Rule 497(k)
File No. 333-178767
First Trust Variable Insurance Trust
SUMMARY PROSPECTUS
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FIRST TRUST CAPITAL STRENGTH PORTFOLIO
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CLASS I
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CLASS II
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Before you invest, you may want to review the Fund’s prospectus, which contains more information
about the Fund
and its risks. You can find the Fund’s
statutory prospectus
and other information about the
Fund, including the
statement of additional information
and most recent reports to shareholders, online
at
www.ftportfolios.com/Retail/VA/VASummary.aspx?ProductCode=FTACSI
.
You can also get this
information at no cost by calling (800) 621-1675 or by sending an e-mail request to
info@ftportfolios.com
.
If you purchase shares through a financial intermediary (such as a broker/dealer or bank), you can obtain the Fund’s prospectus and other information from that financial intermediary. The Fund’s prospectus and statement of additional information, both dated May 3, 2021, are all incorporated by reference into this Summary Prospectus.
May 3, 2021
Investment Objective
The First Trust Capital Strength Portfolio (the "Fund") seeks to provide capital appreciation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. The Total Annual
Fund Operating Expenses reflected below do not include contract level fees of the variable annuity or variable life insurance contracts
offered by a Participating Insurance Company (each a “Contract”). If such fees were included, the Total Annual Fund Operating Expenses would be higher. More information about eligibility requirements for each share class is available from your Participating Insurance
Company.
Shareholder Fees
(fees paid directly from your investment)
(fees paid directly from your investment)
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Class I
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Class II
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Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
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None
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None
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
(expenses that you pay each year as a percentage of the value of your investment)
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Class I
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Class II
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Management Fees
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0.50%
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0.50%
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Distribution and Service (12b-1) Fees
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0.25%
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0.00%
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Other Expenses
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3.62%
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6.40%
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Total Annual Fund Operating Expenses
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4.37%
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6.90%
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Fee Waiver and Expense Reimbursement(1)
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3.27%
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6.05%
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Total Net Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursement
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1.10%
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0.85%
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(1)
Pursuant to a contractual agreement between the Trust, on behalf of the Fund, and the Fund’s investment advisor, the Fund's investment advisor has agreed to waive fees and/or pay the Fund’s expenses to the extent necessary to prevent the total net annual fund expenses of the Class I shares and Class II shares (excluding interest expense, brokerage commissions and other trading expenses, taxes and extraordinary
expenses) from exceeding 1.10% and 0.85%, respectively, of the Fund’s average daily net assets per year at least until May 1, 2022 (the “Expense Caps”). Expenses borne by the Fund’s investment advisor are subject to reimbursement by the Fund for up to three years from the date the fee or expense was initially waived or reimbursed, but no reimbursement payment will be made by the Fund at any time if it would result in Class
I share and Class II share expenses (excluding interest expense, brokerage commissions and other trading expenses, taxes, and extraordinary expenses)
exceeding (after the amount of reimbursement is taken into account) the lesser of (i) the applicable expense limitation in place for
the most recent fiscal year for which such expense limitation was in place, (ii) the applicable expense limitation in place at the time the fees were
waived or expenses were reimbursed, or (iii) the current expense limitation. The agreement may be terminated by the Trust on behalf of the Fund at
any time and by the Fund’s investment advisor only after May 1, 2022 upon 60 days’ written notice.
Example
The following example is intended to help you compare the cost of investing in the Fund with the cost of investing in other
mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated. The example also assumes that
your investment has a 5% return each year and that the Fund’s annual operating expenses (before any fee waiver or expense reimbursement) remain at current levels for the time periods indicated. Additionally, the example assumes that the Fund’s investment advisor’s agreement to waive fees and/or pay the Fund’s expenses to the extent necessary to prevent the operating expenses of the Class I shares and Class II shares (excluding interest expense, brokerage commissions and other trading expenses, taxes and extraordinary expenses)
from exceeding 1.10% and 0.85%, respectively, of the Fund’s average daily net assets per year will be terminated following May 1, 2022. The example does not take into account Contract level fees. If such fees were included, the estimated expenses would be higher.
Although your actual costs may be higher or lower, based on these assumptions, your cost whether you redeem or hold all of
your shares, would be:
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Share Class
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1 Year
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3 Years
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5 Years
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10 Years
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Class I
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$112
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$1,026
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$1,951
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$4,316
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Class II
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87
|
1,497
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2,854
|
6,027
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Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs. These costs, which are not reflected in annual fund operating expenses
or in the example, affect the Fund’s performance. During the fiscal period May 1, 2020 (inception) through December 31, 2020, the Fund’s portfolio turnover rate was 79% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets
(including investment borrowings) in the common stocks and real estate investment trusts (“REITs”) that comprise The Capital Strength IndexSM (the “Index”). The Index is developed, maintained and sponsored by Nasdaq, Inc. (the “Index Provider”).
The Index seeks to provide exposure to well-capitalized companies with strong market positions that have the potential to
provide their stockholders with a greater degree of stability and performance over time. The Fund may invest in securities of any
market capitalization. The Index’s initial universe consists of the securities comprising the NASDAQ US Benchmark Index, an index seeking to track the performance of small, mid and large capitalization U.S. companies. The Index then excludes all securities with a
three-month average daily trading volume of less than $5 million and multiple share classes of the same issuer. The Index then ranks the
remaining securities by float-adjusted market capitalization and excludes all securities not ranked in the top 500. The universe is
further narrowed by excluding those securities issued by companies with less than $1 billion in cash and short-term investments, companies
with a long-term debt to market capitalization ratio greater than 30% and companies with a return on equity that is 15% or less.
The remaining securities are then given a volatility score based upon a combination of their short-term (90 days) and long-term (260 days)
realized volatility. The 50 securities with the lowest volatility score are chosen for inclusion in the Index.
A review is then enacted to determine if any industry (as determined by the Industry Classification Benchmark (“ICB”)) has a cumulative weight greater than 30%. If an industry has a weight greater than 30%, the worst-ranking security by volatility will be removed
and replaced with the next eligible security (e.g., the 51st ranked by volatility) from a different industry. This process is repeated until no industry has a weight greater than 30%. Once finalized, each security is equal-dollar weighted.
The Index is rebalanced and reconstituted quarterly and the Fund will make corresponding changes to its portfolio shortly
after the Index changes are made public. The Index’s quarterly rebalance and reconstitution schedule may cause the Fund to experience a higher rate of portfolio turnover. The Fund will be concentrated in an industry or a group of industries to the extent that the Index
is so concentrated. As of March 31, 2021, the Index was composed of 50 securities and the Fund had significant investments in industrial and consumer discretionary companies, although this may change from time to time. To the extent the Fund invests a significant
portion of its assets in a given investment sector, the Fund may be exposed to the risks associated with that jurisdiction or investment
sector.
The Fund is classified as “non-diversified” under the Investment Company Act of 1940, as amended (the “1940 Act”).
Principal Risks
You could lose money by investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. There can be no assurance that the Fund’s investment objective will be achieved. The order of the below risk factors does not indicate the significance of any particular risk
factor.
CONSUMER DISCRETIONARY COMPANIES RISK. Consumer discretionary companies, such as retailers, media companies and consumer services companies, provide non-essential goods and services. These companies manufacture products and provide discretionary services directly to the consumer, and the success of these companies is tied closely to the performance of
the overall domestic and international economy, interest rates, competition and consumer confidence. Success depends heavily on disposable
household income and consumer spending. Changes in demographics and consumer tastes can also affect the demand for, and success
of, consumer discretionary products in the marketplace.
CYBER SECURITY RISK. The Fund is susceptible to operational risks through breaches in cyber security. A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information, suffer data corruption
or lose operational capacity. Such events could cause the Fund to incur regulatory penalties, reputational damage, additional
compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized access to the Fund’s digital information systems through “hacking” or malicious software coding but may also result from outside attacks such as denial-of-service attacks through efforts to make network services unavailable to intended users. In addition, cyber security
breaches of the issuers of securities in which the Fund invests or the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or sub-advisor, as applicable, can also subject the Fund to many of the same risks associated with direct
cyber security breaches. Although the Fund has established risk management systems designed to reduce the risks associated with cyber security,
there is no guarantee that such efforts will succeed, especially because the Fund does not directly control the cyber security
systems of issuers or third-party service providers.
EQUITY SECURITIES RISK. The value of the Fund’s shares will fluctuate with changes in the value of the equity securities in which it invests. Equity securities prices fluctuate for several reasons, including changes in investors’ perceptions of the financial condition of an issuer or the general condition of the relevant equity market, such as market volatility, or when political or economic
events affecting an issuer occur. Common stock prices may be particularly sensitive to rising interest rates, as the cost of capital rises
and borrowing costs increase. Equity securities may decline significantly in price over short or extended periods of time, and such declines
may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.
INDEX PROVIDER RISK. There is no assurance that the Index Provider, or any agents that act on its behalf, will compile the Index accurately, or that the Index will be determined, maintained, constructed, reconstituted, rebalanced, composed, calculated
or
disseminated accurately. The Index Provider and its agents do not provide any representation or warranty in relation to the
quality, accuracy or completeness of data in the Index, and do not guarantee that the Index will be calculated in accordance with its
stated methodology. The Advisor’s mandate as described in this prospectus is to manage the Fund consistently with the Index provided by the Index Provider. The Advisor relies upon the Index provider and its agents to accurately compile, maintain, construct,
reconstitute, rebalance, compose, calculate and disseminate the Index accurately. Therefore, losses or costs associated with any Index Provider
or agent errors generally will be borne by the Fund and its shareholders. To correct any such error, the Index Provider or its
agents may carry out an unscheduled rebalance of the Index or other modification of Index constituents or weightings. When the Fund in
turn rebalances its portfolio, any transaction costs and market exposure arising from such portfolio rebalancing will be borne
by the Fund and its shareholders. Unscheduled rebalances also expose the Fund to additional tracking error risk. Errors in respect of
the quality, accuracy and completeness of the data used to compile the Index may occur from time to time and may not be identified and
corrected by the Index Provider for a period of time or at all, particularly where the Index is less commonly used as a benchmark by
funds or advisors. For example, during a period where the Index contains incorrect constituents, the Fund tracking the Index would
have market exposure to such constituents and would be underexposed to the Index’s other constituents. Such errors may negatively impact the Fund and its shareholders. The Index Provider and its agents rely on various sources of information to assess the criteria
of issuers included in the Index, including information that may be based on assumptions and estimates. Neither the Fund nor the Advisor
can offer assurances that the Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers. Unusual market conditions may cause the Index Provider to postpone a scheduled rebalance, which could cause the Index
to vary from its normal or expected composition. The postponement of a scheduled rebalance in a time of market volatility could
mean that constituents that would otherwise be removed at rebalance due to changes in market capitalizations, issuer credit ratings,
or other reasons may remain, causing the performance and constituents of the Index to vary from those expected under normal conditions.
Apart from scheduled rebalances, the Index Provider or its agents may carry out additional ad hoc rebalances to the Index
due to unusual market conditions or in order, for example, to correct an error in the selection of index constituents.
INDUSTRIALS COMPANIES RISK. Industrials companies convert unfinished goods into finished durables used to manufacture other goods or provide services. Examples of industrials companies include companies involved in the production of electrical equipment
and components, industrial products, manufactured housing and telecommunications equipment, as well as defense and aerospace
companies. General risks of industrials companies include the general state of the economy, exchange rates, commodity prices,
intense competition, consolidation, domestic and international politics, government regulation, import controls, excess capacity,
consumer demand and spending trends. In addition, industrials companies may also be significantly affected by overall capital spending
levels, economic cycles, rapid technological changes, delays in modernization, labor relations, environmental liabilities, governmental
and product liability and e-commerce initiatives.
INFLATION RISK. Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the present value of the Fund’s assets and distributions may decline.
LOW VOLATILITY RISK. Although subject to the risks of common stocks, low volatility stocks are seen as having a lower risk profile than the overall markets. However, a portfolio comprised of low volatility stocks may not produce investment exposure that
has lower variability to changes in such stocks’ price levels. Low volatility stocks are likely to underperform the broader market during periods of rapidly rising stock prices when market volatility is high. Low volatility stocks also may not protect against market declines.
MARKET RISK. Market risk is the risk that a particular security, or shares of the Fund in general, may fall in value. Securities are subject
to market fluctuations caused by such factors as economic, political, regulatory or market developments, changes in interest
rates and perceived trends in securities prices. Shares of the Fund could decline in value or underperform other investments. In
addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues,
recessions, or other events could have a significant negative impact on the Fund and its investments. For example, the coronavirus disease
2019 (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting
international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, has had negative impacts,
and in many cases severe impacts, on markets worldwide. Additionally, the COVID-19 pandemic has caused prolonged disruptions to
the normal business operations of companies around the world and the impact of such disruptions is hard to predict. Such events
may affect certain geographic regions, countries, sectors and industries more significantly than others. Such events could adversely
affect the prices and liquidity of the Fund’s portfolio securities or other instruments and could result in disruptions in the trading markets. Any of such circumstances could have a materially negative impact on the value of the Fund’s shares and result in increased market volatility. During any such events, the Fund’s shares may trade at increased premiums or discounts to their net asset value.
NON-CORRELATION RISK. The Fund’s return may not match the return of the Index for a number of reasons. The Fund incurs operating expenses not applicable to the Index, and may incur costs in buying and selling securities, especially when rebalancing the Fund’s portfolio holdings to reflect changes in the composition of the Index. In addition, the Fund’s portfolio holdings may not exactly replicate the securities included in the Index or the ratios between the securities included in the Index.
NON-DIVERSIFICATION RISK. The Fund is classified as “non-diversified” under the 1940 Act. As a result, the Fund is only limited as to the percentage of its assets which may be invested in the securities of any one issuer by the diversification requirements
imposed by the Internal Revenue Code of 1986, as amended. The Fund may invest a relatively high percentage of its assets in a limited
number
of issuers. As a result, the Fund may be more susceptible to a single adverse economic or regulatory occurrence affecting
one or more of these issuers, experience increased volatility and be highly invested in certain issuers.
OPERATIONAL RISK. The Fund is subject to risks arising from various operational factors, including, but not limited to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. Although the Fund and the Advisor seek to reduce these operational risks through
controls and procedures, there is no way to completely protect against such risks.
PASSIVE INVESTMENT RISK. The Fund is not actively managed. The Fund invests in securities included in or representative of the Index regardless of investment merit. The Fund generally will not attempt to take defensive positions in declining markets.
In the event that the Index is no longer calculated, the Index license is terminated or the identity or character of the Index is materially
changed, the Fund will seek to engage a replacement index.
PORTFOLIO TURNOVER RISK. High portfolio turnover may result in the Fund paying higher levels of transaction costs and may generate greater tax liabilities for shareholders. Portfolio turnover risk may cause the Fund’s performance to be less than expected.
REIT RISK. REITs typically own and operate income-producing real estate, such as residential or commercial buildings, or real-estate
related assets, including mortgages. As a result, investments in REITs are subject to the risks associated with investing
in real estate, which may include, but are not limited to: fluctuations in the value of underlying properties; defaults by borrowers or tenants;
market saturation; changes in general and local operating expenses; and other economic, political or regulatory occurrences affecting
companies in the real estate sector. REITs are also subject to the risk that the real estate market may experience an economic downturn
generally, which may have a material effect on the real estate in which the REITs invest and their underlying portfolio securities. REITs
may have also a relatively small market capitalization which may result in their shares experiencing less market liquidity and greater
price volatility than larger companies. Increases in interest rates typically lower the present value of a REIT's future earnings stream, and
may make financing property purchases and improvements more costly. Because the market price of REIT stocks may change based upon investors'
collective perceptions of future earnings, the value of the Fund will generally decline when investors anticipate or experience
rising interest rates.
SIGNIFICANT EXPOSURE RISK. To the extent that the Fund invests a large percentage of its assets in a single asset class or industry or sector, an adverse economic, business or political development may affect the value of the Fund’s investments more than if the Fund were more broadly diversified. A significant exposure makes the Fund more susceptible to any single occurrence and may
subject the Fund to greater market risk than a fund that is more broadly diversified.
Performance
The Fund has not yet operated for a full calendar year and, therefore, performance information is not included in this section
of the prospectus. See the Fund’s website at www.ftportfolios.com for performance information regarding the Fund.
Management
Investment Advisor
First Trust Advisors L.P. (“First Trust” or the “Advisor”)
Portfolio Managers
The Fund’s portfolio is managed by a team (the “Investment Committee”) consisting of:
•
Daniel J. Lindquist, Chairman of the Investment Committee and Managing Director of First Trust
•
Jon C. Erickson, Senior Vice President of First Trust
•
David G. McGarel, Chief Investment Officer, Chief Operating Officer and Managing Director of First Trust
•
Roger F. Testin, Senior Vice President of First Trust
•
Chris A. Peterson, Senior Vice President of First Trust
The Investment Committee members are primarily and jointly responsible for the day-to-day management of the Fund. Each Investment Committee member has served as a part of the portfolio management team of the Fund since April 2020.
Purchase and Sale of Fund Shares
Shares of the Fund are sold only to each Participating Insurance Company’s variable insurance account (each an “Account”) to fund the benefits of the Contracts. The Account purchases shares of the Fund in accordance with variable account allocation instructions
received from owners of the Contracts.
Individual investors may not purchase or redeem shares in the Fund directly; shares may be purchased or redeemed only through
the Contracts. There are no minimum investment requirements. For a discussion of how Contract owners may purchase Fund shares,
please refer to the prospectus for the Account. Owners of the Contracts may direct purchase or redemption instructions to their Participating
Insurance Company.
The Fund offers to buy back (redeem) shares of the Fund from the Account at any time at net asset value. The Account will
redeem shares to make benefit or surrender payments under the terms of the Contracts or to effect transfers among investment options.
Redemptions are processed on any day on which the Fund is open for business and are effected at the net asset value next determined
after the redemption order, in proper form, is received. Orders received before the close of trading on a business day will
receive that day’s closing price; otherwise, the next business day’s price will be used. For a discussion of how Contract owners may redeem shares, please refer to the prospectus for your Account.
Tax Information
Shares of the Fund may be purchased only by the Accounts of Participating Insurance Companies. Participating Insurance Companies
and owners of Contracts should seek advice based on their individual circumstances from their own tax advisor. Tax disclosure
relating to the Contracts that offer the Fund as an investment alternative is to be contained in the prospectus for the Contracts.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank or a Participating
Insurance Company), First Trust and related companies may pay the intermediary for the sale of Fund shares and related services. These
payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend
the Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
You can find the Fund’s
statutory prospectus
and other information about the Fund, including the
statement of additional information
and most recent reports to shareholders, online at www.ftportfolios.com/Retail/VA/VASummary.aspx?ProductCode=FTACSI.
FTACSISP0521