Rule 497(k)
File No. 333-182308
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First Trust
Exchange-Traded Fund VI
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SUMMARY PROSPECTUS
First Trust Indxx Innovative Transaction & Process ETF
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Ticker Symbol:
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LEGR
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Exchange:
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Nasdaq, Inc.
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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=LEGR. 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, 2024, are all incorporated by reference into this Summary Prospectus.
February 1, 2024
Investment Objective
The First Trust Indxx Innovative Transaction & Process 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 Indxx Blockchain Index (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
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0.65%
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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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0.65%
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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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$66
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$208
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$362
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$810
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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 17% of the average value of its portfolio.
Principal Investment Strategies
The Fund will normally invest at least 90% of its net assets (including investment
borrowings) in the securities that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees
and expenses, the performance of the Index. The Index is owned, developed, maintained and sponsored by Indxx, Inc. (the “Index Provider”). The Index Provider reserves the right to use qualitative judgment to include, exclude, adjust, or postpone the inclusion
of a stock in the Index. Continued Index membership of a constituent is not necessarily subject to the guidelines provided in the Index
methodology. A stock may be considered for exclusion by the Index Provider on the basis of corporate governance, accounting policies, lack
of transparency and lack of representation, despite meeting all the criteria provided in the Index methodology.
According to the Index Provider, the Index is designed to track the performance of
companies that are either actively using, investing in, developing, or have products that are poised to benefit from blockchain technology
and/or the potential for increased efficiency that it provides to various business processes. The Index seeks to include only companies
that have devoted material resources to the use of blockchain technologies. Blockchain is a type of distributed ledger, or decentralized
database that keeps continuously updated digital records of who owns a particular asset (e.g., cryptocurrency, contracts, information, etc.).
It is kept and validated simultaneously by a network of computers, similar to a shared
spreadsheet that no one person can change without the agreement of the others. A blockchain is comprised of unchangeable, digitally recorded data in packages called “blocks.” These digitally recorded blocks of data are stored in a linear “chain.” Each block in the chain contains data (e.g., a transaction), that is cryptographically connected to the previous-block in the chain, ensuring all data in the overall “blockchain” has not been tampered with and remains unchanged. Blockchain networks can be private with restricted membership
similar to an intranet, or public like the Internet, accessible to any person in the world. The entire chain is continually updated
so that every ledger in the network is the same, giving each member the ability to prove who owns what at any given time. Blockchain
technology has the potential to increase efficiency
for various business processes, including recordkeeping, payment processing and inventory management, among others. See “Additional Information on the Fund’s Investment Objective and Strategies” for an additional discussion of blockchain technology.
According to the Index Provider, the securities included in the Index are selected
in the following manner:
1.
the Index begins with a global universe of equity securities in both developed and
emerging markets;
2.
companies that don't meet the minimum size, liquidity and float requirements are removed;
3.
companies trading at a price of $10,000 or above per share are removed;
4.
the universe is then narrowed to companies with exposure to blockchain technology
and/or the potential to benefit from the increased process efficiency it could provide (as discussed above), as identified
by the Index Provider;
5.
from the eligible universe, each company is assigned to a tier based on three categories of exposure (see “Index Information” for additional information);
i.
Tier 1 – Active Enablers – companies that are actively developing blockchain technology products or systems
for their own use and for sale and support to other companies; companies that are
direct service providers for blockchain technology; or, companies that have business models that rely on delivering
products or services that utilize blockchain technology;
ii.
Tier 2 – Active Users – companies that are using blockchain technology which is generally supported by an
Active Enabler; or, companies that have at least one use or test case implementing blockchain
technology;
iii.
Tier 3 – Active Explorers – companies that have been publicly disclosed as being active in exploring the incorporation of blockchain technology into their business; or, companies that have
a press release on their website or a news article stating that they have started working in the blockchain technology
space;
6.
companies assigned to Tiers 1 and 2 are eligible for inclusion in the Index;
7.
the top 100 companies, ranked by exposure to blockchain technology, are included in
the Index;
8.
companies from Tier 1 and Tier 2 will each make up 50% of the Index, with companies
equally-weighted within each tier (see “Index Information” for weighting restrictions).
According to the Index Provider, only Tiers 1 and 2 are eligible for inclusion in
the Index because the Index Provider believes that only companies meeting these requirements have devoted material resources to the use or
development of blockchain technology. The Index may be composed of non-U.S. securities, including non-U.S. securities that trade
as depositary receipts. The Index Provider may adjust the rebalance/reconstitution schedule in the future to accommodate the evolution
of the target universe. The Fund may also 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, 2023, the Index was composed of 99 securities
with market capitalizations ranging from $18.68 billion to $2.79 trillion. As of December 31, 2023, the Fund had significant
investments in financial companies, information technology companies and European issuers, although this may change from time to time.
The Fund's investments will change as the Index changes and, as a result, the Fund may have significant investments in jurisdictions
or investment sectors that it may not have had as of December 31, 2023. 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 objectives will be achieved. The order of the below risk factors does not indicate
the significance of any particular risk factor.
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.
BLOCKCHAIN TECHNOLOGY RISK. Blockchain technology is an entirely new and relatively untested technology which
operates as a distributed ledger. The risks associated with blockchain technology may not emerge
until the technology is widely used. Blockchain systems could be vulnerable to fraud, particularly if a significant minority of participants
colluded to defraud the rest. Access to a given blockchain requires an individualized key, which, if compromised, could result in
loss due to theft, destruction or inaccessibility. There is little regulation of blockchain technology other than the intrinsic public nature
of the blockchain system. Any future regulatory developments could affect the viability and expansion of the use of blockchain technology.
Because blockchain technology systems may operate across many national boundaries and regulatory jurisdictions, it is possible
that blockchain technology may be subject
to widespread and inconsistent regulation. Blockchain technology is not a product
or service that provides identifiable revenue for companies that implement, or otherwise use it. Therefore, the values of the companies
included in an Index may not be a reflection of their connection to blockchain technology, but may be based on other business operations.
Currently, blockchain technology is primarily used for the recording of transactions in digital currency, which are extremely
speculative, unregulated and volatile. Problems in digital currency markets could have a wider effect on companies associated with
blockchain technology. Blockchain technology also may never be implemented to a scale that provides identifiable economic benefit to
the companies included in an Index. There are currently a number of competing blockchain platforms with competing intellectual property
claims. The uncertainty inherent in these competing technologies could cause companies to use alternatives to blockchain. Finally,
because digital assets registered in a blockchain do not have a standardized exchange, like a stock market, there is less liquidity
for such assets and greater possibility of fraud or manipulation.
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.
CURRENT MARKET CONDITIONS RISK. Current market conditions risk is the risk that a particular investment, or shares
of the Fund in general, may fall in value due to current market conditions. As a means to fight
inflation, which remains at elevated levels, the Federal Reserve and certain foreign central banks have raised interest rates and expect to
continue to do so, and the Federal Reserve has announced that it intends to reverse previously implemented quantitative easing. U.S.
regulators have proposed several changes to market and issuer regulations which would directly impact the Fund, and any regulatory changes could adversely impact the Fund’s ability to achieve its investment strategies or make certain investments. Recent and
potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence
in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. The ongoing
adversarial political climate in the United States, as well as political and diplomatic events both domestic and abroad, have and may
continue to have an adverse impact the U.S. regulatory landscape, markets and investor behavior, which could have a negative impact on the Fund’s investments and operations. Other unexpected political, regulatory and diplomatic events within the U.S. and abroad
may affect investor and consumer confidence and may adversely impact financial markets and the broader economy. For example, ongoing
armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have
caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle
East and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact
on certain Fund investments as well as Fund performance and liquidity. The economies of the United States and its trading partners,
as well as the financial markets generally, may be adversely impacted by trade disputes and other matters. For example, the United
States has imposed trade barriers and restrictions on China. In addition, the Chinese government is engaged in a longstanding dispute
with Taiwan, continually threatening an invasion. If the political climate between the United States and China does not improve or continues
to deteriorate, if China were to attempt invading Taiwan, or if other geopolitical conflicts develop or worsen, economies,
markets and individual securities may be adversely affected, and the value of the Fund’s assets may go down. The COVID-19 global pandemic, or any future public health crisis, 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 vaccines
have been developed, there is no guarantee that vaccines will be effective against emerging future variants of the disease. As
this global pandemic illustrated, such events may affect certain geographic regions, countries, sectors and industries more significantly
than others. Advancements in technology may also adversely impact markets and the overall performance of the Fund. For instance,
the economy may be significantly impacted by the advanced development and increased regulation of artificial intelligence. These
events, and any other future events, may adversely affect the prices and liquidity of the Fund’s portfolio investments and could result in disruptions in the trading markets.
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.
DEPOSITARY RECEIPTS RISK. Depositary receipts represent equity interests in a foreign company that trade on
a local stock exchange. Depositary receipts may be less liquid than the underlying shares in their primary
trading market. Any distributions paid to the holders of depositary receipts are usually subject to a fee charged by the depositary. Holders
of depositary receipts may have limited voting rights, and investment restrictions in certain countries may adversely impact the
value of depositary receipts because such restrictions
may limit the ability to convert the equity shares into depositary receipts and vice
versa. Such restrictions may cause the equity shares of the underlying issuer to trade at a discount or premium to the market price of
the depositary receipts.
EMERGING MARKETS RISK. Investments in securities issued by governments and companies operating in emerging
market countries involve additional risks relating to political, economic, or regulatory conditions
not associated with investments in securities and instruments issued by U.S. companies or by companies operating in other developed
market countries. Investments in emerging markets securities are generally considered speculative in nature and are subject to the following
heightened risks: smaller market capitalization of securities markets which may suffer periods of relative illiquidity; significant
price volatility; restrictions on foreign investment; possible repatriation of investment income and capital; rapid inflation; and currency convertibility
issues. Emerging market countries also often have less uniformity in accounting, auditing and reporting requirements, unsettled
securities laws, unreliable securities valuation and greater risk associated with custody of securities. Financial and other reporting
by companies and government entities also may be less reliable in emerging market countries. Shareholder claims that are available
in the U.S., as well as regulatory oversight and authority that is common in the U.S., including for claims based on fraud, may be difficult
or impossible for shareholders of securities in emerging market countries or for U.S. authorities to pursue. The Index the Fund seeks to track
may not weight the securities in emerging market countries on the basis of investor protection limitations, financial reporting quality
or available oversight mechanisms. Furthermore, investors may be required to register the proceeds of sales and future economic or
political crises could lead to price controls, forced mergers, expropriation or confiscatory taxation, seizure, nationalization or creation
of government monopolies.
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.
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).
FINANCIAL COMPANIES RISK. Financial companies, such as retail and commercial banks, insurance companies and
financial services companies, are especially subject to the adverse effects of economic recession, currency
exchange rates, extensive government regulation, decreases in the availability of capital, volatile interest rates, portfolio
concentrations in geographic markets, industries or products (such as commercial and residential real estate loans), competition from
new entrants and blurred distinctions in their fields of business.
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 or issuer-specific events may cause the Index Provider
to postpone a scheduled rebalance, exclude or substitute a security in the Index or undertake other measures 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.
INFORMATION TECHNOLOGY COMPANIES RISK. Information technology companies produce and provide hardware, software and information technology systems and services. These companies may be adversely affected
by rapidly changing technologies, short product life cycles, fierce competition, aggressive pricing and reduced profit margins,
the loss of patent, copyright and trademark protections, cyclical market patterns, evolving industry standards and frequent new
product introductions. In addition, information technology companies are particularly vulnerable to federal, state and local government
regulation, and competition and consolidation, both domestically and internationally, including competition from foreign competitors
with lower production costs. Information technology companies also heavily rely on intellectual property rights and may be
adversely affected by the loss or impairment of those rights.
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 investment, or shares of the Fund in general,
may fall in value. Securities are subject to market fluctuations caused by real or perceived adverse economic, political,
and regulatory factors 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,
market manipulation, government defaults, government shutdowns, regulatory actions, political changes, diplomatic developments,
the imposition of sanctions and other similar measures, spread of infectious diseases or other public health issues, recessions,
natural disasters, or other events could have a significant negative impact on the Fund and its investments. Any of such circumstances could have
a materially negative impact on the value of the Fund’s shares, the liquidity of an investment, and may 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, the bid/ask spread on the Fund’s shares may widen and the returns on investment may fluctuate.
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. Accordingly, the Fund's return may underperform the return 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.
SMALLER COMPANIES RISK. Small and/or mid capitalization companies may be more vulnerable to adverse general
market or economic developments, and their securities may be less liquid and may experience greater price
volatility than larger, more established companies as a result of several factors, including limited trading volumes, fewer products
or financial resources, management inexperience and less publicly available information. Accordingly, such companies are generally subject
to greater market risk than larger, more established companies.
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 broad-based 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 Indxx Innovative Transaction & Process ETF
Calendar Year Total Returns as of 12/31
Calendar Year Total Returns as of 12/31
During the periods shown in the chart above:
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Return
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Period Ended
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Best Quarter
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20.07%
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December 31, 2020
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Worst Quarter
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-21.83%
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March 31, 2020
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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, 2023
|
|
1 Year
|
5 Years
|
Since
Inception
|
Inception
Date
|
|
Return Before Taxes
|
21.79%
|
12.17%
|
7.46%
|
1/24/2018
|
|
Return After Taxes on Distributions
|
20.45%
|
11.21%
|
6.60%
|
|
|
Return After Taxes on Distributions and Sale of Fund Shares
|
12.85%
|
9.24%
|
5.46%
|
|
|
Indxx Blockchain Index (reflects no deduction for fees, expenses or
taxes)
|
23.29%
|
13.24%
|
8.45%
|
|
|
S&P 500® Index (reflects no deduction for fees, expenses or taxes)
|
26.29%
|
15.69%
|
11.08%
|
|
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
•
David G. McGarel, Chief Investment Officer, Chief Operating Officer and Managing Director
of First Trust
•
Jon C. Erickson, Senior Vice President 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 2018, except Erik Russo, who has served as a part of the portfolio management team of the Fund since 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=LEGR.
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