ThZeal - The Zeal

Semi-Annual Consolidated

Financial Statements

and Other Information

For the Six Months Ended

June 30, 2024

First Trust Exchange-Traded Fund VII

First Trust Alternative Absolute Return Strategy ETF (FAAR)

Table of Contents

First Trust Alternative Absolute Return Strategy ETF (FAAR)
Semi-Annual Consolidated Financial Statements and Other Information
June 30, 2024

Consolidated Portfolio of Investments	1
Consolidated Statement of Assets and Liabilities	3
Consolidated Statement of Operations	4
Consolidated Statements of Changes in Net Assets	5
Consolidated Financial Highlights	6
Notes to Consolidated Financial Statements	7
Other Information	13

Performance and Risk Disclosure

There is no assurance that First Trust Alternative Absolute Return Strategy ETF (the “Fund”) will achieve its investment objective. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund.

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost.

First Trust Advisors L.P., the Fund’s advisor, may also periodically provide additional information on Fund performance on the Fund’s webpage at www.ftportfolios.com.

How to Read This Report

This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data that provides insight into the Fund’s performance and investment approach.

The material risks of investing in the Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings.

First Trust Alternative Absolute Return Strategy ETF (FAAR)

Consolidated Portfolio of Investments

June 30, 2024 (Unaudited)

Principal Value	Description	Stated Coupon	Stated Maturity	Value
U.S. GOVERNMENT BONDS AND NOTES — 67.2%
$12,000,000	U.S. Treasury Note	0.38%	09/15/24	$11,878,247
12,000,000	U.S. Treasury Note	1.00%	12/15/24	11,769,286
12,000,000	U.S. Treasury Note	0.50%	03/31/25	11,588,977
12,000,000	U.S. Treasury Note	0.25%	06/30/25	11,437,704
13,000,000	U.S. Treasury Note	0.25%	09/30/25	12,259,355
24,000,000	U.S. Treasury Note	0.38%	11/30/25	22,518,281
2,000,000	U.S. Treasury Note	0.75%	03/31/26	1,865,430
	Total U.S. Government Bonds and Notes			83,317,280
	(Cost $83,472,381)

Shares	Description	Value
MONEY MARKET FUNDS — 28.5%
17,647,728	Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (a)	17,647,728
17,647,729	Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (a)	17,647,729
	Total Money Market Funds	35,295,457
	(Cost $35,295,457)


	Total Investments — 95.7%	118,612,737
	(Cost $118,767,838)
	Net Other Assets and Liabilities — 4.3%	5,265,371
	Net Assets — 100.0%	$123,878,108

Futures Contracts at June 30, 2024 (See Note 2C - Futures Contracts in the Notes to Consolidated Financial Statements):

Futures Contracts Long	Number of Contracts	Expiration Date	Notional Value	Unrealized Appreciation (Depreciation)/ Value
Brent Crude Oil Futures	67	Jul-2024	$5,695,000	$219,649
Brent Crude Oil Futures	66	Aug-2024	5,556,540	207,986
Cattle Feeder Futures	10	Aug-2024	1,296,500	(3,119 )
Cocoa Futures	14	Dec-2024	922,740	29,017
Coffee “C” Futures	41	Sep-2024	3,487,050	87,146
Copper Futures	51	Sep-2024	5,599,162	(107,485 )
Gasoline RBOB Futures	27	Jul-2024	2,836,701	122,903
Gold 100 Oz. Futures	36	Aug-2024	8,422,560	(286,750 )
Kansas City Hard Red Winter Wheat Futures	23	Sep-2024	674,188	(59,154 )
Live Cattle Futures	106	Aug-2024	7,862,020	285,970
LME Zinc Futures	25	Sep-2024	1,834,669	(38,581 )
Low Sulphur Gasoil “G” Futures	62	Aug-2024	4,860,800	181,240
Low Sulphur Gasoil “G” Futures	17	Sep-2024	1,332,800	(4,725 )
Soybean Futures	82	Nov-2024	4,526,400	(163,759 )
Soybean Meal Futures	279	Dec-2024	9,360,450	(490,554 )
Sugar #11 (World) Futures	90	Sep-2024	2,046,240	118,780
WTI Crude Futures	102	Aug-2024	8,225,280	249,604
			$74,539,100	$348,168

Futures Contracts Short
Corn Futures	217	Dec-2024	$(4,565,138 )	$390,230
Cotton No. 2 Futures	200	Dec-2024	(7,269,000 )	132,273
Lean Hogs Futures	38	Aug-2024	(1,360,400 )	(18,000 )
LME Aluminium Futures	42	Sep-2024	(2,649,738 )	43,335

See Notes to Consolidated Financial Statements

Page 1

First Trust Alternative Absolute Return Strategy ETF (FAAR)

Consolidated Portfolio of Investments (Continued)

June 30, 2024 (Unaudited)

Futures Contracts at June 30, 2024 (Continued):

Futures Contracts Short	Number of Contracts	Expiration Date	Notional Value	Unrealized Appreciation (Depreciation)/ Value
LME Lead Futures	51	Sep-2024	$(2,842,039 )	$12,237
LME Nickel Futures	14	Sep-2024	(1,450,912 )	19,124
Natural Gas Futures	55	Jul-2024	(1,430,550 )	32,347
NY Harbor ULSD Futures	97	Jul-2024	(10,319,849 )	(694,574 )
Silver Futures	30	Sep-2024	(4,434,000 )	45,222
Soybean Oil Futures	164	Dec-2024	(4,308,936 )	27,164
Wheat Futures	30	Sep-2024	(860,250 )	142,437
Wheat Futures	183	Dec-2024	(5,462,550 )	350,113
			$(46,953,362 )	$481,908
		Total	$27,585,738	$830,076

(a)	Rate shown reflects yield as of June 30, 2024.

Valuation Inputs

A summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Consolidated Financial Statements):

ASSETS TABLE
	Total Value at 6/30/2024	Level 1 Quoted Prices	Level 2 Significant Observable Inputs	Level 3 Significant Unobservable Inputs
U.S. Government Bonds and Notes	$83,317,280	$—	$83,317,280	$—
Money Market Funds	35,295,457	35,295,457	—	—
Total Investments	118,612,737	35,295,457	83,317,280	—
Futures Contracts*	2,696,777	2,696,777	—	—
Total	$121,309,514	$37,992,234	$83,317,280	$—

LIABILITIES TABLE
	Total Value at 6/30/2024	Level 1 Quoted Prices	Level 2 Significant Observable Inputs	Level 3 Significant Unobservable Inputs
Futures Contracts*	$(1,866,701 )	$(1,866,701 )	$—	$—

*	Includes cumulative appreciation/depreciation on futures contracts as reported in the Futures Contracts table. Only the current day’s variation margin is presented on the Consolidated Statement of Assets and Liabilities.

See Notes to Consolidated Financial Statements

Page 2

First Trust Alternative Absolute Return Strategy ETF (FAAR)

Consolidated Statement of Assets and Liabilities

June 30, 2024 (Unaudited)

ASSETS:
Investments, at value	$118,612,737
Cash segregated as collateral for open futures contracts	5,254,599
Receivables:
Dividends	125,844
Interest	68,179
Total Assets	124,061,359

LIABILITIES:
Payables:
Investment advisory fees	96,272
Variation margin	86,979
Total Liabilities	183,251
NET ASSETS	$123,878,108

NET ASSETS consist of:
Paid-in capital	$120,117,552
Par value	43,500
Accumulated distributable earnings (loss)	3,717,056
NET ASSETS	$123,878,108
NET ASSET VALUE, per share	$28.48
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share)	4,350,002
Investments, at cost	$118,767,838

See Notes to Consolidated Financial Statements

Page 3

First Trust Alternative Absolute Return Strategy ETF (FAAR)

Consolidated Statement of Operations

For the Six Months Ended June 30, 2024 (Unaudited)

INVESTMENT INCOME:
Interest	$2,282,218
Dividends	1,176,082
Total investment income	3,458,300

EXPENSES:
Investment advisory fees	663,682
Total expenses	663,682
NET INVESTMENT INCOME (LOSS)	2,794,618

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on futures contracts	4,427,237
Net change in unrealized appreciation (depreciation) on:
Investments	(549,297)
Futures contracts	2,355,224
Net change in unrealized appreciation (depreciation)	1,805,927
NET REALIZED AND UNREALIZED GAIN (LOSS)	6,233,164
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$9,027,782

See Notes to Consolidated Financial Statements

Page 4

First Trust Alternative Absolute Return Strategy ETF (FAAR)

Consolidated Statements of Changes in Net Assets

	Six Months Ended 6/30/2024 (Unaudited)	Year Ended 12/31/2023
OPERATIONS:
Net investment income (loss)	$2,794,618	$6,862,322
Net realized gain (loss)	4,427,237	(12,644,435)
Net change in unrealized appreciation (depreciation)	1,805,927	(4,775,572)
Net increase (decrease) in net assets resulting from operations	9,027,782	(10,557,685)

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations	(2,079,761)	(5,353,372)

SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold	2,921,310	5,798,426
Cost of shares redeemed	(42,859,467)	(40,573,915)
Net increase (decrease) in net assets resulting from shareholder transactions	(39,938,157)	(34,775,489)
Total increase (decrease) in net assets	(32,990,136)	(50,686,546)

NET ASSETS:
Beginning of period	156,868,244	207,554,790
End of period	$123,878,108	$156,868,244

CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period	5,750,002	6,950,002
Shares sold	100,000	200,000
Shares redeemed	(1,500,000)	(1,400,000)
Shares outstanding, end of period	4,350,002	5,750,002

See Notes to Consolidated Financial Statements

Page 5

First Trust Alternative Absolute Return Strategy ETF (FAAR)

Consolidated Financial Highlights

For a share outstanding throughout each period

	Six Months Ended 6/30/2024 (Unaudited)	Year Ended December 31,
	Six Months Ended 6/30/2024 (Unaudited)	2023	2022	2021	2020	2019
Net asset value, beginning of period	$27.28	$29.86	$28.72	$26.95	$25.88	$26.48
Income from investment operations:
Net investment income (loss)	0.57 (a)	1.09 (a)	0.20 (a)	(0.28 ) (a)	(0.18 ) (a)	0.36
Net realized and unrealized gain (loss)	1.07	(2.80 )	2.68	3.92	2.08	(0.70 )
Total from investment operations	1.64	(1.71 )	2.88	3.64	1.90	(0.34 )
Distributions paid to shareholders from:
Net investment income	(0.44 )	(0.87 )	(1.74 )	(1.87 )	(0.83 )	(0.26 )
Net asset value, end of period	$28.48	$27.28	$29.86	$28.72	$26.95	$25.88
Total return (b)	6.01 %	(5.79 )%	10.02 %	13.49 %	7.35 %	(1.27 )%

Ratios to average net assets/supplemental data:
Net assets, end of period (in 000’s)	$123,878	$156,868	$207,555	$117,768	$59,298	$25,879
Ratio of total expenses to average net assets	0.95 % (c) (d)	0.95 %	0.95 %	0.95 %	0.95 %	0.95 %
Ratio of net investment income (loss) to average net assets	4.00 % (c) (d)	3.76 %	0.61 %	(0.95 )%	(0.68 )%	0.88 %
Portfolio turnover rate (e)	0 %	0 %	0 %	0 %	0 %	0 %

(a)	Based on average shares outstanding.
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all distributions at net asset value during the period, and redemption at net asset value on the last day of the period. The returns presented do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Total return is calculated for the time period presented and is not annualized for periods of less than a year.
(c)	Annualized.
(d)	Ratio of total expenses to average net assets and ratio of net investment income (loss) to average net assets do not reflect the Fund’s proportionate share of expenses and income of underlying investment companies in which the Fund invests.
(e)	Portfolio turnover is calculated for the time period presented and is not annualized for periods of less than a year and does not include securities received or delivered from processing creations or redemptions, derivatives and in-kind transactions.

See Notes to Consolidated Financial Statements

Page 6

Notes to Consolidated Financial Statements

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

1. Organization

First Trust Exchange-Traded Fund VII (the “Trust”) is an open-end management investment company organized as a Massachusetts business trust on November 6, 2012, and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).

This report covers the First Trust Alternative Absolute Return Strategy ETF (the “Fund”), a diversified series of the Trust, which trades under the ticker “FAAR” on Nasdaq, Inc. and commenced operations on May 18, 2016. Unlike conventional mutual funds, the Fund issues and redeems shares on a continuous basis, at net asset value (“NAV”), only in large blocks of shares known as “Creation Units.”

The Fund is an actively managed exchange-traded fund. The investment objective of the Fund seeks to provide investors with long-term total return. The Fund seeks to achieve long-term total return through long and short investments in exchange-traded commodity futures contracts (“Commodity Futures”) through a wholly-owned subsidiary of the Fund, FT Cayman Subsidiary III, organized under the laws of the Cayman Islands (the “Subsidiary”). The Fund does not invest directly in Commodity Futures. The Fund gains exposure to these investments exclusively by investing in the Subsidiary. The Fund will invest up to 25% of its total assets in the Subsidiary. As of June 30, 2024, the Fund invested 22.42% of the Fund’s total assets in the Subsidiary. There can be no assurance that the Fund will achieve its investment objective. The Fund may not be appropriate for all investors.

2. Significant Accounting Policies

The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, “Financial Services-Investment Companies.” The consolidated financial statements include the accounts on a consolidated basis of the Subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the consolidated financial statements. The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates.

A. Portfolio Valuation

The Fund’s NAV is determined daily as of the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. The Fund’s NAV is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding.

The Fund’s investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent readily available market quotations such as last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Pricing Committee of the Fund’s investment advisor, First Trust Advisors L.P. (“First Trust” or the “Advisor”), in accordance with valuation procedures approved by the Trust’s Board of Trustees, and in accordance with provisions of the 1940 Act and rules thereunder. Investments valued by the Advisor’s Pricing Committee, if any, are footnoted as such in the footnotes to the Consolidated Portfolio of Investments. The Fund’s investments are valued as follows:

Exchange-traded futures contracts are valued at the end of the day settlement price.

U.S. Treasuries are valued on the basis of valuations provided by a third-party pricing service approved by the Trust’s Board of Trustees.

Shares of open-end funds are valued based on NAV per share.

If the Fund’s investments are not able to be priced by pre-established pricing methods, such investments may be valued by the Trust’s Board of Trustees or its delegate, the Advisor’s Pricing Committee, at fair value. A variety of factors may be considered in determining the fair value of such investments.

Page 7

Notes to Consolidated Financial Statements (Continued)

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

Valuing the Fund’s holdings using fair value pricing will result in using prices for those holdings that may differ from current market valuations. The Subsidiary’s holdings will be valued in the same manner as the Fund’s holdings.

The Fund is subject to fair value accounting standards that define fair value, establish the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation as of the measurement date. The three levels of the fair value hierarchy are as follows:

• Level 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following:

o Quoted prices for similar investments in active markets.

o Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly.

o Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates).

o Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the investment.

The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value the Fund’s investments as of June 30, 2024, is included with the Fund’s Consolidated Portfolio of Investments.

B. Securities Transactions and Investment Income

Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, if any, is recorded daily on the accrual basis. Amortization of premiums and accretion of discounts are recorded using the effective interest method.

C. Futures Contracts

The Fund, through the Subsidiary, may purchase and sell exchange-listed commodity contracts. When the Subsidiary purchases a listed futures contract, it agrees to purchase a specified reference asset (e.g., commodity) at a specified future date. When the Subsidiary sells or shorts a listed futures contract, it agrees to sell a specified reference asset (e.g., commodity) at a specified future date. The price at which the purchase and sale will take place is fixed when the Subsidiary enters into the contract. The exchange clearing corporation is the ultimate counterparty for all exchange-listed contracts, so credit risk is limited to the creditworthiness of the exchange’s clearing corporation. Margin deposits are posted as collateral with the clearing broker and, in turn, with the exchange clearing corporation. Open futures contracts can be closed out prior to settlement by entering into an offsetting transaction in a matching futures contract. If the Subsidiary is not able to enter into an offsetting transaction, the Subsidiary will continue to be required to maintain margin deposits on the futures contract. When the contract is closed or expires, the Subsidiary records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed or expired. This gain or loss is included in “Net realized gain (loss) on futures contracts” on the Consolidated Statement of Operations.

Exchange-listed commodity futures contracts are generally based upon commodities within the five principal commodity groups: energy, industrial metals, agriculture, precious metals, and livestock. The price of a commodity futures contract will reflect the storage costs of purchasing the physical commodity. These storage costs include the time value of money invested in the physical commodity plus the actual costs of storing the commodity less any benefits from ownership of the physical commodity that are not obtained by the holder of a futures contract (this is sometimes referred to as the “convenience yield”). To the extent that these storage costs change for an underlying commodity while the Subsidiary is in a long position on that commodity, the value of the futures contract may change proportionately.

Upon entering into a futures contract, the Subsidiary must deposit funds, called margin, with its custodian in the name of the clearing broker equal to a specified percentage of the current value of the contract. Open futures contracts are marked-to-market daily with the change in value recognized as a component of “Net change in unrealized appreciation (depreciation) on futures contracts” on the

Page 8

Notes to Consolidated Financial Statements (Continued)

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

Consolidated Statement of Operations. This daily fluctuation in value of the contracts is also known as variation margin and is included as “Variation margin” payable or receivable on the Consolidated Statement of Assets and Liabilities.

When the Subsidiary purchases or sells a futures contract, the Subsidiary is required to collateralize its position in order to limit the risk associated with the use of leverage and other related risks. To collateralize its position, the Subsidiary segregates assets consisting of cash or liquid securities that, when added to any amounts deposited with a futures commission merchant as margin, are equal to the unrealized depreciation of the futures contract or otherwise collateralize its position in a manner consistent with the 1940 Act or the 1940 Act Rules and SEC interpretations thereunder. As the Subsidiary continues to engage in the described securities trading practices and properly segregates assets, the segregated assets will function as a practical limit on the amount of leverage which the Subsidiary may undertake and on the potential increase in the speculative character of the Subsidiary’s outstanding portfolio investments. Additionally, such segregated assets generally ensure the availability of adequate funds to meet the obligations of the Subsidiary arising from such investment activities.

D. Cash

The Fund holds assets equal to or greater than the full notional exposure of the futures contracts. These assets may consist of cash and other short-term securities to comply with SEC guidance with respect to coverage of futures contracts by registered investment companies. At June 30, 2024, the Fund had restricted cash held of $5,254,599, which is included in “Cash segregated as collateral for open futures contracts” on the Consolidated Statement of Assets and Liabilities.

E. Dividends and Distributions to Shareholders

Dividends from net investment income of the Fund, if any, are declared and paid quarterly, or as the Board of Trustees may determine from time to time. Distributions of net realized capital gains earned by the Fund, if any, are distributed at least annually. The Fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

Distributions in cash may be reinvested automatically in additional whole shares only if the broker through whom the shares were purchased makes such option available. Such shares will generally be reinvested by the broker based upon the market price of those shares and investors may be subject to customary brokerage commissions charged by the broker.

Distributions from net investment income and realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Certain capital accounts in the consolidated financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These permanent differences are primarily due to the varying treatment of income and gain/loss on portfolio securities held by the Fund and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for consolidated financial statement and tax purposes, will reverse at some time in the future.

The tax character of distributions paid during the fiscal year ended December 31, 2023 was as follows:

Distributions paid from:
Ordinary income	$5,353,372
Capital gains	—
Return of capital	—

As of December 31, 2023, the components of distributable earnings on a tax basis for the Fund were as follows:

Undistributed ordinary income	$119,634
Accumulated capital and other gain (loss)	1,483,575
Net unrealized appreciation (depreciation)	(2,621,030 )

F. Income Taxes

The Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), which includes distributing substantially all of its net investment income and net realized gains to shareholders. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund’s taxable income exceeds the distributions from such taxable income for the calendar year.

Page 9

Notes to Consolidated Financial Statements (Continued)

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

The Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income, whether or not such earnings are distributed by the Subsidiary to the Fund. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.

The Fund is subject to accounting standards that establish a minimum threshold for recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. The taxable years ended 2020, 2021, 2022, and 2023 remain open to federal and state audit. As of June 30, 2024, management has evaluated the application of these standards to the Fund and has determined that no provision for income tax is required in the Fund’s consolidated financial statements for uncertain tax positions.

The Fund intends to utilize provisions of the federal income tax laws, which allow it to carry a realized capital loss forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At December 31, 2023, for federal income tax purposes, the Fund had $6,503 of non-expiring capital loss carryforwards available, to the extent provided by regulations, to offset future capital gains. To the extent that these loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to the Fund’s shareholders.

As of June 30, 2024, the aggregate cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation/(depreciation) (including short positions and derivatives, if any) for federal income tax purposes were as follows:

Tax Cost	Gross Unrealized Appreciation	Gross Unrealized (Depreciation)	Net Unrealized Appreciation (Depreciation)
$118,767,838	$2,696,777	$(2,021,802 )	$674,975

G. Expenses

Expenses, other than the investment advisory fee and other excluded expenses, are paid by the Advisor (see Note 3).

3. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements

First Trust, the investment advisor to the Fund, is a limited partnership with one limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust is responsible for the selection and ongoing monitoring of the Fund’s and the Subsidiary’s investment portfolios, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund.

Pursuant to the Investment Management Agreement between the Trust and the Advisor, First Trust manages the investment of the Fund’s assets and is responsible for the Fund’s and the Subsidiary’s expenses, including the cost of transfer agency, custody, fund administration, legal, audit, and other services, but excluding fee payments under the Investment Management Agreement, interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees payable pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses. The annual unitary management fee payable by the Fund to First Trust for these services will be reduced at certain levels of the Fund’s net assets (“breakpoints”) and calculated pursuant to the following schedule:

Breakpoints
Fund net assets up to and including $2.5 billion	0.95000 %
Fund net assets greater than $2.5 billion up to and including $5 billion	0.92625 %
Fund net assets greater than $5 billion up to and including $7.5 billion	0.90250 %
Fund net assets greater than $7.5 billion up to and including $10 billion	0.87875 %
Fund net assets greater than $10 billion	0.85500 %

The Subsidiary does not pay First Trust a separate management fee.

The Trust has multiple service agreements with The Bank of New York Mellon (“BNY”). Under the service agreements, BNY performs custodial, fund accounting, certain administrative services, and transfer agency services for the Fund. As custodian, BNY is responsible for custody of the Fund’s assets. As fund accountant and administrator, BNY is responsible for maintaining the books and

Page 10

Notes to Consolidated Financial Statements (Continued)

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

records of the Fund’s securities and cash. As transfer agent, BNY is responsible for maintaining shareholder records for the Fund. BNY is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company.

Each Trustee who is not an officer or employee of First Trust, any sub-advisor or any of their affiliates (“Independent Trustees”) is paid a fixed annual retainer that is allocated equally among each fund in the First Trust Fund Complex. Each Independent Trustee is also paid an annual per fund fee that varies based on whether the fund is a closed-end or other actively managed fund, a target outcome fund or an index fund.

Additionally, the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee, the Vice Chair of the Audit Committee, the Lead Independent Trustee and the Vice Lead Independent Trustee are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Committee Chairs, the Audit Committee Vice Chair, the Lead Independent Trustee and the Vice Lead Independent Trustee rotate periodically in serving in such capacities. The officers and “Interested” Trustee receive no compensation from the Trust for acting in such capacities.

4. Purchases and Sales of Securities

The costs of purchases of U.S. Government securities and non-U.S. Government securities, excluding short-term investments, for the six months ended June 30, 2024, were $13,028,094 and $0, respectively. The proceeds from sales and paydowns of U.S. Government securities and non-U.S. Government securities, excluding short-term investments, for the six months ended June 30, 2024 were $0 and $0, respectively.

For the six months ended June 30, 2024, the Fund had no in-kind transactions.

5. Derivative Transactions

The following table presents the types of derivatives held by the Subsidiary at June 30, 2024, the primary underlying risk exposure and the location of these instruments as presented on the Consolidated Statement of Assets and Liabilities.

		Asset Derivatives		Liability Derivatives
Derivative Instrument	Risk Exposure	Consolidated Statement of Assets and Liabilities Location	Value	Consolidated Statement of Assets and Liabilities Location	Value
Futures contracts	Commodity Risk	Unrealized appreciation on futures contracts*	$2,696,777	Unrealized depreciation on futures contracts*	$1,866,701

*	Includes cumulative appreciation/depreciation on futures contracts as reported in the Fund’s Consolidated Portfolio of Investments. Only the current day’s variation margin is presented on the Consolidated Statement of Assets and Liabilities.

The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized for the six months ended June 30, 2024, on derivative instruments, as well as the primary underlying risk exposure associated with the instruments.

Consolidated Statement of Operations Location
Commodity Risk Exposure
Net realized gain (loss) on futures contracts	$4,427,237
Net change in unrealized appreciation (depreciation) on futures contracts	2,355,224

The average notional value of futures contracts outstanding during the six months ended June 30, 2024, which is indicative of the volume of this derivative type, was $135,789,597.

The Fund does not have the right to offset financial assets and financial liabilities related to futures contracts on the Consolidated Statement of Assets and Liabilities.

Page 11

Notes to Consolidated Financial Statements (Continued)

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

6. Creations, Redemptions and Transaction Fees

The Fund generally issues and redeems its shares in primary market transactions through a creation and redemption mechanism and does not sell or redeem individual shares. Instead, financial entities known as “Authorized Participants” have contractual arrangements with the Fund or one of the Fund’s service providers to purchase and redeem Fund shares directly with the Fund in Creation Units. Prior to the start of trading on every business day, the Fund publishes through the National Securities Clearing Corporation the “basket” of securities, cash or other assets that it will accept in exchange for a Creation Unit of the Fund’s shares. An Authorized Participant that wishes to effectuate a creation of the Fund’s shares deposits with the Fund the “basket” of securities, cash or other assets identified by the Fund that day, and then receives the Creation Unit of the Fund’s shares in return for those assets. After purchasing a Creation Unit, the Authorized Participant may continue to hold the Fund’s shares or sell them in the secondary market. The redemption process is the reverse of the purchase process: the Authorized Participant redeems a Creation Unit of the Fund’s shares for a basket of securities, cash or other assets. The combination of the creation and redemption process with secondary market trading in the Fund’s shares and underlying securities provides arbitrage opportunities that are designed to help keep the market price of the Fund’s shares at or close to the NAV per share of the Fund.

The Fund imposes fees in connection with the purchase of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, plus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the creation basket.

The Fund also imposes fees in connection with the redemption of Creation Units. These fees may vary based upon various fact-based circumstances, including, but not limited to, the composition of the securities included in the Creation Unit or the countries in which the transactions are settled. The price received for each Creation Unit will equal the daily NAV per share of the Fund times the number of shares in a Creation Unit, minus the fees described above and, if applicable, any operational processing and brokerage costs, transfer fees, stamp taxes and part or all of the spread between the expected bid and offer side of the market related to the securities comprising the redemption basket. Investors who use the services of a broker or other such intermediary in addition to an Authorized Participant to effect a redemption of a Creation Unit may also be assessed an amount to cover the cost of such services. The redemption fee charged by the Fund will comply with Rule 22c-2 of the 1940 Act which limits redemption fees to no more than 2% of the value of the shares redeemed.

7. Distribution Plan

The Board of Trustees adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act. In accordance with the Rule 12b-1 plan, the Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year to reimburse First Trust Portfolios L.P. (“FTP”), the distributor of the Fund, for amounts expended to finance activities primarily intended to result in the sale of Creation Units or the provision of investor services. FTP may also use this amount to compensate securities dealers or other persons that are Authorized Participants for providing distribution assistance, including broker-dealer and shareholder support and educational and promotional services.

No 12b-1 fees are currently paid by the Fund, and pursuant to a contractual arrangement, no 12b-1 fees will be paid any time before April 30, 2025.

8. Indemnification

The Trust, on behalf of the Fund, has a variety of indemnification obligations under contracts with its service providers. The Trust’s maximum exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

9. Subsequent Events

Management has evaluated the impact of all subsequent events on the Fund through the date the consolidated financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the consolidated financial statements that have not already been disclosed.

Page 12

Other Information

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

Changes in and Disagreements with Accountants (Item 8 of Form N-CSR)

There were no changes in or disagreements with the Fund’s accountants during the six months ended June 30, 2024.

Proxy Disclosures (Item 9 of Form N-CSR)

There were no matters submitted for vote by shareholders of the Fund during the six months ended June 30, 2024.

Remuneration Paid to Directors, Officers, and Others (Item 10 of Form N-CSR)

Independent Trustees and any member of any advisory board of the Fund are compensated through the unitary management fee paid by the Fund to the advisor and not directly by the Fund. The investment advisory fee paid is included in the Consolidated Statement of Operations.

Statement Regarding the Basis for the Board’s Approval of Investment Advisory Contract (Item 11 of Form N-CSR)

The Board of Trustees of First Trust Exchange-Traded Fund VII (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the “Fund Agreement”) with First Trust Advisors L.P. (the “Advisor”) on behalf of the First Trust Alternative Absolute Return Strategy ETF (the “Fund”). The Board approved the continuation of the Fund Agreement for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. Because the Fund invests in exchange-traded commodity futures contracts through a wholly-owned subsidiary of the Fund (the “Subsidiary”), the Board, including the Independent Trustees, also approved the continuation of an Investment Management Agreement (the “Subsidiary Agreement” and together with the Fund Agreement, the “Agreements”) with the Advisor for the Subsidiary, also for a one-year period. The Board determined that the continuation of the Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.

To reach this determination, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 16, 2024, April 25, 2024 and June 2–3, 2024, the Board, including the Independent Trustees, reviewed materials provided by the Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor to the Fund and the Subsidiary (including the relevant personnel responsible for these services and their experience); the unitary fee rate schedule payable by the Fund as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor, including other exchange-traded funds (“ETFs”) managed by the Advisor; the expense ratio of the Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for the Fund, including comparisons of the Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to the Fund and the potential for the Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; any indirect benefits to the Advisor and its affiliate, First Trust Portfolios L.P. (“FTP”); and information on the Advisor’s compliance program. The Board reviewed initial materials with the Advisor at the meeting held on April 25, 2024, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor. Following the April 25, 2024 meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 2–3, 2024 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangements between the Trust and the Advisor and between the Advisor and the Subsidiary continue to be reasonable business arrangements from the Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in the Fund knowing that the Advisor manages the Fund and knowing the Fund’s unitary fee.

In reviewing the Agreements, the Board considered the nature, extent and quality of the services provided by the Advisor under the Agreements. The Board considered that the Advisor is responsible for the overall management and administration of the Trust, the Fund and the Subsidiary, and reviewed all of the services provided by the Advisor to the Fund and the Subsidiary, as well as the

Page 13

Other Information (Continued)

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

background and experience of the persons responsible for such services. The Board noted that the Fund is an actively-managed ETF and noted that the Advisor’s Alternatives Investment Team is responsible for the day-to-day management of the Fund’s and the Subsidiary’s investments. The Board considered the background and experience of the members of the Alternatives Investment Team and noted the Board’s prior meetings with members of the Team. The Board considered the Advisor’s statement that it applies the same oversight model internally with its Alternatives Investment Team as it uses for overseeing external sub-advisors, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s and the Fund’s compliance with the 1940 Act, as well as the Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Fund. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Fund and the other funds in the First Trust Fund Complex. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust, the Fund and the Subsidiary by the Advisor under the Agreements have been and are expected to remain satisfactory and that the Advisor has managed the Fund consistent with its investment objective, policies and restrictions.

The Board considered the unitary fee rate schedule payable by the Fund under the Fund Agreement for the services provided. The Board considered that as part of the unitary fee the Advisor is responsible for the Fund’s expenses, including the cost of transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the Fund Agreement and interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board noted that the Advisor receives no compensation under the Subsidiary Agreement and pays the expenses of the Subsidiary. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Group, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because the Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for the Fund was above the median total (net) expense ratio of the peer funds in the Expense Group. With respect to the Expense Group discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for actively-managed ETFs, including the limited number of actively-managed ETFs following an absolute return strategy, and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Fund and other non-ETF clients that limited their comparability. In considering the unitary fee rate schedule overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to the Fund and the other funds in the First Trust Fund Complex.

The Board considered performance information for the Fund. The Board noted the process it has established for monitoring the Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund’s performance. The Board received and reviewed information comparing the Fund’s performance for periods ended December 31, 2023 to the performance of the funds in the Performance Universe and to that of a benchmark index. Based on the information provided, the Board noted that the Fund underperformed the Performance Universe median for the one-, three- and five-year periods ended December 31, 2023. The Board also noted that the Fund underperformed the benchmark index for the one- and five-year periods ended December 31, 2023 and outperformed the benchmark index for the three-year period ended December 31, 2023.

On the basis of all the information provided on the unitary fee and performance of the Fund and the ongoing oversight by the Board, the Board concluded that the unitary fee for the Fund continues to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor to the Fund under the Agreements.

The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Fund at current asset levels and whether the Fund may benefit from any economies of scale. The Board noted that the unitary fee rate schedule for the Fund includes breakpoints pursuant to which the unitary fee rate will be reduced as assets of the Fund meet certain thresholds. The Board considered the Advisor’s statement that it believes that its expenses relating to providing advisory services to the Fund will increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board also noted that under the unitary fee structure, any reduction in expenses associated with the management and operations of the Fund would benefit the Advisor, but that the unitary fee structure provides a level of certainty in

Page 14

Other Information (Continued)

First Trust Alternative Absolute Return Strategy ETF (FAAR)

June 30, 2024 (Unaudited)

expenses for shareholders of the Fund. The Board concluded that the unitary fee rate schedule for the Fund reflects an appropriate level of sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to the Fund for the twelve months ended December 31, 2023 and the estimated profitability level for the Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for the Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Fund. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Fund, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Fund. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.

Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements continue to be fair and reasonable and that the continuation of the Agreements is in the best interests of the Fund. No single factor was determinative in the Board’s analysis.

Page 15

Semi-Annual Consolidated

Financial Statements

and Other Information

For the Six Months Ended

June 30, 2024

First Trust Exchange-Traded Fund VII

First Trust Global Tactical Commodity Strategy Fund

(FTGC)

Table of Contents

First Trust Global Tactical Commodity Strategy Fund (FTGC)
Semi-Annual Consolidated Financial Statements and Other Information
June 30, 2024

Consolidated Portfolio of Investments	1
Consolidated Statement of Assets and Liabilities	3
Consolidated Statement of Operations	4
Consolidated Statements of Changes in Net Assets	5
Consolidated Financial Highlights	6
Notes to Consolidated Financial Statements	7
Other Information	13

Performance and Risk Disclosure

There is no assurance that First Trust Global Tactical Commodity Strategy Fund (the “Fund”) will achieve its investment objective. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund.

First Trust Advisors L.P., the Fund’s advisor, may also periodically provide additional information on Fund performance on the Fund’s webpage at www.ftportfolios.com.

How to Read This Report

The material risks of investing in the Fund are spelled out in its prospectus, statement of additional information, and other Fund regulatory filings.

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Consolidated Portfolio of Investments

June 30, 2024 (Unaudited)

Principal Value	Description	Stated Coupon	Stated Maturity	Value
U.S. GOVERNMENT BONDS AND NOTES — 52.3%
$150,000,000	U.S. Treasury Note	0.38%	09/15/24	$148,478,080
175,000,000	U.S. Treasury Note	1.00%	12/15/24	171,635,417
170,000,000	U.S. Treasury Note	0.50%	03/31/25	164,177,177
150,000,000	U.S. Treasury Note	0.25%	06/30/25	142,971,302
185,000,000	U.S. Treasury Note	0.25%	09/30/25	174,460,058
320,000,000	U.S. Treasury Note	0.38%	11/30/25	300,243,750
150,000,000	U.S. Treasury Note	0.75%	03/31/26	139,907,226
	Total U.S. Government Bonds and Notes			1,241,873,010
	(Cost $1,244,729,227)
U.S. TREASURY BILLS — 16.8%
100,000,000	U.S. Treasury Bill	(a)	07/02/24	99,985,373
100,000,000	U.S. Treasury Bill	(a)	07/05/24	99,941,463
100,000,000	U.S. Treasury Bill	(a)	08/01/24	99,548,821
100,000,000	U.S. Treasury Bill	(a)	08/29/24	99,139,583
	Total U.S. Treasury Bills			398,615,240
	(Cost $398,618,292)

Shares	Description	Value
MONEY MARKET FUNDS — 22.1%
262,924,938	Dreyfus Government Cash Management Fund, Institutional Shares - 5.19% (b)	262,924,938
262,924,939	Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.14% (b)	262,924,939
	Total Money Market Funds	525,849,877
	(Cost $525,849,877)


	Total Investments — 91.2%	2,166,338,127
	(Cost $2,169,197,396)
	Net Other Assets and Liabilities — 8.8%	208,986,347
	Net Assets — 100.0%	$2,375,324,474

Futures Contracts at June 30, 2024 (See Note 2C - Futures Contracts in the Notes to Consolidated Financial Statements):

Futures Contracts Long	Number of Contracts	Expiration Date	Notional Value	Unrealized Appreciation (Depreciation)/ Value
Brent Crude Oil Futures	1,286	Jul-2024	$109,310,000	$5,183,523
Brent Crude Oil Futures	581	Aug-2024	48,914,390	3,937,128
Cattle Feeder Futures	158	Aug-2024	20,484,700	119,421
Cocoa Futures	385	Dec-2024	25,375,350	(3,581,270 )
Coffee “C” Futures	965	Sep-2024	82,073,250	(480,866 )
Copper Futures	1,761	Sep-2024	193,335,787	(6,194,378 )
Corn Futures	3,142	Dec-2024	66,099,825	(7,096,266 )
Cotton No. 2 Futures	588	Dec-2024	21,370,860	(322,125 )
Gasoline RBOB Futures	1,287	Jul-2024	135,216,081	8,017,887
Gasoline RBOB Futures	513	Aug-2024	53,240,166	2,531,084
Gold 100 Oz. Futures	1,067	Aug-2024	249,635,320	(8,176,887 )
Kansas City Hard Red Winter Wheat Futures	1,233	Sep-2024	36,142,313	(3,752,292 )
Lean Hogs Futures	381	Aug-2024	13,639,800	(275,999 )
Lean Hogs Futures	221	Oct-2024	6,694,090	(276,123 )
Live Cattle Futures	572	Aug-2024	42,425,240	1,885,813

See Notes to Consolidated Financial Statements

Page 1

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Consolidated Portfolio of Investments (Continued)

June 30, 2024 (Unaudited)

Futures Contracts at June 30, 2024 (Continued):

Futures Contracts Long	Number of Contracts	Expiration Date	Notional Value	Unrealized Appreciation (Depreciation)/ Value
LME Aluminum Futures	1,322	Sep-2024	$83,403,658	$(6,040,325 )
LME Lead Futures	363	Sep-2024	20,228,629	(685,534 )
LME Nickel Futures	340	Sep-2024	35,236,430	(6,806,546 )
LME Zinc Futures	782	Sep-2024	57,388,439	(3,072,717 )
Low Sulphur Gasoil “G” Futures	1,124	Aug-2024	88,121,600	1,256,413
Low Sulphur Gasoil “G” Futures	476	Sep-2024	37,318,400	396,998
Natural Gas Futures	3,459	Jul-2024	89,968,590	(6,056,519 )
NY Harbor ULSD Futures	570	Jul-2024	60,642,414	3,643,745
Silver Futures	666	Sep-2024	98,434,800	(105,545 )
Soybean Futures	1,822	Nov-2024	100,574,400	(3,322,738 )
Soybean Meal Futures	2,878	Aug-2024	99,578,800	(1,806,842 )
Soybean Meal Futures	1,580	Dec-2024	53,009,000	(1,941,678 )
Soybean Oil Futures	1,501	Dec-2024	39,437,274	(236,712 )
Sugar #11 (World) Futures	5,993	Sep-2024	136,256,848	10,983,959
Wheat Futures	1,342	Sep-2024	38,481,850	(2,767,406 )
WTI Crude Futures	1,148	Aug-2024	92,574,720	1,304,315
WTI Crude Futures	635	Nov-2024	49,745,900	160,909
		Total	$2,284,358,924	$(23,577,573 )

(a)	Zero coupon security.
(b)	Rate shown reflects yield as of June 30, 2024.

Valuation Inputs

A summary of the inputs used to value the Fund’s investments as of June 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Consolidated Financial Statements):

ASSETS TABLE
	Total Value at 6/30/2024	Level 1 Quoted Prices	Level 2 Significant Observable Inputs	Level 3 Significant Unobservable Inputs
U.S. Government Bonds and Notes	$1,241,873,010	$—	$1,241,873,010	$—
U.S. Treasury Bills	398,615,240	—	398,615,240	—
Money Market Funds	525,849,877	525,849,877	—	—
Total Investments	2,166,338,127	525,849,877	1,640,488,250	—
Futures Contracts*	40,162,432	40,162,432	—	—
Total	$2,206,500,559	$566,012,309	$1,640,488,250	$—

LIABILITIES TABLE
	Total Value at 6/30/2024	Level 1 Quoted Prices	Level 2 Significant Observable Inputs	Level 3 Significant Unobservable Inputs
Futures Contracts*	$(63,740,005 )	$(63,740,005 )	$—	$—

*	Includes cumulative appreciation/depreciation on futures contracts as reported in the Futures Contracts table. Only the current day’s variation margin is presented on the Consolidated Statement of Assets and Liabilities.

See Notes to Consolidated Financial Statements

Page 2

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Consolidated Statement of Assets and Liabilities

June 30, 2024 (Unaudited)

ASSETS:
Investments, at value	$2,166,338,127
Cash segregated as collateral for open futures contracts	214,095,075
Receivables:
Dividends	2,365,797
Interest	1,144,448
Total Assets	2,383,943,447

LIABILITIES:
Payables:
Variation margin	6,740,247
Investment advisory fees	1,878,726
Total Liabilities	8,618,973
NET ASSETS	$2,375,324,474

NET ASSETS consist of:
Paid-in capital	$2,326,879,721
Par value	993,533
Accumulated distributable earnings (loss)	47,451,220
NET ASSETS	$2,375,324,474
NET ASSET VALUE, per share	$23.91
Number of shares outstanding (unlimited number of shares authorized, par value $0.01 per share)	99,353,334
Investments, at cost	$2,169,197,396

See Notes to Consolidated Financial Statements

Page 3

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Consolidated Statement of Operations

For the Six Months Ended June 30, 2024 (Unaudited)

INVESTMENT INCOME:
Interest	$34,425,741
Dividends	23,583,618
Total investment income	58,009,359

EXPENSES:
Investment advisory fees	11,038,277
Total expenses	11,038,277
NET INVESTMENT INCOME (LOSS)	46,971,082

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments	(526)
Futures contracts	106,725,565
Net realized gain (loss)	106,725,039
Net change in unrealized appreciation (depreciation) on:
Investments	(7,828,272)
Futures contracts	27,419,436
Net change in unrealized appreciation (depreciation)	19,591,164
NET REALIZED AND UNREALIZED GAIN (LOSS)	126,316,203
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$173,287,285

See Notes to Consolidated Financial Statements

Page 4

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Consolidated Statements of Changes in Net Assets

	Six Months Ended 6/30/2024 (Unaudited)	Year Ended 12/31/2023
OPERATIONS:
Net investment income (loss)	$46,971,082	$108,201,044
Net realized gain (loss)	106,725,039	(164,541,262)
Net change in unrealized appreciation (depreciation)	19,591,164	(117,530,484)
Net increase (decrease) in net assets resulting from operations	173,287,285	(173,870,702)

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations	(35,151,724)	(86,724,096)

SHAREHOLDER TRANSACTIONS:
Proceeds from shares sold	140,189,235	430,212,741
Cost of shares redeemed	(308,041,081)	(1,140,520,073)
Net increase (decrease) in net assets resulting from shareholder transactions	(167,851,846)	(710,307,332)
Total increase (decrease) in net assets	(29,716,285)	(970,902,130)

NET ASSETS:
Beginning of period	2,405,040,759	3,375,942,889
End of period	$2,375,324,474	$2,405,040,759

CHANGES IN SHARES OUTSTANDING:
Shares outstanding, beginning of period	107,053,334	138,203,334
Shares sold	5,800,000	18,200,000
Shares redeemed	(13,500,000)	(49,350,000)
Shares outstanding, end of period	99,353,334	107,053,334

See Notes to Consolidated Financial Statements

Page 5

First Trust Global Tactical Commodity Strategy Fund (FTGC)

Consolidated Financial Highlights

For a share outstanding throughout each period

	Six Months Ended 6/30/2024 (Unaudited)	Year Ended December 31,
	Six Months Ended 6/30/2024 (Unaudited)	2023	2022	2021	2020	2019
Net asset value, beginning of period	$22.47	$24.43	$23.02	$19.27	$18.94	$17.92
Income from investment operations:
Net investment income (loss)	0.47 (a)	0.90 (a)	0.13 (a)	(0.22 ) (a)	(0.14 )	0.26
Net realized and unrealized gain (loss)	1.33	(2.11 )	3.82	5.63	0.47	0.91
Total from investment operations	1.80	(1.21 )	3.95	5.41	0.33	1.17
Distributions paid to shareholders from:
Net investment income	(0.36 )	(0.75 )	(2.54 )	(1.66 )	—	(0.15 )
Net asset value, end of period	$23.91	$22.47	$24.43	$23.02	$19.27	$18.94
Total return (b)	8.02 %	(5.01 )%	17.14 %	28.09 %	1.74 %	6.55 %

Ratios to average net assets/supplemental data:
Net assets, end of period (in 000’s)	$2,375,324	$2,405,041	$3,375,943	$1,979,385	$238,039	$163,876
Ratio of total expenses to average net assets	0.95 % (c) (d)	0.95 %	0.95 %	0.95 %	0.95 %	0.95 %
Ratio of net investment income (loss) to average net assets	4.04 % (c) (d)	3.80 %	0.48 %	(0.94 )%	(0.54 )%	1.13 %
Portfolio turnover rate (e)	0 %	0 %	0 %	0 %	0 %	0 %

(a)	Based on average shares outstanding.
(b)	Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all distributions at net asset value during the period, and redemption at net asset value on the last day of the period. The returns presented do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. Total return is calculated for the time period presented and is not annualized for periods of less than a year.
(c)	Annualized.
(d)	Ratio of total expenses to average net assets and ratio of net investment income (loss) to average net assets do not reflect the Fund’s proportionate share of expenses and income of underlying investment companies in which the Fund invests.
(e)	Portfolio turnover is calculated for the time period presented and is not annualized for periods of less than a year and does not include securities received or delivered from processing creations or redemptions, derivatives and in-kind transactions.

See Notes to Consolidated Financial Statements

Page 6

Notes to Consolidated Financial Statements

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

1. Organization

This report covers the First Trust Global Tactical Commodity Strategy Fund (the “Fund”), a diversified series of the Trust, which trades under the ticker “FTGC” on Nasdaq, Inc. and commenced operations on October 22, 2013. Unlike conventional mutual funds, the Fund issues and redeems shares on a continuous basis, at net asset value (“NAV”), only in large blocks of shares known as “Creation Units.”

The Fund is an actively managed exchange-traded fund. The investment objective of the Fund seeks to provide total return by providing investors with commodity exposure while seeking a relatively stable risk profile. The Fund seeks to achieve attractive risk adjusted returns by investing in commodity futures contracts, exchange-traded commodity linked instruments, and commodity linked total return swaps (collectively, “Commodities Instruments”) through a wholly-owned subsidiary of the Fund, FT Cayman Subsidiary II, organized under the laws of the Cayman Islands (the “Subsidiary”). The Fund will not invest directly in Commodities Instruments. The Fund expects to gain exposure to these investments exclusively by investing in the Subsidiary. The Fund will invest up to 25% of its total assets in the Subsidiary. As of June 30, 2024, the Fund invested 19.13% of the Fund’s total assets in the Subsidiary. There can be no assurance that the Fund will achieve its investment objective. The Fund may not be appropriate for all investors.

2. Significant Accounting Policies

A. Portfolio Valuation

Exchange-traded futures contracts are valued at the end of the day settlement price.

U.S. Treasuries are valued on the basis of valuations provided by a third-party pricing service approved by the Trust’s Board of Trustees.

Shares of open-end funds are valued based on NAV per share.

Page 7

Notes to Consolidated Financial Statements (Continued)

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

• Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following:

o Quoted prices for similar investments in active markets.

o Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

B. Investment Transactions and Investment Income

Investment transactions are recorded as of the trade date. Realized gains and losses from investment transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, if any, is recorded daily on the accrual basis. Amortization of premiums and accretion of discounts are recorded using the effective interest method.

C. Futures Contracts

Exchange-listed commodity futures contracts are generally based upon commodities within the six principal commodity groups: energy, industrial metals, agriculture, precious metals, foods and fibers, and livestock. The price of a commodity futures contract will reflect the storage costs of purchasing the physical commodity. These storage costs include the time value of money invested in the physical commodity plus the actual costs of storing the commodity less any benefits from ownership of the physical commodity that are not obtained by the holder of a futures contract (this is sometimes referred to as the “convenience yield”). To the extent that these storage costs change for an underlying commodity while the Subsidiary is in a long position on that commodity, the value of the futures contract may change proportionately.

Page 8

Notes to Consolidated Financial Statements (Continued)

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

D. Cash

The Fund holds assets equal to or greater than the full notional exposure of the futures contracts. These assets may consist of cash and other short-term securities to comply with SEC guidance with respect to coverage of futures contracts by registered investment companies. At June 30, 2024, the Fund had restricted cash held of $214,095,075, which is included in “Cash segregated as collateral for open futures contracts” on the Consolidated Statement of Assets and Liabilities.

E. Dividends and Distributions to Shareholders

The tax character of distributions paid during the fiscal year ended December 31, 2023 was as follows:

Distributions paid from:
Ordinary income	$86,724,096
Capital gains	—
Return of capital	—

As of December 31, 2023, the components of distributable earnings on a tax basis for the Fund were as follows:

Undistributed ordinary income	$2,028,055
Accumulated capital and other gain (loss)	(22,709,770 )
Net unrealized appreciation (depreciation)	(23,378,693 )

F. Income Taxes

Page 9

Notes to Consolidated Financial Statements (Continued)

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

The Fund intends to utilize provisions of the federal income tax laws, which allow it to carry a realized capital loss forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At December 31, 2023, for federal income tax purposes, the Fund had $60,457 of non-expiring capital loss carryforwards available, to the extent provided by regulations, to offset future capital gains. To the extent that these loss carryforwards are used to offset future capital gains, it is probable that the capital gains so offset will not be distributed to the Fund’s shareholders.

Tax Cost	Gross Unrealized Appreciation	Gross Unrealized (Depreciation)	Net Unrealized Appreciation (Depreciation)
$2,169,197,396	$39,421,219	$(65,858,061 )	$(26,436,842 )

G. Expenses

Expenses, other than the investment advisory fee and other excluded expenses, are paid by the Advisor (see Note 3).

3. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements

Breakpoints
Fund net assets up to and including $2.5 billion	0.95000 %
Fund net assets greater than $2.5 billion up to and including $5 billion	0.92625 %
Fund net assets greater than $5 billion up to and including $7.5 billion	0.90250 %
Fund net assets greater than $7.5 billion up to and including $10 billion	0.87875 %
Fund net assets greater than $10 billion	0.85500 %

The Subsidiary does not pay First Trust a separate management fee.

Page 10

Notes to Consolidated Financial Statements (Continued)

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

4. Purchases and Sales of Securities

The costs of purchases of U.S. Government securities and non-U.S. Government securities, excluding short-term investments, for the six months ended June 30, 2024, were $279,282,255 and $0, respectively. The proceeds from sales and paydowns of U.S. Government securities and non-U.S. Government securities, excluding short-term investments, for the six months ended June 30, 2024 were $0 and $0, respectively.

For the six months ended June 30, 2024, the Fund had no in-kind transactions.

5. Derivative Transactions

		Asset Derivatives		Liability Derivatives
Derivative Instrument	Risk Exposure	Consolidated Statement of Assets and Liabilities Location	Value	Consolidated Statement of Assets and Liabilities Location	Value
Futures contracts	Commodity Risk	Unrealized appreciation on futures contracts*	$39,421,195	Unrealized depreciation on futures contracts*	$62,998,768

*	Includes cumulative appreciation/depreciation on futures contracts as reported in the Fund’s Consolidated Portfolio of Investments. Only the current day’s variation margin is presented on the Consolidated Statement of Assets and Liabilities.

Consolidated Statement of Operations Location
Commodity Risk Exposure
Net realized gain (loss) on futures contracts	$106,725,565
Net change in unrealized appreciation (depreciation) on futures contracts	27,419,436

The average notional value of futures contracts outstanding during the six months ended June 30, 2024, which is indicative of the volume of this derivative type, was $2,248,687,082.

The Fund does not have the right to offset financial assets and financial liabilities related to futures contracts on the Consolidated Statement of Assets and Liabilities.

Page 11

Notes to Consolidated Financial Statements (Continued)

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

6. Creations, Redemptions and Transaction Fees

7. Distribution Plan

No 12b-1 fees are currently paid by the Fund, and pursuant to a contractual arrangement, no 12b-1 fees will be paid any time before April 30, 2025.

8. Indemnification

9. Subsequent Events

Page 12

Other Information

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

Changes in and Disagreements with Accountants (Item 8 of Form N-CSR)

There were no changes in or disagreements with the Fund’s accountants during the six months ended June 30, 2024.

Proxy Disclosures (Item 9 of Form N-CSR)

There were no matters submitted for vote by shareholders of the Fund during the six months ended June 30, 2024.

Remuneration Paid to Directors, Officers, and Others (Item 10 of Form N-CSR)

Statement Regarding the Basis for the Board’s Approval of Investment Advisory Contract (Item 11 of Form N-CSR)

The Board of Trustees of First Trust Exchange-Traded Fund VII (the “Trust”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the “Fund Agreement”) with First Trust Advisors L.P. (the “Advisor” ) on behalf of the First Trust Global Tactical Commodity Strategy Fund (the “Fund”). The Board approved the continuation of the Fund Agreement for a one-year period ending June 30, 2025 at a meeting held on June 2–3, 2024. Because the Fund invests in commodity futures contracts, exchange-traded commodity linked instruments and commodity linked total return swaps through a wholly-owned subsidiary of the Fund (the “Subsidiary”), the Board, including the Independent Trustees, also approved the continuation of an Investment Management Agreement (the “Subsidiary Agreement” and together with the Fund Agreement, the “Agreements”) with the Advisor for the Subsidiary, also for a one-year period. The Board determined that the continuation of the Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.

Page 13

Other Information (Continued)

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

Fund and the Subsidiary, and reviewed all of the services provided by the Advisor to the Fund and the Subsidiary, as well as the background and experience of the persons responsible for such services. The Board noted that the Fund is an actively-managed ETF and noted that the Advisor’s Alternatives Investment Team is responsible for the day-to-day management of the Fund’s and the Subsidiary’s investments. The Board considered the background and experience of the members of the Alternatives Investment Team and noted the Board’s prior meetings with members of the Team. The Board considered the Advisor’s statement that it applies the same oversight model internally with its Alternatives Investment Team as it uses for overseeing external sub-advisors, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s and the Fund’s compliance with the 1940 Act, as well as the Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Fund. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 25, 2024 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Fund and the other funds in the First Trust Fund Complex. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Trust, the Fund and the Subsidiary by the Advisor under the Agreements have been and are expected to remain satisfactory and that the Advisor has managed the Fund consistent with its investment objective, policies and restrictions.

The Board considered the unitary fee rate schedule payable by the Fund under the Fund Agreement for the services provided. The Board considered that as part of the unitary fee the Advisor is responsible for the Fund’s expenses, including the cost of transfer agency, custody, fund administration, legal, audit and other services and license fees, if any, but excluding the fee payment under the Fund Agreement and interest, taxes, brokerage commissions and other expenses connected with the execution of portfolio transactions, distribution and service fees pursuant to a Rule 12b-1 plan, if any, and extraordinary expenses, if any. The Board noted that the Advisor receives no compensation under the Subsidiary Agreement and pays the expenses of the Subsidiary. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Group, as well as advisory and unitary fee rates charged by the Advisor to other fund (including ETFs) and non-fund clients, as applicable. Because the Fund pays a unitary fee, the Board determined that expense ratios were the most relevant comparative data point. Based on the information provided, the Board noted that the total (net) expense ratio for the Fund was above the median total (net) expense ratio of the peer funds in the Expense Group. With respect to the Expense Group, the Board discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating peer groups for actively-managed ETFs, including the limited number of actively-managed ETFs following a commodity-based strategy, and different business models that may affect the pricing of services among ETF sponsors. The Board took these limitations and differences into account in considering the peer data. With respect to fees charged to other non-ETF clients, the Board considered differences between the Fund and other non-ETF clients that limited their comparability. In considering the unitary fee rate schedule overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to the Fund and the other funds in the First Trust Fund Complex.

The Board considered performance information for the Fund. The Board noted the process it has established for monitoring the Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund’s performance. The Board received and reviewed information comparing the Fund’s performance for periods ended December 31, 2023 to the performance of the funds in the Performance Universe and to that of a benchmark index. Based on the information provided, the Board noted that the Fund outperformed the Performance Universe median and the benchmark index for the one-, three- and five-year periods ended December 31, 2023 and underperformed the Performance Universe median and outperformed the benchmark index for the ten-year period ended December 31, 2023.

Page 14

Other Information (Continued)

First Trust Global Tactical Commodity Strategy Fund (FTGC)

June 30, 2024 (Unaudited)

management and operations of the Fund would benefit the Advisor, but that the unitary fee structure provides a level of certainty in expenses for shareholders of the Fund. The Board concluded that the unitary fee rate schedule for the Fund reflects an appropriate level of sharing of any economies of scale that may be realized in the management of the Fund at current asset levels. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to the Fund for the twelve months ended December 31, 2023 and the estimated profitability level for the Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for the Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Fund. The Board considered that the Advisor had identified as an indirect benefit to the Advisor and FTP their exposure to investors and brokers who, absent their exposure to the Fund, may have had no dealings with the Advisor or FTP, and noted that the Advisor does not utilize soft dollars in connection with the Fund. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.

Page 15

Fund	Costs of a $10,000 investment	Costs paid as a percentage of a $10,000 investment
First Trust Alternative Absolute Return Strategy ETF	$49	0.95%⁽¹⁾

Fund net assets	$123,878,108%
Total number of portfolio holdings	$38%
Portfolio turnover rate	$0%

Fund	Costs of a $10,000 investment	Costs paid as a percentage of a $10,000 investment
First Trust Global Tactical Commodity Strategy Fund	$49	0.95%⁽¹⁾

Fund net assets	$2,375,324,474%
Total number of portfolio holdings	$45%
Portfolio turnover rate	$0%

U.S. Government Bonds and Notes	67.2%
Money Market Funds	28.5%
Net Other Assets and Liabilities⁽¹⁾	4.3%
Total	100.0%

U.S. Government Bonds and Notes	52.3%
U.S. Treasury Bills	16.8%
Money Market Funds	22.1%
Net Other Assets and Liabilities⁽¹⁾	8.8%
Total	100.0%

By (Signature and Title)*		/s/ James M. Dykas
		James M. Dykas, President and Chief Executive Officer (principal executive officer)

By (Signature and Title)*		/s/ Derek D. Maltbie
		Derek D. Maltbie, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer)