Rule 497(k)
Registration Nos. 333-182308 and 811-22717
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First Trust
Exchange-Traded Fund VI
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SUMMARY PROSPECTUS
First Trust International Developed Capital Strength ETF
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Ticker Symbol:
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FICS
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Exchange:
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The Nasdaq Stock Market LLC
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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/ETF/ETFfundnews.aspx?Ticker=FICS. 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. The Fund’s prospectus and statement of additional information, both dated February 1, 2023, are all incorporated by reference into this Summary Prospectus.
December 22, 2023
Investment Objective
The First Trust International Developed Capital Strength ETF (the “Fund”) seeks investment results that correspond generally to the price and yield (before the Fund’s fees and expenses) of an index called The International Developed Capital Strength IndexSM (the “Index”).
Fees and Expenses of the Fund
The following table describes the fees and expenses you may pay if you buy, hold and sell shares of the Fund. Investors may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example
below.
Shareholder Fees
(fees paid directly from your investment)
(fees paid directly from your investment)
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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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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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Management Fees(1)
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0.70%
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Distribution and Service (12b-1) Fees
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0.00%
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Other Expenses
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0.00%
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Total Annual Fund Operating Expenses
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0.70%
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(1)
Effective November 1, 2022, as approved by the Trust’s Board of Trustees, the management fee paid to First Trust Advisors L.P., the Fund's investment advisor, will be reduced at certain levels of Fund net assets (“breakpoints”). See the Fund's Statement of Additional Information for more information on the breakpoints.
Example
The example below is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds.
The example assumes that you invest $10,000 in the Fund for the time periods indicated and then hold or sell all of your shares
at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain at current levels. Although your actual costs may be higher or lower, based on these assumptions your costs
would be:
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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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$72
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$224
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$390
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$871
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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 and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year the Fund’s portfolio turnover rate was 77% 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 90% of its net assets
(including investment borrowings) in the common stocks and real estate investment trusts (“REITs”) that comprise The International Developed Capital Strength IndexSM (the “Index”). The Fund will generally employ a full replication strategy, meaning that it will normally invest in all of the securities comprising the Index in proportion to their weightings in the Index. However, under various circumstances,
full replication of the Index may not be possible or practicable, and the Fund may purchase a sample of securities in the Index.
The Fund will use the net total return version of the Index, which reinvests cash dividends on the ex-date and adjusts for an Index security’s country of incorporation withholding rate. The Index is developed, maintained and sponsored by Nasdaq, Inc. (the “Index Provider”). The Index Provider may, from time to time, exercise reasonable discretion as it deems appropriate in order to ensure Index
integrity, for example, in response to stock splits, spin-offs or other corporate actions.
According to the Index Provider, the Index seeks to provide exposure to well-capitalized companies in the developed markets
outside of the U.S. with strong market positions that have the potential to provide their stockholders with a greater degree of stability
and performance over time. The Index Provider classifies a country as “developed” based on quantitative criteria including: (1) having at least $20 thousand gross national income per capita for three consecutive years; (2) having at least a $30 billion market capitalization; (3) having at least a $10 billion annual turnover; (4) having at least a 45% float ratio; and (5) having at least ten securities that meet all the eligibility requirements for the Nasdaq Global Index. For countries that meet these quantitative criteria, the Index
Provider also
applies qualitative criteria, such as screening for markets that may have restrictions on foreign investment, currency convertibility
or capital. The Fund may invest in securities of any market capitalization. According to the Index Provider, the Index’s initial universe consists of the securities comprising the Nasdaq Developed ex-US Index, an index seeking to track the performance of small,
mid and large capitalization international 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. Float-adjusted market capitalization reflects
what the Index Provider believes to be the outstanding shares minus non-publicly held shares multiplied by the market price. The universe
is further narrowed by excluding those securities issued by companies with less than $500 million in cash and short-term investments,
companies with a long-term debt to market capitalization ratio greater than 30%, companies with a return on equity that is 15% or less,
companies that are currently in bankruptcy proceedings and companies that have entered into a definitive agreement or other arrangement
which would likely result in the security no longer being Index eligible. The remaining securities are then given a volatility score
based upon a combination of their short-term (three month) and long-term (one year) historical volatility. Volatility is a statistical
measure of the magnitude of changes in the security’s return without regard to the direction of those changes, and higher volatility generally indicates higher risk and is often reflected by frequent and sometimes significant movements up and down in value. 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”)), or country has a weight greater than 30%. If an industry or country 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 or country. This process is repeated until no industry or country has a weight greater than 30%. Once finalized, each security is equal-dollar
weighted, meaning each security’s Index market value is an equal-dollar value corresponding to an equal percent weight of the Index’s aggregate market value. If the number of securities in the Index is less than 50, then the securities that had the highest return on
equity that failed the criteria but passed the debt to market cap ratio and cash and short term investments constraints are selected from
the top 500 by free float adjusted market capitalization to go back into the eligible universe until there are 60 eligible securities.
Then, the above steps are repeated to select 50 securities with the lowest combined volatility scores that meet the industry and country
constraints. The Fund may invest in U.S. dollar denominated and non-U.S. dollar denominated securities.
The Index is rebalanced and reconstituted semi-annually and the Fund will make corresponding changes to its portfolio shortly
after the Index changes are made public. The Fund will be concentrated in an industry or a group of industries to the extent that
the Index is so concentrated. As of December 31, 2022, the Index was composed of 50 securities. As of December 31, 2022, the Fund had significant investments in industrials companies, Japanese issuers, Asian issuers and European issuers, although this may
change from time to time. To the extent the Fund invests a significant portion of its assets in a given jurisdiction or investment sector,
the Fund may be exposed to the risks associated with that jurisdiction or investment sector.
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.
ASIA RISK. The Fund is subject to certain risks specifically associated with investments in the securities of Asian issuers. Many Asian
economies have experienced rapid growth and industrialization, and there is no assurance that this growth rate will be maintained.
Some Asian economies are highly dependent on trade, and economic conditions in other countries within and outside Asia can
impact these economies. Certain of these economies may be adversely affected by trade or policy disputes with its major trade partners.
There is also 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. Certain Asian countries have experienced
and may in the future experience expropriation and nationalization of assets, confiscatory taxation, currency manipulation, political
instability, armed conflict and social instability as a result of religious, ethnic, socio-economic and/or political unrest.
In particular, escalated tensions involving North Korea and any outbreak of hostilities involving North Korea could have a severe adverse
effect on Asian economies. Governments of certain Asian countries have exercised, and continue to exercise, substantial influence over
many aspects of the private sector. In certain cases, the government owns or controls many companies, including the largest in
the country. Accordingly, government actions could have a significant effect on the issuers of the Fund’s securities or on economic conditions generally. Recent developments in relations between the U.S. and China have heightened concerns of increased tariffs and restrictions
on trade between the two countries. An increase in tariffs or trade restrictions, or even the threat of such developments,
could lead to a significant reduction in international trade, which could have a negative impact on the economy of Asian countries and
a commensurately negative impact on the Fund.
AUTHORIZED PARTICIPANT CONCENTRATION RISK. Only an authorized participant may engage in creation or redemption transactions directly with the Fund. A limited number of institutions act as authorized participants for the Fund. To the
extent that these institutions exit the business or are unable to proceed with creation and/or redemption orders and no other authorized
participant steps forward to create or redeem, the Fund’s shares may trade at a premium or discount (the difference between the market price of the Fund's shares and the Fund's net asset value) and possibly face delisting and the bid/ask spread (the difference between
the
price that someone is willing to pay for shares of the Fund at a specific point in time versus the price at which someone
is willing to sell) on the Fund’s shares may widen.
CURRENCY RISK. Changes in currency exchange rates affect the value of investments denominated in a foreign currency, and therefore the value of such investments in the Fund’s portfolio. The Fund’s net asset value could decline if a currency to which the Fund has exposure depreciates against the U.S. dollar or if there are delays or limits on repatriation of such currency. Currency exchange
rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change
quickly and without warning.
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’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.
EUROPE RISK. The Fund is subject to certain risks specifically associated with investments in the securities of European issuers. Political
or economic disruptions in European countries, even in countries in which the Fund is not invested, may adversely affect security
values and thus the Fund’s holdings. A significant number of countries in Europe are member states in the European Union (the “EU”), and the member states no longer control their own monetary policies by directing independent interest rates for their currencies.
In these member states, the authority to direct monetary policies, including money supply and official interest rates for the Euro,
is exercised by the European Central Bank. In a 2016 referendum, the United Kingdom elected to withdraw from the EU (“Brexit”). After years of negotiations between the United Kingdom and the EU, a withdrawal agreement was reached whereby the United Kingdom formally
left the EU. As the second largest economy among EU members, the implications of the United Kingdom’s withdrawal are difficult to gauge and cannot be fully known. Its departure may negatively impact the EU and Europe as a whole by causing volatility within
the EU, triggering prolonged economic downturns in certain European countries or sparking additional member states to contemplate
departing the EU (thereby perpetuating political instability in the region).
INDEX CONCENTRATION RISK. The Fund will be concentrated in an industry or a group of industries to the extent that the Index is so concentrated. To the extent that the Fund invests a significant percentage of its assets in a single asset class or the
securities of issuers within the same country, state, region, industry or sector, an adverse economic, business or political development
may affect the value of the Fund’s investments more than if the Fund were more broadly diversified. A 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.
There may be instances in which the Index, for a variety of reasons including changes in the prices of individual securities
held by the Fund, has a larger exposure to a small number of stocks or a single stock relative to the rest of the stocks in the Index.
Under such circumstances, the Fund will not deviate from the Index except in rare circumstances or in an immaterial way and therefore the Fund’s returns would be more greatly influenced by the returns of the stock(s) with the larger exposure.
INDEX OR MODEL CONSTITUENT RISK. The Fund may be a constituent of one or more indices or ETF models. As a result, the Fund may be included in one or more index-tracking exchange-traded funds or mutual funds. Being a component security of such a
vehicle could greatly affect the trading activity involving the Fund’s shares, the size of the Fund and the market volatility of the Fund. Inclusion in an index could increase demand for the Fund and removal from an index could result in outsized selling activity in a relatively
short period of time. As a result, the Fund’s net asset value could be negatively impacted and the Fund’s market price may be below the Fund’s net asset value during certain periods. In addition, index rebalances may potentially result in increased trading activity in the Fund's shares.
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.
INTERNATIONAL CLOSED MARKET TRADING RISK. Because securities held by the Fund trade on non-U.S. exchanges that are closed when the Fund’s primary listing exchange is open, there are likely to be deviations between the current price of an underlying security and the last quoted price for the underlying security (i.e., the Fund’s quote from the closed foreign market) used for purposes of calculating the Fund's net asset value, resulting in premiums or discounts to the Fund’s net asset value that may be greater than those experienced by other exchange-traded funds. However, because shares can be created and redeemed in Creation Units at the Fund’s net asset value, it is not expected that large discounts or premiums to the net asset value of the Fund will be sustained
over the long term (unlike shares of many closed-end funds, which frequently trade at appreciable discounts from, and sometimes at premiums
to, their net asset values). In addition, shareholders may not be able to redeem their shares of the Fund, or purchase and sell
shares of the Fund on the listing exchange for the Fund, on days when the net asset value of the Fund could be significantly affected
by events in the relevant foreign markets.
JAPAN RISK. The Fund is subject to certain risks specifically associated with investments in the securities of Japanese issuers. The
Japanese economy may be subject to considerable degrees of economic, political and social instability, which could have a
negative impact on Japanese securities. Japan’s economy is characterized by government intervention and protectionism, reliance on oil imports, an unstable financial services sector and relatively high unemployment. Since 2000, Japan has experienced relatively low economic
growth, and it may remain low in the future. Its economy is heavily dependent on international trade and has been adversely
affected by trade tariffs and competition from emerging economies. As such, economic growth is heavily dependent on continued growth
in international trade, relatively low commodities prices, government support of the financial services sector and other government
policies. Any changes or trends in these economic factors could have a significant impact on Japanese markets overall and
may negatively affect the Fund’s investments. Japan’s economy and equity market also share a strong correlation with U.S. markets and the Japanese economy may be affected by economic problems in the U.S. Despite a strengthening in the economic relationship between Japan
and China, the countries’ political relationship has at times been strained. Should political tension increase, it could adversely affect the economy and destabilize the region as a whole. Additionally, escalated tensions involving North Korea and any outbreak of
hostilities involving North Korea could have a severe adverse effect on Japan’s economy. Japan’s geography also subjects it to an increased risk of natural disasters, such as earthquakes, volcanic eruptions, typhoons and tsunamis, all of which could negatively impact the Fund’s investments.
LARGE CAPITALIZATION COMPANIES RISK. Large capitalization companies may grow at a slower rate and be less able to adapt to changing market conditions than smaller capitalization companies. Thus, the return on investment in securities of large capitalization
companies may be less than the return on investment in securities of small and/or mid capitalization companies. The performance
of large capitalization companies also tends to trail the overall market during different market cycles.
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 MAKER RISK. The Fund faces numerous market trading risks, including the potential lack of an active market for Fund shares due to a limited number of market markers. Decisions by market makers or authorized participants to reduce their role or step
away from these activities in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the
relationship between the underlying values of the Fund’s portfolio securities and the Fund’s market price. The Fund may rely on a small number of third-party market makers to provide a market for the purchase and sale of shares. Any trading halt or other problem relating
to the trading activity of these market makers could result in a dramatic change in the spread between the Fund’s net asset value and the price at which the Fund’s shares are trading on the Exchange, which could result in a decrease in value of the Fund’s shares. This reduced effectiveness could result in Fund shares trading at a discount to net asset value and also in greater than normal
intraday bid-ask spreads for Fund shares.
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 ensuing policies enacted by governments and central banks have caused and may continue
to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects. While
the U.S. has resumed “reasonably” normal business activity, many countries continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease. As this global pandemic illustrated, such
events may affect certain geographic regions, countries, sectors and industries more significantly than others. These events also 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 and the bid/ask spread on the Fund’s shares may widen.
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. Additionally, in order to comply
with its investment strategies and policies, the Fund portfolio may deviate from the composition of the Index.
NON-U.S. SECURITIES RISK. Non-U.S. securities are subject to higher volatility than securities of domestic issuers due to possible adverse political, social or economic developments, restrictions on foreign investment or exchange of securities, capital
controls, lack of liquidity, currency exchange rates, excessive taxation, government seizure of assets, the imposition of sanctions by foreign
governments, different legal or accounting standards, and less government supervision and regulation of securities exchanges
in foreign countries.
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. The Fund relies on third-parties for a range of services, including custody.
Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its investment objective. Although the Fund and the Fund's investment advisor seek to reduce these operational risks through controls and procedures, there is
no way to completely protect against such risks.
PASSIVE INVESTMENT RISK. 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.
PREMIUM/DISCOUNT RISK. The market price of the Fund’s shares will generally fluctuate in accordance with changes in the Fund’s net asset value as well as the relative supply of and demand for shares on the Exchange. The Fund’s investment advisor cannot predict whether shares will trade below, at or above their net asset value because the shares trade on the Exchange at market prices
and not at net asset value. Price differences may be due, in large part, to the fact that supply and demand forces at work in the
secondary trading market for shares will be closely related, but not identical, to the same forces influencing the prices of the holdings
of the Fund trading individually or in the aggregate at any point in time. However, given that shares can only be purchased and redeemed
in Creation Units, and only to and from broker-dealers and large institutional investors that have entered into participation agreements
(unlike shares of closed-end funds, which frequently trade at appreciable discounts from, and sometimes at premiums to, their net
asset value), the Fund’s investment advisor believes that large discounts or premiums to the net asset value of shares should not be sustained. During stressed market conditions, the market for the Fund’s shares may become less liquid in response to deteriorating liquidity in
the market for the Fund’s underlying portfolio holdings, which could in turn lead to differences between the market price of the Fund’s shares and their net asset value and the bid/ask spread on the Fund’s shares may widen.
REIT RISK. REITs typically own and operate income-producing real estate, such as residential or commercial buildings, or real-estate
related assets. 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. REITs are pooled investment vehicles that have their own expenses. As a shareholder in a REIT, the Fund bears its ratable
share of the REIT’s expenses, subjecting Fund shareholders to additional expenses.
TRADING ISSUES RISK. Trading in Fund shares on the Exchange may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in shares inadvisable. In addition, trading in Fund shares on the Exchange is subject to
trading halts caused by extraordinary market volatility pursuant to the Exchange’s “circuit breaker” rules. There can be no assurance that the requirements of the Exchange necessary to maintain the listing of the Fund will continue to be met or will remain unchanged.
The Fund may have difficulty maintaining its listing on the Exchange in the event the Fund’s assets are small, the Fund does not have enough shareholders, or if the Fund is unable to proceed with creation and/or redemption orders.
Annual Total Return
The bar chart and table below illustrate the annual calendar year returns of the Fund based on net asset value as well as
the average annual Fund and Index returns. The bar chart and table provide an indication of the risks of investing in the Fund by showing
changes in the Fund’s performance from year-to-year and by showing how the Fund’s average annual total returns based on net asset value compared to those of the Index and a market index. See “Total Return Information” for additional performance information regarding the Fund. The Fund’s performance information is accessible on the Fund’s website at www.ftportfolios.com.
First Trust International Developed Capital Strength ETF
Calendar Year Total Returns as of 12/31
Calendar Year Total Returns as of 12/31
During the period shown in the chart above:
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Best Quarter
|
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Worst Quarter
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|
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12.02%
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December 31, 2022
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-12.80%
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June 30, 2022
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The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.
All after-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not
reflect the impact of any state or local tax. Returns after taxes on distributions reflect the taxed return on the payment of dividends and capital
gains. Returns after taxes on distributions and sale of shares assume you sold your shares at period end, and, therefore, are also
adjusted for any capital gains or losses incurred. Returns for the market indices do not include expenses, which are deducted from
Fund returns, or taxes.
Your own actual after-tax returns will depend on your specific tax situation and may differ from what is shown here. After-tax
returns are not relevant to investors who hold Fund shares in tax-deferred accounts such as individual retirement accounts (IRAs) or employee-sponsored retirement plans.
Average Annual Total Returns for the Periods Ended December 31, 2022
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1 Year
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Since
Inception
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Inception
Date
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Return Before Taxes
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-19.43%
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-0.40%
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12/15/2020
|
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Return After Taxes On Distributions
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-20.05%
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-1.04%
|
|
|
Return After Taxes on Distributions and Sale of Fund Shares
|
-11.51%
|
-0.56%
|
|
|
The International Developed Capital Strength IndexSM (reflects no deduction for
fees, expenses or taxes)
|
-19.24%
|
0.32%
|
|
|
MSCI World ex USA Index (reflects no deduction for fees, expenses or taxes)
|
-14.29%
|
-0.79%
|
|
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
•
Stan Ueland, Senior Vice President of First Trust
•
Chris A. Peterson, Senior Vice President of First Trust
•
Erik Russo, 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 December 2020.
Purchase and Sale of Fund Shares
The Fund issues and redeems shares on a continuous basis, at net asset value, only in large blocks of shares called “Creation Units.” Individual shares of the Fund may only be purchased and sold on the secondary market through a broker-dealer. Since shares
of the Fund trade on securities exchanges in the secondary market at their market price rather than their net asset value, the Fund’s shares may trade at a price greater than (premium) or less than (discount) the Fund’s net asset value. An investor may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares of the Fund (bid) and the lowest
price a seller is willing to accept for shares of the Fund (ask) when buying or selling shares in the secondary market (the “bid-ask spread”). Recent information, including the Fund’s net asset value, market price, premiums and discounts, bid-ask spreads and the median bid-ask spread for the Fund’s most recent fiscal year, is available online at https://www.ftportfolios.com/Retail/etf/home.aspx.
Tax Information
The Fund’s distributions are taxable and will generally be taxed as ordinary income or capital gains. Distributions on shares held in a tax-deferred account, while not immediately taxable, will be subject to tax when the shares are no longer held in a tax-deferred
account.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer, registered investment adviser, bank or other financial intermediary
(collectively, “intermediaries”), First Trust and First Trust Portfolios L.P., the Fund’s distributor, 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/ETF/ETFfundnews.aspx?Ticker=FICS.
FICSSP122223