
inclusion of the United Kingdom, may materially impact revenues,
expenses or income; increase competition; affect issuers' currency
exchange rate risk and derivatives exposure; cause issuers to increase
spending on information technology updates; and result in potentially
adverse tax consequences. We cannot predict when or if the United
Kingdom will convert to the euro or what impact, if any, the adoption of
the euro by the United Kingdom will have on any of the Securities issued
by United Kingdom companies in the Trusts.
Foreign Securities. All of the Securities in the MSCI EAFE Target 20
Portfolio and the NYSE(R) International Target 25 Portfolio and certain
of the Securities in certain other Trusts are issued by foreign
companies, which makes these Trusts subject to more risks than if they
invested solely in domestic common stocks. These Securities are either
directly listed on a U.S. securities exchange or a foreign securities
exchange or are in the form of ADRs which are listed on a U.S. securities
exchange. Risks of foreign common stocks include higher brokerage costs;
different accounting standards; expropriation, nationalization or other
adverse political or economic developments; currency devaluations,
blockages or transfer restrictions; restrictions on foreign investments
and exchange of securities; inadequate financial information; lack of
liquidity of certain foreign markets; and less government supervision and
regulation of exchanges, brokers, and issuers in foreign countries.
The purchase and sale of the foreign Securities, other than foreign
Securities listed on a U.S. securities exchange, will generally occur
only in foreign securities markets. Because foreign securities exchanges
may be open on different days than the days during which investors may
purchase or redeem Units, the value of a Trust's Securities may change
on days when investors are not able to purchase or redeem Units.
Although we do not believe that the Trusts will have problems buying and
selling these Securities, certain of the factors stated above may make
it impossible to buy or sell them in a timely manner. Custody of certain
of the Securities in the Global Target 15 Portfolio, MSCI EAFE Target 20
Portfolio, Target 50/50 Portfolio, Target Dividend Multi-Strategy
Portfolio and Target VIP Conservative Equity Portfolio is maintained by:
Hongkong and Shanghai Banking Corporation, Hong Kong for Hong Kong
Securities; The Bank of Tokyo-Mitsubishi Ltd., Tokyo, Japan for Japanese
Securities; The Bank of New York, London, for Irish Securities; and
Euroclear Bank, a global custody and clearing institution for all other
foreign Securities; each of which have entered into a sub-custodian
relationship with the Trustee. In the event the Trustee informs the
Sponsor of any material change in the custody risks associated with
maintaining assets with any of the entities listed above, the Sponsor
will instruct the Trustee to take such action as the Sponsor deems
appropriate to minimize such risk.
Emerging Markets. Certain of the Securities in certain of the Trusts are
issued by companies headquartered or incorporated in countries
considered to be emerging markets. Risks of investing in developing or
emerging countries are even greater than the risks associated with
foreign investments in general. These increased risks include, among
other risks, the possibility of investment and trading limitations,
greater liquidity concerns, higher price volatility, greater delays and
disruptions in settlement transactions, greater political uncertainties
and greater dependence on international trade or development assistance.
In addition, emerging market countries may be subject to overburdened
infrastructures, obsolete financial systems and environmental problems.
For these reasons, investments in emerging markets are often considered
speculative.
Exchange Rates. Because securities of foreign issuers not listed on a
U.S. securities exchange generally pay dividends and trade in foreign
currencies, the U.S. dollar value of these Securities (and therefore
Units of the Trusts containing securities of foreign issuers) will vary
with fluctuations in foreign exchange rates. Most foreign currencies
have fluctuated widely in value against the U.S. dollar for various
economic and political reasons.
Page 65
To determine the value of foreign Securities not listed on a U.S.
securities exchange or their dividends, the Evaluator will estimate
current exchange rates for the relevant currencies based on activity in
the various currency exchange markets. However, these markets can be
quite volatile, depending on the activity of the large international
commercial banks, various central banks, large multi-national
corporations, speculators, hedge funds and other buyers and sellers of
foreign currencies. Since actual foreign currency transactions may not
be instantly reported, the exchange rates estimated by the Evaluator may
not reflect the amount the Trusts would receive, in U.S. dollars, had
the Trustee sold any particular currency in the market. The value of the
Securities in terms of U.S. dollars will decline if the U.S. dollar
decreases in value relative to the value of the currencies in which the
Securities trade.
Small Cap Companies. All of the Securities in the Target Small-Cap
Portfolio and certain of the Securities in certain other Trusts are
issued by companies which have been designated by the Sponsor as small-
cap. Smaller companies present some unique investment risks. Small-caps
may have limited product lines, as well as shorter operating histories,
less experienced management and more limited financial resources than
larger companies. Stocks of smaller companies may be less liquid than
those of larger companies and may experience greater price fluctuations
than larger companies. In addition, small-cap stocks may not be widely
followed by the investment community, which may result in low demand.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
such as that concerning Microsoft Corporation, Lorillard, Inc. and
Reynolds American Inc., or any of the industries represented by these
issuers, may negatively impact the value of these Securities. We cannot
predict what impact any pending or threatened litigation will have on
the value of the Securities.
Hypothetical Performance Information
The following tables compare hypothetical performance information for
the strategies employed by each Trust and the actual performances of the
DJIA(sm), Dow Jones U.S. Select Dividend Index(sm), Nasdaq-100 Index(R),
NYSE International 100 Index(sm), S&P 500 Index, S&P 1000 Index, Russell
3000(R) Index, FT Index, Hang Seng Index, Russell 2000(R) Index, MSCI
EAFE Index(R) and a combination of the DJIA(sm), FT Index and Hang Seng
Index (the "Cumulative International Index Returns") in each of the full
years listed below (and as of the most recent month).
These hypothetical returns should not be used to predict future
performance of the Trusts. Hypothetical Total Return figures are shown
for those strategies which correspond to a Trust providing a
distribution reinvestment option. For strategies which correspond to a
Trust which does not provide a distribution reinvestment option,
hypothetical Price Appreciation figures are shown. Total Return or Price
Appreciation figures from a Trust will differ from its strategy for
several reasons, including the following:
- Total Return and Price Appreciation figures shown do not reflect
brokerage commissions paid by a Trust on the purchase of Securities or
taxes incurred by you.
- Strategy returns are for calendar years (and through the most recent
quarter), while the Trusts begin and end on various dates.
- Trusts have a maturity longer than one year.
- Trusts may not be fully invested at all times or equally weighted in
each of the strategies or the stocks comprising their respective
strategy or strategies.
- Securities are often purchased or sold at prices different from the
closing prices used in buying and selling Units.
- For Trusts investing in foreign Securities, currency exchange rates
may differ.
You should note that the Trusts are not designed to parallel movements
in any index and it is not expected that they will do so. In fact, each
Trust's strategy underperformed its comparative index, or combination
thereof, in certain years, and we cannot guarantee that a Trust will
outperform its respective index over the life of a Trust or over
consecutive rollover periods, if available. Each index differs widely in
size and focus, as described below.
DJIA(sm). The DJIA(sm) consists of 30 U.S. stocks chosen by the editors
of The Wall Street Journal as being representative of the broad market
and of American industry. Changes in the component stocks of the
DJIA(sm) are made entirely by the editors of The Wall Street Journal
without consulting the companies, the stock exchange or any official
agency. For the sake of continuity, changes are made rarely.
Dow Jones U.S. Select Dividend Index(sm). The Dow Jones U.S. Select
Dividend Index(sm) consists of 100 dividend-paying stocks, weighted by
their indicated annualized yield. Eligible stocks are selected from a
universe of all dividend-paying companies in the Dow Jones U.S. Total
Page 66
Market Index(sm) that have a non-negative historical five-year dividend-
per-share growth rate, a five-year average dividend to earnings-per-
share ratio of less than or equal to 60% and a three-month average daily
trading volume of 200,000 shares.
Nasdaq-100 Index(R). The Nasdaq-100 Index(R) consists of the 100 largest
and most active non-financial domestic and international companies
listed on the Nasdaq National Market System.
NYSE International 100 Index(sm). The NYSE International 100 Index(sm)
is an unmanaged index of the 100 largest non-U.S. stocks trading on the
New York Stock Exchange. The NYSE International 100 Index(sm) assumes
that all dividends received during a year are reinvested on a daily basis.
Russell 2000(R) Index. The Russell 2000(R) Index offers investors access
to the small-cap segment of the U.S. equity universe. The Russell
2000(R) Index is constructed to provide a comprehensive, unbiased small-
cap barometer and is completely reconstituted annually to ensure larger
stocks do not distort the performance and characteristics of the true
small-cap opportunity set. The Russell 2000(R) Index includes the
smallest 2,000 securities in the Russell 3000(R) Index.
Russell 3000(R) Index. The Russell 3000(R) Index offers investors access
to the broad U.S. equity universe representing approximately 98% of the
U.S. market. The Russell 3000(R) Index is constructed to provide a
comprehensive, unbiased and stable barometer of the broad market and is
completely reconstituted annually to ensure new and growing equities are
reflected.
S&P 500 Index. The S&P 500 Index consists of 500 stocks chosen by
Standard and Poor's to be representative of the leaders of various
industries.
S&P 1000 Index. The S&P 1000 Index is a combination of the S&P MidCap
400 (the most widely used index for mid-size companies) and the S&P
SmallCap 600 (an index of 600 U.S. small-cap companies), where the S&P
MidCap 400 represents approximately 70% of the index and S&P SmallCap
600 represents approximately 30% of the index).
Financial Times Industrial Ordinary Share Index. The FT Index consists
of 30 common stocks chosen by the editors of The Financial Times as
being representative of British industry and commerce.
Hang Seng Index. The Hang Seng Index consists of a cross section of
stocks currently listed on the Stock Exchange of Hong Kong Ltd. and is
intended to represent four major market sectors: commerce and industry,
finance, property and utilities.
MSCI EAFE Index(R). The MSCI EAFE Index(R) (Europe, Australasia, Far
East) is an unmanaged float-adjusted market capitalization index that is
designed to measure the equity market performance of developed markets,
excluding the United States and Canada.
Page 67
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COMPARISON OF TOTAL RETURN (2)
(Strategy figures reflect the deduction of sales charges and expenses but not brokerage commissions or taxes.)
HYPOTHETICAL STRATEGY TOTAL RETURNS (1)
NYSE (R) TARGET
THE DOW (R) THE DOW (R) GLOBAL MSCI EAFE INTERNATIONAL DIVERSIFIED
TARGET 5 TARGET DIVIDEND TARGET 15 TARGET 20 TARGET 25 DIVIDEND
YEAR STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY
---- ------------ --------------- --------- --------- ------------- ------------
1972 18.96%
1973 17.58%
1974 -7.52%
1975 62.86%
1976 38.84%
1977 3.18%
1978 -1.30%
1979 7.39%
1980 38.69%
1981 1.22%
1982 40.99%
1983 34.21%
1984 8.55%
1985 35.96%
1986 28.26%
1987 8.46% 14.92%
1988 18.90% 20.93%
1989 7.97% 14.49%
1990 -17.94% 0.65%
1991 59.77% 39.91%
1992 20.63% 28.74% 24.23%
1993 31.38% 18.24% 62.37%
1994 5.43% -8.50% -10.03%
1995 28.02% 46.93% 11.47% 14.53% 26.80%
1996 23.46% 16.17% 19.47% 29.16% 25.92% 14.90%
1997 17.13% 40.64% -8.77% 6.48% 23.28% 25.89%
1998 9.90% 2.99% 11.11% 32.05% 12.56% 12.88%
1999 -9.46% -6.60% 6.16% 53.65% 64.31% 17.47%
2000 8.26% 25.89% 2.27% -2.76% 10.87% 19.73%
2001 -5.01% 40.69% -1.04% -16.50% -14.12% 29.55%
2002 -12.86% -0.79% -14.32% -3.03% -20.67% -10.46%
2003 20.20% 32.16% 35.94% 37.81% 39.53% 46.97%
2004 9.61% 18.92% 29.23% 23.05% 23.68% 20.44%
2005 -2.41% 2.29% 11.51% 5.97% 13.70% 1.90%
2006 39.57% 17.64% 40.05% 33.17% 28.55% 15.34%
2007 2.25% 1.11% 14.26% 24.20% 24.70% -3.92%
2008 -48.20% -37.78% -42.86% -46.70% -54.10% -38.79%
(thru 11/28)
Page 68
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COMPARISON OF TOTAL RETURN (2)
(Strategy figures reflect the deduction of sales charges and expenses but not brokerage commissions or taxes.)
INDEX TOTAL RETURNS (1)
DOW JONES S&P 500 MSCI NYSE RUSSELL HANG SENG CUMULATIVE
U.S. SELECT INDEX EAFE INTERNA- 3000(R) INDEX INTERNA-
DIVIDEND INDEX(R) TIONAL 100 INDEX TIONAL INDEX
YEAR DJIA(SM) INDEX(SM) INDEX FT INDEX RETURNS(3)
---- -------- ----------- -------- -------- ---------- ------- -------- --------- ------------
1972 18.48% 19.00%
1973 -13.28% -14.69%
1974 -23.57% -26.47%
1975 44.75% 37.23%
1976 22.82% 23.93%
1977 -12.84% -7.16%
1978 2.79% 6.57%
1979 10.55% 18.61%
1980 22.16% 32.50%
1981 -3.57% -4.92%
1982 27.11% 21.55%
1983 25.96% 22.56%
1984 1.30% 6.27%
1985 33.55% 31.72%
1986 27.10% 18.67%
1987 5.48% 5.25% 38.32% -10.02% 11.26%
1988 16.14% 16.56% 7.03% 16.05% 13.07%
1989 32.19% 31.62% 24.53% 5.53% 20.75%
1990 -0.56% -3.10% 10.36% 6.74% 5.51%
1991 24.19% 30.40% 14.88% 42.46% 27.17%
1992 7.41% 22.65% 7.61% -2.18% 28.89% 11.37%
1993 16.93% 14.59% 10.04% 20.25% 123.35% 53.51%
1994 5.01% -0.19% 1.32% 1.19% -29.98% -7.93%
1995 36.87% 42.80% 37.54% 11.21% 35.81% 17.83% 27.28% 27.33%
1996 28.89% 25.08% 22.94% 6.05% 18.50% 21.51% 20.55% 37.47% 28.97%
1997 24.94% 37.83% 33.35% 1.78% 19.20% 31.70% 16.44% -17.68% 7.90%
1998 18.15% 4.33% 28.58% 19.94% 22.64% 23.94% 12.20% -2.68% 9.22%
1999 27.21% -4.08% 21.04% 27.02% 41.93% 20.90% 17.44% 73.42% 39.36%
2000 -4.71% 24.86% -9.10% -14.17% -20.67% -7.47% -18.58% -9.35% -10.88%
2001 -5.43% 13.09% -11.88% -21.44% -21.13% -11.40% -23.67% -22.40% -17.17%
2002 -15.01% -3.94% -22.09% -15.94% -19.14% -21.53% -29.52% -15.60% -20.04%
2003 28.26% 30.16% 28.67% 38.59% 37.58% 31.04% 26.27% 41.79% 32.11%
2004 5.30% 18.14% 10.87% 20.25% 16.25% 11.94% 20.80% 16.96% 14.35%
2005 1.72% 3.79% 4.91% 13.54% 11.22% 6.15% 12.45% 8.67% 7.61%
2006 19.03% 19.54% 15.78% 26.34% 24.49% 15.80% 40.25% 38.60% 32.62%
2007 8.87% -5.16% 5.49% 11.17% 16.43% 5.24% 0.13% 42.88% 17.29%
2008 -31.65% -29.81% -37.65% -46.59% -46.53% -38.47% -53.62% -47.92% -44.40%
(thru 11/28)
______________________
<FN>
See "Notes to Comparison of Total Return" on page 70.
Page 69
NOTES TO COMPARISON OF TOTAL RETURN
(1) The Strategy stocks for each Strategy for a given year consist of the
common stocks selected by applying the respective Strategy as of the
beginning of the period (and not the date the Trusts actually sell Units).
(2) With the exception of the Hang Seng Index for the periods 12/31/1986
through 12/31/1992, Total Return represents the sum of the change in
market value of each group of stocks between the first and last trading
day of a period plus the total dividends paid on each group of stocks
during such period divided by the opening market value of each group of
stocks as of the first trading day of a period. Total Return figures
assume that all dividends are reinvested monthly (except for the Dow
Jones U.S. Select Dividend Indexsm(sm) and the NYSE International 100
Index(sm), which assume daily reinvestment of dividends) and all returns
are stated in terms of U.S. dollars. For the periods 12/31/1986 through
12/31/1992, Total Return on the Hang Seng Index does not include any
dividends paid. Strategy figures reflect the deduction of sales charges
and expenses but have not been reduced by estimated brokerage
commissions paid by Trusts in acquiring Securities or any taxes incurred
by investors. Based on the year-by-year returns contained in the tables,
over the full years as listed above, each Strategy achieved a greater
average annual total return than that of its corresponding index:
AVERAGE
ANNUAL AVERAGE ANNUAL
STRATEGY TOTAL RETURN CORRESPONDING INDEX TOTAL RETURN
________ ____________ ___________________ ______________
The Dow(R) Target 5 Strategy 14.90% DJIA(sm) (from 01/01/72 through 12/31/07) 11.68%
The Dow(R) Target Dividend Strategy 16.04% Dow Jones U.S. Select Dividend Index(sm) 14.30%
S&P 500 Index (from 01/01/92 through 12/31/07) 10.30%
Global Target 15 Strategy 14.06% Cumulative International Index 12.96%
MSCI EAFE Target 20 Strategy 16.74% MSCI EAFE Index(R) 8.11%
NYSE(R) International Target 25 Strategy 17.35% NYSE International 100 Index(sm) 10.20%
Target Diversified Dividend Strategy 15.82% Russell 3000(R) Index 11.20%
(3) The combination of the DJIA(sm), the FT Index and the Hang Seng
Index (the "Cumulative International Index") Returns represent the
weighted average of the annual returns of the stocks contained in the FT
Index, Hang Seng Index and DJIA(sm). The Cumulative International Index
Returns are weighted in the same proportions as the index components
appear in the Global Target 15 Portfolio. For instance, the Cumulative
International Index is weighted as follows: DJIA(sm), 33-1/3%; FT Index,
33-1/3%; Hang Seng Index, 33-1/3%. Cumulative International Index
Returns do not represent an actual index.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</FN>
Page 70
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COMPARISON OF PRICE APPRECIATION (2)
(Strategy figures reflect the deduction of sales charges and expenses but not brokerage commissions or taxes.)
HYPOTHETICAL STRATEGY PRICE APPRECIATION (1)
TARGET
THE DIVIDEND TARGET
NASDAQ(R) THE S&P S&P TARGET TARGET MULTI- TARGET TARGET LONG-TERM TARGET TARGET
TARGET 15 TARGET 24 SMID 60 50/50 STRATEGY DOUBLE PLAY GROWTH GROWTH MEGA-CAP SMALL-CAP
YEAR STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY STRATEGY
----- --------- --------- --------- -------- --------- ----------- -------- -------- -------- ----------
1972
1973
1974
1975
1976
1977
1978
1979 36.69%
1980 57.67%
1981 -11.51%
1982 46.87%
1983 28.47%
1984 -3.90%
1985 47.62%
1986 19.42% 18.24% 20.90%
1987 12.03% 2.17% 12.37%
1988 -1.45% 4.35% 20.31%
1989 34.33% 22.24% 23.40%
1990 -7.63% 6.37% -1.24%
1991 105.78% 39.93% 56.57%
1992 -2.90% -1.77% 15.33% 12.19% 25.65%
1993 25.71% 8.08% 19.78% 21.48% 19.63%
1994 7.76% 4.80% -3.33% 1.89% -0.49%
1995 50.53% 38.78% 24.00% 44.20% 28.03% 49.12% 29.65% 35.31% 38.36%
1996 56.87% 31.05% 13.17% 27.00% 18.07% 35.05% 24.99% 19.28% 17.56% 32.59%
1997 32.14% 30.00% 41.91% 32.73% 20.38% 36.99% 41.18% 38.73% 40.75% 14.22%
1998 119.16% 39.72% 4.93% 26.86% 14.52% 46.97% 37.22% 20.59% 44.39% -0.38%
1999 96.66% 41.02% 23.98% 20.89% 7.64% 52.36% 33.88% 34.34% 40.87% 10.88%
2000 -16.43% 3.98% 13.92% 10.01% 12.27% 7.24% 8.48% 10.97% -16.53% 2.85%
2001 -27.11% -10.95% 32.00% 14.19% 14.09% 19.94% -4.07% 8.84% -11.94% -3.94%
2002 -26.36% -19.08% -5.17% -11.11% -10.36% -12.31% -10.68% -9.95% -22.72% -16.03%
2003 34.82% 22.99% 45.30% 32.72% 35.54% 35.25% 34.10% 39.26% 17.68% 52.97%
2004 -3.58% 13.61% 23.44% 15.57% 23.40% 20.15% 16.81% 20.40% 13.02% 19.37%
2005 1.25% 3.66% 3.12% 4.33% 5.49% 10.95% 17.17% 10.95% 24.41% 12.53%
2006 1.64% 1.50% 19.65% 14.38% 25.92% 9.01% 16.86% 19.61% 14.50% 21.60%
2007 18.90% 3.23% -9.54% 5.03% 5.40% 12.35% 20.05% 8.83% 19.93% -6.77%
2008 -52.41% -30.62% -41.97% -42.05% -43.77% -44.94% -52.89% -48.44% -45.98% -51.09%
(thru 11/28)
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COMPARISON OF PRICE APPRECIATION (2)
(Strategy figures reflect the deduction of sales charges and expenses but not brokerage commissions or taxes.)
HYPOTHETICAL STRATEGY PRICE APPRECIATION (1) INDEX PRICE APPRECIATION
TARGET VIP VALUE LINE(R)
CONSERVATIVE DIVERSIFIED VALUE LINE(R) RUSSELL
EQUITY TARGET 40 TARGET 25 NASDAQ-100 S&P 500 S&P 1000 2000(R)
YEAR STRATEGY STRATEGY STRATEGY INDEX(R) INDEX INDEX INDEX
----- ------------ ------------- ------------- ---------- -------- --------- -------
1972 18.72%
1973 -14.50%
1974 -26.03%
1975 36.92%
1976 23.64%
1977 -7.16%
1978 6.39%
1979 18.19% 43.07%
1980 31.52% 38.60%
1981 -4.85% 2.03%
1982 20.37% 24.95%
1983 22.31% 29.13%
1984 5.97% -7.30%
1985 31.83% 31.05% 31.05%
1986 20.18% 6.89% 18.54% 5.68%
1987 4.08% 16.94% 10.49% 5.67% -8.80%
1988 7.83% -9.40% 13.54% 16.34% 25.02%
1989 24.45% 47.92% 26.17% 31.22% 16.26%
1990 2.92% 3.12% -10.41% -3.13% -19.48%
1991 44.04% 83.11% 64.99% 30.00% 46.04%
1992 2.78% -2.69% 8.87% 7.43% 18.41%
1993 17.79% 25.02% 11.67% 9.92% 18.88%
1994 1.51% 12.07% 1.74% 1.28% -1.82%
1995 35.88% 30.01% 52.23% 43.01% 37.12% 30.69% 28.45%
1996 32.09% 26.49% 54.25% 42.74% 22.68% 19.85% 16.49%
1997 24.03% 38.62% 33.95% 20.77% 33.10% 30.26% 22.36%
1998 34.89% 15.93% 91.07% 85.43% 28.34% 13.20% -2.55%
1999 36.72% 64.34% 111.35% 102.05% 20.89% 14.11% 21.26%
2000 3.07% 0.37% -10.41% -36.82% -9.03% 15.86% -3.02%
2001 -10.62% 0.67% -0.09% -32.61% -11.85% 1.45% 2.49%
2002 -18.97% -8.88% -23.91% -37.52% -21.97% -14.54% -20.48%
2003 23.94% 25.28% 39.23% 49.43% 28.36% 36.61% 47.25%
2004 12.43% 31.00% 21.76% 10.72% 10.74% 18.39% 18.33%
2005 3.25% 19.54% 19.63% 1.88% 4.83% 10.93% 4.55%
2006 11.68% 15.28% 1.27% 7.26% 15.61% 11.89% 18.37%
2007 5.33% 1.19% 24.28% 19.20% 5.48% 5.18% -1.57%
2008 -34.15% -49.94% -52.65% -42.73% -37.20% -37.93% -37.42%
(thru 11/28)
______________________
<FN>
See "Notes to Comparison of Price Appreciation" on page 73.
Page 72
NOTES TO COMPARISON OF PRICE APPRECIATION
(1) The Strategy stocks for each Strategy for a given year consist of the
common stocks selected by applying the respective Strategy as of the
beginning of the period (and not the date the Trusts actually sell Units).
(2) Price Appreciation represents the sum of the change in market value
of each group of stocks between the first and last trading day of a
period divided by the opening market value of each group of stocks as of
the first trading day of a period. Price Appreciation figures assume
annual dividend reinvestment in connection with the annual re-
calculation of the Strategy (except for the S&P 1000 Index and the
Russell 2000(R) Index, which assume daily reinvestment of dividends).
Strategy figures reflect the deduction of sales charges and expenses but
have not been reduced by estimated brokerage commissions paid by Trusts
in acquiring Securities or any taxes incurred by investors. Based on the
year-by-year returns contained in the tables, over the full years as
listed above, each Strategy achieved a greater average annual total
return than that of its corresponding index:
AVERAGE AVERAGE
ANNUAL PRICE ANNUAL PRICE
STRATEGY APPRECIATION CORRESPONDING INDEX APPRECIATION
________ ____________ ___________________ _____________
The Nasdaq(R) Target 15 Strategy 18.58% Nasdaq-100 Index(R) 13.55%
The S&P Target 24 Strategy 12.57% S&P 500 Index (from 01/01/86 through 12/31/07) 11.69%
S&P Target SMid 60 Strategy 16.64% S&P 1000 Index 14.15%
Target 50/50 Strategy 15.96% S&P 500 Index (from 01/01/92 through 12/31/07) 10.19%
Target Dividend Multi-Strategy 14.82% S&P 500 Index (from 01/01/95 through 12/31/07) 11.14%
Target Double Play Strategy 21.09% S&P 500 Index (from 01/01/92 through 12/31/07) 10.19%
Target Growth Strategy 19.43% S&P 500 Index (from 01/01/95 through 12/31/07) 11.14%
Target Long-Term Growth Strategy 17.69% S&P 500 Index (from 01/01/96 through 12/31/07) 9.22%
Target Mega-Cap Strategy 14.60% S&P 500 Index (from 01/01/95 through 12/31/07) 11.14%
Target Small-Cap Strategy 17.47% Russell 2000(R) Index 12.79%
Target VIP Conservative Equity Strategy 13.07% S&P 500 Index (from 01/01/87 through 12/31/07) 11.37%
Value Line(R) Diversified Target 40 Strategy 18.56% S&P 500 Index (from 01/01/95 through 12/31/07) 11.14%
Value Line(R) Target 25 Strategy 24.01% S&P 500 Index (from 01/01/85 through 12/31/07) 12.47%
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
</FN>
Page 73
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The maximum sales charge (which combines an initial upfront sales
charge, a deferred sales charge and the creation and development fee).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities, changes in the
relevant currency exchange rates, changes in the applicable commissions,
stamp taxes, custodial fees and other costs associated with foreign
trading, and changes in the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934, as amended.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for a
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of each Trust's statement of net assets,
legal fees and the initial fees and expenses of the Trustee) will be
purchased in the same proportionate relationship as all the Securities
contained in a Trust. Securities will be sold to reimburse the Sponsor
for a Trust's organization costs at the end of the initial offering
period (a significantly shorter time period than the life of the
Trusts). During the initial offering period, there may be a decrease in
the value of the Securities. To the extent the proceeds from the sale of
these Securities are insufficient to repay the Sponsor for Trust
organization costs, the Trustee will sell additional Securities to allow
a Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit of a Trust will be reduced by the amount of additional
Securities sold. Although the dollar amount of the reimbursement due to
the Sponsor will remain fixed and will never exceed the per Unit amount
set forth for a Trust in "Notes to Statements of Net Assets," this will
result in a greater effective cost per Unit to Unit holders for the
reimbursement to the Sponsor. To the extent actual organization costs
are less than the estimated amount, only the actual organization costs
will ultimately be charged to a Trust. When Securities are sold to
reimburse the Sponsor for organization costs, the Trustee will sell
Securities, to the extent practicable, which will maintain the same
proportionate relationship among the Securities contained in a Trust as
existed prior to such sale.
Minimum Purchase.
The minimum amount you can purchase of a Trust is generally $1,000 worth
of Units ($500 if you are purchasing Units for your Individual
Retirement Account or any other qualified retirement plan), but such
amounts may vary depending on your selling firm.
Maximum Sales Charge.
The maximum sales charge is comprised of a transactional sales charge
and a creation and development fee. After the initial offering period
the maximum sales charge will be reduced by 0.50%, to reflect the amount
of the previously charged creation and development fee.
Transactional Sales Charge.
The transactional sales charge you will pay has both an initial and a
deferred component.
Initial Sales Charge. The initial sales charge, which you will pay at
the time of purchase, is equal to the difference between the maximum
sales charge of 2.95% of the Public Offering Price and the sum of the
maximum remaining deferred sales charge and creation and development fee
(initially $.195 per Unit). This initial sales charge is equal to
approximately 1.00% of the Public Offering Price of a Unit, but will
vary from 1.00% depending on the purchase price of your Units and as
deferred sales charge and creation and development fee payments are
made. When the Public Offering Price per Unit exceeds $10.00, the
initial sales charge will exceed 1.00% of the Public Offering Price.
Monthly Deferred Sales Charge. In addition, three monthly deferred sales
charges of approximately $.0484 per Unit will be deducted from a Trust's
assets on approximately the twentieth day of each month from April 20,
2009 through June 19, 2009. If you buy Units at a price of less than
$10.00 per Unit, the dollar amount of the deferred sales charge will not
change, but the deferred sales charge on a percentage basis will be more
than 1.45% of the Public Offering Price.
Creation and Development Fee.
As Sponsor, we will also receive, and the Unit holders will pay, a
creation and development fee. See "Expenses and Charges" for a
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description of the services provided for this fee. The creation and
development fee is a charge of $.050 per Unit collected at the end of
the initial offering period. If you buy Units at a price of less than
$10.00 per Unit, the dollar amount of the creation and development fee
will not change, but the creation and development fee on a percentage
basis will be more than 0.50% of the Public Offering Price.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below) the maximum sales charge is reduced, as
follows:
Your maximum Dealer
If you invest sales charge concession
(in thousands)*: will be: will be:
________________ ____________ __________
$50 but less than $100 2.70% 2.00%
$100 but less than $250 2.45% 1.75%
$250 but less than $500 2.20% 1.50%
$500 but less than $1,000 1.95% 1.25%
$1,000 or more 1.40% 0.75%
* The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you can combine the Units you purchase
of a Trust with any other same day purchases of other trusts for which
we are Principal Underwriter and are currently in the initial offering
period. In addition, we will also consider Units you purchase in the
name of your spouse or child under 21 years of age to be purchases by
you. The reduced sales charges will also apply to a trustee or other
fiduciary purchasing Units for a single trust estate or single fiduciary
account. You must inform your dealer of any combined purchases before
the sale in order to be eligible for the reduced sales charge.
You may use your Rollover proceeds from a previous series of a Trust,
termination proceeds from other unit investment trusts with a similar
strategy as a Trust, or redemption or termination proceeds from any unit
investment trust we sponsor to purchase Units of a Trust during the
initial offering period at the Public Offering Price less 1.00% (for
purchases of $1,000,000 or more, the maximum sales charge will be
limited to 1.40% of the Public Offering Price), but you will not be
eligible to receive the reduced sales charges described in the above
table. Please note that if you purchase Units of a Trust in this manner
using redemption proceeds from trusts which assess the amount of any
remaining deferred sales charge at redemption, you should be aware that
any deferred sales charge remaining on these units will be deducted from
those redemption proceeds. In order to be eligible for this reduced
sales charge program, the termination or redemption proceeds used to
purchase Units must be derived from a transaction that occurred within
30 days of your Unit purchase. In addition, this program will only be
available for investors that utilize the same broker/dealer (or a
different broker/dealer with appropriate notification) for both the Unit
purchase and the transaction resulting in the receipt of the termination
or redemption proceeds used for the Unit purchase. You may be required
to provide appropriate documentation or other information to your
broker/dealer to evidence your eligibility for this reduced sales charge
program.
Investors purchasing Units through registered broker/dealers who charge
periodic fees in lieu of commissions or who charge for financial
planning, investment advisory or asset management services or provide
these or comparable services as part of an investment account where a
comprehensive "wrap fee" or similar charge is imposed ("Fee Accounts")
will not be assessed the transactional sales charge described in this
section on the purchase of Units in the primary market. Certain Fee
Accounts Unit holders may be assessed transaction or other account fees
on the purchase and/or redemption of such Units by their broker/dealer
or other processing organizations for providing certain transaction or
account activities. Fee Accounts Units are not available for purchase in
the secondary market. We reserve the right to limit or deny purchases of
Units not subject to the transactional sales charge by investors whose
frequent trading activity we determine to be detrimental to the Trusts.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies and dealers may purchase Units at the
Public Offering Price less the applicable dealer concession. Immediate
family members include spouses, children, grandchildren, parents,
grandparents, siblings, mothers-in-law, fathers-in-law, sons-in-law,
daughters-in-law, brothers-in-law and sisters-in-law, and trustees,
custodians or fiduciaries for the benefit of such persons.
The Sponsor and certain dealers may establish a schedule where
employees, officers and directors of such dealers can purchase Units of
a Trust at the Public Offering Price less the established schedule
amount, which is designed to compensate such dealers for activities
relating to the sale of Units (the "Employee Dealer Concession").
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
the maximum sales charge you must pay is less than the applicable
maximum deferred sales charge, including Fee Accounts Units, you will be
credited additional Units with a dollar value equal to the difference
between your maximum sales charge and the maximum deferred sales charge
at the time you buy your Units. The following Trusts offer a
distribution reinvestment option: The Dow(R) Target 5 Portfolio, The
Dow(R) Target Dividend Portfolio, Global Target 15 Portfolio, MSCI EAFE
Target 20 Portfolio, NYSE(R) International Target 25 Portfolio and
Target Diversified Dividend Portfolio. If you elect to have
distributions reinvested into additional Units of such Trusts, in
addition to the reinvestment Units you receive you will also be credited
additional Units with a dollar value at the time of reinvestment
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sufficient to cover the amount of any remaining deferred sales charge
and creation and development fee to be collected on such reinvestment
Units. The dollar value of these additional credited Units (as with all
Units) will fluctuate over time, and may be less on the dates deferred
sales charges or the creation and development fee are collected than
their value at the time they were issued.
The Value of the Securities.
The Evaluator will determine the aggregate underlying value of the
Securities in a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The NASDAQ Stock Market(R), their value is generally based
on the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation, as may be the case with certain foreign Securities listed on
a foreign securities exchange). For purposes of valuing Securities
traded on The NASDAQ Stock Market(R), closing sale price shall mean the
NASDAQ(R) Official Closing Price as determined by The NASDAQ Stock
Market LLC. However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). The Evaluator, at its discretion, may make
adjustments to the prices of Securities held by a Trust if an event
occurs after the close of the market on which a Security normally trades
but before the Evaluation Time, depending on the nature and significance
of the event, consistent with applicable regulatory guidance relating to
fair value pricing. This may occur particularly with respect to foreign
securities held by a Trust in which case the Trust may make adjustments
to the last closing sales price to reflect more accurately the fair
value of the Securities as of the Evaluation Time. If current ask prices
are unavailable, or if available but determined by the Evaluator to not
be appropriate, the valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary. The
aggregate underlying value of non-U.S. listed Securities is computed on
the basis of the relevant currency exchange rate expressed in U.S.
dollars as of the Evaluation Time.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
The Sponsor compensates intermediaries, such as broker/dealers and
banks, for their activities that are intended to result in sales of
Units of the Trusts. This compensation includes dealer concessions
described in the following section and may include additional
concessions and other compensation and benefits to broker/dealers and
other intermediaries.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
reflect a concession or agency commission of 2.25% of the Public
Offering Price per Unit, subject to the reduced concession applicable to
volume purchases as set forth in "Public Offering-Discounts for Certain
Persons." However, for Units subject to a transactional sales charge
which are purchased using redemption or termination proceeds or on
purchases by Rollover Unit holders, this amount will be reduced to 1.3%
of the sales price of these Units (0.75% for purchases of $1,000,000 or
more).
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Eligible dealer firms and other selling agents who, during the previous
consecutive 12-month period through the end of the most recent month,
sold primary market units of unit investment trusts sponsored by us in
the dollar amounts shown below will be entitled to the following
additional sales concession on primary market sales of units during the
current month of unit investment trusts sponsored by us:
Total sales Additional
(in millions) Concession
_____________________ __________
$25 but less than $100 0.050%
$100 but less than $150 0.075%
$150 but less than $250 0.100%
$250 but less than $500 0.115%
$500 but less than $750 0.125%
$750 but less than $1,000 0.130%
$1,000 but less than $1,500 0.135%
$1,500 but less than $2,000 0.140%
$2,000 but less than $3,000 0.150%
$3,000 but less than $4,000 0.160%
$4,000 but less than $5,000 0.170%
$5,000 or more 0.175%
Dealers and other selling agents will not receive a concession on the
sale of Units which are not subject to a transactional sales charge, but
such Units will be included in determining whether the above volume
sales levels are met. Eligible dealer firms and other selling agents
include clearing firms that place orders with First Trust and provide
First Trust with information with respect to the representatives who
initiated such transactions. Eligible dealer firms and other selling
agents will not include firms that solely provide clearing services to
other broker/dealer firms or firms who place orders through clearing
firms that are eligible dealers. We reserve the right to change the
amount of concessions or agency commissions from time to time. Certain
commercial banks may be making Units of the Trusts available to their
customers on an agency basis. A portion of the transactional sales
charge paid by these customers is kept by or given to the banks in the
amounts shown above.
Other Compensation and Benefits to Broker/Dealers.
The Sponsor, at its own expense and out of its own profits, currently
provides additional compensation and benefits to broker/dealers who sell
shares of Units of these Trusts and other First Trust products. This
compensation is intended to result in additional sales of First Trust
products and/or compensate broker/dealers and financial advisors for
past sales. A number of factors are considered in determining whether to
pay these additional amounts. Such factors may include, but are not
limited to, the level or type of services provided by the intermediary,
the level or expected level of sales of First Trust products by the
intermediary or its agents, the placing of First Trust products on a
preferred or recommended product list, access to an intermediary's
personnel, and other factors. The Sponsor makes these payments for
marketing, promotional or related expenses, including, but not limited
to, expenses of entertaining retail customers and financial advisers,
advertising, sponsorship of events or seminars, obtaining information
about the breakdown of unit sales among an intermediary's
representatives or offices, obtaining shelf space in broker/dealer firms
and similar activities designed to promote the sale of the Sponsor's
products. The Sponsor makes such payments to a substantial majority of
intermediaries that sell First Trust products. The Sponsor may also make
certain payments to, or on behalf of, intermediaries to defray a portion
of their costs incurred for the purpose of facilitating Unit sales, such
as the costs of developing or purchasing trading systems to process Unit
trades. Payments of such additional compensation described in this and
the preceding paragraph, some of which may be characterized as "revenue
sharing," may create an incentive for financial intermediaries and their
agents to sell or recommend a First Trust product, including these
Trusts, over products offered by other sponsors or fund companies. These
arrangements will not change the price you pay for your Units. In
addition, as compensation for purchasing a portion of the unit
investment trust business of Citigroup Global Markets Inc. ("CGMI"), we
will pay CGMI a fee based on the dollar amount of proceeds from unit
investment trusts formerly sponsored by CGMI which are invested in
trusts sponsored by us which equates to $3.50 per $1,000 invested. This
payment will be made out of our profits and not from assets of a Trust.
Advertising and Investment Comparisons.
Advertising materials regarding a Trust may discuss several topics,
including: developing a long-term financial plan; working with your
financial professional; the nature and risks of various investment
strategies and unit investment trusts that could help you reach your
financial goals; the importance of discipline; how a Trust operates; how
securities are selected; various unit investment trust features such as
convenience and costs; and options available for certain types of unit
investment trusts. These materials may include descriptions of the
principal businesses of the companies represented in each Trust,
research analysis of why they were selected and information relating to
the qualifications of the persons or entities providing the research
analysis. In addition, they may include research opinions on the economy
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and industry sectors included and a list of investment products
generally appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of a Trust (which
may show performance net of the expenses and charges a Trust would have
incurred) and returns over specified periods of other similar trusts we
sponsor in our advertising and sales materials, with (1) returns on
other taxable investments such as the common stocks comprising various
market indexes, corporate or U.S. Government bonds, bank CDs and money
market accounts or funds, (2) performance data from Morningstar
Publications, Inc. or (3) information from publications such as Money,
The New York Times, U.S. News and World Report, BusinessWeek, Forbes or
Fortune. The investment characteristics of each Trust differ from other
comparative investments. You should not assume that these performance
comparisons will be representative of a Trust's future performance. We
may also, from time to time, use advertising which classifies trusts or
portfolio securities according to capitalization and/or investment style.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum
transactional sales charge per Unit for each Trust less any reduction as
stated in "Public Offering." We will also receive the amount of any
collected creation and development fee. Also, any difference between our
cost to purchase the Securities and the price at which we sell them to a
Trust is considered a profit or loss (see Note 2 of "Notes to Schedules
of Investments"). During the initial offering period, dealers and others
may also realize profits or sustain losses as a result of fluctuations
in the Public Offering Price they receive when they sell the Units.
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES
BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell or
redeem your Units before you have paid the total deferred sales charge
on your Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee (or the FTPS Unit Servicing Agent in the case of FTPS Units)
will notify us of any tender of Units for redemption. If our bid at that
time is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no
later than if they were redeemed by the Trustee. We may tender Units we
hold to the Trustee for redemption as any other Units. If we elect not
to purchase Units, the Trustee (or the FTPS Unit Servicing Agent in the
case of FTPS Units) may sell tendered Units in the over-the-counter
market, if any. However, the amount you will receive is the same as you
would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of the
Trusts from the Income Account of such Trust if funds are available, and
then from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
First Trust Advisors L.P., an affiliate of ours, acts as both Portfolio
Supervisor and Evaluator to the Trusts, and will be compensated for
providing portfolio supervisory services and evaluation services as well
as bookkeeping and other administrative services to the Trusts. In
providing portfolio supervisory services, the Portfolio Supervisor may
purchase research services from a number of sources, which may include
underwriters or dealers of the Trusts. As Sponsor, we will receive
brokerage fees when the Trusts use us (or an affiliate of ours) as agent
in buying or selling Securities. As authorized by the Indenture, the
Trustee may employ a subsidiary or affiliate of the Trustee to act as
broker to execute certain transactions for a Trust. Each Trust will pay
for such services at standard commission rates.
FTP Services LLC, an affiliate of ours, acts as FTPS Unit Servicing
Agent to the Trusts with respect to the Trusts' FTPS Units. FTPS Units
are Units which are purchased and sold through the Fund/SERV(R) trading
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system or on a manual basis through FTP Services LLC. In all other
respects, FTPS Units are identical to other Units. FTP Services LLC will
be compensated for providing shareholder services to the FTPS Units.
The fees payable to First Trust Advisors L.P., FTP Services LLC and the
Trustee are based on the largest aggregate number of Units of a Trust
outstanding at any time during the calendar year, except during the
initial offering period, in which case these fees are calculated based
on the largest number of Units outstanding during the period for which
compensation is paid. These fees may be adjusted for inflation without
Unit holders' approval, but in no case will the annual fee paid to us or
our affiliates for providing a given service to all unit investment
trusts for which we provide such services be more than the actual cost
of providing such services in such year.
As Sponsor, we will receive a fee from each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is a charge of
$.050 per Unit outstanding at the end of the initial offering period.
The Trustee will deduct this amount from a Trust's assets as of the
close of the initial offering period. We do not use this fee to pay
distribution expenses or as compensation for sales efforts. This fee
will not be deducted from your proceeds if you sell or redeem your Units
before the end of the initial offering period.
In addition to a Trust's operating expenses and those fees described
above, the Trusts may also incur the following charges:
- A quarterly license fee (which will fluctuate with a Trust's net asset
value) payable by certain of the Trusts for the use of certain
trademarks and trade names of Dow Jones, MSCI Barra, Standard & Poor's,
The NASDAQ Stock Market LLC, the NYSE and/or Value Line(R).
- All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Sponsor of a
Trust;
- Foreign custodial and transaction fees (which may include compensation
paid to the Trustee or its subsidiaries or affiliates), if any; and/or
- All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trusts. Since the Securities are all common stocks and dividend
income is unpredictable, we cannot guarantee that dividends will be
sufficient to meet any or all expenses of the Trusts. If there is not
enough cash in the Income or Capital Accounts, the Trustee has the power
to sell Securities in a Trust to make cash available to pay these
charges which may result in capital gains or losses to you. See "Tax
Status."
Tax Status
United States Taxation.
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of a Trust. This section is current as of
the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a corporation, a non-U.S. person,
a broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state, local or foreign
tax consequences.
This federal income tax summary is based in part on the advice and
opinion of counsel to the Sponsor. The Internal Revenue Service could
disagree with any conclusions set forth in this section. In addition,
our counsel was not asked to review, and has not reached a conclusion
with respect to the federal income tax treatment of the assets to be
deposited in the Trusts. This may not be sufficient for you to use for
the purpose of avoiding penalties under federal tax law.
As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.
Assets of the Trusts.
Each Trust is expected to hold one or more of the following:
(i) shares of stock in corporations (the "Stocks") that are treated as
equity for federal income tax purposes, and
(ii) equity interests (the "REIT Shares") in real estate investment
trusts ("REITs") that constitute interests in entities treated as real
estate investment trusts for federal income tax purposes.
It is possible that a Trust will also hold other assets, including
assets that are treated differently for federal income tax purposes from
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those described above, in which case you will have federal income tax
consequences different from or in addition to those described in this
section. All of the assets held by a Trust constitute the "Trust
Assets." Neither our counsel nor we have analyzed the proper federal
income tax treatment of a Trust's Assets and thus neither our counsel
nor we have reached a conclusion regarding the federal income tax
treatment of a Trust's Assets.
Trust Status.
If a Trust is at all times operated in accordance with the documents
establishing the Trust and certain requirements of federal income tax
law are met, the Trust will not be taxed as a corporation for federal
income tax purposes. As a Unit owner, you will be treated as the owner
of a pro rata portion of each of the Trust Assets, and as such you will
be considered to have received a pro rata share of income (e.g.,
dividends and capital gains, if any) from each Trust Asset when such
income would be considered to be received by you if you directly owned
the Trust Assets. This is true even if you elect to have your
distributions reinvested into additional Units. In addition, the income
from Trust Assets that you must take into account for federal income tax
purposes is not reduced by amounts used to pay sales charges or Trust
expenses.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Trust Assets, you will generally recognize
gain or loss. If you dispose of your Units or redeem your Units for
cash, you will also generally recognize gain or loss. To determine the
amount of this gain or loss, you must subtract your tax basis in the
related Trust Assets from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each
Trust Asset by apportioning the cost of your Units, including sales
charges, among the Trust Assets ratably according to their values on the
date you acquire your Units. In certain circumstances, however, you may
have to adjust your tax basis after you acquire your Units (for example,
in the case of certain dividends that exceed a corporation's accumulated
earnings and profits, or in the case of certain distributions with
respect to REIT Shares that represent a return of capital, as discussed
below).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 15% (generally 5% for certain taxpayers in the
10% and 15% tax brackets). These capital gains rates are generally
effective for taxable years beginning before January 1, 2011.
Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if
the holding period for the asset is more than one year and is short-term
if the holding period for the asset is one year or less. You must
exclude the date you purchase your Units to determine your holding
period. The tax rates for capital gains realized from assets held for
one year or less are generally the same as for ordinary income. The
Internal Revenue Code, however, treats certain capital gains as ordinary
income in special situations. Capital gain received from assets held for
more than one year that is considered "unrecaptured section 1250 gain"
(which may be the case, for example, with some capital gains
attributable to the REIT Shares) is taxed at a maximum stated tax rate
of 25%. In the case of capital gains dividends, the determination of
which portion of the capital gains dividend, if any, is subject to the
25% tax rate, will be made based on rules prescribed by the United
States Treasury.
Dividends from Stocks.
Certain dividends received with respect to the Stocks may qualify to be
taxed at the same rates that apply to net capital gain (as discussed
above), provided certain holding period requirements are satisfied.
These special rules relating to the taxation of dividends at capital
gains rates generally apply to taxable years beginning before January 1,
2011.
Dividends from REIT Shares.
Some dividends on the REIT Shares may be designated as "capital gain
dividends," generally taxable to you as long-term capital gains. If you
hold a Unit for six months or less or if your Trust holds a REIT Share
for six months or less, any loss incurred by you related to the
disposition of such REIT Share will be treated as a long-term capital
loss to the extent of any long-term capital gain distributions received
(or deemed to have been received) with respect to such REIT Share.
Distributions of income or capital gains declared on the REIT Shares in
October, November or December will be deemed to have been paid to you on
December 31 of the year they are declared, even when paid by the REIT
during the following January. Other dividends on the REIT Shares will
generally be taxable to you as ordinary income, although in limited
circumstances, some of the ordinary income dividends from a REIT may
also qualify to be taxed at the same rates that apply to net capital
gains (as discussed above), provided certain holding period requirements
are satisfied. These special rules relating to the taxation of ordinary
income dividends from real estate investment trusts generally apply to
taxable years beginning before January 1, 2011.
Dividends Received Deduction.
Generally, a domestic corporation owning Units in a Trust may be
eligible for the dividends received deduction with respect to such Unit
owner's pro rata portion of certain types of dividends received by such
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Trust from certain domestic corporations. However, a corporation that
owns Units generally will not be entitled to the dividends received
deduction with respect to dividends from most foreign corporations or
from REITs.
Rollovers.
If you elect to be a Rollover Unit holder and have your proceeds from
your Trust rolled over into a future series of such Trust, it is
considered a sale for federal income tax purposes and any gain on the
sale will be treated as a capital gain, and any loss will be treated as
a capital loss. However, any loss you incur in connection with the
exchange of your Units of the Trusts for units of the next series will
generally be disallowed with respect to this deemed sale and subsequent
deemed repurchase, to the extent the two trusts have substantially
identical Trust Assets under the wash sale provisions of the Internal
Revenue Code.
In-Kind Distributions.
Under certain circumstances as described in this prospectus, you may
request an In-Kind Distribution of Trust Assets when you redeem your
Units at any time prior to 30 business days before a Trust's Mandatory
Termination Date. However, this ability to request an In-Kind
Distribution will terminate at any time that the number of outstanding
Units has been reduced to 10% or less of the highest number of Units
issued by a Trust. By electing to receive an In-Kind Distribution, you
will receive Trust Assets plus, possibly, cash. You will not recognize
gain or loss if you only receive whole Trust Assets in exchange for the
identical amount of your pro rata portion of the same Trust Assets held
by a Trust. However, if you also receive cash in exchange for a Trust
Asset or a fractional portion of a Trust Asset, you will generally
recognize gain or loss based on the difference between the amount of
cash you receive and your tax basis in such Trust Asset or fractional
portion.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of your Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by your Trust to the same extent as if you directly
paid the expense. You may be required to treat some or all of the
expenses of your Trust as miscellaneous itemized deductions. Individuals
may only deduct certain miscellaneous itemized deductions to the extent
they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Distributions by your Trust that are treated as U.S. source income
(e.g., dividends received on Stocks of domestic corporations) will
generally be subject to U.S. income taxation and withholding in the case
of Units held by nonresident alien individuals, foreign corporations or
other non-U.S. persons, subject to any applicable treaty. If you are a
foreign investor (i.e., an investor other than a U.S. citizen or
resident or a U.S. corporation, partnership, estate or trust), you may
not be subject to U.S. federal income taxes, including withholding
taxes, on some or all of the income from your Trust or on any gain from
the sale or redemption of your Units, provided that certain conditions
are met. You should consult your tax advisor with respect to the
conditions you must meet in order to be exempt for U.S. tax purposes.
You should also consult your tax advisor with respect to other U.S. tax
withholding and reporting requirements.
Some distributions by your Trust may be subject to foreign withholding
taxes. Any income withheld will still be treated as income to you. Under
the grantor trust rules, you are considered to have paid directly your
share of any foreign taxes that are paid. Therefore, for U.S. tax
purposes, you may be entitled to a foreign tax credit or deduction for
those foreign taxes.
If any U.S. investor is treated as owning directly or indirectly 10% or
more of the combined voting power of the stock of a foreign corporation,
and all U.S. shareholders of that corporation collectively own more than
50% of the vote or value of the stock of that corporation, the foreign
corporation may be treated as a controlled foreign corporation (a
"CFC"). If you own 10% or more of a CFC (through a Trust and in
combination with your other investments) you will be required to include
certain types of the CFC's income in your taxable income for federal
income tax purposes whether or not such income is distributed to your
Trust or to you.
Based on the advice of Carter Ledyard & Milburn, LLP, special counsel to
the Trusts for New York tax matters, under the existing income tax laws
of the State and City of New York, assuming that the Trusts are not
treated as corporations for federal income tax purposes, the Trusts will
not be taxed as corporations for New York State and New York City tax
purposes, and the income of the Trusts will be treated as the income of
the Unit holders in the same manner as for federal income tax purposes.
You should consult your tax advisor regarding potential foreign, state
or local taxation with respect to your Units.
United Kingdom Taxation.
The following summary describes certain important U.K. tax consequences
for certain U.S. resident Unit holders who hold Units in the Global
Target 15 Portfolio, the MSCI EAFE Target 20 Portfolio, the Target
Dividend Multi-Strategy Portfolio or the Target VIP Conservative Equity
Portfolio as capital assets. This summary is intended to be a general
guide only and is subject to any changes in law interpretation or
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practice occurring after the date of this prospectus. You should consult
your own tax advisor about your particular circumstances.
Taxation of Dividends. A U.K. resident individual who receives a
dividend from a U.K. company is generally entitled to a tax credit which
is offset against U.K. income tax liabilities.
As a U.S. resident Unit holder, you will not be able to claim any refund
of the tax credit for dividends paid by U.K. companies.
Taxation of Capital Gains. U.S. investors who are neither resident nor
ordinarily resident for U.K. tax purposes in the United Kingdom will not
generally be liable for U.K. tax on gains arising on the disposal of
Units in the Global Target 15 Portfolio, the MSCI EAFE Target 20
Portfolio, the Target Dividend Multi-Strategy Portfolio or the Target
VIP Conservative Equity Portfolio. However, they may be liable if, in
the case of corporate holders, such persons carry on a trade in the U.K.
through a permanent establishment, or in the case of individual holders,
such persons carry on a trade, profession or vocation in the U.K.
through a branch or agency and the Units are used, held or acquired for
the purposes of such a trade, profession or vocation or such branch or
agency or permanent establishment as the case may be. Individual U.S.
investors may also be liable if they have previously been resident or
ordinarily resident in the United Kingdom and become resident or
ordinarily resident in the United Kingdom in the future.
Inheritance Tax. Individual U.S. investors who, for the purposes of the
Estate and Gift Tax Convention between the United States and the United
Kingdom, are domiciled in the United States and who are not U.K.
nationals will generally not be subject to U.K. inheritance tax on death
or on gifts of the Units made during their lifetimes, provided any
applicable U.S. federal gift or estate tax is paid. They may be subject
to U.K. inheritance tax if the Units form part of the business property
of a U.K. permanent establishment of an enterprise or pertain to a U.K.
fixed base used for the performance of personal services in the United
Kingdom.
Where the Units are held on trust, the Units will generally not be
subject to U.K. inheritance tax if at the time of settlement, the
settlor was domiciled in the United States and was not a national of the
United Kingdom.
Where the Units are subject to both U.K. inheritance tax and U.S.
federal gift or estate tax, one of the taxes could generally be credited
against the other.
Stamp Tax. A sale of Securities listed in the FT Index will generally
result in either U.K. stamp duty or stamp duty reserve tax ("SDRT")
being payable by the purchaser. The Global Target 15 Portfolio, the MSCI
EAFE Target 20 Portfolio, the Target Dividend Multi-Strategy Portfolio
and the Target VIP Conservative Equity Portfolio each paid this tax when
they acquired Securities. When the Global Target 15 Portfolio, the MSCI
EAFE Target 20 Portfolio, the Target Dividend Multi-Strategy Portfolio
or the Target VIP Conservative Equity Portfolio sell Securities, it is
anticipated that any U.K. stamp duty or SDRT will be paid by the
purchaser.
Hong Kong Taxation.
The following summary describes certain important Hong Kong tax
consequences to certain U.S. Unit holders who hold Units in the Global
Target 15 Portfolio, the MSCI EAFE Target 20 Portfolio, the Target
Dividend Multi-Strategy Portfolio or the Target VIP Conservative Equity
Portfolio as capital assets. This summary assumes that you are not
carrying on a trade, profession or business in Hong Kong and that you
have no profits sourced in Hong Kong arising from the carrying on of
such trade, profession or business. This summary is intended to be a
general guide only and is subject to any changes in Hong Kong or U.S.
law occurring after the date of this prospectus and you should consult
your own tax advisor about your particular circumstances.
Taxation of Dividends. Dividends you receive from the Global Target 15
Portfolio, the MSCI EAFE Target 20 Portfolio, the Target Dividend Multi-
Strategy Portfolio or the Target VIP Conservative Equity Portfolio
relating to Hong Kong issuers are not taxable and therefore will not be
subject to the deduction of any withholding tax.
Profits Tax. Unless you are carrying on a trade, profession or business
in Hong Kong you will not be subject to profits tax imposed by Hong Kong
on any gain or profits made on the realization or other disposal of your
Units.
Estate Duty. Units of the Global Target 15 Portfolio, the MSCI EAFE
Target 20 Portfolio, the Target Dividend Multi-Strategy Portfolio or the
Target VIP Conservative Equity Portfolio do not give rise to Hong Kong
estate duty liability.
Retirement Plans
You may purchase Units of the Trusts for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
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some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. For purposes of record-keeping, the Trustee will
treat the FTPS Unit Servicing Agent as sole Record Owner of FTPS Units
on its books. The FTPS Unit Servicing Agent will keep a record of all
individual FTPS Unit holders, the actual Record Owners of such Units, on
its books. It is your responsibility to notify the Trustee (or the FTPS
Unit Servicing Agent in the case of FTPS Units) when you become Record
Owner, but normally your broker/dealer provides this notice. You may
elect to hold your Units in either certificated or uncertificated form.
All Fee Accounts Units and FTPS Units, however, will be held in
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with signature
guaranteed by an eligible institution. In certain cases the Trustee may
require additional documentation before they will transfer or redeem
your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee (or the FTPS
Unit Servicing Agent in the case of FTPS Units) will establish an
account for you and credit your account with the number of Units you
purchase. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee (or the FTPS Unit Servicing
Agent in the case of FTPS Units) will send you:
- A written initial transaction statement containing a description of
your Trust;
- A list of the number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee (or the FTPS Unit
Servicing Agent in the case of FTPS Units) will provide you with a
statement detailing the per Unit amount of income (if any) distributed.
After the end of each calendar year, the Trustee (or the FTPS Unit
Servicing Agent in the case of FTPS Units) will provide you with the
following information:
- A summary of transactions in your Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- Amounts of income and capital distributed during the year.
You may request from the Trustee (or the FTPS Unit Servicing Agent in
the case of FTPS Units) copies of the evaluations of the Securities as
prepared by the Evaluator to enable you to comply with federal and state
tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital or capital gain dividends, are
credited to the Capital Account of such Trust. Dividends received on
foreign Securities, if any, are converted into U.S. dollars at the
applicable exchange rate.
The Trustee will distribute money from the Income and Capital Accounts,
as determined at the monthly Record Date, monthly on the twenty-fifth
day of each month to Unit holders of record on the tenth day of such
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month provided the aggregate amount, exclusive of sale proceeds,
available for distribution in the Income and Capital Accounts equals at
least 0.1% of the net asset value of the Trust. Undistributed money in
the Income and Capital Accounts will be distributed in the next month in
which the aggregate amount available for distribution, exclusive of sale
proceeds, equals or exceeds 0.1% of the net asset value of a Trust. See
"Summary of Essential Information." No income distribution will be paid
if accrued expenses of a Trust exceed amounts in the Income Account on
the Distribution Dates. Distribution amounts will vary with changes in a
Trust's fees and expenses, in dividends received and with the sale of
Securities. The Trustee will distribute sale proceeds in the Capital
Account, net of amounts designated to meet redemptions, pay the deferred
sales charge and creation and development fee or pay expenses, on the
twenty-fifth day of each month to Unit holders of record on the tenth
day of such month provided the amount equals at least $1.00 per 100
Units. If the Trustee does not have your TIN, it is required to withhold
a certain percentage of your distribution and deliver such amount to the
IRS. You may recover this amount by giving your TIN to the Trustee, or
when you file a tax return. However, you should check your statements to
make sure the Trustee has your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, unless you are a
Rollover Unit holder, you will receive the pro rata share of the money
from the sale of the Securities. All Unit holders will receive a pro
rata share of any other assets remaining in their Trust, after deducting
any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of that Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of certain Trusts by notifying the Trustee (or the FTPS Unit Servicing
Agent in the case of FTPS Units) at least 10 days before any Record
Date. Each later distribution of income and/or capital on your Units
will be reinvested by the Trustee into additional Units of such Trusts.
There is no sales charge on Units acquired through the Distribution
Reinvestment Option, as discussed under "Public Offering." This option
may not be available in all states. Each reinvestment plan is subject to
availability or limitation by the Sponsor and each broker/dealer or
selling firm. The Sponsor or broker/dealers may suspend or terminate the
offering of a reinvestment plan at any time. Please contact your
financial professional for additional information. PLEASE NOTE THAT
EVEN IF YOU REINVEST DISTRIBUTIONS, THEY ARE STILL CONSIDERED
DISTRIBUTIONS FOR INCOME TAX PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
the address set forth on the back cover of this prospectus. If your
Units are uncertificated, you need only deliver a request for redemption
to the Trustee (or the FTPS Unit Servicing Agent in the case of FTPS
Units). In either case, the certificates or the redemption request must
be properly endorsed with proper instruments of transfer and signature
guarantees as explained in "Rights of Unit Holders-Unit Ownership" (or
by providing satisfactory indemnity if the certificates were lost,
stolen, or destroyed). No redemption fee will be charged, but you are
responsible for any governmental charges that apply. Certain
broker/dealers may charge a transaction fee for processing redemption
requests. Units redeemed directly through the Trustee (or the FTPS Unit
Servicing Agent in the case of FTPS Units) are not subject to such
transaction fees. Three business days after the day you tender your
Units (the "Date of Tender") you will receive cash in an amount for each
Unit equal to the Redemption Price per Unit calculated at the Evaluation
Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee (or
the FTPS Unit Servicing Agent in the case of FTPS Units) receives your
certificates or redemption request (if such day is a day the NYSE is
open for trading). However, if your certificates or redemption request
are received after 4:00 p.m. Eastern time (or after any earlier closing
time on a day on which the NYSE is scheduled in advance to close at such
earlier time), the Date of Tender is the next day the NYSE is open for
trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of a Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
redemption will be taken from the Capital Account of a Trust. The IRS
will require the Trustee to withhold a portion of your redemption
proceeds if the Trustee does not have your TIN as generally discussed
under "Income and Capital Distributions."
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If you tender at least 2,500 Units of The Dow(R) Target 5 Portfolio, The
Dow(R) Target Dividend Portfolio, The Nasdaq (R) Target 15 Portfolio,
NYSE(R) International Target 25 Portfolio, The S&P Target 24 Portfolio,
S&P Target SMid 60 Portfolio, Target Diversified Dividend Portfolio,
Target Double Play Portfolio, Target Growth Portfolio, Target Mega-Cap
Portfolio, Target Small-Cap Portfolio, Value Line(R) Diversified Target
40 Portfolio or Value Line(R) Target 25 Portfolio; or 5,000 Units of
Target 50/50 Portfolio, Target Dividend Multi-Strategy Portfolio, Target
Long-Term Growth Portfolio or Target VIP Conservative Equity Portfolio
or such other amount as required by your broker/dealer, for redemption,
rather than receiving cash, you may elect to receive an In-Kind
Distribution in an amount equal to the Redemption Price per Unit by
making this request in writing to the Trustee at the time of tender.
However, to be eligible to participate in the In-Kind Distribution
option at redemption, Fee Accounts Unit holders must hold their Units
through the end of the initial offering period. The In-Kind Distribution
option is generally not available to FTPS Unit holders. No In-Kind
Distribution requests submitted during the 30 business days prior to a
Trust's Mandatory Termination Date will be honored. Where possible, the
Trustee will make an In-Kind Distribution by distributing each of the
Securities in book-entry form to your bank or broker/dealer account at
the Depository Trust Company. This option is generally eligible only for
stocks traded and held in the United States, thus excluding most foreign
Securities. The Trustee will subtract any customary transfer and
registration charges from your In-Kind Distribution. As a tendering Unit
holder, you will receive your pro rata number of whole shares of the
eligible Securities that make up the portfolio, and cash from the
Capital Account equal to the non-eligible Securities and fractional
shares to which you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of a Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate underlying value of the Securities held in that Trust;
and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of such Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of such Trust, if any;
4. cash held for distribution to Unit holders of record of such Trust as
of the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by such Trust; and
dividing
1. the result by the number of outstanding Units of such Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, during the
initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Investing in a New Trust
Each Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When each Trust is
about to terminate, you may have the option to roll your proceeds into
the next series of a Trust (the "New Trusts") if one is available. We
intend to create the New Trusts in conjunction with the termination of
the Trusts and plan to apply the same strategy we used to select the
portfolio for the Trusts to the New Trusts.
If you wish to have the proceeds from your Units rolled into a New Trust
you must notify the Trustee (or the FTPS Unit Servicing Agent in the
case of FTPS Units) in writing of your election by the "Rollover
Notification Date" stated in the "Summary of Essential Information." If
you make this election you will be considered a "Rollover Unit holder,"
and your Units will be redeemed and the underlying Securities sold by
the Trustee, in its capacity as "Distribution Agent," during the
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"Special Redemption and Liquidation Period" set forth in the "Summary of
Essential Information." The Distribution Agent may engage us or other
brokers as its agent to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of a New Trust or trust with a similar investment
strategy that you have selected, provided such trusts are registered and
being offered. Accordingly, proceeds may be uninvested for up to several
days. Units purchased with rollover proceeds will generally be purchased
subject to the maximum remaining deferred sales charge and creation and
development fee on such units (currently expected to be $.195 per unit),
but not the initial sales charge. Units purchased using proceeds from
Fee Accounts Units will generally not be subject to any transactional
sales charge.
We intend to create New Trust units as quickly as possible, depending on
the availability of the securities contained in a New Trust's portfolio.
Rollover Unit holders will be given first priority to purchase New Trust
units. We cannot, however, assure the exact timing of the creation of
New Trust units or the total number of New Trust units we will create.
Any proceeds not invested on behalf of Rollover Unit holders in New
Trust units will be distributed within a reasonable time after such
occurrence. Although we believe that enough New Trust units can be
created, monies in a New Trust may not be fully invested on the next
business day.
Please note that there are certain tax consequences associated with
becoming a Rollover Unit holder. See "Tax Status." We may modify, amend
or terminate this rollover option upon 60 days notice.
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders;
- The sale of Securities is necessary or advisable in order to maintain
the qualification of a Trust as a "regulated investment company" in the
case of a Trust which has elected to qualify as such;
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust; or
As a result of the ownership of the Security, a Trust or its Unit
holders would be a direct or indirect shareholder of a passive foreign
investment company.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of a Trust, will reject any offer for new or exchanged securities
or property in exchange for a Security, such as those acquired in a
merger or other transaction. If such exchanged securities or property
are nevertheless acquired by a Trust, at our instruction they will
either be sold or held in such Trust. In making the determination as to
whether to sell or hold the exchanged securities or property we may get
advice from the Portfolio Supervisor. Any proceeds received from the
sale of Securities, exchanged securities or property will be credited to
the Capital Account of a Trust for distribution to Unit holders or to
meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for the Trusts to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the 1940 Act.
The Trustee may sell Securities designated by us, or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
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- To make any amendment required by any governmental agency; or
- To make other changes determined not to be adverse to your best
interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, each Trust will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trusts may be terminated earlier:
- Upon the consent of 100% of the Unit holders of a Trust;
- If the value of the Securities owned by such Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire sales charge; however, termination of a Trust
before the Mandatory Termination Date for any other stated reason will
result in all remaining unpaid deferred sales charges on your Units
being deducted from your termination proceeds. For various reasons,
including Unit holders' participation as Rollover Unit holders, a Trust
may be reduced below the Discretionary Liquidation Amount and could
therefore be terminated before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you do not elect to participate in the Rollover Option, you will
receive a cash distribution from the sale of the remaining Securities,
along with your interest in the Income and Capital Accounts, within a
reasonable time after your Trust is terminated. The Trustee will deduct
from a Trust any accrued costs, expenses, advances or indemnities
provided for by the Indenture, including estimated compensation of the
Trustee and costs of liquidation and any amounts required as a reserve
to pay any taxes or other governmental charges.
Information on the Sponsor, Trustee,
FTPS Unit Servicing Agent and Evaluator
The Sponsor.
We, First Trust Portfolios L.P., specialize in the underwriting, trading
and wholesale distribution of unit investment trusts under the "First
Trust" brand name and other securities. An Illinois limited partnership
formed in 1991, we took over the First Trust Product line and act as
Sponsor for successive series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
The First Trust product line commenced with the first insured unit
investment trust in 1974. To date we have deposited more than $105
billion in First Trust unit investment trusts. Our employees include a
team of professionals with many years of experience in the unit
investment trust industry.
We are a member of FINRA and the Securities Investor Protection
Corporation. Our principal offices are at 120 East Liberty Drive,
Wheaton, Illinois 60187; telephone number (800) 621-1675. As of December
31, 2007, the total consolidated partners' capital of First Trust
Portfolios L.P. and subsidiaries was $56,998,038 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is The Bank of New York Mellon, a trust company organized
under the laws of New York. The Bank of New York Mellon has its unit
investment trust division offices at 101 Barclay Street, New York, New
York 10286, telephone (800) 813-3074. If you have questions regarding
your account or your Trust, please contact the Trustee at its unit
Page 87
investment trust division offices or your financial adviser. The Sponsor
does not have access to individual account information. The Bank of New
York Mellon is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of
Governors of the Federal Reserve System, and its deposits are insured by
the Federal Deposit Insurance Corporation to the extent permitted by law.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
The FTPS Unit Servicing Agent.
The FTPS Unit Servicing Agent is FTP Services LLC, an Illinois limited
liability company formed in 2005 and an affiliate of the Sponsor. FTP
Services LLC acts as record keeper, shareholder servicing agent and
distribution agent for Units which are purchased and sold through the
Fund/SERV(R) trading system or on a manual basis through FTP Services
LLC. FTP Services LLC provides FTPS Units with administrative and
distribution related services as described in this prospectus. The FTPS
Unit Servicing Agent's address is 120 East Liberty Drive, Wheaton,
Illinois 60187. If you have questions regarding the FTPS Units, you may
call the FTPS Unit Servicing Agent at (866) 514-7768. The FTPS Unit
Servicing Agent has not participated in selecting the Securities; it
only provides administrative services to the FTPS Units. Fund/SERV(R) is
a service of National Securities Clearing Corporation, a subsidiary of
The Depository Trust & Clearing Corporation.
Limitations of Liabilities of Sponsor, FTPS Unit Servicing Agent and
Trustee.
Neither we, the FTPS Unit Servicing Agent nor the Trustee will be liable
for taking any action or for not taking any action in good faith
according to the Indenture. We will also not be accountable for errors
in judgment. We will only be liable for our own willful misfeasance, bad
faith, gross negligence (ordinary negligence in the FTPS Unit Servicing
Agent and Trustee's case) or reckless disregard of our obligations and
duties. The Trustee is not liable for any loss or depreciation when the
Securities are sold. If we fail to act under the Indenture, the Trustee
may do so, and the Trustee will not be liable for any action it takes in
good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trusts; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 120 East Liberty Drive, Wheaton, Illinois 60187.
The Trustee, Sponsor, FTPS Unit Servicing Agent and Unit holders may
rely on the accuracy of any evaluation prepared by the Evaluator. The
Evaluator will make determinations in good faith based upon the best
available information, but will not be liable to the Trustee, Sponsor,
FTPS Unit Servicing Agent or Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler LLP, 111 W. Monroe St., Chicago,
Illinois, 60603. They have passed upon the legality of the Units offered
hereby and certain matters relating to federal tax law. Carter Ledyard &
Milburn LLP acts as the Trustee's counsel, as well as special New York
tax counsel for the Trusts. Linklaters LLP acts as special United
Kingdom tax counsel for the Global Target 15 Portfolio.
Experts.
The Trusts' statements of net assets, including the schedules of
investments, as of the opening of business on the Initial Date of
Deposit included in this prospectus, have been audited by Deloitte &
Touche LLP, an independent registered public accounting firm, as stated
in their report appearing herein, and are included in reliance upon the
report of such firm given upon their authority as experts in accounting
and auditing.
Supplemental Information.
If you write or call the Sponsor, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
The NASDAQ Stock Market LLC.
Neither The Nasdaq(R) Target 15 Portfolio nor the Target 50/50 Portfolio
is sponsored, endorsed, sold or promoted by The NASDAQ Stock Market LLC
Page 88
(including its affiliates) (Nasdaq, with its affiliates, is referred to
as the "Corporations"). The Corporations have not passed on the legality
or suitability of, or the accuracy or adequacy of descriptions and
disclosures relating to The Nasdaq(R) Target 15 Portfolio or the Target
50/50 Portfolio. The Corporations make no representation or warranty,
express or implied, to the owners of Units of The Nasdaq(R) Target 15
Portfolio or the Target 50/50 Portfolio or any member of the public
regarding the advisability of investing in securities generally or in
The Nasdaq(R) Target 15 Portfolio or the Target 50/50 Portfolio
particularly, or the ability of the Nasdaq-100 Index(R) to track general
stock market performance. The Corporations' only relationship to the
Sponsor ("Licensee") is in the licensing of the Nasdaq 100(R), Nasdaq-
100 Index(R) and Nasdaq(R) trademarks or service marks, and certain
trade names of the Corporations and the use of the Nasdaq-100 Index(R)
which is determined, composed and calculated by Nasdaq without regard to
Licensee, The Nasdaq(R) Target 15 Portfolio or the Target 50/50
Portfolio. Nasdaq has no obligation to take the needs of the Licensee,
the owners of Units of The Nasdaq(R) Target 15 Portfolio or the Target
50/50 Portfolio into consideration in determining, composing or
calculating the Nasdaq-100 Index(R). The Corporations are not
responsible for and have not participated in the determination of the
timing of, prices at or quantities of The Nasdaq(R) Target 15 Portfolio
or the Target 50/50 Portfolio to be issued or in the determination or
calculation of the equation by which The Nasdaq(R) Target 15 Portfolio
or the Target 50/50 Portfolio is to be converted into cash. The
Corporations have no liability in connection with the administration,
marketing or trading of The Nasdaq(R) Target 15 Portfolio or the Target
50/50 Portfolio.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. THE
CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED BY THE LICENSEE, OWNERS OF THE TARGET VIP AGGRESSIVE EQUITY
PORTFOLIO OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100
INDEX(R) OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS
OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIM ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY
OF SUCH DAMAGES.
MSCI EAFE Index(R).
THE MSCI EAFE TARGET 20 PORTFOLIO IS NOT SPONSORED, ENDORSED, SOLD OR
PROMOTED BY MSCI INC. ("MSCI"), ANY OF ITS AFFILIATES, ANY OF ITS
INFORMATION PROVIDERS OR ANY OTHER THIRD PARTY INVOLVED IN, OR RELATED
TO, COMPILING, COMPUTING OR CREATING ANY MSCI INDEX (COLLECTIVELY, THE
"MSCI PARTIES"). THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI.
MSCI AND THE MSCI INDEX NAMES ARE SERVICE MARK(S) OF MSCI OR ITS
AFFILIATES AND HAVE BEEN LICENSED FOR USE FOR CERTAIN PURPOSES BY FIRST
TRUST PORTFOLIOS L.P. NONE OF THE MSCI PARTIES MAKES ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, TO THE ISSUER OR OWNERS OF THIS TRUST
OR ANY OTHER PERSON OR ENTITY REGARDING THE ADVISABILITY OF INVESTING IN
TRUSTS GENERALLY OR IN THIS TRUST PARTICULARLY OR THE ABILITY OF ANY
MSCI INDEX TO TRACK CORRESPONDING STOCK MARKET PERFORMANCE. MSCI OR ITS
AFFILIATES ARE THE LICENSORS OF CERTAIN TRADEMARKS, SERVICE MARKS AND
TRADE NAMES AND OF THE MSCI INDEXES WHICH ARE DETERMINED, COMPOSED AND
CALCULATED BY MSCI WITHOUT REGARD TO THIS TRUST OR THE ISSUER OR OWNERS
OF THIS TRUST OR ANY OTHER PERSON OR ENTITY. NONE OF THE MSCI PARTIES
HAS ANY OBLIGATION TO TAKE THE NEEDS OF THE ISSUER OR OWNERS OF THIS
TRUST OR ANY OTHER PERSON OR ENTITY INTO CONSIDERATION IN DETERMINING,
COMPOSING OR CALCULATING THE MSCI INDEXES. NONE OF THE MSCI PARTIES IS
RESPONSIBLE FOR OR HAS PARTICIPATED IN THE DETERMINATION OF THE TIMING
OF, PRICES AT, OR QUANTITIES OF THIS TRUST TO BE ISSUED OR IN THE
DETERMINATION OR CALCULATION OF THE EQUATION BY OR THE CONSIDERATION
INTO WHICH THE UNITS OF THIS TRUST ARE REDEEMABLE. FURTHER, NONE OF THE
MSCI PARTIES HAS ANY OBLIGATION OR LIABILITY TO THE ISSUER OR OWNERS OF
Page 89
THIS TRUST OR ANY OTHER PERSON OR ENTITY IN CONNECTION WITH THE
ADMINISTRATION, MARKETING OR OFFERING OF THIS TRUST.
ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN
THE CALCULATION OF THE MSCI INDEXES FROM SOURCES THAT MSCI CONSIDERS
RELIABLE, NONE OF THE MSCI PARTIES WARRANTS OR GUARANTEES THE
ORIGINALITY, ACCURACY AND/OR THE COMPLETENESS OF ANY MSCI INDEX OR ANY
DATA INCLUDED THEREIN. NONE OF THE MSCI PARTIES MAKES ANY WARRANTY,
EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ISSUER OF THIS
TRUST, OWNERS OF THIS TRUST, OR ANY OTHER PERSON OR ENTITY, FROM THE USE
OF ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN. NONE OF THE MSCI PARTIES
SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS OF
OR IN CONNECTION WITH ANY MSCI INDEX OR ANY DATA INCLUDED THEREIN.
FURTHER, NONE OF THE MSCI PARTIES MAKES ANY EXPRESS OR IMPLIED
WARRANTIES OF ANY KIND, AND THE MSCI PARTIES HEREBY EXPRESSLY DISCLAIM
ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
WITH RESPECT TO EACH MSCI INDEX AND ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL ANY OF THE MSCI PARTIES
HAVE ANY LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE,
CONSEQUENTIAL OR ANY OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Page 90
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Page 91
First Trust(R)
Dow(R) Target 5 1Q '09 - Term 3/31/10
Dow(R) Target Dvd. 1Q '09 - Term 3/31/10
Global Target 15 1Q '09 - Term 3/31/10
MSCI EAFE Target 20 1Q '09 - Term 3/31/10
Nasdaq(R) Target 15 1Q '09 - Term 3/31/10
NYSE(R) Intl. Target 25 1Q '09 - Term 3/31/10
S&P Target 24 1Q '09 - Term 3/31/109
S&P Target SMid 60 1Q '09 - Term 3/31/10
Target 50/50 1Q '09 - Term 3/31/10
Target Divsd. Dvd. 1Q '09 - Term 3/31/10
Target Dvd. Multi-Strat. 1Q '09 - Term 3/31/10
Target Dbl. Play 1Q '09 - Term 3/31/10
Target Growth 1Q '09 - Term 3/31/10
Target Long-Term Growth 1Q '09 - Term 3/31/10
Target Mega-Cap 1Q '09 - Term 3/31/10
Target Small-Cap 1Q '09 - Term 3/31/10
Target VIP Cons. Eqty. 1Q '09 - Term 3/31/109
Value Line(R) Divsd. Target 40 1Q '09 - Term 3/31/10
Value Line(R) Target 25 1Q '09 - Term 3/31/10
FT 1900
Sponsor:
First Trust Portfolios L.P.
Member SIPC o Member FINRA
120 East Liberty Drive
Wheaton, Illinois 60187
1-800-621-1675
FTPS Unit Servicing Agent: Trustee:
FTP Services LLC The Bank of New York Mellon
120 East Liberty Drive 101 Barclay Street
Wheaton, Illinois 60187 New York, New York 10286
1-866-514-7768 1-800-813-3074
24-Hour Pricing Line:1-800-446-0132
________________________
When Units of the Trusts are no longer available, this prospectus may be
used as a preliminary prospectus for a future series, in which case you
should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES
UNTIL THAT SERIES HAS BECOME EFFECTIVE WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SECURITIES CAN BE SOLD IN ANY STATE WHERE A SALE WOULD BE
ILLEGAL.
________________________
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the SEC in Washington, D.C.
under the:
- Securities Act of 1933 (file no. 333-153812) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the SEC's Public Reference Room in Washington
D.C. Information regarding the operation of the SEC's Public Reference
Room may be obtained by calling the SEC at
1-202-942-8090.
Information about the Trusts is available on the EDGAR Database on the
SEC's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the SEC
100 F Street, N.E.; Washington, D.C. 20549
e-mail address: publicinfo@sec.gov
December 31, 2008
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 92
First Trust(R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 1900 not found in the prospectus for the Trusts. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trusts. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing.
This Information Supplement is dated December 31, 2008. Capitalized terms
have been defined in the prospectus.
Table of Contents
Dow Jones & Company, Inc. 2
Standard & Poor's 2
The NASDAQ Stock Market LLC 3
Value Line Publishing, Inc. 3
New York Stock Exchange 3
Risk Factors
Securities 4
Dividends 4
Hong Kong 4
United Kingdom 5
Foreign Issuers 6
Emerging Markets 6
Exchange Rates 7
REITs 11
Small-Cap Companies 12
Litigation
Microsoft Corporation 12
Tobacco Industry 13
Concentrations
Consumer Products 14
Energy 14
Financials 15
Health Care 18
Industrials 19
Information Technology 19
Materials 20
Securities
The Dow(R) DART 5 Strategy Stocks 20
The Dow(R) DART 10 Strategy Stocks 20
The Dow(R) Target 5 Strategy Stocks 21
The Dow(R) Target Dividend Strategy Stocks 21
European Target 20 Strategy Stocks 23
Global Target 15 Strategy Stocks 24
MSCI EAFE Target 20 Strategy Stocks 25
The Nasdaq(R) Target 15 Strategy Stocks 26
NYSE(R) International Target 25 Strategy Stocks 27
The S&P Target 24 Strategy Stocks 29
S&P Target SMid 60 Strategy Stocks 30
Target Diversified Dividend Strategy Stocks 33
Target Growth Strategy Stocks 36
Target Mega-Cap Strategy Stocks 37
Target Small-Cap Strategy Stocks 39
Value Line(R) Diversified Target 40 Strategy Stocks 41
Value Line(R) Target 25 Strategy Stocks 43
Page 1
Dow Jones & Company, Inc.
The Trusts are not sponsored, endorsed, sold or promoted by Dow Jones &
Company, Inc. ("Dow Jones"). Dow Jones makes no representation or
warranty, express or implied, to the owners of the Trusts or any member
of the public regarding the advisability of investing in securities
generally or in the Trusts particularly. Dow Jones' only relationship to
the Sponsor is the licensing of certain trademarks, trade names and
service marks of Dow Jones, the Dow Jones Industrial Average(sm) and the
Dow Jones U.S. Select Dividend Index(sm), which are determined, composed
and calculated by Dow Jones without regard to the Sponsor or the Trusts.
Dow Jones has no obligation to take the needs of the Sponsor or the
owners of the Trusts into consideration in determining, composing or
calculating the Dow Jones Industrial Average(sm) and the Dow Jones U.S.
Select Dividend Index(sm). Dow Jones is not responsible for and has not
participated in the determination of the timing of, prices at, or
quantities of the Trusts to be issued or in the determination or
calculation of the equation by which the Trusts are to be converted into
cash. Dow Jones has no obligation or liability in connection with the
administration, marketing or trading of the Trusts.
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
DOW JONES INDUSTRIAL AVERAGE(SM), THE DOW JONES U.S. SELECT DIVIDEND
INDEX(sm) OR ANY DATA INCLUDED THEREIN AND DOW JONES SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW JONES
MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
THE SPONSOR, OWNERS OF THE TRUSTS, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE DOW JONES INDUSTRIAL AVERAGE(SM), THE DOW JONES U.S. SELECT
DIVIDEND INDEX(sm) OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE DOW JONES INDUSTRIAL AVERAGE(SM), THE DOW JONES U.S. SELECT
DIVIDEND INDEX(sm) OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF
THE FOREGOING, IN NO EVENT SHALL DOW JONES HAVE ANY LIABILITY FOR ANY
LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES,
EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
Page 2
Standard & Poor's
The Trusts are not sponsored, endorsed, sold or promoted by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes
no representation or warranty, express or implied, to the owners of the
Trusts or any member of the public regarding the advisability of
investing in securities generally or in the Trusts particularly or the
ability of either the S&P 500 Index, the S&P MidCap 400 Index or the S&P
SmallCap 600 Index to track general stock market performance. S&P's only
relationship to the licensee is the licensing of certain trademarks and
trade names of S&P and of the S&P 500 Index, the S&P MidCap 400 Index and
the S&P SmallCap 600 Index, which are determined, composed and calculated
by S&P without regard to the licensee or the Trusts. S&P has no
obligation to take the needs of the licensee or the owners of the Trusts
into consideration in determining, composing or calculating the S&P 500
Index, the S&P MidCap 400 Index or the S&P SmallCap 600 Index. S&P is not
responsible for and has not participated in the determination of the
prices and amount of the Trusts or the timing of the issuance or sale of
the Trusts or in the determination or calculation of the equation by
which the Trusts are to be converted into cash. S&P has no obligation or
liability in connection with the administration, marketing or trading of
the Trusts.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX, THE S&P MIDCAP 400 INDEX OR THE S&P SMALL CAP 600 INDEX OR ANY
DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE LICENSEE, OWNERS OF THE
TRUSTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX,
THE S&P MIDCAP 400 INDEX OR THE S&P SMALL CAP 600 INDEX OR ANY DATA
INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX, THE S&P
MIDCAP 400 INDEX OR THE S&P SMALL CAP 600 INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P
HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY
THEREOF.
The NASDAQ Stock Market LLC.
The "Nasdaq 100(R)," "Nasdaq-100 Index(R)," and "Nasdaq(R)" are trade or
service marks of The NASDAQ Stock Market LLC (which with its affiliates
is the "Corporations") and are licensed for use by us. Neither The
Nasdaq(R) Target 15 Portfolio nor the Target 50/50 Portfolio have been
passed on by the Corporations as to its legality or suitability. Neither
The Nasdaq(R) Target 15 Portfolio nor the Target 50/50 Portfolio are
issued, endorsed, sold, or promoted by the Corporations. The Corporations
make no warranties and bear no liability with respect to The Nasdaq(R)
Target 15 Portfolio or the Target 50/50 Portfolio.
Value Line Publishing, Inc.
Value Line Publishing, Inc.'s ("VLPI") only relationship to First Trust
Portfolios L.P. and/or First Trust Advisors L.P. is VLPI's licensing to
First Trust Portfolios L.P. and/or First Trust Advisors L.P. of certain
VLPI trademarks and trade names and the Value Line(R) Timeliness(TM)
Ranking System (the "System"), which is composed by VLPI without regard
to First Trust Portfolios L.P. or First Trust Advisors L.P., this
Product or any investor. VLPI has no obligation to take the needs of
First Trust Portfolios L.P. and/or First Trust Advisors L.P. or any
investor in the Product into consideration in composing the System. The
Product results may differ from the hypothetical or published results of
the Value Line(R) Timeliness(TM) Ranking System. VLPI is not responsible
for and has not participated in the determination of the prices and
composition of the Product or the timing of the issuance for sale of the
Product or in the calculation of the equations by which the Product is
to be converted into cash.
VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING
FROM USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND VLPI
MAKES NO WARRANTY AS TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS THAT
MAY BE ACHIEVED BY USING THE SYSTEM OR ANY INFORMATION OR MATERIALS
GENERATED THEREFROM. VLPI DOES NOT WARRANT THAT THE SYSTEM WILL MEET ANY
REQUIREMENTS OR THAT IT WILL BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES
NOT GUARANTEE ANY USES, INFORMATION, DATA OR OTHER RESULTS GENERATED FROM
THE SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY (I) IN CONNECTION WITH
THE ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCT; OR (II) FOR ANY
LOSS, DAMAGE, COST OR EXPENSE SUFFERED OR INCURRED BY ANY INVESTOR OR
OTHER PERSON OR ENTITY IN CONNECTION WITH THIS PRODUCT, AND IN NO EVENT
SHALL VLPI BE LIABLE FOR ANY LOST PROFITS OR OTHER CONSEQUENTIAL,
SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES IN
CONNECTION WITH THE PRODUCT.
New York Stock Exchange
"NYSE(R)" is a registered trademark of, and "NYSE International 100
Index(SM)" is a service mark of, New York Stock Exchange, Inc. ("NYSE").
NYSE has no relationship to First Trust Portfolios L.P. other than the
licensing of the "NYSE International 100 Index(SM)" and the trademark and
service mark referenced above for use in connection with the NYSE (R)
International Target 25 Portfolio and the Target Long-Term Growth
Portfolio.
NYSE does not: sponsor, endorse, sell or promote the NYSE (R)
International Target 25 Portfolio or the Target Long-Term Growth
Portfolio; recommend that any person invest in the NYSE (R) International
Target 25 Portfolio or the Target Long-Term Growth Portfolio or any other
securities; have any responsibility or liability for or make any decision
about the timing, amount or pricing of the NYSE (R) International Target
25 Portfolio or the Target Long-Term Growth Portfolio; have any
responsibility or liability for the administration, management or
marketing of the NYSE (R) International Target 25 Portfolio or the Target
Long-Term Growth Portfolio; consider the needs of the NYSE (R)
International Target 25 Portfolio or the Target Long- Term Growth
Portfolio or the owners of the NYSE (R) International Target 25 Portfolio
or the Target Long-Term Growth Portfolio in determining, composing or
calculating the NYSE International 100 Index(SM) or have any obligation
to do so.
NYSE will not have any liability in connection with the NYSE (R)
International Target 25 Portfolio or the Target Long-Term Growth
Portfolio. Specifically, NYSE does not make any warranty, express or
implied, and NYSE disclaims any warranty about: the results to be
obtained by the NYSE (R) International Target 25 Portfolio or the Target
Long-Term Growth Portfolio, the owners of the NYSE (R) International
Target 25 Portfolio or the Target Long-Term Growth Portfolio, or any
other relevant person in connection with the use of the Index and the
data included in the Index; the accuracy or completeness of the Index and
its data; the merchantability or fitness for a particular purpose or use
of the Index and its data. NYSE will have no liability for any errors,
omissions or interruptions in the Index or its data. Under no
circumstances will NYSE be liable for any lost profits or indirect,
punitive, special or consequential damages or losses, even if NYSE knows
Page 3
that they might occur. The licensing agreement between First Trust
Portfolios L.P. and NYSE is solely for their benefit and not for the
benefit of the owners of the NYSE (R) International Target 25 Portfolio
or the Target Long-Term Growth Portfolio or any other third parties.
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or the
general condition of the relevant stock market may worsen, and the value
of the Securities and therefore the value of the Units may decline.
Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value, as market
confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors, including expectations regarding
government, economic, monetary and fiscal policies, inflation and
interest rates, economic expansion or contraction, and global or regional
political, economic or banking crises. Both U.S. and foreign markets have
experienced substantial volatility and significant declines recently as a
result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate to
those of creditors of, or holders of debt obligations or preferred stocks
of, such issuers. Shareholders of common stocks of the type held by the
Trusts have a right to receive dividends only when and if, and in the
amounts, declared by the issuer's board of directors and have a right to
participate in amounts available for distribution by the issuer only
after all other claims on the issuer have been paid or provided for.
Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same
degree of protection of capital as do debt securities. The issuance of
additional debt securities or preferred stock will create prior claims
for payment of principal, interest and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay
dividends on its common stock or the rights of holders of common stock
with respect to assets of the issuer upon liquidation or bankruptcy.
Cumulative preferred stock dividends must be paid before common stock
dividends, and any cumulative preferred stock dividend omitted is added
to future dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Hong Kong. Hong Kong, established as a British colony in the 1840's,
reverted to Chinese sovereignty effective July 1, 1997. On such date,
Hong Kong became a Special Administrative Region ("SAR") of China under
the "one country, two systems" principle. Hong Kong's new constitution
became the Basic Law (promulgated by China in 1990). Prior to July 1,
1997, the Hong Kong government followed a laissez-faire policy toward
industry. There were no major import, export or foreign exchange
restrictions. Regulation of business was generally minimal with certain
exceptions, including regulated entry into certain sectors of the economy
and a fixed exchange rate regime by which the Hong Kong dollar has been
pegged to the U.S. dollar. Over the two decades leading up to and through
1996, the gross domestic product (GDP) tripled in real terms, equivalent
to an average annual growth rate of 6%. However, Hong Kong's recent
economic data has not been as encouraging. The economy grew only 0.6% in
2001 because of the world economic downturn, the September 11 events, and
sluggish domestic demand. Economic performance improved only gradually in
2002, with real GDP expanding by a mere 2.3%. Hong Kong has been
undergoing a painful economic adjustment process in the years following
the Asian financial crisis. The economy suffered seriously along with the
collapse of an overheated property market in the years following 1997,
which resulted in the deflation that has persisted for several years
since November 1998, dampening investment and consumption. However, in
the years following 2002, Hong Kong has enjoyed strong economic growth.
Real GDP expanded by 8.6% in 2004, 7.5% in 2005 and 6.8% in 2006.
Additionally, the unemployment rate fell in 2006 to 5.6%. This economic
growth is the result of an increase in private domestic consumption, an
increase in fixed asset and infrastructure spending and continued strong
exports of goods and services. Despite this recent positive performance,
the lasting impact of the Asian financial crisis, as well as current
international economic instability, remains unknown.
Although China committed by treaty to preserve for 50 years the economic
and social freedoms enjoyed in Hong Kong prior to the reversion, the
continuation of the economic system in Hong Kong going forward will be
dependent on the Chinese government, and there can be no assurances that
the commitment made by China regarding Hong Kong will be maintained.
Prior to the reversion, legislation was enacted in Hong Kong designed to
extend democratic voting procedures for Hong Kong's legislature. The
Basic Law stipulates that, after a review in 2007, elections for Chief
Executive and all members of the Legislative Council may be held by
universal suffrage, which is the "ultimate aim" set by the Basic Law.
Page 4
However, China's current administration has taken a hard line on such
steps that it thinks may lead to the democratization of Hong Kong,
calling into question China's commitment to the "one country, two
systems" model and to reform in general. Additionally, Hong Kong recently
proposed legislation to implement Article 23 of the Basic Law, which
stipulates that Hong Kong should enact laws on its own to prohibit any
act of treason, secession, sedition or subversion against the central
government of China. The draft legislation has since been withdrawn due
to local and international concerns, most notably a mass protest rally on
July 1st, 2003, organized in an effort to protect Hong Kong's rights and
freedoms as guaranteed in the Basic Law and to uphold the "one country,
two systems" principle. Any increase in uncertainty as to the future
economic and political status of Hong Kong could have a materially
adverse effect on the value of the Trust. The Sponsor is unable to
predict the level of market liquidity or volatility which may occur as a
result of a change in Hong Kong's economic or political status, both of
which may negatively impact such Trust and the value of the Units.
The currency crisis which affected a majority of Asian markets in mid-
1997 and beyond has forced Hong Kong leaders to address whether to
devalue the Hong Kong dollar or maintain its peg to the U.S. dollar.
During the volatile markets of 1998, the Hong Kong Monetary Authority
(the "HKMA") acquired the common stock of certain Hong Kong issuers
listed on the Hong Kong Stock Exchange in an effort to stabilize the Hong
Kong dollar and thwart currency speculators. Government intervention may
hurt Hong Kong's reputation as a free market and increases concerns that
authorities are not willing to let Hong Kong's currency system function
autonomously. This may undermine confidence in the Hong Kong dollar's peg
to the U.S. dollar. Any downturn in economic growth or increase in the
rate of inflation in China or Hong Kong could have a materially adverse
effect on the value of the Trust.
Securities prices on the Hong Kong Stock Exchange, and specifically the
Hang Seng Index, can be highly volatile and are sensitive to developments
in Hong Kong and China, as well as other world markets. For example, the
Hang Seng Index declined by approximately 31% in October, 1997 as a
result of speculation that the Hong Kong dollar would become the next
victim of the Asian currency crisis, and in 1989, the Hang Seng Index
dropped 1,216 points (approximately 58%) in early June following the
events at Tiananmen Square. During 1994, the Hang Seng Index lost
approximately 31% of its value. From January through August of 1998,
during a period marked by international economic instability and a global
currency crisis, the Hang Seng Index declined by nearly 27%. Due to the
outbreak of the Severe Acute Respiratory Syndrome (SARS) during March to
May of 2003, the Hang Seng Index suffered a significant decrease. Also,
the Hang Seng Index rose approximately 27% from June 2006 until the end
of November 2006, at which time it suffered its largest one-day loss in
five years. The Hang Seng Index is subject to change, and de-listing of
any issues may have an adverse impact on the performance of the Trust,
although de-listing would not necessarily result in the disposal of the
stock of these companies, nor would it prevent the Trust from purchasing
additional de-listed Securities. In recent years, a number of companies
have de-listed from the Hang Seng Index. In addition, as a result of Hong
Kong's reversion to Chinese sovereignty, an increased number of Chinese
companies could become listed on the Hong Kong Stock Exchange, thereby
changing the composition of the stock market and, potentially, the
composition of the Hang Seng Index.
United Kingdom. The emphasis of the United Kingdom's economy is in the
private services sector, which includes the wholesale and retail sector,
banking, finance, insurance and tourism. Services as a whole account for
a majority of the United Kingdom's gross national product and makes a
significant contribution to the country's balance of payments. The
portfolios of the Trusts may contain common stocks of British companies
engaged in such industries as banking, chemicals, building and
construction, transportation, telecommunications and insurance. Many of
these industries may be subject to government regulation, which may have
a materially adverse effect on the performance of their stock. Gross
domestic product (GDP) growth slipped in 2001-03 as the global downturn,
the high value of the pound, and the bursting of the "new economy" bubble
hurt manufacturing and exports. Still, the economy is one of the
strongest in Europe with low inflation, interest rates and unemployment.
The United Kingdom is a member of the European Union (the "EU") which was
created through the formation of the Maastricht Treaty on European Union
in late 1993. The Treaty has had the effect of eliminating most remaining
trade barriers between the 15 member nations and has made Europe one of
the largest common markets in the world. However, the effective
implementation of the Treaty provisions is an ongoing process, and the
rate at which trade barriers continue to be eliminated is uncertain at
this time. Furthermore, the recent rapid political and social change
throughout Europe make the extent and nature of future economic
development in the United Kingdom and Europe and the impact of such
development upon the value of Securities issued by United Kingdom
companies impossible to predict.
Page 5
A majority of the EU members converted their existing sovereign
currencies to a common currency (the "euro") on January 1, 1999. The
United Kingdom did not participate in this conversion on January 1, 1999
and the Sponsor is unable to predict if or when the United Kingdom will
convert to the euro. The relatively good economic performance as of late
has complicated the current regime's efforts to make a case for the
United Kingdom to join the European Economic and Monetary Union (EMU),
although the government has stipulated that a public referendum on
adopting the euro will occur only after five economic tests are met. The
five tests are concerned with the compatibility of the United Kingdom's
business cycles and economic structures with EMU membership, the
sufficiency of flexibility to react to potential shocks after accession,
the creation of better conditions for firms looking to make long-term
investments in the United Kingdom, the maintenance of the United
Kingdom's competitive position and, finally, the promotion of higher
growth, stability and lasting job creation. Most expect that a referendum
will not take place until after the next general election. The Sponsor is
unable to predict what impact, if any, adoption of the euro by the United
Kingdom will have on any of the Securities issued by United Kingdom
companies in the Trusts.
Foreign Issuers. Since all of the Securities in the Global Target 15
Portfolio, the MSCI EAFE Target 20 Portfolio and the NYSE (R)
International Target 25 Portfolio and certain of the Securities in
certain other Trusts consist of securities of foreign issuers, an
investment in these Trusts involves certain investment risks that are
different in some respects from an investment in a trust which invests
entirely in the securities of domestic issuers. These investment risks
include future political or governmental restrictions which might
adversely affect the payment or receipt of payment of dividends on the
relevant Securities, the possibility that the financial condition of the
issuers of the Securities may become impaired or that the general
condition of the relevant stock market may worsen (both of which would
contribute directly to a decrease in the value of the Securities and thus
in the value of the Units), the limited liquidity and relatively small
market capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, there may be less publicly available information
than is available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions and
other transaction costs on foreign securities exchanges are generally
higher than in the United States and there is generally less government
supervision and regulation of exchanges, brokers and issuers in foreign
countries than there is in the United States. However, due to the nature
of the issuers of the Securities selected for the Trusts, the Sponsor
believes that adequate information will be available to allow the
Supervisor to provide portfolio surveillance for such Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates for
the various Securities. See "Exchange Rates" below.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to such Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance that
exchange control regulations might not be adopted in the future which
might adversely affect payment to such Trusts. The adoption of exchange
control regulations and other legal restrictions could have an adverse
impact on the marketability of international securities in the Trusts and
on the ability of such Trusts to satisfy their obligation to redeem Units
tendered to the Trustee for redemption. In addition, restrictions on the
settlement of transactions on either the purchase or sale side, or both,
could cause delays or increase the costs associated with the purchase and
sale of the foreign Securities and correspondingly could affect the price
of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to a Trust relating to the purchase
of a Security by reason of the federal securities laws or otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by a
Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the Trusts will encounter
obstacles in disposing of the Securities, investors should realize that
the Securities may be traded in foreign countries where the securities
markets are not as developed or efficient and may not be as liquid as
Page 6
those in the United States. The value of the Securities will be adversely
affected if trading markets for the Securities are limited or absent.
Emerging Markets. An investment in Units of certain of the Trusts should
be made with an understanding of the risks inherent with investing in
certain smaller and emerging markets. Compared to more mature markets,
some emerging markets may have a low level of regulation, enforcement of
regulations and monitoring of investors' activities. Those activities may
include practices such as trading on material non-public information. The
securities markets of developing countries are not as large as the more
established securities markets and have substantially less trading
volume, resulting in a lack of liquidity and high price volatility. There
may be a high concentration of market capitalization and trading volume
in a small number of issuers representing a limited number of industries
as well as a high concentration of investors and financial
intermediaries. These factors may adversely affect the timing and pricing
of the acquisition or disposal of securities.
In certain emerging markets, registrars are not subject to effective
government supervision nor are they always independent from issuers. The
possibility of fraud, negligence, undue influence being exerted by the
issuer or refusal to recognize ownership exists, which, along with other
factors, could result in the registration of a shareholding being
completely lost. Investors should therefore be aware that the Trust could
suffer loss arising from these registration problems. In addition, the
legal remedies in emerging markets are often more limited than the
remedies available in the United States.
Practices pertaining to the settlement of securities transactions in
emerging markets involve higher risks than those in developed markets, in
large part because of the need to use brokers and counterparties who are
less well capitalized, and custody and registration of assets in some
countries may be unreliable. As a result, brokerage commissions and other
fees are generally higher in emerging markets and the procedures and
rules governing foreign transactions and custody may involve delays in
payment, delivery or recovery of money or investments. Delays in
settlement could result in investment opportunities being missed if the
Trust is unable to acquire or dispose of a security. Certain foreign
investments may also be less liquid and more volatile than U.S.
investments, which may mean at times that such investments are unable to
be sold at desirable prices.
Political and economic structures in emerging markets often change
rapidly, which may cause instability. In adverse social and political
circumstances, governments have been involved in policies of
expropriation, confiscatory taxation, nationalization, intervention in
the securities market and trade settlement, and imposition of foreign
investment restrictions and exchange controls, and these could be
repeated in the future. In addition to withholding taxes on investment
income, some governments in emerging markets may impose different capital
gains taxes on foreign investors. Foreign investments may also be subject
to the risks of seizure by a foreign government and the imposition of
restrictions on the exchange or export of foreign currency. Additionally,
some governments exercise substantial influence over the private economic
sector and the political and social uncertainties that exist for many
developing countries are considerable.
Another risk common to most developing countries is that the economy is
heavily export oriented and, accordingly, is dependent upon international
trade. The existence of overburdened infrastructures and obsolete
financial systems also presents risks in certain countries, as do
environmental problems. Certain economies also depend to a large degree
upon exports of primary commodities and, therefore, are vulnerable to
changes in commodity prices which, in turn, may be affected by a variety
of factors.
Exchange Rates. The Global Target 15 Portfolio, the MSCI EAFE Target 20
Portfolio, the Target 50/50 Portfolio, the Target Dividend Multi-
Strategy Portfolio and the Target VIP Conservative Equity Portfolio
contain Securities that are principally traded in foreign currencies and
as such, involve investment risks that are substantially different from
an investment in a fund which invests in securities that are principally
traded in United States dollars. The United States dollar value of the
portfolio (and hence of the Units) and of the distributions from the
portfolio will vary with fluctuations in the United States dollar foreign
exchange rates for the relevant currencies. Most foreign currencies have
fluctuated widely in value against the United States dollar for many
reasons, including supply and demand of the respective currency, the rate
of inflation in the respective economies compared to the United States,
the impact of interest rate differentials between different currencies on
the movement of foreign currency rates, the balance of imports and
exports goods and services, the soundness of the world economy and the
strength of the respective economy as compared to the economies of the
United States and other countries.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty which established a system of fixed
exchange rates and the convertibility of the United States dollar into
gold through foreign central banks. Starting in 1971, growing volatility
in the foreign exchange markets caused the United States to abandon gold
convertibility and to effect a small devaluation of the United States
dollar. In 1973, the system of fixed exchange rates between a number of
Page 7
the most important industrial countries of the world, among them the
United States and most Western European countries, was completely
abandoned. Subsequently, major industrialized countries have adopted
"floating" exchange rates, under which daily currency valuations depend
on supply and demand in a freely fluctuating international market. Many
smaller or developing countries have continued to "peg" their currencies
to the United States dollar although there has been some interest in
recent years in "pegging" currencies to "baskets" of other currencies or
to a Special Drawing Right administered by the International Monetary
Fund. In Europe, the euro has been developed. Currencies are generally
traded by leading international commercial banks and institutional
investors (including corporate treasurers, money managers, pension funds
and insurance companies). From time to time, central banks in a number of
countries also are major buyers and sellers of foreign currencies, mostly
for the purpose of preventing or reducing substantial exchange rate
fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well-particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength
or weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling
large amounts of the same currency or currencies. However, over the long
term, the currency of a country with a low rate of inflation and a
favorable balance of trade should increase in value relative to the
currency of a country with a high rate of inflation and deficits in the
balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and
end-of-month equivalent U.S. dollar rates of exchange for the United
Kingdom pound sterling, the Hong Kong dollar, the euro, the Japanese Yen,
the Singapore dollar and the Australian dollar:
Page 8
Foreign Exchange Rates
Range of Fluctuations in Foreign Currencies
[Enlarge/Download Table]
United Kingdom
Annual Pound Sterling/ Hong Kong/ Euro/ Japanese Yen/ Singapore/ Australia/
Period U.S. Dollar U.S. Dollar U.S. Dollar U.S. Dollar U.S. Dollar U.S. Dollar
______ ______________ ___________ ___________ _____________ ___________ ___________
1983 0.616-0.707 6.480-8.700
1984 0.670-0.864 7.774-8.050
1985 0.672-0.951 7.729-7.990
1986 0.643-0.726 7.768-7.819
1987 0.530-0.680 7.751-7.822
1988 0.525-0.601 7.764-7.912
1989 0.548-0.661 7.775-7.817
1990 0.504-0.627 7.740-7.817
1991 0.499-0.624 7.716-7.803
1992 0.499-0.667 7.697-7.781
1993 0.630-0.705 7.722-7.766
1994 0.610-0.684 7.723-7.750
1995 0.610-0.653 7.726-7.763 80.630-104.550 1.389-1.466 1.289-1.411
1996 0.583-0.670 7.732-7.742 103.450-116.210 1.394-1.426 1.225-1.363
1997 0.584-0.633 7.708-7.751 111.260-130.880 1.399-1.699 1.253-1.538
1998 0.584-0.620 7.735-7.749 113.600-147.260 1.584-1.792 1.456-1.797
1999 0.597-0.646 7.746-7.775 0.845-0.999 101.640-124.320 1.654-1.736 1.488-1.639
2000 0.605-0.715 7.774-7.800 0.968-1.209 101.450-114.410 1.656-1.759 1.499-1.961
2001 0.678-0.707 7.798-7.800 1.045-1.194 113.570-131.790 1.727-1.856 1.749-2.087
2002 0.621-0.709 7.799-7.800 0.953-1.164 115.810-134.710 1.733-1.852 1.737-1.974
2003 0.560-0.636 7.742-7.800 0.794-0.929 106.970-121.690 1.700-1.784 1.330-1.779
2004 0.514-0.568 7.763-7.800 0.738-0.844 102.080-114.510 1.631-1.728 1.253-1.465
2005 0.518-0.583 7.752-7.800 0.743-0.857 102.050-121.040 1.619-1.706 1.252-1.381
2006 0.509-0.576 7.753-7.792 0.755-0.839 109.760-119.780 1.534-1.661 1.264-1.419
2007 0.481-0.509 7.750-7.826 0.683-0.767 107.410-123.900 1.440-1.545 1.071-1.298
Source: Bloomberg L.P.
Page 9
End of Month Exchange Rates
for Foreign Currencies
[Enlarge/Download Table]
United Kingdom Japanese
Pound Sterling/ Hong Kong/ Euro/ Yen/ Singapore/ Australia/
Monthly Period U.S. Dollar U.S.Dollar U.S. Dollar U.S. Dollar U.S. Dollar U.S. Dollar
______________ ______________ __________ ___________ ___________ ___________ ___________
2005:
January .531 7.800 .767 103.700 1.638 1.289
February .521 7.799 .756 104.630 1.622 1.263
March .529 7.799 .771 107.150 1.651 1.294
April .524 7.794 .777 104.750 1.638 1.280
May .550 7.780 .813 108.570 1.667 1.323
June .558 7.771 .827 110.920 1.686 1.312
July .569 7.774 .825 112.500 1.663 1.322
August .555 7.772 .811 110.600 1.681 1.324
September .567 7.758 .832 113.510 1.692 1.312
October .565 7.752 .834 116.400 1.693 1.337
November .578 7.755 .848 119.810 1.692 1.356
December .580 7.755 .844 117.750 1.663 1.362
2006:
January .562 7.757 .823 117.200 1.622 1.319
February .570 7.758 .839 115.770 1.622 1.347
March .576 7.760 .825 117.780 1.616 1.396
April .548 7.753 .792 113.830 1.581 1.317
May .535 7.758 .781 112.650 1.580 1.329
June .541 7.766 .782 114.420 1.583 1.345
July .535 7.771 .783 114.670 1.579 1.305
August .525 7.777 .780 117.400 1.573 1.309
September .534 7.792 .789 118.180 1.588 1.340
October .524 7.778 .784 116.980 1.556 1.292
November .509 7.778 .755 115.800 1.541 1.267
December .510 7.778 .758 119.070 1.534 1.268
2007:
January .509 7.808 .767 120.690 1.536 1.287
February .509 7.813 .756 118.560 1.529 1.269
March .508 7.814 .749 117.830 1.517 1.237
April .500 7.823 .733 119.520 1.520 1.205
May .505 7.808 .743 121.730 1.529 1.208
June .498 7.818 .738 123.180 1.530 1.177
July .492 7.826 .731 118.600 1.517 1.174
August .496 7.796 .734 115.780 1.526 1.223
September .488 7.775 .701 114.800 1.485 1.126
October .481 7.750 .690 115.430 1.447 1.071
November .486 7.787 .683 111.230 1.449 1.131
December .504 7.799 .685 111.710 1.440 1.143
2008:
January .503 7.797 .673 106.450 1.417 1.116
February .505 7.782 .659 103.740 1.395 1.074
March .504 7.783 .633 99.690 1.376 1.095
April .503 7.794 .640 103.910 1.356 1.060
May .505 7.804 .643 105.510 1.362 1.046
June .502 7.797 .635 106.210 1.360 1.043
July .504 7.802 .641 107.910 1.367 1.061
August .549 7.804 .682 108.800 1.416 1.166
September .562 7.765 .710 106.110 1.435 1.262
October .622 7.750 .786 98.460 1.484 1.497
November .650 7.750 .788 95.520 1.513 1.526
Source: Bloomberg L.P.
Page 10
The Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large
international commercial banks, various central banks, large multi-
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by the Evaluator
may not be indicative of the amount in United States dollars the Trusts
would receive had the Trustee sold any particular currency in the market.
The foreign exchange transactions of the Trusts will be conducted by the
Trustee with foreign exchange dealers acting as principals on a spot
(i.e., cash) buying basis. Although foreign exchange dealers trade on a
net basis, they do realize a profit based upon the difference between the
price at which they are willing to buy a particular currency (bid price)
and the price at which they are willing to sell the currency (offer
price).
REITs. An investment in Units of certain of the Trusts should be made
with an understanding of risks inherent in an investment in REITs
specifically and real estate generally (in addition to securities market
risks). Generally, these include economic recession, the cyclical nature
of real estate markets, competitive overbuilding, unusually adverse
weather conditions, changing demographics, changes in governmental
regulations (including tax laws and environmental, building, zoning and
sales regulations), increases in real estate taxes or costs of material
and labor, the inability to secure performance guarantees or insurance as
required, the unavailability of investment capital and the inability to
obtain construction financing or mortgage loans at rates acceptable to
builders and purchasers of real estate. Additional risks include an
inability to reduce expenditures associated with a property (such as
mortgage payments and property taxes) when rental revenue declines, and
possible loss upon foreclosure of mortgaged properties if mortgage
payments are not paid when due.
REITs are financial vehicles that have as their objective the pooling of
capital from a number of investors in order to participate directly in
real estate ownership or financing. REITs are generally fully integrated
operating companies that have interests in income-producing real estate.
Equity REITs emphasize direct property investment, holding their invested
assets primarily in the ownership of real estate or other equity
interests. REITs obtain capital funds for investment in underlying real
estate assets by selling debt or equity securities in the public or
institutional capital markets or by bank borrowing. Thus, the returns on
common equities of the REITs in which the Trust invests will be
significantly affected by changes in costs of capital and, particularly
in the case of highly "leveraged" REITs (i.e., those with large amounts
of borrowings outstanding), by changes in the level of interest rates.
The objective of an equity REIT is to purchase income- producing real
estate properties in order to generate high levels of cash flow from
rental income and a gradual asset appreciation, and they typically invest
in properties such as office, retail, industrial, hotel and apartment
buildings and healthcare facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests
for tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
of the shares held by five or fewer individuals, (v) invest substantially
all of its capital in real estate related assets and derive substantially
all of its gross income from real estate related assets and (vi)
distributed at least 95% of its taxable income to its shareholders each
year. If any REIT in the Trust's portfolio should fail to qualify for
such tax status, the related shareholders (including the Trust) could be
adversely affected by the resulting tax consequences.
The underlying value of the Securities and the Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
mortgage funds, the impact of present or future environmental legislation
and compliance with environmental laws, the ongoing need for capital
improvements, particularly in older properties, changes in real estate
tax rates and other operating expenses, regulatory and economic
impediments to raising rents, adverse changes in governmental rules and
fiscal policies, dependency on management skill, civil unrest, acts of
God, including earthquakes and other natural disasters (which may result
in uninsured losses), acts of war, adverse changes in zoning laws, and
other factors which are beyond the control of the issuers of the REITs in
the Trust. The value of the REITs may at times be particularly sensitive
to devaluation in the event of rising interest rates.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes and office buildings. The impact of economic conditions on
REITs can also be expected to vary with geographic location and property
Page 11
type. Investors should be aware the REITs may not be diversified and are
subject to the risks of financing projects. REITs are also subject to
defaults by borrowers, self-liquidation, the market's perception of the
REIT industry generally, and the possibility of failing to qualify for
pass-through of income under the Internal Revenue Code, and to maintain
exemption from the Investment Company Act of 1940. A default by a
borrower or lessee may cause the REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related
to protecting its investments. In addition, because real estate generally
is subject to real property taxes, the REITs in the Trust may be
adversely affected by increases or decreases in property tax rates and
assessments or reassessments of the properties underlying the REITs by
taxing authorities. Furthermore, because real estate is relatively
illiquid, the ability of REITs to vary their portfolios in response to
changes in economic and other conditions may be limited and may adversely
affect the value of the Units. There can be no assurance that any REIT
will be able to dispose of its underlying real estate assets when
advantageous or necessary.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets, including
liability, fire and extended coverage. However, certain types of losses
may be uninsurable or not be economically insurable as to which the
underlying properties are at risk in their particular locales. There can
be no assurance that insurance coverage will be sufficient to pay the
full current market value or current replacement cost of any lost
investment. Various factors might make it impracticable to use insurance
proceeds to replace a facility after it has been damaged or destroyed.
Under such circumstances, the insurance proceeds received by a REIT might
not be adequate to restore its economic position with respect to such
property.
Under various environmental laws, a current or previous owner or operator
of real property may be liable for the costs of removal or remediation of
hazardous or toxic substances on, under or in such property. Such laws
often impose liability whether or not the owner or operator caused or
knew of the presence of such hazardous or toxic substances and whether or
not the storage of such substances was in violation of a tenant's lease.
In addition, the presence of hazardous or toxic substances, or the
failure to remediate such property properly, may adversely affect the
owner's ability to borrow using such real property as collateral. No
assurance can be given that one or more of the REITs in the Trust may not
be presently liable or potentially liable for any such costs in
connection with real estate assets they presently own or subsequently
acquire while such REITs are held in the Trust.
Small-Cap Companies. While historically small-cap company stocks have
outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Small-cap companies may have
limited product lines, markets or financial resources; may lack
management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. Some of
these companies may distribute, sell or produce products which have
recently been brought to market and may be dependent on key personnel.
The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less
publicly available information. Also, because small cap companies
normally have fewer shares outstanding and these shares trade less
frequently than large companies, it may be more difficult for the Trusts
which contain these Securities to buy and sell significant amounts of
such shares without an unfavorable impact on prevailing market prices.
Litigation
Microsoft Corporation. Microsoft Corporation has been engaged in
antitrust and unfair competition litigation with the U.S. Department of
Justice, the District of Columbia, and several states. Microsoft reached
a settlement in 2001 with the U.S. Department of Justice which was joined
by nineteen states, while three other states reached separate
settlements.
Microsoft is also involved in class action lawsuits alleging unfair
competition and monopolization of markets for operating systems and
certain software. The classes have consisted of both direct and indirect
purchasers of Microsoft products. As of February 14, 2007, damages claims
brought in class action cases by indirect purchasers have been dismissed
under federal law and in 16 states. Additionally, two states have refused
to certify these classes. However, classes have been certified in several
states, and Microsoft has reached settlement agreements with many of
these classes. The settlement agreements have received final approval in
17 states and the District of Columbia. Two other states have granted
preliminary approval of settlements. The settlement agreements generally
grant the class members vouchers entitling the holder to reimbursement.
Microsoft also faces antitrust and unfair competition litigation in
Europe and Asia. On March 24, 2004, the European Commission (the
"Commission") found that Microsoft violated the European Union Treaty's
competition rules by abusing its market power. The Commission found that
Microsoft abused its power by deliberately limiting the interoperability
between PCs and non-Microsoft servers and bundling Windows Media Player
Page 12
with its Windows operating system. As remedial measures, Microsoft was
ordered to disclose certain interface documentation to allow non-
Microsoft servers to interact with Windows PCs and servers, and it was
ordered to develop a new version of its Windows operating system without
Windows Media Player. Microsoft was also fined $605 million by the
Commission, and it was fined $351 million in 2006 for failure to comply
with the Commission's disclosure order of 2004. Microsoft was fined again
in February 2008, in the amount of $1.35 billion, for failure to comply
with the 2004 order. Additionally, the Commission initiated two other
formal investigations regarding Microsoft's alleged abuse of a dominant
market position in January 2008. These investigations again involve the
interoperability and the bundling of Microsoft products.
The Korean Fair Trade Commission ("KFTC") made similar anti-competitive
findings regarding the bundling of instant messaging software and Windows
Media Player with Microsoft's Windows operating systems. The KFTC issued
an order in December 2005 which imposed a fine of $35 million and
required a modified version of Windows be made available. On August 23,
2006, versions of Microsoft Windows mandated by the KFTC were released.
Microsoft is involved in several other lawsuits arising from both
intellectual property issues and the normal operations of business. It is
impossible to predict what impact any future litigation or settlement
will have on Microsoft or the value of its stock.
Tobacco Industry. Certain of the issuers of Securities in certain Trusts
may be involved in the manufacture, distribution and sale of tobacco
products. Pending litigation proceedings against such issuers in the
United States and abroad cover a wide range of matters including product
liability and consumer protection. Damages claimed in such litigation
alleging personal injury (both individual and class actions), and in
health cost recovery cases brought by governments, labor unions and
similar entities seeking reimbursement for healthcare expenditures,
aggregate many billions of dollars.
In November 1998, five of the largest tobacco companies in the United
States entered into the Tobacco Master Settlement Agreement ("MSA") with
46 states to settle state lawsuits to recover costs associated with
treating smoking-related illnesses. According to the MSA, the tobacco
industry is projected to pay the settling states in excess of $200
billion over the next 25 years. Four states settled their tobacco cases
separately from the MSA.
In March 2001, five states initiated court proceedings to stop R.J.
Reynolds Tobacco Company ("R.J. Reynolds") from violating provisions of
the MSA. The lawsuits, filed in state courts of Arizona, California, New
York, Ohio and Washington, seek enforcement of restrictions on marketing,
advertising and promotional activities that R.J. Reynolds agreed to under
the terms of the MSA. In June 2002, a California court ruled that R.J.
Reynolds unlawfully placed cigarette ads in magazines with a large
percentage of readers aged 12-17, in violation of the MSA. As a result,
R.J. Reynolds was ordered to pay $20 million in sanctions plus attorneys'
fees and costs. An Arizona court also found R.J. Reynolds had violated
the MSA. In July 2004, R.J. Reynolds and Brown & Williamson Tobacco
Corporation ("B&W") combined R.J. Reynolds and the U.S. assets,
liabilities and operations of B&W to form Reynolds American Inc.
On December 15, 2005, the Illinois Supreme Court reversed a $10.1 billion
verdict against Altria Group's Philip Morris USA division ("Philip
Morris") in what is known as the Price case, ordering a lower court to
dismiss the case in which the company was accused of defrauding customers
into thinking "light" cigarettes were safer than regular ones. The Court
held that the Federal Trade Commission specifically authorized the use of
"light" and "low tar" to describe the cigarettes, and, therefore, Philip
Morris is not liable under the Illinois Consumer Fraud Act, even if the
terms may be deemed false, deceptive or misleading. The case was decided
on the basis of a state statute and not federal preemption. The initial
$10.1 billion judgment in the Price case was handed down against Philip
Morris by a trial court judge in March 2003. The Illinois Supreme Court
took the unusual step of bypassing the appellate court in hearing the
case on appeal directly from the trial court. The size of the original
award put the company at risk for filing bankruptcy protection. In
addition, because Philip Morris accounts for more than half of the annual
tobacco-settlement payments to the states under the 1998 MSA, such
payments could have been in jeopardy. On May 5, 2006 the Illinois Supreme
Court denied the plaintiff's motion for a rehearing, and on November 27,
2006 the Supreme Court of the United States denied certiorari.
In a suit brought by the Department of Justice against Altria and other
cigarette companies, a U.S. District Court ruled on August 17, 2006, that
the defendants violated the Racketeer Influenced and Corrupt
Organizations Act ("RICO"). However, the court refused to grant the $10
billion smoking cessation campaign and $4 billion youth counter-
marketing campaign remedies requested by the government. The court did
rule that Philip Morris must remove "light" and "ultra light" from its
packaging. Altria is appealing this verdict.
Page 13
On July 6, 2006, the Florida Supreme Court decertified a class and
overturned a trial court's $145 billion punitive damages award against
Philip Morris as excessive and improper as a matter of law.
On December 15, 2008 the Supreme Court of the United States ruled that
consumers may sue Philip Morris under state unfair trade laws. The Court
held that neither the Federal Trade Commission's actions nor the Labeling
Act, which sets forth the required cigarette warning labels, preempted a
lawsuit based on state law. The Court noted that the Labeling Act
mandates labels aimed at providing adequate health warnings, and it bars
states from requiring additional health warnings. But the Labeling Act
does not prevent claims that cigarettes labeled as "light" or "low tar"
are fraudulent, deceptive or misleading.
Additional pending and future litigation and/or legislation could
adversely affect the value, operating revenues, financial position and
sustainability of tobacco companies. The Sponsor is unable to predict the
outcome of litigation pending against tobacco companies or how the
current uncertainty concerning regulatory and legislative measures will
ultimately be resolved. These and other possible developments may have a
significant impact upon both the price of such Securities and the value
of Units of Trusts containing such Securities.
Concentrations
When at least 25% of a Trust's portfolio is invested in securities issued
by companies within a single sector, the Trust is considered to be
concentrated in that particular sector. A portfolio concentrated in a
single sector may present more risks than a portfolio broadly diversified
over several sectors.
The Dow (R) Target 5 Portfolio is concentrated in stocks of material
companies. The Dow (R) Target Dividend Portfolio is concentrated in
stocks of financial companies. The Global Target 15 Portfolio is
concentrated in stocks of industrial companies. The MSCI EAFE Target 20
Portfolio is concentrated in stocks of consumer product companies. The
Nasdaq (R) Target 15 Portfolio is concentrated in stocks of health care
and information technology companies. The NYSE (R) International Target
25 Portfolio is concentrated in stocks of financial companies. The S&P
Target SMid 60 Portfolio is concentrated in stocks of energy companies.
The Target 50/50 Portfolio is concentrated in stocks of financial
companies. The Target Dividend Multi-Strategy Portfolio is concentrated
in stocks of financial companies. The Target Growth Portfolio is
concentrated in stocks of consumer products companies. The Target
Mega-Cap Portfolio is concentrated in stocks of consumer products
companies. The Target Small-Cap Portfolio is concentrated in stocks of
financial companies. The Target VIP Conservative Equity Portfolio is
concentrated in stocks of consumer products companies. The Value Line (R)
Diversified Target 40 Portfolio is concentrated in stocks of consumer
products companies. The Value Line (R) Target 25 Portfolio is
concentrated in stocks of consumer products and health care companies.
Consumer Products. The general problems and risks inherent in an
investment in the consumer products sector include the cyclicality of
revenues and earnings, changing consumer demands, regulatory
restrictions, product liability litigation and other litigation resulting
from accidents, extensive competition (including that of low- cost
foreign competition), unfunded pension fund liabilities and employee and
retiree benefit costs and financial deterioration resulting from
leveraged buy-outs, takeovers or acquisitions. In general, expenditures
on consumer products will be affected by the economic health of
consumers. A weak economy with its consequent effect on consumer spending
would have an adverse effect on consumer products companies. Other
factors of particular relevance to the profitability of the sector are
the effects of increasing environmental regulation on packaging and on
waste disposal, the continuing need to conform with foreign regulations
governing packaging and the environment, the outcome of trade
negotiations and the effect on foreign subsidies and tariffs, foreign
exchange rates, the price of oil and its effect on energy costs,
inventory cutbacks by retailers, transportation and distribution costs,
health concerns relating to the consumption of certain products, the
effect of demographics on consumer demand, the availability and cost of
raw materials and the ongoing need to develop new products and to improve
productivity.
Energy. The business activities of companies in the energy sector may
include: production, generation, transmission, marketing, control, or
measurement of coal, gas and oil; the provision of component parts or
services to companies engaged in the above activities; energy research or
experimentation; and environmental activities related to the solution of
energy problems, such as energy conservation and pollution control.
The securities of companies in the energy field are subject to changes in
value and dividend yield which depend, to a large extent, on the price
and supply of energy fuels. Swift price and supply fluctuations may be
caused by events relating to international politics, energy conservation,
the success of exploration projects, and tax and other regulatory
policies of various governments. As a result of the foregoing, the
Securities in a Trust may be subject to rapid price volatility. The
Sponsor is unable to predict what impact the foregoing factors will have
on the Securities during the life of a Trust.
Page 14
According to the U.S. Department of Commerce, the factors which will most
likely shape the energy sector include the price and availability of oil
from the Middle East, changes in U.S. environmental policies and the
continued decline in U.S. production of crude oil. Possible effects of
these factors may be increased U.S. and world dependence on oil from the
Organization of Petroleum Exporting Countries ("OPEC") and highly
uncertain and potentially more volatile oil prices. Factors which the
Sponsor believes may increase the profitability of oil and petroleum
operations include increasing demand for oil and petroleum products as a
result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases in average
domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are
the two principal requirements for stable crude oil markets. Without
excess capacity, supply disruptions in some countries cannot be
compensated for by others. Surplus capacity in Saudi Arabia and a few
other countries and the utilization of that capacity prevented, during
the Persian Gulf crisis, and continues to prevent, severe market
disruption. Although unused capacity contributed to market stability in
1990 and 1991, it ordinarily creates pressure to overproduce and
contributes to market uncertainty. The restoration of a large portion of
Kuwait and Iraq's production and export capacity could lead to such a
development in the absence of substantial growth in world oil demand.
Formerly, OPEC members attempted to exercise control over production
levels in each country through a system of mandatory production quotas.
Because of the 1990-1991 crisis in the Middle East, the mandatory system
has since been replaced with a voluntary system. Production under the new
system has had to be curtailed on at least one occasion as a result of
weak prices, even in the absence of supplies from Kuwait and Iraq. The
pressure to deviate from mandatory quotas, if they are reimposed, is
likely to be substantial and could lead to a weakening of prices. In the
longer term, additional capacity and production will be required to
accommodate the expected large increases in world oil demand and to
compensate for expected sharp drops in U.S. crude oil production and
exports from the Soviet Union. Only a few OPEC countries, particularly
Saudi Arabia, have the petroleum reserves that will allow the required
increase in production capacity to be attained. Given the large-scale
financing that is required, the prospect that such expansion will occur
soon enough to meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to environmental
concerns will also pose serious challenges to the sector over the coming
decade. Refiners are likely to be required to make heavy capital
investments and make major production adjustments in order to comply with
increasingly stringent environmental legislation, such as the 1990
amendments to the Clean Air Act. If the cost of these changes is
substantial enough to cut deeply into profits, smaller refiners may be
forced out of the sector entirely. Moreover, lower consumer demand due to
increases in energy efficiency and conservation, gasoline reformulations
that call for less crude oil, warmer winters or a general slowdown in
economic growth in this country and abroad could negatively affect the
price of oil and the profitability of oil companies. No assurance can be
given that the demand for or prices of oil will increase or that any
increases will not be marked by great volatility. Some oil companies may
incur large cleanup and litigation costs relating to oil spills and other
environmental damage. Oil production and refining operations are subject
to extensive federal, state and local environmental laws and regulations
governing air emissions and the disposal of hazardous materials.
Increasingly stringent environmental laws and regulations are expected to
require companies with oil production and refining operations to devote
significant financial and managerial resources to pollution control.
General problems of the oil and petroleum products sector include the
ability of a few influential producers to significantly affect
production, the concomitant volatility of crude oil prices, increasing
public and governmental concern over air emissions, waste product
disposal, fuel quality and the environmental effects of fossil-fuel use
in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy sector or
the environment could have a negative impact on the energy products
sector. While legislation has been enacted to deregulate certain aspects
of the energy sector, no assurances can be given that new or additional
regulations will not be adopted. Each of the problems referred to could
adversely affect the financial stability of the issuers of any energy
sector stocks in a Trust.
Financials. Banks, thrifts and their holding companies are especially
subject to the adverse effects of economic recession, volatile interest
rates, portfolio concentrations in geographic markets and in commercial
and residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
both commercial and consumer products. There is no certainty that such
conditions will continue. Bank and thrift institutions had received
significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and
Page 15
refinancing activity subsided, this income diminished. Economic
conditions in the real estate markets, which have been weak in the past,
can have a substantial effect upon banks and thrifts because they
generally have a portion of their assets invested in loans secured by
real estate. Banks, thrifts and their holding companies are subject to
extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of business
activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as increases
in the minimum capital requirements applicable to banks and thrifts and
increases in deposit insurance premiums required to be paid by banks and
thrifts to the Federal Deposit Insurance Corporation ("FDIC"), can
negatively impact earnings and the ability of a company to pay dividends.
Neither federal insurance of deposits nor governmental regulations,
however, insures the solvency or profitability of banks or their holding
companies, or insures against any risk of investment in the securities
issued by such institutions.
The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great extent,
these changes are embodied in the Financial Institutions Reform, Recovery
and Enforcement Act; enacted in August 1989, the Federal Deposit
Insurance Corporation Improvement Act of 1991, the Resolution Trust
Corporation Refinancing, Restructuring, and Improvement Act of 1991 and
the regulations promulgated under these laws. Many of the regulations
promulgated pursuant to these laws have only recently been finalized and
their impact on the business, financial condition and prospects of the
Securities in a Trust's portfolio cannot be predicted with certainty. The
Gramm-Leach-Bliley Act repealed most of the barriers set up by the 1933
Glass-Steagall Act which separated the banking, insurance and securities
sectors. Now banks, insurance companies and securities firms can merge to
form one-stop financial conglomerates marketing a wide range of financial
service products to investors. This legislation will likely result in
increased merger activity and heightened competition among existing and
new participants in the field. Efforts to expand the ability of federal
thrifts to branch on an interstate basis have been initially successful
through promulgation of regulations, and legislation to liberalize
interstate banking has recently been signed into law. Under the
legislation, banks will be able to purchase or establish subsidiary banks
in any state, one year after the legislation's enactment. Since mid-1997,
banks have been allowed to turn existing banks into branches.
Consolidation is likely to continue. The Securities and Exchange
Commission and the Financial Accounting Standards Board require the
expanded use of market value accounting by banks and have imposed rules
requiring market accounting for investment securities held in trading
accounts or available for sale. Adoption of additional such rules may
result in increased volatility in the reported health of the sector, and
mandated regulatory intervention to correct such problems. Additional
legislative and regulatory changes may be forthcoming. For example, the
bank regulatory authorities have proposed substantial changes to the
Community Reinvestment Act and fair lending laws, rules and regulations,
and there can be no certainty as to the effect, if any, that such changes
would have on the Securities in a Trust's portfolio. In addition, from
time to time the deposit insurance system is reviewed by Congress and
federal regulators, and proposed reforms of that system could, among
other things, further restrict the ways in which deposited moneys can be
used by banks or reduce the dollar amount or number of deposits insured
for any depositor. Such reforms could reduce profitability as investment
opportunities available to bank institutions become more limited and as
consumers look for savings vehicles other than bank deposits. Banks and
thrifts face significant competition from other financial institutions
such as mutual funds, credit unions, mortgage banking companies and
insurance companies, and increased competition may result from
legislative broadening of regional and national interstate banking powers
as has been recently enacted. Among other benefits, the legislation
allows banks and bank holding companies to acquire across previously
prohibited state lines and to consolidate their various bank subsidiaries
into one unit. The Sponsor makes no prediction as to what, if any, manner
of bank and thrift regulatory actions might ultimately be adopted or what
ultimate effect such actions might have on a Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
Page 16
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends by
bank holding companies. In the policy statement, the FRB expressed its
view that a bank holding company experiencing earnings weaknesses should
not pay cash dividends which exceed its net income or which could only be
funded in ways that would weaken its financial health, such as by
borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will have
on the Securities or whether such approvals, if necessary, will be
obtained.
Companies involved in the insurance sector are engaged in underwriting,
reinsuring, selling, distributing or placing of property and casualty,
life or health insurance. Other growth areas within the insurance sector
include brokerage, reciprocals, claims processors and multiline insurance
companies. Insurance company profits are affected by interest rate
levels, general economic conditions, and price and marketing competition.
Property and casualty insurance profits may also be affected by weather
catastrophes and other disasters. Life and health insurance profits may
be affected by mortality and morbidity rates. Individual companies may be
exposed to material risks including reserve inadequacy and the inability
to collect from reinsurance carriers. Insurance companies are subject to
extensive governmental regulation, including the imposition of maximum
rate levels, which may not be adequate for some lines of business.
Proposed or potential tax law changes may also adversely affect insurance
companies' policy sales, tax obligations, and profitability. In addition
to the foregoing, profit margins of these companies continue to shrink
due to the commoditization of traditional businesses, new competitors,
capital expenditures on new technology and the pressures to compete
globally.
In addition to the normal risks of business, companies involved in the
insurance sector are subject to significant risk factors, including those
applicable to regulated insurance companies, such as: (i) the inherent
uncertainty in the process of establishing property-liability loss
reserves, particularly reserves for the cost of environmental, asbestos
and mass tort claims, and the fact that ultimate losses could materially
exceed established loss reserves which could have a material adverse
effect on results of operations and financial condition; (ii) the fact
that insurance companies have experienced, and can be expected in the
future to experience, catastrophe losses which could have a material
adverse impact on their financial condition, results of operations and
cash flow; (iii) the inherent uncertainty in the process of establishing
property-liability loss reserves due to changes in loss payment patterns
caused by new claims settlement practices; (iv) the need for insurance
companies and their subsidiaries to maintain appropriate levels of
statutory capital and surplus, particularly in light of continuing
scrutiny by rating organizations and state insurance regulatory
authorities, and in order to maintain acceptable financial strength or
claims-paying ability rating; (v) the extensive regulation and
supervision to which insurance companies' subsidiaries are subject,
various regulatory initiatives that may affect insurance companies, and
regulatory and other legal actions; (vi) the adverse impact that
increases in interest rates could have on the value of an insurance
company's investment portfolio and on the attractiveness of certain of
its products; (vii) the need to adjust the effective duration of the
assets and liabilities of life insurance operations in order to meet the
anticipated cash flow requirements of its policyholder obligations; and
(viii) the uncertainty involved in estimating the availability of
reinsurance and the collectibility of reinsurance recoverables.
The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners
("NAIC") and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance companies,
interpretations of existing laws and the development of new laws. In
addition, Congress and certain federal agencies have investigated the
condition of the insurance sector in the United States to determine
whether to promulgate additional federal regulation. The Sponsor is
unable to predict whether any state or federal legislation will be
Page 17
enacted to change the nature or scope of regulation of the insurance
sector, or what effect, if any, such legislation would have on the
sector.
All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the
amount of investments in certain investment categories. Failure to comply
with these laws and regulations would cause non-conforming investments to
be treated as non-admitted assets for purposes of measuring statutory
surplus and, in some instances, would require divestiture.
Environmental pollution clean-up is the subject of both federal and state
regulation. By some estimates, there are thousands of potential waste
sites subject to clean up. The insurance sector is involved in extensive
litigation regarding coverage issues. The Comprehensive Environmental
Response Compensation and Liability Act of 1980 ("Superfund") and
comparable state statutes ("mini-Superfund") govern the clean-up and
restoration by "Potentially Responsible Parties" ("PRPs"). Superfund and
the mini-Superfunds ("Environmental Clean-up Laws or "ECLs") establish a
mechanism to pay for clean-up of waste sites if PRPs fail to do so, and
to assign liability to PRPs. The extent of liability to be allocated to a
PRP is dependent on a variety of factors. The extent of clean-up
necessary and the assignment of liability has not been fully established.
The insurance sector is disputing many such claims. Key coverage issues
include whether Superfund response costs are considered damages under the
policies, when and how coverage is triggered, applicability of pollution
exclusions, the potential for joint and several liability and definition
of an occurrence. Similar coverage issues exist for clean up and waste
sites not covered under Superfund. To date, courts have been inconsistent
in their rulings on these issues. An insurer's exposure to liability with
regard to its insureds which have been, or may be, named as PRPs is
uncertain. Superfund reform proposals have been introduced in Congress,
but none have been enacted. There can be no assurance that any Superfund
reform legislation will be enacted or that any such legislation will
provide for a fair, effective and cost-efficient system for settlement of
Superfund related claims.
While current federal income tax law permits the tax-deferred
accumulation of earnings on the premiums paid by an annuity owner and
holders of certain savings-oriented life insurance products, no assurance
can be given that future tax law will continue to allow such tax
deferrals. If such deferrals were not allowed, consumer demand for the
affected products would be substantially reduced. In addition, proposals
to lower the federal income tax rates through a form of flat tax or
otherwise could have, if enacted, a negative impact on the demand for
such products.
Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/dealers, investment banks,
finance companies and mutual fund companies. Earnings and share prices of
companies in this sector are quite volatile, and often exceed the
volatility levels of the market as a whole. Recently, ongoing
consolidation in the sector and the strong stock market has benefited
stocks which investors believe will benefit from greater investor and
issuer activity. Major determinants of future earnings of these companies
are the direction of the stock market, investor confidence, equity
transaction volume, the level and direction of long-term and short-term
interest rates, and the outlook for emerging markets. Negative trends in
any of these earnings determinants could have a serious adverse effect on
the financial stability, as well as the stock prices, of these companies.
Furthermore, there can be no assurance that the issuers of the Securities
included in the Trust will be able to respond in a timely manner to
compete in the rapidly developing marketplace. In addition to the
foregoing, profit margins of these companies continue to shrink due to
the commoditization of traditional businesses, new competitors, capital
expenditures on new technology and the pressures to compete globally.
Health Care. Health care companies are subject to governmental regulation
of their products and services, a factor which could have a significant
and possibly unfavorable effect on the price and availability of such
products or services. Furthermore, such companies face the risk of
increasing competition from new products or services, generic drug sales,
the termination of patent protection for drug or medical supply products
and the risk that technological advances will render their products
obsolete. The research and development costs of bringing a drug to market
are substantial, and include lengthy governmental review processes with
no guarantee that the product will ever come to market. Many of these
companies may have losses and may not offer certain products for several
years. Such companies may also have persistent losses during a new
product's transition from development to production, and revenue patterns
may be erratic. In addition, health care facility operators may be
affected by events and conditions including among other things, demand
for services, the ability of the facility to provide the services
required, physicians' confidence in the facility, management
capabilities, competition with other hospitals, efforts by insurers and
governmental agencies to limit rates, legislation establishing state
rate-setting agencies, expenses, government regulation, the cost and
possible unavailability of malpractice insurance and the termination or
restriction of governmental financial assistance, including that
associated with Medicare, Medicaid and other similar third party payor
programs.
Page 18
As the population of the United States ages, the companies involved in
the health care field will continue to search for and develop new drugs,
medical products and medical services through advanced technologies and
diagnostics. On a worldwide basis, such companies are involved in the
development and distributions of drugs, vaccines, medical products and
medical services. These activities may make the health care and medical
services sector very attractive for investors seeking the potential for
growth in their investment portfolio. However, there are no assurances
that the Trust's objective will be met.
Legislative proposals concerning health care are proposed in Congress
from time to time. These proposals span a wide range of topics, including
cost and price controls (which might include a freeze on the prices of
prescription drugs), national health insurance, incentives for
competition in the provision of health care services, tax incentives and
penalties related to health care insurance premiums and promotion of pre-
paid health care plans. The Sponsor is unable to predict the effect of
any of these proposals, if enacted, on the issuers of Securities in the
Trust.
Industrials. The profitability of industrial companies will be affected
by various factors including the general state of the economy, intense
competition, domestic and international politics, excess capacity and
spending trends.
The Internet may also influence the industrial market. Customers' desire
for better pricing and convenience, as well as manufacturers' desire to
boost profitability by finding new avenues of sales growth and
productivity gains, may drive many industrial manufacturers to invest
heavily in Internet hardware and software. Because the Internet allows
manufacturers to take orders directly from customers, thus eliminating
the middlemen from both supply chains and distributors, industrial makers
may no longer need traditional third-party outfits to distribute their
products. In addition, the Internet may also allow industrial
manufacturers to cut inventory levels, by enabling customers to tailor
their orders to their specific needs.
Industrial companies may also be affected by factors more specific to
their individual industries. Industrial machinery manufacturers may be
subject to declines in consumer demand and the need for modernization.
Agricultural equipment businesses may be influenced by fluctuations in
farm income, farm commodity prices, government subsidies and weather
conditions. The number of housing starts, levels of public and non-
residential construction including weakening demand for new office and
retail space, and overall construction spending may adversely affect
construction equipment manufacturers, while overproduction, consolidation
and weakening global economies may lead to deteriorating sales for truck
makers.
Information Technology. Technology companies generally include companies
involved in the development, design, manufacture and sale of computers
and peripherals, software and services, data networking/communications
equipment, internet access/information providers, semiconductors and
semiconductor equipment and other related products, systems and services.
The market for these products, especially those specifically related to
the Internet, is characterized by rapidly changing technology, rapid
product obsolescence, cyclical market patterns, evolving industry
standards and frequent new product introductions. The success of the
issuers of the Securities depends in substantial part on the timely and
successful introduction of new products. An unexpected change in one or
more of the technologies affecting an issuer's products or in the market
for products based on a particular technology could have a material
adverse effect on an issuer's operating results. Furthermore, there can
be no assurance that the issuers of the Securities will be able to
respond in a timely manner to compete in the rapidly developing
marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general conditions
of the industry have caused and are likely to cause the market price of
high-technology common stocks to fluctuate substantially. In addition,
technology company stocks have experienced extreme price and volume
fluctuations that often have been unrelated to the operating performance
of such companies. This market volatility may adversely affect the market
price of the Securities and therefore the ability of a Unit holder to
redeem Units at a price equal to or greater than the original price paid
for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many technology
issuers are characterized by a highly concentrated customer base
consisting of a limited number of large customers who may require product
vendors to comply with rigorous industry standards. Any failure to comply
with such standards may result in a significant loss or reduction of
sales. Because many products and technologies of technology companies are
incorporated into other related products, such companies are often highly
dependent on the performance of the personal computer, electronics and
telecommunications industries. There can be no assurance that these
customers will place additional orders, or that an issuer of Securities
will obtain orders of similar magnitude as past orders from other
customers. Similarly, the success of certain technology companies is tied
Page 19
to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. The
adoption of any such laws could have a material adverse impact on the
Securities in the Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Materials. Companies in the materials sector are involved in the
production of aluminum, chemicals, commodities, chemicals specialty
products, forest products, non-ferrous mining products, paper products,
precious metals and steel. Basic materials companies may be affected by
the volatility of commodity prices, exchange rates, import controls,
worldwide competition, depletion of resources, and mandated expenditures
for safety and pollution control devices. In addition, they may be
adversely affected by technical progress, labor relations, and
governmental regulation. These companies are also at risk for
environmental damage and product liability claims. Production of
industrial materials often exceeds demand as a result of over-building or
economic downturns, which may lead to poor investment returns.
Securities
The following information describes the common stocks selected through
the application of each of the Strategies which comprise the various
Trusts described in the prospectus.
The Dow (R) DART 5 Strategy Stocks
AT&T Inc., headquartered in San Antonio, Texas, is the largest
telecommunications holding company in the United States. The company is a
worldwide provider of IP-based communications services to business and a
leading U.S. provider of high-speed DSL Internet, local and long-
distance voice services, wireless services, and directory publishing and
advertising services.
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines. The company also provides various financial products and
services.
Exxon Mobil Corporation, headquartered in Irving, Texas, explores for,
produces, transports and sells crude oil and natural gas petroleum
products. The company also explores for and mines coal and other minerals
properties; makes and sells petrochemicals; and owns interests in
electrical power generation facilities.
General Electric Company, headquartered in Fairfield, Connecticut,
manufactures major appliances, industrial and power systems, aircraft
engines, turbines and generators, and equipment used in medical imaging.
The company owns NBC Universal, which develops, produces and markets
films, television, news, sports and special events programming to a
global audience. In addition, a variety of financial services are offered
through GE Commercial Finance.
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
The Dow (R) DART 10 Strategy Stocks
Alcoa Inc., headquartered in Pittsburgh, Pennsylvania, makes primary
aluminum and fabricated products for the transportation, construction,
packaging and other markets.
Page 20
AT&T Inc., headquartered in San Antonio, Texas, is the largest
telecommunications holding company in the United States. The company is a
worldwide provider of IP-based communications services to business and a
leading U.S. provider of high-speed DSL Internet, local and long-
distance voice services, wireless services, and directory publishing and
advertising services.
Bank of America Corporation, headquartered in Charlotte, North Carolina,
is the holding company for Bank of America and NationsBank and conducts a
general banking business in the United States and internationally.
The Boeing Company, headquartered in Chicago, Illinois, produces and
markets commercial jet transports and provides related support services,
principally to commercial customers. The company also develops, produces,
modifies and supports military aircraft and helicopters and related
systems, and electronic, space and missile systems.
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines. The company also provides various financial products and
services.
Exxon Mobil Corporation, headquartered in Irving, Texas, explores for,
produces, transports and sells crude oil and natural gas petroleum
products. The company also explores for and mines coal and other minerals
properties; makes and sells petrochemicals; and owns interests in
electrical power generation facilities.
General Electric Company, headquartered in Fairfield, Connecticut,
manufactures major appliances, industrial and power systems, aircraft
engines, turbines and generators, and equipment used in medical imaging.
The company owns NBC Universal, which develops, produces and markets
films, television, news, sports and special events programming to a
global audience. In addition, a variety of financial services are offered
through GE Commercial Finance.
Kraft Foods Inc., headquartered in Northfield, Illinois, is engaged in
the manufacture and sale of retail packaged foods in the United States,
Canada, Europe, Latin America and Asia Pacific.
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
The Walt Disney Company, headquartered in Burbank, California, operates
as a diversified international entertainment company with operations
consisting of filmed entertainment, theme parks and resorts and consumer
products. The company also has broadcasting (including Capital
Cities/ABC, Inc.) and publishing operations.
The Dow (R) Target 5 Strategy Stocks
Alcoa Inc., headquartered in Pittsburgh, Pennsylvania, makes primary
aluminum and fabricated products for the transportation, construction,
packaging and other markets.
Bank of America Corporation, headquartered in Charlotte, North Carolina,
is the holding company for Bank of America and NationsBank and conducts a
general banking business in the United States and internationally.
E.I. du Pont de Nemours and Company, headquartered in Wilmington,
Delaware, is a global science and technology company with operations in
high-performance materials, specialty chemicals, pharmaceuticals and
biotechnology.
General Electric Company, headquartered in Fairfield, Connecticut,
manufactures major appliances, industrial and power systems, aircraft
engines, turbines and generators, and equipment used in medical imaging.
The company owns NBC Universal, which develops, produces and markets
films, television, news, sports and special events programming to a
global audience. In addition, a variety of financial services are offered
through GE Commercial Finance.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries, baby
care products, dental rinse and other proprietary health items.
The Dow (R) Target Dividend Strategy Stocks
American Electric Power Company, Inc., headquartered in Columbus, Ohio,
is a public utility holding company engaged in the generation, purchase,
transmission and distribution of electric power.
BB&T Corporation, headquartered in Winston-Salem, North Carolina, through
subsidiaries, conducts a general banking business in four states and
Washington, D.C.; offers lease financing to commercial businesses and
municipal governments; and reinsures and underwrites certain credit life
and credit accident and health insurance policies.
Page 21
Briggs & Stratton Corporation, headquartered in Wauwatosa, Wisconsin, is
a producer of air-cooled gasoline engines and other gasoline engine
powered equipment which are sold to manufacturers of lawn and garden
equipment worldwide.
Eastman Chemical Company, headquartered in Kingsport, Tennessee, is a
global chemical company engaged in the manufacture and sale of a broad
portfolio of chemicals, plastics, and fibers.
F.N.B. Corporation, headquartered in Hermitage, Pennsylvania, is a
financial services holding company. The company, through its subsidiaries
in Pennsylvania, northern and central Tennessee, and eastern Ohio,
provides a variety of financial services, primarily to consumers and
small to medium-sized businesses.
First BanCorp., headquartered in Santurce, Puerto Rico, is the holding
company for FirstBank Puerto Rico, the second largest locally owned
commercial bank in Puerto Rico. The bank specializes in consumer lending
in the Puerto Rican market, offering an array of financial services to a
growing number of consumer and commercial customers.
First Niagara Financial Group, Inc., headquartered in Lockport, New York,
is a bank holding company. The banks provide an array of deposit products
and loans, as well as insurance, leasing, investment advisory services,
insurance agency services and trust services.
Fulton Financial Corporation, headquartered in Lancaster, Pennsylvania,
is a multi-bank financial holding company that provides a full range of
banking and financial services to businesses and consumers through its
wholly-owned banking subsidiaries.
MeadWestvaco Corporation, headquartered in Stamford, Connecticut, is a
global company engaged in packaging, coated and specialty papers,
consumer and office products, and specialty chemicals businesses.
NiSource Inc., headquartered in Merrillville, Indiana, is an energy and
utility-based holding company that provides natural gas, electricity and
water to the public for residential, commercial and industrial uses. The
company's business is comprised primarily of regulated gas utilities that
operate throughout northern Indiana and New England.
Pinnacle West Capital Corporation, headquartered in Phoenix, Arizona,
owns Arizona Public Service Company, an electric utility that provides
retail and wholesale electric service to substantially all of Arizona,
with the major exceptions of the Tucson metropolitan area and
approximately one-half of the Phoenix metropolitan area.
R. R. Donnelley & Sons Company, headquartered in Chicago, Illinois,
prepares, produces and delivers integrated communications services that
produce, manage and deliver its customers' content, regardless of the
communications medium.
Regions Financial Corporation, headquartered in Birmingham, Alabama, is a
regional bank holding company operating full-service banking offices in
Alabama, Arkansas, Florida, Georgia, Louisiana, South Carolina, Tennessee
and Texas.
Sensient Technologies Corporation, headquartered in Milwaukee, Wisconsin,
supplies colors, flavors, and fragrances. The company manufactures a
variety of cosmetic and pharmaceutical additives, ink-jet inks, and food
and beverage flavors.
SunTrust Banks, Inc., headquartered in Atlanta, Georgia, through
subsidiaries, operates a banking business based in the southeastern
United States. The company's primary businesses include traditional
deposit and credit services as well as trust and investment services.
TECO Energy, Inc., headquartered in Tampa, Florida, is a utility holding
company whose subsidiaries provide retail electric and gas service to
customers in central Florida and operate independent power projects in
the United States and Latin America.
Textron, Inc., headquartered in Providence, Rhode Island, is engaged in
the manufacture of helicopters and spare parts, light and mid-size
business jets, turboprop and piston aircraft, automotive interior engine
components and industrial tools.
The Timken Company, headquartered in Canton, Ohio, is a global
manufacturer of highly engineered bearings, alloy and specialty steel and
related components.
Universal Corporation, headquartered in Richmond, Virginia, is an
independent leaf tobacco merchant with additional operations in agri-
products and the distribution of lumber and building products. The
company markets its products globally.
Zions Bancorporation, headquartered in Salt Lake City, Utah, conducts a
banking business through offices in seven states. The company also
underwrites insurance; operates an insurance brokerage business; and
provides innovative financing solutions for small businesses nationwide.
Page 22
European Target 20 Strategy Stocks
Allianz AG, headquartered in Munich, Germany, is a global insurance
company engaging in property and casualty protection, life and health
insurance, and asset management.
Anheuser-Busch InBev NV, headquartered in Leuven, Belgium, is a beer
brewing company with production plants in Europe, Asia and North America.
The company buys and/or develops brands and distribution networks
offering premium and specialty brands.
Aviva Plc, headquartered in London, England, is a leading insurance firm
throughout Europe, offering both life and general insurance. The
company's life and savings segments focus on life insurance, pensions,
unit trusts and other investment products while its general insurance
segment includes home, auto and fire coverage. Financial services include
investment management, stock brokerage and trustee services. The company
operates in more than 50 countries worldwide.
AXA S.A., headquartered in Paris, France, is an insurance company which
also provides related financial services. The company offers life and
non-life insurance, reinsurance, savings and pension products, and asset
management services.
Banco Bilbao Vizcaya Argentaria, S.A., headquartered in Bilbao, Spain,
engages in the retail banking, asset management, private banking, and
wholesale banking businesses worldwide.
BNP Paribas S.A., headquartered in Paris, France, attracts deposits and
offers banking services. The company offers consumer, mortgage,
commercial and industrial loans; foreign exchange services; discount
securities brokerage services; lease financing; factoring; international
trade financing; private banking services; and life insurance. The
company also advises on mergers and acquisitions, capital restructuring
and privatizations.
BP Plc, headquartered in London, England, produces and markets crude oil
and petroleum products worldwide, is engaged in exploration and field
development throughout the world, and is engaged in the manufacture and
sale of various petroleum-based chemical products.
BT Group Plc, headquartered in London, England, provides
telecommunication services, principally in the United Kingdom. The
company's main services and products are fixed voice and data calls, the
provision of fixed exchange lines to homes and businesses, the provision
of communication services to other operators, the provision of private
services to businesses, and the supply of telecommunication equipment for
customers' premises.
Credit Agricole S.A., headquartered in Paris, France, is the lead bank of
the Credit Agricole Group. The company acts as the central bank of the
Credit Agricole Group, coordinates its sales and marketing strategy and
ensures the liquidity and solvency of each of the Caisses Regionales. The
company, through its subsidiaries, designs and manages specialized
financial products that are distributed primarily by the Caisses
Regionales.
Credit Suisse Group, headquartered in Zurich, Switzerland, provides
conventional consumer and business banking services within its home
market, but most of its business is done outside Switzerland. The company
offers private banking services to a global clientele, and its Credit
Suisse First Boston unit provides corporate and investment banking
services and institutional asset management throughout the world.
Daimler AG, headquartered in Stuttgart, Germany, designs, manufactures,
assembles and sells passenger cars and commercial trucks under the brand
names "Mercedes-Benz" and "Daimler." The company also provides related
financial services for its automotive and commercial operations.
Deutsche Bank AG, headquartered in Frankfurt, Germany, provides a broad
range of banking, investment, fund management, securities, credit card,
mortgage leasing and insurance services worldwide. The company provides
its services to retailers and private clients, corporations and financial
institutions, as well as multi-national conglomerates. The company also
offers a variety of financial consulting and advisory services.
Deutsche Post AG, headquartered in Bonn, Germany, provides domestic and
international mail delivery and international parcel services to both
commercial and public clients. The company also offers freight delivery,
logistics services, and a variety of financial services including
standard banking services and brokerage services.
Enel SpA, headquartered in Rome, Italy, generates, transmits and
distributes electricity throughout Italy. The company's subsidiaries also
provide fixed-line and mobile telephone services, install public lighting
systems, and operate real estate, telecommunications and Internet service
provider businesses.
Eni SpA, headquartered in Rome, Italy, operates in the oil and natural
gas, petrochemicals, and oil field services industries. The company is
currently expanding into power generation.
HSBC Holdings Plc, headquartered in London, England, is one of the
largest banking and financial services organizations in the world. The
company provides a comprehensive range of banking and related financial
services in more than 80 countries and territories.
Santander Central Hispano S.A., headquartered in Madrid, Spain, is a
leader in the running of Spanish banks. It offers domestic retail
banking, as well as in other European countries and in Latin America.
Page 23
StatoilHydro ASA, headquartered in Stavanger, Norway, is the largest
integrated oil and gas company in Scandinavia, producing oil and gas from
the Norwegian Continental Shelf and other regions.
Swiss Re, headquartered in Zurich, Switzerland, provides insurance,
reinsurance and insurance-linked financial market products. Company
products include automobile, liability, accident, health insurance, life,
engineering, marine, and aviation. The company also manages equity and
fixed-income investments for itself and other insurance companies.
TeliaSonera AB, headquartered in Stockholm, Sweden, offers
telecommunication services. The company offers mobile communications
services in Europe and the United States, as well as operating fixed
networks in Northern Europe.
Global Target 15 Strategy Stocks
Dow Jones Industrial Average(sm) Companies
__________________________________________
Alcoa Inc., headquartered in Pittsburgh, Pennsylvania, makes primary
aluminum and fabricated products for the transportation, construction,
packaging and other markets.
Bank of America Corporation, headquartered in Charlotte, North Carolina,
is the holding company for Bank of America and NationsBank and conducts a
general banking business in the United States and internationally.
E.I. du Pont de Nemours and Company, headquartered in Wilmington,
Delaware, is a global science and technology company with operations in
high-performance materials, specialty chemicals, pharmaceuticals and
biotechnology.
General Electric Company, headquartered in Fairfield, Connecticut,
manufactures major appliances, industrial and power systems, aircraft
engines, turbines and generators, and equipment used in medical imaging.
The company owns NBC Universal, which develops, produces and markets
films, television, news, sports and special events programming to a
global audience. In addition, a variety of financial services are offered
through GE Commercial Finance.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries, baby
care products, dental rinse and other proprietary health items.
Financial Times Industrial Ordinary Share Index Companies
_________________________________________________________
BT Group Plc, headquartered in London, England, provides
telecommunication services, principally in the United Kingdom. The
company's main services and products are fixed voice and data calls, the
provision of fixed exchange lines to homes and businesses, the provision
of communication services to other operators, the provision of private
services to businesses, and the supply of telecommunication equipment for
customers' premises.
GKN Plc, headquartered in Worcestershire, England, is a world leader in
the production of automotive driveline systems and transmission and
engine components. The company also owns Meineke Discount Muffler.
ITV Plc, headquartered in London, England, is a United Kingdom media
company involved in news, broadcasting and production. The company owns
all of the regional Channel 3 licenses in England and Wales. The company
also owns ITV1, a commercial television channel, as well as ITV2, a
partial interest in GMTV, and other interests.
Ladbrokes Plc, headquartered in Middlesex, England, is comprised of
Ladbrokes, the biggest retail bookmaker in the United Kingdom and
Ireland; Ladbrokes.com, a world-leading provider of interactive betting
and gaming services; Vernons, the leading football pools operator; and
Ladbrokes Casinos, which opened its first casino at the Hilton London
Paddington.
LogicaCMG Plc, headquartered in London, England, is a global solutions
company, providing IT consulting and management, systems integration,
products, services and support. The company's client base includes
various sectors, such as telecommunications, financial services, energy
and utilities, distribution and transportation.
Hang Seng Index Companies
_________________________
The Bank of East Asia, Ltd., headquartered in Hong Kong, China, and its
subsidiaries provide general banking and related financial services, and
business corporate and investor services.
BOC Hong Kong (Holdings) Limited, headquartered in Hong Kong, China, is
the parent of Bank of China (Hong Kong), which operates branches in Hong
Kong as well as on mainland China.
Cathay Pacific Airways Limited, headquartered in Hong Kong, China,
operates scheduled airline services. The company also provides airline
catering, aircraft handling and engineering services.
Page 24
CITIC Pacific Limited, headquartered in Hong Kong, China, is a subsidiary
of China's state-owned China International Trust & Investment (CITIC).
The company invests in infrastructure (aviation, civil engineering
projects, power generation, telecommunications), property (including a
portion of Lantau Island, the site of Disney's Hong Kong theme park), and
trading and distribution firms.
Cosco Pacific Limited, headquartered in Hong Kong, China, is one of the
world's leading container-related companies with an increasingly
integrated range of activities spanning container leasing, container
terminals and container-related industries. The company's parent, China
Ocean Shipping (Group) Company, is the largest shipping company in China.
MSCI EAFE Target 20 Strategy Stocks
Belgium
_______
Belgacom S.A., headquartered in Brussels, Belgium, provides communication
services and products to residential, business and corporate customers in
Belgium and internationally.
France
______
Compagnie de Saint-Gobain S.A., headquartered in Paris, France, produces
flat glass, insulation, and glass containers, high-performance ceramics,
plastics, and abrasives, and building materials such as roofing, wall
facings, mortars, and ductile cast iron pipe.
France Telecom S.A., headquartered in Paris, France, through its
subsidiaries, offers various telecommunications services, which include
fixed line telephony, wireless telephony, multimedia, Internet, data
transmission, cable television and other services to consumers,
businesses, and telecommunications operators worldwide.
Groupe Danone S.A., headquartered in Paris, France, together with its
subsidiaries, produces fresh dairy products, biscuits and cereal
products, and packaged water worldwide.
Vivendi S.A., headquartered in Paris, France, through its subsidiaries,
conducts operations ranging from music, games and television to film and
telecommunications.
Germany
_______
Bayerische Motoren Werke (BMW) AG, headquartered in Munich, Germany,
manufactures and sells luxury cars and motorcycles worldwide.
Porsche Automobil Holding SE, headquartered in Stuttgart, Germany, is
engaged in the design, manufacture, and marketing of luxury sports cars.
The company also designs and builds engines, transmissions, and driver
security collision systems on contract for other manufacturers. The
company sells and leases its cars worldwide.
Hong Kong
_________
MTR Corporation Limited, headquartered in Hong Kong, China, operates Hong
Kong's mass transit railway system. The company also develops and sells
residential and commercial properties near its stations, invests in
shopping centers, and provides wireless telecommunications, advertising
and property management services.
Ireland
_______
CRH Plc, headquartered in Dublin, Ireland, manufactures cement, concrete
products, aggregates, asphalt, clay bricks, chemical lime, security
fencing products, and roofing, insulation and other building materials.
The company also operates builders merchant locations and DIY stores.
Italy
_____
Enel SpA, headquartered in Rome, Italy, generates, transmits and
distributes electricity throughout Italy. The company's subsidiaries also
provide fixed-line and mobile telephone services, install public lighting
systems, and operate real estate, telecommunications and Internet service
provider businesses.
Eni SpA, headquartered in Rome, Italy, operates in the oil and natural
gas, petrochemicals, and oil field services industries. The company is
currently expanding into power generation.
Telecom Italia SpA, headquartered in Milan, Italy, through subsidiaries,
offers fixed line and mobile telephone and data transmission services in
Italy and abroad. The company offers local and long-distance telephone,
satellite communications, Internet access and teleconferencing services.
Japan
_____
Bridgestone Corp., headquartered in Tokyo, Japan, is the world's largest
tire maker. The company also makes tires for heavy equipment (off-road
and mining vehicles) and aircraft. Non-tire products include building
materials (roof tiles), sporting goods (golf balls), industrial rubber
products (conveyor belts and automotive hoses), marine components
(dredging hoses, marine fenders, oil booms, and silt barriers), and
switches.
Page 25
Kyushu Electric Power Company, Incorporated, headquartered in Fukuoka
City, Japan, provides electric power in Kyushu including Fukuoka,
Nagasaki, Kumamoto, Oita, Miyazaki, and Kagoshima. The company, which
also has offices in the United States and Europe, diversifies power
resources into nuclear, liquefied natural gas, coal, and geothermal
energy.
The Netherlands
_______________
European Aeronautic Defence and Space Company, headquartered in Le Carre,
the Netherlands, manufactures airplanes and military equipment. The
company produces commercial aircraft including the "Airbus," military
fighter aircraft, military and commercial helicopters, missiles,
satellites, and telecommunications and defense systems. The company also
offers military and commercial aircraft conversion and maintenance
services.
Koninklijke (Royal) Philips Electronics N.V., headquartered in Amsterdam,
the Netherlands, makes lighting products; consumer electronics;
components and sub-systems; music and films, integrated circuits and
discrete semiconductors; and medical systems and business electronics.
The company markets its products worldwide.
Royal Dutch Shell Plc, headquartered in The Hague, the Netherlands,
produces crude oil, natural gas, chemicals, coal and metals worldwide;
and it provides integrated petroleum services in the United States.
Spain
_____
Repsol YPF, S.A., headquartered in Madrid, Spain, explores for and
produces crude oil and natural gas. Through its subsidiaries, the company
also refines petroleum and transports petroleum products. Gasoline and
other products are retailed through its chain of gasoline filling
stations. Petroleum reserves are maintained in Spain, Asia, Latin
America, the Middle East, North Africa and the United States.
United Kingdom
______________
BP Plc, headquartered in London, England, produces and markets crude oil
and petroleum products worldwide, is engaged in exploration and field
development throughout the world, and is engaged in the manufacture and
sale of various petroleum-based chemical products.
Centrica Plc, headquartered in Windsor, England, through various
subsidiaries, provides gas and energy related products and services to
residential and business customers throughout Great Britain.
The Nasdaq(R) Target 15 Strategy Stocks
Altera Corporation, headquartered in San Jose, California, designs,
manufactures and markets programmable logic devices and associated
development tools to the telecommunications, data communications and
industrial applications markets.
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production.
Apollo Group, Inc. (Class A), headquartered in Phoenix, Arizona, through
subsidiaries, offers higher education programs and services for working
adults at over 100 campuses and learning centers in the United States,
Puerto Rico and London, England. The company offers accredited degree
programs, certificate programs and customized training.
Bed Bath & Beyond Inc., headquartered in Union, New Jersey, sells
domestic merchandise (bed linens, bath accessories and kitchen textiles)
and home furnishings (cookware, dinnerware, glassware and basic
housewares) through retail stores.
C.H. Robinson Worldwide, Inc., headquartered in Eden Prairie, Minnesota,
offers multimodal transportation services and a variety of logistics
solutions, including fresh produce sourcing and freight consolidation.
The company operates a network of offices in the United States and
internationally.
Cephalon, Inc., headquartered in West Chester, Pennsylvania, discovers
and develops pharmaceutical products for the treatment of neurological
disorders such as narcolepsy, amyotrophic lateral sclerosis ("ALS" or Lou
Gehrig's disease), Parkinson's disease, peripheral neuropathies,
Alzheimer's disease and stroke.
Check Point Software Technologies Ltd., headquartered in Ramat-Gan,
Israel, develops, sells and supports secure enterprise networking
solutions. The company's integrated architecture includes network
security ("FireWall-1," "VPN-1," "Open Security Manager" and "Provider-
1"), traffic control ("FloodGate-1" and "ConnectControl") and Internet
protocol address management ("Meta IP").
Cintas Corporation, headquartered in Cincinnati, Ohio, designs and
manufactures corporate identity uniforms which they rent or sell to
customers, along with non-uniform equipment. The company also offers
ancillary products which include the sale or rental of walk-off mats,
fender covers, towels, mops and linen products.
Page 26
The DIRECTV Group, Inc., headquartered in El Segundo, California,
provides digital television entertainment in the United States and Latin
America.
Fastenal Company, headquartered in Winona, Minnesota, is principally
engaged in the sale of industrial supplies, including threaded fasteners
and construction supplies, through its retail store sites located in all
50 states, Canada, Mexico, Puerto Rico and Singapore.
Gilead Sciences, Inc., headquartered in Foster City, California,
discovers, develops and commercializes treatments for important viral
diseases, including a currently available therapy for cytomegalovirus
retinitis, and products in development to treat diseases caused by human
immunodeficiency virus, hepatitis B virus and influenza virus.
Hansen Natural Corporation, headquartered in Corona, California, through
its subsidiaries, engages in the development, marketing, sale, and
distribution of beverages in the United States and Canada.
J.B. Hunt Transport Services, Inc., headquartered in Lowell, Arkansas,
provides a variety of motor transport and logistics services throughout
the United States, Canada and Mexico. The company transports a variety of
products, including automotive parts, department store merchandise, food
and beverages, paper and wood products, plastics and chemicals.
Microsoft Corporation, headquartered in Redmond, Washington, develops,
manufactures, licenses and supports a range of software products,
including scalable operating systems, server applications, worker
productivity applications and software development tools. The company
also develops the MSN network of Internet products and services.
Ross Stores, Inc., headquartered in Newark, California, operates a chain
of off-price retail apparel and home accessories stores. The stores offer
brand name and designer merchandise at low everyday prices.
NYSE(R) International Target 25 Strategy Stocks
Canada
______
Bank of Montreal, headquartered in Montreal, Quebec, Canada, and its
subsidiaries, offers credit and noncredit products and services in North
America.
Petro-Canada, headquartered in Calgary, Alberta, Canada, is an oil, gas
and petroleum company. The company explores for, develops, produces and
markets crude oil, natural gas and natural gas liquids. The company also
refines, distributes and markets petroleum products and related goods and
services.
The Toronto-Dominion Bank, headquartered in Toronto, Ontario, Canada, and
its subsidiaries provide retail and commercial banking, wealth
management, and wholesale banking products and services in the United
States, Canada, and internationally.
France
______
AXA S.A. (ADR), headquartered in Paris, France, is an insurance company
which also provides related financial services. The company offers life
and non-life insurance, reinsurance, savings and pension products, and
asset management services.
Veolia Environnement (ADR), headquartered in Paris, France, offers waste
management services and logistics for industrial clients, sorting and
recycling of materials, waste treatment through incineration, composting
and storage, and final recovery of waste in the form of energy or organic
materials.
Germany
_______
Allianz AG (ADR), headquartered in Munich, Germany, is a global insurance
company engaging in property and casualty protection, life and health
insurance, and asset management.
Daimler AG, headquartered in Stuttgart, Germany, designs, manufactures,
assembles and sells passenger cars and commercial trucks under the brand
names "Mercedes-Benz" and "Daimler." The company also provides related
financial services for its automotive and commercial operations.
Deutsche Bank AG, headquartered in Frankfurt, Germany, provides a broad
range of banking, investment, fund management, securities, credit card,
mortgage leasing and insurance services worldwide. The company provides
its services to retailers and private clients, corporations and financial
institutions, as well as multi-national conglomerates. The company also
offers a variety of financial consulting and advisory services.
Greece
______
National Bank of Greece S.A. (ADR), headquartered in Athens, Greece,
together with its subsidiaries, provides diversified financial services
primarily in Greece.
Italy
_____
Telecom Italia SpA (ADR), headquartered in Milan, Italy, through
subsidiaries, offers fixed line and mobile telephone and data
transmission services in Italy and abroad. The company offers local and
long-distance telephone, satellite communications, Internet access and
teleconferencing services.
Page 27
Japan
_____
Hitachi, Ltd. (ADR), headquartered in Tokyo, Japan, is engaged in the
manufacture of communications and electronic equipment, consumer
electronics, and heavy electrical and industrial machinery. The company
has a wide range of products from nuclear power systems to kitchen
appliances and also operates subsidiaries in the metal, chemical, and
wire and cable industries.
Honda Motor Co., Ltd. (ADR), headquartered in Tokyo, Japan,
manufactures, distributes and provides financing for the sale of its
motorcycles, automobiles and power products, including portable
generators, power tillers and general purpose engines.
Nippon Telegraph & Telephone Corporation (ADR), headquartered in Tokyo,
Japan, provides telephone, telegraph, leased circuits, data
communication, terminal equipment sales, and related services. The
company provides both local and long distance telecommunication services
within Japan.
Sony Corporation (ADR), headquartered in Tokyo, Japan, develops, makes
and markets electronic equipment and devices. Products include video and
audio equipment and televisions; computers and computer peripherals;
semiconductors and telecommunications equipment.
The Netherlands
_______________
ArcelorMittal (ADR), headquartered in Luxembourg City, Luxembourg, and
domiciled in Rotterdam, the Netherlands, through its subsidiaries,
operates as a global steel company. The company produces a range of
finished and semi-finished steel products that include hot-rolled sheets,
cold-rolled sheets, electro-galvanized and coated steel, bars, wire-rods,
wire-products, pipes, billets and slabs.
ING Groep N.V. (ADR), headquartered in Amsterdam, the Netherlands, offers
a comprehensive range of financial services worldwide, including life and
non-life insurance, commercial and investment banking, asset management
and related products.
Russia
______
Vimpel-Communications (VimpelCom) (ADR), headquartered in Moscow, Russia,
is a provider of cellular telecommunications services in Russia,
including the City of Moscow and the Moscow region. The company operates
under the "Bee Line" brand, which is one of the most recognized brand
names in Russia.
South Korea
___________
Korea Electric Power Corporation (ADR), headquartered in Seoul, South
Korea, builds and operates hydro-power, thermal-power, and nuclear power
units in South Korea. The company also generates, transmits, and
distributes electricity to South Korea and is majority owned by the
Korean government.
Spain
_____
Repsol YPF, S.A. (ADR), headquartered in Madrid, Spain, explores for and
produces crude oil and natural gas. Through its subsidiaries, the company
also refines petroleum and transports petroleum products. Gasoline and
other products are retailed through its chain of gasoline filling
stations. Petroleum reserves are maintained in Spain, Asia, Latin
America, the Middle East, North Africa and the United States.
Switzerland
___________
Credit Suisse Group (ADR), headquartered in Zurich, Switzerland, is one
of the world's leading financial services companies, providing banking
and insurance solutions for private clients, companies and institutions.
UBS AG, headquartered in Zurich, Switzerland, is a leading global
financial services firm, the world's largest global asset manager, a top-
tier provider of investment banking and securities distribution, and a
leading provider of private banking services.
United Kingdom
______________
Barclays Plc (ADR), headquartered in London, England, is a financial
services group engaged primarily in the banking and investment banking
businesses. Through its subsidiary, Barclay Bank Plc, the company offers
commercial and investment banking, insurance, financial and related
services in more than 60 countries.
Lloyds TSB Group Plc (ADR), headquartered in London, England, through
subsidiaries and associated companies, offers a wide range of banking and
financial services throughout the United Kingdom and a number of other
countries.
Rio Tinto Plc (ADR), headquartered in London, England, is engaged in
finding, mining and processing mineral resources. The company's major
products include aluminum, copper, diamonds, energy products (coal and
uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc
and zircon) and iron ore.
Page 28
Royal Bank of Scotland Group Plc (ADR), headquartered in Edinburgh,
Scotland, offers services such as deposit accounts, credit cards and
mortgages to commercial and personal clients in Scotland, England, Wales
and Ireland. The company also sells insurance and investment products and
provides private banking through The Coutts Group. In the United States
it owns Citizens Financial, one of the largest bank holding companies in
New England.
The S&P Target 24 Strategy Stocks
Altera Corporation, headquartered in San Jose, California, designs,
manufactures and markets programmable logic devices and associated
development tools to the telecommunications, data communications and
industrial applications markets.
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production.
AutoZone, Inc., headquartered in Memphis, Tennessee, is a specialty
retailer of automotive parts, chemicals and accessories, targeting the
do-it-yourself customers. The company offers a variety of products,
including new and remanufactured automotive hard parts, maintenance items
and accessories.
Campbell Soup Company, headquartered in Camden, New Jersey, operates with
its consolidated subsidiaries as a manufacturer and marketer of soups and
a manufacturer of juice beverages, sauces, biscuits and confectionery
products.
Chevron Corporation, headquartered in San Francisco, California, is
engaged in fully integrated petroleum operations, chemicals operations,
and coal mining through subsidiaries and affiliates worldwide. The
company markets its petroleum products under brand names such as
"Chevron," "Texaco," "Caltex," "Havoline" and "Delo." The company is also
developing businesses in the areas of e-commerce and technology.
Coach, Inc., headquartered in New York, New York, designs, produces and
markets leather goods and accessories. Products include handbags,
business cases, luggage and travel accessories. The company markets its
products internationally.
Colgate-Palmolive Company, headquartered in New York, New York, is an
international consumer products company. The company's products include
toothpaste, toothbrushes, shampoos, deodorants, bar and liquid soaps,
dishwashing liquid and laundry products, among others. The company's
brand names include "Ajax," "Colgate," "Fab," "Mennen," "Palmolive,"
"Prescription Diet," "Protex," "Science Diet" and "Soupline/Suavitel."
Dover Corporation, headquartered in New York, New York, makes, installs
and services elevators. The company also makes a broad range of
specialized metal fabricated industrial products, electronic components
and sophisticated manufacturing equipment.
The Dun & Bradstreet Corporation, headquartered in Short Hills, New
Jersey, provides business information and tools in the United States and
internationally.
ENSCO International Incorporated, headquartered in Dallas, Texas, is an
international offshore contract drilling company that also provides
marine transportation services in the Gulf of Mexico.
EOG Resources, Inc., headquartered in Houston, Texas, is engaged in the
exploration for, and the development, production and marketing of,
natural gas and crude oil primarily in major producing basins in the
United States, as well as in Canada, Trinidad and other international
areas.
Forest Laboratories, Inc., headquartered in New York, New York, develops,
manufactures and sells both branded and generic forms of ethical drug
products that require a physician's prescription, as well as
non-prescription pharmaceutical products sold over-the-counter.
Gilead Sciences, Inc., headquartered in Foster City, California,
discovers, develops and commercializes treatments for important viral
diseases, including a currently available therapy for cytomegalovirus
retinitis, and products in development to treat diseases caused by human
immunodeficiency virus, hepatitis B virus and influenza virus.
Lexmark International, Inc., headquartered in Lexington, Kentucky,
develops, manufactures and supplies printing solutions and products,
including laser and inkjet printers and associated supplies for the
office and home markets.
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
Page 29
Microchip Technology Incorporated, headquartered in Chandler, Arizona,
develops, makes and markets field programmable 8-bit microcontrollers,
application-specific standard products and related specialty memory
products for high-volume embedded control applications in the consumer,
automotive, office automation, communications and industrial markets.
Moody's Corporation, headquartered in New York, New York, is a global
credit rating, research and risk analysis firm, publishing credit
opinions, research and ratings on fixed-income securities, issuers of
securities and other credit obligations.
PepsiCo, Inc., headquartered in Purchase, New York, markets and
distributes beverages including "Pepsi-Cola," "Diet Pepsi," "Pepsi Max,"
"Mountain Dew," "7UP," "Diet 7UP," "Mirinda," "Slice" and "Tropicana Pure
Premium." The company, which operates internationally, also makes and
distributes ready-to-drink Lipton tea products and snacks, with
"Frito-Lay" representing the North American business.
Public Storage, headquartered in Glendale, California, is a real estate
investment trust specializing in mini warehouses and self-service storage
facilities. The company also has properties used in other industrial and
commercial operations.
Sempra Energy, headquartered in San Diego, California, is an energy
services company whose primary subsidiaries are San Diego Gas and
Electric, which provides electric and gas service to San Diego and
southern Orange Counties, and Southern California Gas Company.
The Southern Company, headquartered in Atlanta, Georgia, through wholly
owned subsidiaries, supplies electricity in Alabama, Florida, Georgia and
Mississippi; and owns generating units at a large electric generating
station which supplies power to certain utility subsidiaries.
TECO Energy, Inc., headquartered in Tampa, Florida, is a utility holding
company whose subsidiaries provide retail electric and gas service to
customers in central Florida and operate independent power projects in
the United States and Latin America.
The Travelers Companies, Inc., headquartered in St. Paul, Minnesota,
through its subsidiaries, provides commercial and personal property and
casualty insurance products and services to businesses, government units,
associations and individuals in the United States.
W.W. Grainger, Inc., headquartered in Lake Forest, Illinois, is a
distributor of maintenance, repair, and operating supplies, services and
related information to the commercial, industrial, contractor and
institutional markets in North America.
S&P Target SMid 60 Strategy Stocks
Advanced Medical Optics, Inc., headquartered in Santa Clara, California,
has developed and makes a device which uses an excimer laser to reshape
the surface of the cornea to treat nearsightedness, astigmatism and
farsightedness and is intended to reduce or eliminate the patient's
dependence on corrective lenses.
Albany International Corp. (Class A), headquartered in Albany, New York,
develops, manufactures, markets and services custom-designed engineered
fabrics used in the manufacture of paper, paperboard and products in
other process industries.
Avnet Inc., headquartered in Phoenix, Arizona, distributes electronic
components, enterprise network and computer equipment, and embedded
subsystems.
Benchmark Electronics, Inc., headquartered in Angleton, Texas, provides
contract manufacturing and design services to original equipment
manufacturers. The company specializes in the assembly of printed circuit
boards with computer-automated equipment using surface mount and
pin-through-hole interconnection technologies.
Black Box Corporation, headquartered in Lawrence, Pennsylvania, is a
direct marketer and technical service provider of computer communications
and networking equipment and services to businesses of all sizes,
operating in 132 countries.
Brightpoint, Inc., headquartered in Plainfield, Indiana, is a distributor
of wireless devices and accessories, and provides logistics services to
mobile operators with operations centers and/or sales offices in various
countries, including Australia, Colombia, Finland, France, Germany,
India, New Zealand, Norway, the Philippines, the Slovak Republic, Sweden,
United Arab Emirates and the United States.
Cabela's Incorporated, headquartered in Sidney, Nebraska, operates as a
direct marketer and a retailer of hunting, fishing, camping, and related
outdoor merchandise.
Page 30
Cedar Shopping Centers Inc., headquartered in Port Washington, New York,
is a real estate investment trust that engages in the ownership,
operation, development and redevelopment of supermarket-anchored
community shopping centers and drug store-anchored convenience centers in
the United States.
Checkpoint Systems, Inc., headquartered in Thorofare, New Jersey, is a
manufacturer and marketer of retail asset tracking and protection
products including integrated security, automatic identification and
retail merchandising solutions.
CIBER, Inc., headquartered in Greenwood Village, Colorado, and its
subsidiaries provide information technology (IT) system integration
consulting and other IT services to companies across most major
industries and governmental agencies. The company also resells certain IT
hardware and software products.
Cimarex Energy Co., headquartered in Denver, Colorado, is engaged in oil
and gas exploration and production and gas marketing, with exploration
and development activities primarily in Louisiana, Oklahoma, Texas and
the Hugoton Field of western Kansas.
The Cooper Companies, Inc., headquartered in Pleasanton, California,
provides proprietary products and services in two areas: specialty
contact lenses; and diagnostic and surgical instruments for women's
health care. Major brand names include "Hydrasoft," "Preference,"
"Vantage," "Permaflex" and "Cooper Clear."
Cross Country Healthcare, Inc., headquartered in Boca Raton, Florida, is
a provider of healthcare staffing services, comprised of travel nurse and
allied health staffing, per diem nurse staffing and clinical research
trials staffing.
DiamondRock Hospitality Company, headquartered in Bethesda, Maryland, is
a lodging-focused real estate investment trust that owns and operates
upscale hotels and resorts in North America.
Exterran Holdings Inc., headquartered in Houston, Texas, provides natural
gas compression technology, and sales, operations, maintenance,
fabrication, service, and equipment for oil and gas production,
processing, and transportation applications worldwide.
Fairchild Semiconductor International, Inc., headquartered in South
Portland, Maine, provides products that manage and distribute power and
interface solutions for various electronic devices. The company's
semiconductors are used in computers, communication products and other
applications.
Forest Oil Corporation, headquartered in Denver, Colorado, is a natural
gas and crude oil exploration, development, production and marketing
company with active interests in several major exploration and producing
areas in North America. The company's major reserves and producing
properties are located in the Gulf of Mexico, Louisiana, West Texas,
Wyoming, and western Canada.
Gibraltar Industries Inc., headquartered in Buffalo, New York, is a
processor of a broad array of high value-added, technically sophisticated
steel and other metal products.
The Great Atlantic & Pacific Tea Company, Inc., headquartered in
Montvale, New Jersey, is a supermarket company which operates under the
names: "A&P," "Super Fresh," "Sav-A-Center," "Farmer Jack,"
"Waldbaum's," "Super FoodMart," "Ultra Food and Drug," "Dominion," "Food
Basics," "The Barn Markets" and "Food Emporium."
Great Plains Energy Incorporated, headquartered in Kansas City, Missouri,
provides electricity in the midwestern United States. The company
develops competitive generation for the wholesale market. The company is
also an electric delivery company with regulated generation. In addition,
the company invests in energy-related ventures nationwide.
Hornbeck Offshore Services, Inc., headquartered in Covington, Louisiana,
provides marine transportation services to the offshore oil and gas
industry. The company owns and operates supply vessels in the Gulf of
Mexico supporting operations of drilling rigs and platforms. Ocean-going
tugs and barges are also operated in the northeastern United States and
Puerto Rico.
Ingram Micro Inc., headquartered in Santa Ana, California, is a wholesale
distributor of information technology products and services. The company
also markets computer hardware, networking equipment, and software
products, and provides supply chain optimization services and demand
generation services for its suppliers and reseller customers.
Integrated Device Technology, Inc., headquartered in Santa Clara,
California, designs, develops, manufactures and markets high-performance
semiconductor products and modules for data communications and
telecommunications equipment, personal computers and shared network
devices.
Intersil Corporation, headquartered in Irvine, California, is a systems
oriented designer and manufacturer of analog and digital integrated
circuits and discrete semiconductors for the communications market.
Page 31
ION Geophysical Corporation, headquartered in Stafford, Texas, designs
and manufactures products for the collection of seismic data on land, in
transition zones and in marine environments. The company's serves seismic
contractors and major independent and overseas oil and gas companies
globally.
Kindred Healthcare, Inc., headquartered in Louisville, Kentucky, is a
healthcare services company that primarily operates hospitals, nursing
centers and institutional pharmacies.
LaBranche & Co Inc., headquartered in New York, New York, is a
broker/dealer specialist with the New York Stock Exchange. The company
helps maintain a fair and orderly market in specific securities by
matching buyers and sellers and trading for their own account.
LifePoint Hospitals, Inc., headquartered in Brentwood, Tennessee, is
engaged primarily in the operation and management of healthcare
facilities, in particular, general, acute care hospitals in non-urban
communities in the United States.
Live Nation Inc., headquartered in Beverly Hills, California, is a
concert and live event promoter. The company produces and operates such
live events as music concerts, theatrical shows and specialized motor
sports events.
Mariner Energy Inc., headquartered in Houston, Texas, operates as an
independent oil and gas exploration, development and production company.
Medical Properties Trust Inc., headquartered in Birmingham, Alabama, is
a real estate investment trust that acquires and develops healthcare
facilities and leases the facilities to healthcare operating companies.
MPS Group, Inc., headquartered in Jacksonville, Florida, provides
consulting, solutions, and staffing services to businesses in the United
States, Canada, the United Kingdom and Europe. The company provides its
services in the disciplines of information technology, finance and
accounting, law, electronic business, engineering, human capital
automation, executive search and work force management.
NCI Building Systems, Inc., headquartered in Houston, Texas, is an
integrated manufacturer of metal products for the building industry.
Newfield Exploration Company, headquartered in Houston, Texas, explores
for, develops and acquires oil and natural gas properties located
principally in the Gulf of Mexico.
NV Energy Inc., headquartered in Reno, Nevada, operates as the holding
company for Nevada Power Company and Sierra Pacific Power Company which
engage in the distribution, transmission, generation and sale of electric
energy.
OM Group, Inc., headquartered in Cleveland, Ohio, through its operating
subsidiaries, is a vertically integrated international producer and
marketer of value-added metal-based specialty chemicals.
Overseas Shipholding Group, Inc., headquartered in New York, New York, an
independent bulk shipping company, engages in the ocean transportation of
crude oil and petroleum products.
Plains Exploration & Production Company, headquartered in Houston, Texas,
is an oil and gas company engaged in the activities of acquiring,
developing, exploiting, exploring and producing oil and gas properties in
the United States.
PolyOne Corporation, headquartered in Avon Lake, Ohio, serves as a
polymer services company worldwide.
Presidential Life Corporation, headquartered in Nyack, New York, through
its wholly owned subsidiary, Presidential Life Insurance Company, sells
annuity and life insurance products in the United States.
Pride International, Inc., headquartered in Houston, Texas, is an
international provider of contract drilling and related services,
operating both offshore and on land.
Quicksilver Resources Inc., headquartered in Fort Worth, Texas, is an
independent oil and gas company engaged in the exploration, acquisition,
development, production and sale of natural gas, crude oil and natural
gas liquids, primarily from unconventional reservoirs such as fractured
shales, coal beds and tight sands.
Regis Corporation, headquartered in Edina, Minnesota, operates and
franchises hair and retail product salons under the names "Regis
Hairstylists," "Supercuts," "MasterCuts," "Trade Secret," and
"SmartStyle." The company operates salons worldwide.
Reliance Steel & Aluminum Co., headquartered in Los Angeles, California,
is a metals service center company which operates processing and
distribution facilities in 27 states, Belgium, France and South Korea.
RTI International Metals, Inc., headquartered in Niles, Ohio,
manufactures and distributes titanium and specialty metal products
through subsidiaries. The company's products also include extruded shapes
and engineered systems and are used for aerospace, industrial and
consumer applications.
Page 32
School Specialty, Inc., headquartered in Appleton, Wisconsin, is a
distributor of non-textbook educational supplies and furniture for grades
pre-kindergarten through 12 to school districts, administrators and
teachers through its catalogs.
Sterling Financial Corporation, headquartered in Spokane, Washington, is
a unitary savings and loan holding company, the significant operating
subsidiary of which is Sterling Savings Bank.
Stone Energy Corporation, headquartered in Lafayette, Louisiana, is an
independent oil and gas company engaged in the acquisition, exploration,
development and operation of oil and gas properties located onshore and
in the shallow waters of offshore Louisiana.
Swift Energy Company, headquartered in Houston, Texas, is engaged in
developing, exploring, acquiring and operating oil and gas properties,
with a focus on onshore and inland waters oil and natural gas reserves in
Texas and Louisiana, and onshore oil and natural gas reserves in New
Zealand.
SYNNEX Corporation, headquartered in Fremont, California, operates as an
information technology supply chain services company.
Tech Data Corporation, headquartered in Clearwater, Florida, is a full-
line distributor of technology products. The company serves resellers in
the United States, Canada, the Caribbean, Latin America, Europe and the
Middle East. The company also provides pre- and post-sale training,
service, and support, as well as configuration and assembly services and
electronic commerce solutions.
Temple-Inland Inc., headquartered in Austin, Texas, through its
subsidiaries, conducts operations in three groups: Paper, Building
Products and Financial Services.
Terex Corporation, headquartered in Westport, Connecticut, is a global
manufacturer of equipment for the construction, infrastructure and mining
industries.
The Timken Company, headquartered in Canton, Ohio, is a global
manufacturer of highly engineered bearings, alloy and specialty steel and
related components.
Trinity Industries, Inc., headquartered in Dallas, Texas, provides
various products and services for the transportation, industrial,
construction and energy sectors in the United States and Europe.
UCBH Holdings, Inc., headquartered in San Francisco, California, a bank
holding company, provides a range of personal and commercial banking
services to small and medium-sized businesses, business executives,
professionals and other individuals through its wholly owned banking
subsidiary, United Commercial Bank.
Unit Corporation, headquartered in Tulsa, Oklahoma, through its wholly-
owned subsidiaries, contracts to drill onshore oil and natural gas wells
for others and explores for, develops, acquires and produces oil and
natural gas properties for itself.
United Rentals, Inc., headquartered in Greenwich, Connecticut, operates
as an equipment rental company in North America.
WellCare Health Plans Inc., headquartered in Tampa, Florida, provides
managed care services to government-sponsored healthcare programs in
Florida, New York, Illinois, Indiana, Connecticut, Louisiana and Georgia.
The company's activities primarily include claims processing and medical
management.
Wintrust Financial Corporation, headquartered in Lake Forest, Illinois,
is a holding company whose subsidiaries provide banking services in the
Chicago metropolitan area and financing for the payment of insurance
premiums.
Target Diversified Dividend Strategy Stocks
Alcoa Inc., headquartered in Pittsburgh, Pennsylvania, makes primary
aluminum and fabricated products for the transportation, construction,
packaging and other markets.
American Greetings Corporation, headquartered in Cleveland, Ohio, and its
subsidiaries design, manufacture, and sell everyday and seasonal greeting
cards and other social expression products. The company's products
include greeting cards, gift wrap, paper party goods, candles, balloons,
stationery and giftware. The company's products are sold throughout the
world.
AT&T Inc., headquartered in San Antonio, Texas, is the largest
telecommunications holding company in the United States. The company is a
worldwide provider of IP-based communications services to business and a
leading U.S. provider of high-speed DSL Internet, local and long-
distance voice services, wireless services, and directory publishing and
advertising services.
Page 33
Barnes & Noble, Inc., headquartered in New York, New York, is a retailer
that operates bookstores and video game and entertainment software stores
under the "Barnes & Noble Booksellers," "Bookstop," "Bookstar," "B.
Dalton Bookseller," "Doubleday Book Shops" and "Scribner's Bookstore"
trade names.
Biovail Corporation, headquartered in Mississauga, Ontario, Canada, is a
fully integrated pharmaceutical company specializing in the development
of drugs utilizing advanced controlled-release, rapid dissolve, enhanced
absorption and taste masking technologies.
Bristol-Myers Squibb Company, headquartered in New York, New York,
through divisions and subsidiaries, produces and distributes
pharmaceutical and non-prescription health products, toiletries and
beauty aids, and medical devices.
Cal-Maine Foods, Inc., headquartered in Jackson, Mississippi, is
primarily engaged in the production, cleaning, grading and packaging of
fresh shell eggs for sale to shell egg retailers.
Capital One Financial Corporation, headquartered in Falls Church,
Virginia, is a holding company whose principal subsidiaries, Capital One
Bank and Capital One, F.S.B., offer consumer lending products.
CenturyTel, Inc., headquartered in Monroe, Louisiana, is a regional
diversified communications company engaged primarily in providing local
exchange telephone services and wireless telephone communications
services.
Cognex Corporation, headquartered in Natick, Massachusetts, designs,
develops, makes and sells machine vision systems which are used to
replace human vision in a wide range of manufacturing processes in the
semiconductor, electronics, automotive, graphic arts and pharmaceutical
industries.
Commercial Metals Company, headquartered in Irving, Texas, manufactures,
recycles, markets and distributes steel and metal products and related
materials and services through a network of locations located throughout
the United States and internationally.
Deutsche Bank AG, headquartered in Frankfurt, Germany, provides a broad
range of banking, investment, fund management, securities, credit card,
mortgage leasing and insurance services worldwide. The company provides
its services to retailers and private clients, corporations and financial
institutions, as well as multi-national conglomerates. The company also
offers a variety of financial consulting and advisory services.
The Dow Chemical Company, headquartered in Midland, Michigan, is a
leading manufacturer and supplier of chemicals, plastic materials and
agricultural products, and other specialized products and services
marketed worldwide.
DTE Energy Company, headquartered in Detroit, Michigan, is an exempt
holding company for The Detroit Edison Company, a public utility engaged
in the generation, purchase, transmission, distribution and sale of
electric energy in southeastern Michigan.
Eli Lilly and Company, headquartered in Indianapolis, Indiana, with
subsidiaries, develops, makes and markets pharmaceutical and animal
health products sold in countries around the world. The company also
provides healthcare management services in the United States.
Genco Shipping & Trading Ltd., incorporated in the Marshall Islands and
headquartered in New York, New York, offers shipping services. The
company's drybulk carrier ships transport iron ore, coal, grain, steel,
and other products.
The Hartford Financial Services Group, Inc., headquartered in Hartford,
Connecticut, writes commercial property and casualty insurance, personal
automobile and homeowners coverages and a variety of life insurance
plans; and reinsures third-party risks. The company's strategy is to
focus on five core areas: life insurance, reinsurance, commercial lines
property-casualty insurance, personal lines property-casualty insurance,
and international operations.
Intersil Corporation, headquartered in Irvine, California, is a systems
oriented designer and manufacturer of analog and digital integrated
circuits and discrete semiconductors for the communications market.
Macy's, Inc., headquartered in Cincinnati, Ohio, operates department
stores nationwide. The company also operates electronic commerce and
direct mail catalog subsidiaries.
Maxim Integrated Products, Inc., headquartered in Sunnyvale, California,
designs and makes linear and mixed-signal integrated circuits. The
company's products include data converters, interface circuits,
microprocessor-supervisors and amplifiers.
Methanex Corporation, headquartered in Vancouver, British Columbia,
Canada, produces and markets methanol. The company's product is used to
produce formaldehyde, acetic acid and a variety of other chemical
intermediates. Methanol is also used as an additive in gasoline and is
used in fuel cell applications.
Page 34
Molex Incorporated, headquartered in Lisle, Illinois, engages in the
design, manufacture and distribution of electronic components. The
company offers terminals, connectors, planar cables, cable assemblies,
interconnection systems, fiber optic interconnection systems, backplanes
and mechanical and electronic switches.
NACCO Industries, Inc., headquartered in Cleveland, Ohio, manufactures
and markets forklift trucks and related service parts, as well as mines
and markets lignite coal for use by electric utilities. The company also
manufactures small electric and kitchen appliances.
Oshkosh Corporation, headquartered in Oshkosh, Wisconsin, is a
diversified manufacturer of specialty trucks and truck bodies for the
concrete placement, refuse hauling, fire and emergency, and defense
markets.
Overseas Shipholding Group, Inc., headquartered in New York, New York, an
independent bulk shipping company, engages in the ocean transportation of
crude oil and petroleum products.
Patterson-UTI Energy, Inc., headquartered in Snyder, Texas, is the
largest provider of domestic land-based drilling services to major
independent oil and natural gas companies in North America, and is also
engaged in pressure pumping, exploration and drilling.
Penske Automotive Group, Inc., headquartered in Bloomfield Hills,
Michigan, is engaged in the sale of new and used motor vehicles and
related products and services, including vehicle service and parts,
finance and other aftermarket products through a network of franchised
automobile dealerships.
Pepco Holdings, Inc., headquartered in Washington, D.C., is a public
utility company managing several utility operations. The largest
component of the company's business is power delivery, which is conducted
through its subsidiaries, Pepco, Delmarva Power & Light Company and
Atlantic City Electric Company.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries, baby
care products, dental rinse and other proprietary health items.
Pinnacle West Capital Corporation, headquartered in Phoenix, Arizona,
owns Arizona Public Service Company, an electric utility that provides
retail and wholesale electric service to substantially all of Arizona,
with the major exceptions of the Tucson metropolitan area and
approximately one-half of the Phoenix metropolitan area.
Reynolds American Inc., headquartered in Winston-Salem, North Carolina,
is a holding company for Reynolds Tobacco, the second largest cigarette
manufacturer in the United States, whose major brands include "Doral,"
"Winston," "Camel," "Salem" and "Vantage."
Sterling Financial Corporation, headquartered in Spokane, Washington, is
a unitary savings and loan holding company, the significant operating
subsidiary of which is Sterling Savings Bank.
SUPERVALU INC., headquartered in Eden Prairie, Minnesota, operates
within two complementary businesses in the United States grocery food
industry: grocery retail and food distribution.
Teekay Corporation, headquartered in Nassau, Bahamas, provides
international petroleum product and crude oil transportation services to
major oil companies and oil traders, and government agencies. Services
are provided through a fleet of medium size oil tankers worldwide.
TELUS Corporation, headquartered in Vancouver, British Columbia, Canada,
is a telecommunication company offering local, long distance, wireless,
data, Internet and e-business products and services.
Textron, Inc., headquartered in Providence, Rhode Island, is engaged in
the manufacture of helicopters and spare parts, light and mid-size
business jets, turboprop and piston aircraft, automotive interior engine
components and industrial tools.
Tsakos Energy Navigation Ltd., headquartered in Athens, Greece, owns and
operates a fleet of tankers suitable for transporting crude oil, refined
petroleum products and other liquids.
Universal Corporation, headquartered in Richmond, Virginia, is an
independent leaf tobacco merchant with additional operations in agri-
products and the distribution of lumber and building products. The
company markets its products globally.
Verizon Communications Inc., headquartered in New York, New York,
provides wireline voice and data services, wireless services, Internet
service and published directory information. The company also provides
network services for the federal government including business phone
lines, data services, telecommunications equipment and pay phones. The
company operates worldwide.
Westar Energy, Inc., headquartered in Topeka, Kansas, engages in the
generation, transmission, and distribution of electricity in Kansas.
Page 35
Target Growth Strategy Stocks
Abbott Laboratories, headquartered in Abbott Park, Illinois, discovers,
develops, makes and sells a broad and diversified line of healthcare
products and services.
Accenture Ltd., headquartered in Hamilton, Bermuda, provides management
consulting, technology services, and outsourcing services. The company
operates in five segments: Communications and High Tech; Financial
Services; Products and Services; Resources; and Government.
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production.
Apollo Group, Inc. (Class A), headquartered in Phoenix, Arizona, through
subsidiaries, offers higher education programs and services for working
adults at over 100 campuses and learning centers in the United States,
Puerto Rico and London, England. The company offers accredited degree
programs, certificate programs and customized training.
AutoZone, Inc., headquartered in Memphis, Tennessee, is a specialty
retailer of automotive parts, chemicals and accessories, targeting the
do-it-yourself customers. The company offers a variety of products,
including new and remanufactured automotive hard parts, maintenance items
and accessories.
Baxter International Inc., headquartered in Deerfield, Illinois, engages
in the worldwide development, manufacture and distribution of a
diversified line of products, systems and services used primarily in the
healthcare field.
C.H. Robinson Worldwide, Inc., headquartered in Eden Prairie, Minnesota,
offers multimodal transportation services and a variety of logistics
solutions, including fresh produce sourcing and freight consolidation.
The company operates a network of offices in the United States and
internationally.
The Charles Schwab Corporation, headquartered in San Francisco,
California, provides a variety of financial services to individual
investors, independent investment managers, retirement plans, and
institutions. The company provides its services to customers through
multiple service channels, including the Internet, a network of branch
offices, and telephone and multilingual technologies.
Chevron Corporation, headquartered in San Francisco, California, is
engaged in fully integrated petroleum operations, chemicals operations,
and coal mining through subsidiaries and affiliates worldwide. The
company markets its petroleum products under brand names such as
"Chevron," "Texaco," "Caltex," "Havoline" and "Delo." The company is also
developing businesses in the areas of e-commerce and technology.
Coach, Inc., headquartered in New York, New York, designs, produces and
markets leather goods and accessories. Products include handbags,
business cases, luggage and travel accessories. The company markets its
products internationally.
Colgate-Palmolive Company, headquartered in New York, New York, is an
international consumer products company. The company's products include
toothpaste, toothbrushes, shampoos, deodorants, bar and liquid soaps,
dishwashing liquid and laundry products, among others. The company's
brand names include "Ajax," "Colgate," "Fab," "Mennen," "Palmolive,"
"Prescription Diet," "Protex," "Science Diet" and "Soupline/Suavitel."
EOG Resources, Inc., headquartered in Houston, Texas, is engaged in the
exploration for, and the development, production and marketing of,
natural gas and crude oil primarily in major producing basins in the
United States, as well as in Canada, Trinidad and other international
areas.
Express Scripts, Inc., headquartered in Maryland Heights, Missouri, is an
independent pharmacy benefit manager and managed care company that
provides a broad range of pharmacy benefit and medical information
management services, as well as managed vision care programs.
Exxon Mobil Corporation, headquartered in Irving, Texas, explores for,
produces, transports and sells crude oil and natural gas petroleum
products. The company also explores for and mines coal and other minerals
properties; makes and sells petrochemicals; and owns interests in
electrical power generation facilities.
Forest Laboratories, Inc., headquartered in New York, New York, develops,
manufactures and sells both branded and generic forms of ethical drug
products that require a physician's prescription, as well as
non-prescription pharmaceutical products sold over-the-counter.
Gilead Sciences, Inc., headquartered in Foster City, California,
discovers, develops and commercializes treatments for important viral
diseases, including a currently available therapy for cytomegalovirus
retinitis, and products in development to treat diseases caused by human
immunodeficiency virus, hepatitis B virus and influenza virus.
H&R Block, Inc., headquartered in Kansas City, Missouri, is a holding
company whose subsidiaries provide tax-related services, investment
services through broker/dealers, mortgage services, personal productivity
software, accounting, and consulting services to business clients.
Page 36
H.J. Heinz Company, headquartered in Pittsburgh, Pennsylvania,
manufactures, packages and sells processed food products throughout the
world. The company's products include ketchup, sauces/condiments, pet
food, seafood products, baby food, soups, lower-calorie products, bakery
products, frozen dinners and entrees, and frozen pizza. The company also
provides weight control services.
Hewlett-Packard Company, headquartered in Palo Alto, California, designs,
makes and services equipment and systems for measurement, computation and
communications including computer systems, personal computers, printers,
calculators, electronic test equipment, medical electronic equipment,
electronic components and instrumentation for chemical analysis.
Imperial Oil Limited, headquartered in Calgary, Alberta, Canada, is
engaged in the exploration for, production and refining of natural gas
and petroleum products throughout Canada. The company also manufactures
petrochemicals.
Kellogg Company, headquartered in Battle Creek, Michigan, is the world's
leading producer of ready-to-eat cereal products, and has expanded its
operations to include other grain-based convenience food products, such
as "Pop-Tarts," "Eggo," "Nutri-Grain," and "Rice Krispies Treats." The
company also markets "Keebler" food products, as well as other private
label convenience food products.
Lockheed Martin Corporation, headquartered in Bethesda, Maryland, engages
in the research, design, development, manufacture and integration of
advanced technology products and services ranging from aircraft,
spacecraft and launch vehicles to missiles, electronics, information
systems and energy management.
Lorillard, Inc., headquartered in Greensboro, North Carolina, is engaged
in the manufacture and marketing of cigarettes. The company sells to
distributors and retailers in the United States.
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
Microsoft Corporation, headquartered in Redmond, Washington, develops,
manufactures, licenses and supports a range of software products,
including scalable operating systems, server applications, worker
productivity applications and software development tools. The company
also develops the MSN network of Internet products and services.
Occidental Petroleum Corporation, headquartered in Los Angeles,
California, is a multinational organization whose principal business
segments are oil and gas exploration, production and marketing and
chemicals production and marketing.
Rogers Communications, Inc. (Class B), headquartered in Toronto, Ontario,
Canada, through its subsidiaries, provides communications, entertainment
and information services in Canada.
Southwestern Energy Company, headquartered in Houston, Texas, is a
diversified energy company engaging in oil and gas exploration and
production, and natural gas gathering, transmission, marketing and
distribution.
TD Ameritrade Holding Corporation, headquartered in Omaha, Nebraska,
through subsidiaries, operates as an online discount brokerage firm which
provides brokerage services and clearing services to self-directed
individual consumer investors and other financial institutions.
Yum! Brands, Inc., headquartered in Louisville, Kentucky, owns,
franchises and licenses quick-service restaurants worldwide. The
company's restaurants include "A&W All-American Food Restaurants," "KFC,"
"Long John Silver's," "Pizza Hut" and "Taco Bell." They serve chicken,
pizza, seafood, root beer, hamburgers and Mexican food.
Target Mega-Cap Strategy Stocks
3M Company, headquartered in St. Paul, Minnesota, manufactures
industrial, electronic, health, consumer and information-imaging products
for distribution worldwide. The company's products include adhesives,
abrasives, laser imagers and "Scotch" brand products. The company also
manufactures the 3M Electronic Marker System (EMS), markers for utility
usage (water, wastewater or gas) which relocate buried markers via
low-band frequencies.
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production.
Apache Corporation, headquartered in Houston, Texas, is an independent
energy company that explores for, develops, and produces natural gas,
crude oil and natural gas liquids.
Page 37
Becton, Dickinson and Company, headquartered in Franklin Lakes, New
Jersey, manufactures and sells medical supplies, medical devices and
diagnostic systems. The company's products are used by both healthcare
professionals and the general public and are marketed globally.
Chevron Corporation, headquartered in San Francisco, California, is
engaged in fully integrated petroleum operations, chemicals operations,
and coal mining through subsidiaries and affiliates worldwide. The
company markets its petroleum products under brand names such as
"Chevron," "Texaco," "Caltex," "Havoline" and "Delo." The company is also
developing businesses in the areas of e-commerce and technology.
The Chubb Corporation, headquartered in Warren, New Jersey, is a holding
company with subsidiaries principally engaged in the property and
casualty insurance business.
Chunghwa Telecom Co., Ltd. (ADR), headquartered in Taipei, Taiwan,
provides local, domestic, and international long distance services. The
company also offers wireless telecommunication, paging, and Internet
services.
Colgate-Palmolive Company, headquartered in New York, New York, is an
international consumer products company. The company's products include
toothpaste, toothbrushes, shampoos, deodorants, bar and liquid soaps,
dishwashing liquid and laundry products, among others. The company's
brand names include "Ajax," "Colgate," "Fab," "Mennen," "Palmolive,"
"Prescription Diet," "Protex," "Science Diet" and "Soupline/Suavitel."
Comcast Corporation (Class A), headquartered in Philadelphia,
Pennsylvania, operates cable television systems in the United States and
the United Kingdom; develops and operates cellular telephone systems in
Pennsylvania, Delaware and New Jersey; and provides electronic retailing
services.
Devon Energy Corporation, headquartered in Oklahoma City, Oklahoma,
including its subsidiaries, is an energy company engaged primarily in oil
and gas exploration, development and production and in the acquisition of
producing properties.
Duke Energy Corporation, headquartered in Charlotte, North Carolina,
provides electric service to about two million customers in North
Carolina and South Carolina; operates interstate pipelines that deliver
natural gas to various regions of the country; and markets electricity,
natural gas and natural gas liquids.
Exxon Mobil Corporation, headquartered in Irving, Texas, explores for,
produces, transports and sells crude oil and natural gas petroleum
products. The company also explores for and mines coal and other minerals
properties; makes and sells petrochemicals; and owns interests in
electrical power generation facilities.
Gilead Sciences, Inc., headquartered in Foster City, California,
discovers, develops and commercializes treatments for important viral
diseases, including a currently available therapy for cytomegalovirus
retinitis, and products in development to treat diseases caused by human
immunodeficiency virus, hepatitis B virus and influenza virus.
The Home Depot, Inc., headquartered in Atlanta, Georgia, operates do-it-
yourself warehouse stores in the United States, Canada and Mexico. These
stores sell a wide assortment of building material, home improvement, and
lawn and garden products. The company also operates EXPO Design Centers
in several states which offer interior design and renovation products.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and surgical
equipment, and contact lenses.
Lowe's Companies, Inc., headquartered in Wilkesboro, North Carolina,
operates stores which sell building commodities and millwork; heating,
cooling and water systems; home decorating and illumination products;
kitchens, bathrooms and laundries; yard, patio and garden products;
tools; home entertainment products; and special order products.
LUKOIL (ADR), headquartered in Moscow, Russia, is Russia's premier
integrated oil company, producing, refining and selling oil and oil
products. The company accounts for approximately 19% of Russia's crude
oil production.
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
NIKE, Inc. (Class B), headquartered in Beaverton, Oregon, develops and
sells footwear and apparel for men, women and children for competitive
and recreational wear, and designed for specific sports. The company's
other brands include "Converse," "Cole Haan" and "Hurley."
Nippon Telegraph & Telephone Corporation (ADR), headquartered in Tokyo,
Japan, provides telephone, telegraph, leased circuits, data
communication, terminal equipment sales, and related services. The
company provides both local and long distance telecommunication services
within Japan.
Page 38
NTT DoCoMo, Inc. (ADR), headquartered in Tokyo, Japan, provides various
types of telecommunications services including cellular phone, personal
handyphone system (PHS), paging, and other telephone, satellite mobile
communication and wireless Private Branch Exchange (PBX) system services.
The company also sells cellular phones, PNS, car phones and pagers.
Occidental Petroleum Corporation, headquartered in Los Angeles,
California, is a multinational organization whose principal business
segments are oil and gas exploration, production and marketing and
chemicals production and marketing.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries, baby
care products, dental rinse and other proprietary health items.
The Procter & Gamble Company, headquartered in Cincinnati, Ohio,
manufactures consumer products worldwide, including detergents, fabric
conditioners and hard surface cleaners; products for personal cleansing,
oral care, digestive health, hair and skin; paper tissue, disposable
diapers, and pharmaceuticals; and shortenings, oils, snacks, baking
mixes, peanut butter, coffee, drinks and citrus products.
QUALCOMM Inc., headquartered in San Diego, California, designs, develops,
makes, sells, licenses and operates advanced communications systems and
products based on proprietary digital wireless technology. The company's
products include "CDMA" integrated circuits, wireless phones and
infrastructure products, transportation management information systems
and ground stations, and phones for the low-earth- orbit satellite
communications system.
Raytheon Company, headquartered in Lexington, Massachusetts, is in the
business of defense electronics, including missiles; radar; sensors and
electro-optics; intelligence, surveillance and reconnaissance; command,
control, communication and information systems; naval systems; air
traffic control systems; aircraft integration systems; and technical
services.
Roche Holding AG (ADR), headquartered in Basel, Switzerland, develops and
manufactures pharmaceutical and chemical products. The company produces
prescription and non-prescription drugs, fine chemicals, vitamins and
diagnostic equipment. The company manufactures and distributes its
products worldwide.
Taiwan Semiconductor Manufacturing Company Ltd. (ADR), headquartered in
Hsinchu, Taiwan, manufactures integrated circuits based on its
proprietary designs. The company offers a comprehensive set of integrated
circuit fabrication processes to manufacture CMOS logic, mixed-mode,
volatile and non-volatile memory and BiCMOS chips. The company is an
affiliate of Philips Electronic N.V.
Time Warner Cable, Inc., headquartered in Stamford, Connecticut, owns and
manages cable television operations, as well as develops and provides
video, data, and voice services to residential and commercial customers
in the United States.
The Travelers Companies, Inc., headquartered in St. Paul, Minnesota,
through its subsidiaries, provides commercial and personal property and
casualty insurance products and services to businesses, government
units, associations and individuals in the United States.
Target Small-Cap Strategy Stocks
Aerovironment Inc., headquartered in Monrovia, California, engages in
the design, development and production of unmanned aircraft systems and
energy technologies for various industries and governmental agencies.
Allegiant Travel Company, headquartered in Las Vegas, Nevada, a leisure
travel company, provides scheduled passenger services from small cities
to leisure destinations in the United States.
American Science and Engineering, Inc., headquartered in Billerica,
Massachusetts, engages in the development, manufacture, marketing, and
sale of inspection systems. The company's products are used for detection
and security applications by seaport and border authorities, federal
facilities, military bases, airports and corporations worldwide.
Arkansas Best Corporation, headquartered in Fort Smith, Arkansas, is a
transportation holding company engaged primarily in motor carrier
transportation operations, intermodal transportation operations, truck
tire retreading and new truck tire sales.
Axsys Technologies, Inc., headquartered in Rocky Hill, Connecticut,
engages in the design, manufacture, and distribution of precision
components and assemblies for use in aerospace, commercial, and defense
applications. It operates in two divisions: Optical Systems Group and
Distributed Products Group.
Page 39
Beacon Roofing Supply, Inc., headquartered in Peabody, Massachusetts,
distributes residential and nonresidential roofing materials in the
United States and Canada. The company also offers other complementary
building materials, including siding, windows, specialty lumber products,
and waterproofing systems for residential and nonresidential building
exteriors.
California Water Service Group, headquartered in San Jose, California, is
engaged in the supply and distribution of water and the providing of
water-related utility services.
Clayton Williams Energy, Inc., headquartered in Midland, Texas, is
engaged in the exploration for and the production of oil and natural gas.
The company's operations are primarily located in Texas, Louisiana, and
other southern states.
Community Bank System, Inc., headquartered in Dewitt, New York, operates
as the bank holding company for Community Bank, N.A. that provides
various banking and financial services to retail, commercial and
municipal customers.
CSG Systems International, Inc., headquartered in Englewood, Colorado,
provides customer care and billing solutions worldwide for the
communications markets, including cable television, direct broadcast
satellite, telephone, online services and others.
Cyberonics, Inc., headquartered in Houston, Texas, designs, develops and
markets medical devices. The company's devices are used for the treatment
of epilepsy and other debilitating neurological and psychiatric
disorders, as well as other diseases. The company's NCP System is
approved for sale in the United States, Europe, Canada and other markets.
EZCORP, Inc., headquartered in Austin, Texas, is primarily engaged in
operating pawnshops and payday loan stores, which function as convenient
sources of short-term cash and as value-oriented specialty retailers of
primarily previously owned merchandise.
First Cash Financial Services, Inc., headquartered in Arlington, Texas,
is engaged in the operation of pawn stores that lend money on the
collateral of pledged personal property and retail previously owned
merchandise acquired through pawn forfeitures.
First Financial Bankshares, Inc., headquartered in Abilene, Texas,
through its subsidiaries, offers various commercial banking services in
Texas.
Genesee & Wyoming Inc. (Class A), headquartered in Greenwich,
Connecticut, is a holding company whose subsidiaries and unconsolidated
affiliates own and operate short line and regional freight railroads in
the United States, Australia, Bolivia, Canada and Mexico.
Gentiva Health Services, Inc., headquartered in Melville, New York,
together with its subsidiaries, provides home health and related services
in the United States.
Goodrich Petroleum Corporation, headquartered in Houston, Texas, and
subsidiaries engage in the exploration, exploitation, development, and
production of oil and natural gas. The company primarily focuses on east
Texas and northwest Louisiana, and the transition zone of south
Louisiana.
Greatbatch Inc., headquartered in Clarence, New York, is a developer and
manufacturer of batteries, capacitors, feedthroughs, enclosures and other
components used in implantable medical devices.
Hanger Orthopedic Group, Inc., headquartered in Bethesda, Maryland, owns
and operates orthotic and prosthetic patient care centers in the United
States.
Hawaiian Holdings, Inc., headquartered in Honolulu, Hawaii, through its
subsidiary, Hawaiian Airlines, Inc., engages primarily in the scheduled
air transportation of passengers and cargo in the United States.
Hot Topic, Inc., headquartered in City of Industry, California, operates
mall-based specialty stores selling music-licensed and music-influenced
apparel, accessories and gift items. The company targets young men and
women between the ages of 12 to 22 years old.
Infinity Property & Casualty Corporation, headquartered in Birmingham,
Alabama, provides personal automobile insurance throughout the United
States. The company focuses on providing nonstandard auto insurance to
drivers who represent higher than normal risks and pay higher rates for
comparable coverage.
Innophos Holdings, Inc., headquartered in Cranbury, New Jersey, produces
phosphate salts, acids, and related products through a subsidiary. The
company's products are used in foods, beverages, pharmeceuticals, oral
care products,detergents, and water and metal treatment applications. The
company also produces fertilizers.
The Laclede Group, Inc., headquartered in St. Louis, Missouri, is a
holding company that provides natural gas service through its regulated
core utility operations. Its primary subsidiary, Laclede Gas Company, is
a natural gas distribution utility in Missouri.
Page 40
LHC Group Inc., headquartered in Lafayette, Louisiana, through its
subsidiaries, provides post-acute healthcare services primarily to
Medicare beneficiaries in rural markets in the southern United States.
Luminex Corporation, headquartered in Austin, Texas, has developed a
proprietary technology, LabMAP, that combines a microscopic fluid stream
and digital signal processing to perform high-speed biological tests at a
low cost.
Merit Medical Systems, Inc., headquartered in South Jordan, Utah, is
engaged in the manufacture and marketing of products used in cardiology
and radiology procedures. The company's products include inflation
devices, thrombolytic infusion catheters, guide wires, fluid dispensing
systems and angiography accessories. The company sells its products
worldwide.
Old National Bancorp, headquartered in Evansville, Indiana, operates as
the holding company for Old National Bank, which provides various
financial services to individuals and commercial customers.
PetMed Express, Inc., headquartered in Pompano Beach, Florida, doing
business as 1-800-PetMeds, delivers prescription and non prescription pet
medications and other health products for dogs, cats, and horses in the
United States.
Quality Systems, Inc., headquartered in Irvine, California, develops and
markets healthcare information systems that automate medical and dental
practices, networks of practices such as physician hospital organizations
and management service organizations, ambulatory care centers, community
health centers and medical and dental schools.
Questcor Pharmaceuticals, Inc., headquartered in Union City, California,
focuses on developing and commercializing pharmaceutical drugs primarily
in the United States.
Rock-Tenn Company (Class A), headquartered in Norcross, Georgia,
manufactures and distributes folding fiber partitions, cartons,
corrugated containers and displays, laminated paperboard products,
plastic packaging, recycled paperboard and corrugating medium to
nondurable good producers.
S&T Bancorp, Inc., headquartered in Indiana, Pennsylvania, operates as
the holding company for the S&T Bank, which offers various commercial
banking and other financial services to individual and corporate
customers.
Stifel Financial Corp., headquartered in St. Louis, Missouri, through its
subsidiaries, offers securities-related financial services in the United
States and Europe.
SWS Group, Inc., headquartered in Dallas, Texas, provides securities
transaction processing to broker/dealers; securities brokerage to
individuals and institutions; investment banking services to municipal
and corporate clients; fixed income and equity securities trading; and
asset management and trust services.
TreeHouse Foods, Inc., headquartered in Westchester, Illinois, processes
food and markets its products to grocery stores. The company's products
include cheese sauces, non-dairy powdered coffee creamer, pickles,
relishes and puddings.
VAALCO Energy, Inc., headquartered in Houston, Texas, owns crude oil and
natural gas producing properties and conducts exploration activities as
operator of a consortium in Gabon, West Africa, and holds minor interests
in the Texas Gulf Coast area.
ViroPharma Incorporated, headquartered in Exton, Pennsylvania, is a
pharmaceutical company committed to the commercialization, development
and discovery of new antiviral medicines. The company is focusing on a
number of ribonucleic acid virus diseases, including viral meningitis,
viral respiratory infection, the common cold, respiratory syncytial
viruspneumonia, and hepatitis C.
The Wet Seal, Inc. (Class A), headquartered in Foothill Ranch,
California, is a nationwide specialty retailer of fashionable and
contemporary apparel and accessory items designed for consumers with a
young, active lifestyle.
World Fuel Services Corporation, headquartered in Miami, Florida, markets
marine and aviation fuel services.
Value Line(R) Diversified Target 40 Strategy Stocks
Advance Auto Parts, Inc., headquartered in Roanoke, Virginia, is a
specialty retailer of automotive parts, accessories and maintenance
items to do-it-yourself customers in the United States.
Affiliated Computer Services, Inc. (Class A), headquartered in Dallas,
Texas, provides a full range of information technology services,
including business process outsourcing, technology outsourcing, and
professional services to the commercial sector and the federal
government.
Airgas, Inc., headquartered in Radnor, Pennsylvania, distributes
industrial, medical and specialty gases, welding machines, accessories
and protective equipment. The company also manufactures carbon products,
calcium carbide and nitrous oxide.
Alliance Data Systems Corporation, headquartered in Dallas, Texas,
provides transaction services, credit services, and marketing services to
retail companies in North America. The company focuses on facilitating
and managing electronic transactions between clients and their customers
through multiple distribution channels, including its in- store, catalog,
and the Internet.
Page 41
Alliant Techsystems Inc., headquartered in Edina, Minnesota, is a leader
in the production of solid propulsion rocket motors. The company builds
motors for space launch vehicles and is one of the top suppliers of
ammunition (which ranges from small-caliber rounds to tank ammunition) to
the United States and its allies. The company also makes anti-tank mines,
aircraft weapons systems and other high-tech components.
AmerisourceBergen Corporation, headquartered in Chesterbrook,
Pennsylvania, is a wholesale distributor of pharmaceuticals and related
healthcare services serving its customers nationwide through drug
distribution facilities and three specialty products distribution
facilities.
Apache Corporation, headquartered in Houston, Texas, is an independent
energy company that explores for, develops, and produces natural gas,
crude oil and natural gas liquids.
AutoZone, Inc., headquartered in Memphis, Tennessee, is a specialty
retailer of automotive parts, chemicals and accessories, targeting the
do-it-yourself customers. The company offers a variety of products,
including new and remanufactured automotive hard parts, maintenance items
and accessories.
Ball Corporation, headquartered in Broomfield, Colorado, is a
manufacturer of metal and plastic packaging, primarily for beverages and
foods, and a supplier of aerospace and other technologies and services to
commercial customers.
CenterPoint Energy, Inc., headquartered in Houston, Texas, through its
subsidiaries, operates as an energy delivery company in the United
States.
Chevron Corporation, headquartered in San Francisco, California, is
engaged in fully integrated petroleum operations, chemicals operations,
and coal mining through subsidiaries and affiliates worldwide. The
company markets its petroleum products under brand names such as
"Chevron," "Texaco," "Caltex," "Havoline" and "Delo." The company is also
developing businesses in the areas of e-commerce and technology.
Coach, Inc., headquartered in New York, New York, designs, produces and
markets leather goods and accessories. Products include handbags,
business cases, luggage and travel accessories. The company markets its
products internationally.
Crown Holdings, Inc., headquartered in Philadelphia, Pennsylvania, is
engaged in the design, manufacture, and marketing of packaging products
for consumer goods. The company's product line includes steel and
aluminum cans for food, beverage, and other consumer products. The
company operates production facilities worldwide.
CSX Corporation, headquartered in Richmond, Virginia, is a global freight
transportation company with principal business units providing rail,
container-shipping, intermodal and international terminal services.
DaVita, Inc., headquartered in Torrance, California, is a provider of
integrated dialysis services for patients suffering from chronic kidney
failure, also known as end-stage renal diseases.
Devon Energy Corporation, headquartered in Oklahoma City, Oklahoma,
including its subsidiaries, is an energy company engaged primarily in oil
and gas exploration, development and production and in the acquisition of
producing properties.
The DIRECTV Group, Inc., headquartered in El Segundo, California,
provides digital television entertainment in the United States and Latin
America.
Exxon Mobil Corporation, headquartered in Irving, Texas, explores for,
produces, transports and sells crude oil and natural gas petroleum
products. The company also explores for and mines coal and other minerals
properties; makes and sells petrochemicals; and owns interests in
electrical power generation facilities.
FMC Corporation, headquartered in Philadelphia, Pennsylvania, operates as
a chemical company, serving the agricultural, industrial, and consumer
markets worldwide. The company's agricultural products business segment
manufactures and sells proprietary insecticides and herbicides used for
the protection of cotton, corn, rice, cereals, vegetables and other
crops.
General Dynamics Corporation, headquartered in Falls Church, Virginia, is
engaged in the businesses of shipbuilding and marine systems, business
aviation, information systems, and land and amphibious combat systems.
H.J. Heinz Company, headquartered in Pittsburgh, Pennsylvania,
manufactures, packages and sells processed food products throughout the
world. The company's products include ketchup, sauces/condiments, pet
food, seafood products, baby food, soups, lower-calorie products, bakery
products, frozen dinners and entrees, and frozen pizza. The company also
provides weight control services.
Hewitt Associates, Inc., headquartered in Lincolnshire, Illinois,
provides human resource benefits, outsourcing and consulting services
primarily in the United States and the United Kingdom.
Hewlett-Packard Company, headquartered in Palo Alto, California, designs,
makes and services equipment and systems for measurement, computation and
communications including computer systems, personal computers, printers,
calculators, electronic test equipment, medical electronic equipment,
electronic components and instrumentation for chemical analysis.
Page 42
International Business Machines Corporation, headquartered in Armonk, New
York, provides customer solutions through the use of advanced information
technologies. The company offers a variety of solutions that include
services, software, systems, products, financing and technologies.
J.B. Hunt Transport Services, Inc., headquartered in Lowell, Arkansas,
provides a variety of motor transport and logistics services throughout
the United States, Canada and Mexico. The company transports a variety of
products, including automotive parts, department store merchandise, food
and beverages, paper and wood products, plastics and chemicals.
The Kroger Co., headquartered in Cincinnati, Ohio, operates in the retail
food and convenience stores business in the midwestern and southern
United States. The company also manufactures and processes food for sale
by its supermarkets.
Lincoln Electric Holdings, Inc., headquartered in Cleveland, Ohio,
through its subsidiaries, engages in the manufacture and resale of
welding and cutting products worldwide.
Lockheed Martin Corporation, headquartered in Bethesda, Maryland, engages
in the research, design, development, manufacture and integration of
advanced technology products and services ranging from aircraft,
spacecraft and launch vehicles to missiles, electronics, information
systems and energy management.
The Lubrizol Corporation, headquartered in Wickliffe, Ohio, is a global
fluid technology company that develops, produces and sells high-
performance chemicals, systems and services for industry and
transportation.
McKesson Corporation, headquartered in San Francisco, California, is a
healthcare services company providing supply management, software
solutions and comprehensive services to the healthcare industry.
Mettler-Toledo International Inc., headquartered in Columbus, Ohio,
supplies precision instruments and services worldwide. The company offers
various laboratory and industrial instruments, and retail weighing
instruments for use in laboratory, industrial, and food retailing
applications.
Occidental Petroleum Corporation, headquartered in Los Angeles,
California, is a multinational organization whose principal business
segments are oil and gas exploration, production and marketing and
chemicals production and marketing.
Omnicom Group Inc., headquartered in New York, New York, operates
advertising agencies which plan, create, produce and place advertising in
various media. The company also offers marketing consultation, market
research, sales promotion programs, public relations and other services.
PepsiAmericas, Inc., headquartered in Minneapolis, Minnesota,
manufactures, distributes and markets a portfolio of beverage products in
the United States, Central Europe and the Caribbean.
PetSmart, Inc., headquartered in Phoenix, Arizona, operates superstores
and an e-commerce site specializing in pet food, supplies and services.
Ross Stores, Inc., headquartered in Newark, California, operates a chain
of off-price retail apparel and home accessories stores. The stores
offers brand name and designer merchandise at low everyday prices.
SAIC, Inc., headquartered in San Diego, California, provides scientific,
engineering, systems integration, and technical services and solutions to
various branches of the U.S. military, agencies of the U.S. Department of
Defense, the intelligence community, the U.S. Department of Homeland
Security, other U.S. Government civil agencies, state and local
government agencies, foreign governments, and customers in selected
commercial markets.
SYSCO Corporation, headquartered in Houston, Texas, is the largest
marketer and distributor of foodservice products in North America. The
company provides food products and related services to restaurants,
healthcare and educational facilities, lodging establishments and other
foodservice operations across the contiguous United States and portions
of Alaska and Canada.
UGI Corporation, headquartered in King of Prussia, Pennsylvania, is a
holding company that operates propane distribution, gas and electric
utility, energy marketing and related businesses through subsidiaries.
Yum! Brands, Inc., headquartered in Louisville, Kentucky, owns,
franchises and licenses quick-service restaurants worldwide. The
company's restaurants include "A&W All-American Food Restaurants," "KFC,"
"Long John Silver's," "Pizza Hut" and "Taco Bell." They serve chicken,
pizza, seafood, root beer, hamburgers and Mexican food.
Value Line(R) Target 25 Strategy Stocks
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production.
Apollo Group, Inc. (Class A), headquartered in Phoenix, Arizona, through
subsidiaries, offers higher education programs and services for working
adults at over 100 campuses and learning centers in the United States,
Puerto Rico and London, England. The company offers accredited degree
programs, certificate programs and customized training.
Page 43
AutoZone, Inc., headquartered in Memphis, Tennessee, is a specialty
retailer of automotive parts, chemicals and accessories, targeting the
do-it-yourself customers. The company offers a variety of products,
including new and remanufactured automotive hard parts, maintenance items
and accessories.
Axsys Technologies, Inc., headquartered in Rocky Hill, Connecticut,
engages in the design, manufacture, and distribution of precision
components and assemblies for use in aerospace, commercial, and defense
applications. It operates in two divisions: Optical Systems Group and
Distributed Products Group.
Compass Minerals International, Inc., headquartered in Overland Park,
Kansas, is a salt producer in North America and the United Kingdom, and
operates nine production facilities.
Computer Programs and Systems, Inc., headquartered in Mobile, Alabama, is
a healthcare information technology company that designs, develops,
markets, installs and supports computerized information technology
systems to meet the demands of small and mid-size hospitals.
DeVry, Inc., headquartered in Oakbrook Terrace, Illinois, provides
career-oriented technology-based education to high school graduates in
the United States and Canada, through its wholly-owned subsidiaries DeVry
Institutes of Technology, Denver Technical College, Keller Graduate
School of Management and Becker Conviser CPA Review.
Dollar Tree, Inc., headquartered in Chesapeake, Virginia, operates
discount variety stores throughout the United States which offer
merchandise at the $1 price point, including housewares, toys, seasonal
goods, gifts, food, stationery, health and beauty aids, books, party
goods, hardware and other consumer items.
Family Dollar Stores, Inc., headquartered in Charlotte, North Carolina,
operates a chain of self-service retail discount stores in 39 states and
Washington, D.C.
Greatbatch Inc., headquartered in Clarence, New York, is a developer and
manufacturer of batteries, capacitors, feedthroughs, enclosures and other
components used in implantable medical devices.
ITT Educational Services, Inc., headquartered in Indianapolis, Indiana,
provides technical post-secondary degree programs which are designed to
provide students with the knowledge and skills necessary for entry-level
employment in technical positions in a variety of industries. The company
operates its technical schools in 27 states.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and surgical
equipment, and contact lenses.
Jos. A. Bank Clothiers, Inc., headquartered in Hampstead, Maryland, is a
retailer and direct marketer (through catalog and Internet) of men's
tailored and casual clothing and accessories.
ManTech International Corporation, headquartered in Fairfax, Virginia,
delivers a variety of information technology and technical services to
United States federal government customers. The company focuses on
critical national defense programs for the intelligence community and the
Department of Defense. The company designs, develops and operates
enterprise information technology and communication systems and
infrastructures.
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
Myriad Genetics, Inc., headquartered in Salt Lake City, Utah, discovers
and sequences genes related to major common diseases, such as cancer and
cardiovascular disease and the central nervous system using analyses of
extensive family histories and genetic material, as well as proprietary
technologies, to identify inherited gene mutations.
Nash Finch Company, headquartered in Edina, Minnesota, is a food
wholesaler that supplies products to independent supermarkets and
military bases in the United States. The company also owns and operates
supermarkets, warehouse stores, and mass merchandise stores, as well as a
product-growing and marketing subsidiary in California.
Netflix Inc., headquartered in Los Gatos, California, as an online movie
rental subscription service provider in the United States. The company
provides its subscribers access to a library of movie, television and
other filmed entertainment titles.
Panera Bread Company (Class A), headquartered in Richmond Heights,
Missouri, operates a retail bakery-cafe business and franchising business
under the concept names "Panera Bread Company" and "Saint Louis Bread
Company."
Rock-Tenn Company (Class A), headquartered in Norcross, Georgia,
manufactures and distributes folding fiber partitions, cartons,
corrugated containers and displays, laminated paperboard products,
plastic packaging, recycled paperboard and corrugating medium to
nondurable good producers.
Page 44
SAIC, Inc., headquartered in San Diego, California, provides scientific,
engineering, systems integration, and technical services and solutions to
various branches of the U.S. military, agencies of the U.S. Department of
Defense, the intelligence community, the U.S. Department of Homeland
Security, other U.S. Government civil agencies, state and local
government agencies, foreign governments, and customers in selected
commercial markets.
Spartan Stores, Inc., headquartered in Grand Rapids, Michigan, engages
in distributing and retailing groceries in Michigan and Ohio.
Strayer Education, Inc., headquartered in Newlington, Virginia, through
its wholly-owned subsidiary, Strayer University, Inc., operates Strayer
University, a regional institution of higher education that offers
undergraduate and graduate degree programs to students at campuses in
Washington, D.C., Maryland and Virginia.
Tractor Supply Company, headquartered in Nashville, Tennessee, is an
operator of retail farm and ranch stores in the United States.
TreeHouse Foods, Inc., headquartered in Westchester, Illinois, processes
food and markets its products to grocery stores. The company's products
include cheese sauces, non-dairy powdered coffee creamer, pickles,
relishes and puddings.
We have obtained the foregoing company descriptions from third-party
sources we deem reliable.
Page 45
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
First Trust Portfolios L.P. is covered by a Brokers'
Fidelity Bond, in the total amount of $2,000,000, the
insurer being National Union Fire Insurance Company of
Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, FT 1900, hereby identifies The First Trust
Special Situations Trust, Series 4; The First Trust Special
Situations Trust, Series 18; The First Trust Special Situations
Trust, Series 69; The First Trust Special Situations Trust,
Series 108; The First Trust Special Situations Trust, Series 119;
The First Trust Special Situations Trust, Series 190; FT 286; The
First Trust Combined Series 272; FT 412; and FT 438; FT 556; FT
754; FT 1102; FT 1179; FT 1180; FT 1221; FT 1222; FT 1392; FT
1393; FT 1422 and FT 1423; FT 1524; FT 1573; FT 1590; FT 1635; FT
1638; FT 1639; FT 1693; FT 1711; FT 1712; FT 1770; FT 1809; FT
1829; FT 1859; FT 1863; FT 1888; FT 1894 and FT 1911 for purposes
of the representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 1900, has duly caused this Amendment to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wheaton
and State of Illinois on December 31, 2008.
FT 1900
By FIRST TRUST PORTFOLIOS L.P.
Depositor
By: Jason T. Henry
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Judith M. Van Kampen Director )
of The Charger )
Corporation, the ) December 31, 2008
General Partner of )
First Trust )
Portfolios L.P. )
Karla M. Van Kampen-Pierre Director )
of The Charger )
Corporation, the ) Jason T. Henry
General Partner of ) Attorney-in-Fact**
First Trust )
Portfolios L.P. )
David G. Wisen Director )
of The Charger )
Corporation, the )
General Partner of )
First Trust )
Portfolios L.P. )
* The title of the person named herein represents his
or her capacity in and relationship to First Trust
Portfolios L.P., Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of FT 597
(File No. 333-76518) and the same is hereby incorporated
herein by this reference.
S-3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Amendment No. 3 to
Registration Statement No. 333-153812 on Form S-6 of our report
dated December 31, 2008, relating to the financial statements of
FT 1900, comprising Dow(R) Target 5 1Q '09 - Term 3/31/10; Dow(R)
Target Dvd. 1Q '09 - Term 3/31/10; Global Target 15 1Q '09 - Term
3/31/10; MSCI EAFE Target 20 1Q 09 Term 3/31/10; Nasdaq(R)
Target 15 1Q '09 - Term 3/31/10; NYSE(R) Intl. Target 25 1Q '09 -
Term 3/31/10; S&P Target 24 1Q '09 - Term 3/31/10; S&P Target
SMid 60 1Q '09 - Term 3/31/10; Target 50/50 1Q '09 - Term
3/31/10; Target Divsd. Dvd. 1Q '09 - Term 3/31/10; Target Dvd.
Multi-Strat. 1Q '09 - Term 3/31/10; Target Dbl. Play 1Q '09 -
Term 3/31/10; Target Growth 1Q '09 - Term 3/31/10; Target Long-
Term Growth 1Q '09 - Term 3/31/10; Target Mega-Cap 1Q 09 - Term
3/31/10; Target Small-Cap 1Q '09 - Term 3/31/10; Target VIP Cons.
Eqty. 1Q '09 - Term 3/31/10; Value Line(R) Divsd. Target 40 1Q
'09 - Term 3/31/10 and Value Line(R) Target 25 1Q '09 - Term
3/31/10 appearing in the Prospectus, which is a part of such
Registration Statement, and to the reference to us under the
caption "Experts" in such Prospectus.
Deloitte & Touche LLP
Chicago, Illinois
December 31, 2008
S-4
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-5
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for FT
785 and certain subsequent Series, effective December 9,
2003 among First Trust Portfolios L.P., as Depositor,
The Bank of New York Mellon, as Trustee, First Trust
Advisors L.P., as Evaluator, and First Trust Advisors
L.P., as Portfolio Supervisor.
1.1.1 Form of Trust Agreement for FT 1900 and certain
subsequent series, effective December 31, 2008 among
First Trust Portfolios L.P., as Depositor, The Bank of
New York Mellon, as Trustee, First Trust Advisors L.P.,
as Evaluator, First Trust Advisors L.P., as Portfolio
Supervisor, and FTP Services LLC, as FTPS Unit Servicing
Agent.
1.2 Copy of Certificate of Limited Partnership of First
Trust Portfolios L.P. (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of First Trust Portfolios L.P. (incorporated
by reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of The Charger
Corporation, the general partner of First Trust
Portfolios L.P., Depositor (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.5 Copy of By-Laws of The Charger Corporation, the general
partner of First Trust Portfolios L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-48055] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-6
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed
on behalf of FT 415).
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to United Kingdom tax status of
securities being registered.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Directors listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 333-
76518] filed on behalf of FT 597.
S-7
Dates Referenced Herein and Documents Incorporated by Reference
| This ‘487’ Filing | | Date | | Other Filings |
|---|
| |  |
| | 1/1/11 |
| | 3/31/10 | | 24F-2NT |
| | 3/15/10 |
| | 6/19/09 |
| | 4/20/09 |
| | 1/25/09 |
| | 1/10/09 |
| | 1/6/09 |
| | 1/2/09 |
| Filed on / Effective on: | | 12/31/08 |
| | 12/30/08 |
| | 12/15/08 |
| | 12/31/07 |
| | 2/14/07 |
| | 11/27/06 |
| | 8/23/06 |
| | 8/17/06 |
| | 7/6/06 |
| | 5/5/06 |
| | 12/15/05 |
| | 3/24/04 |
| | 12/9/03 |
| | 1/1/99 |
| | 7/1/97 |
| List all Filings |
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Filing Submission 0001445546-08-001007 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
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