FONE First Trust NASDAQ Smartphone Index Fund

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1 First Trust NASDAQ Smartphone Index Fund ETF.com segment: Equity: Global Phones & Handheld Devices Competing ETFs: N/A Related ETF Channels: Technology, Equal-Weighted, Smart-Beta ETFs, Global, Equity, Sectors, Phones & Handheld Devices Find more ETFs with our ETF Screener and Database *Unless otherwise stated, data provided by FactSet. F 5 FUND DESCRIPTION tracks a tiered equal-weighted index of companies classified as smartphone companies by the Consumer Technology Association. FACTSET ANALYTICS INSIGHT While is the only ETF on the market that aims to capture the smartphone industry, investors aren t picking it up. It uses the Consumer Technology Association's classification to select smartphone companies around the world that meet its size and liquidity requirements. is far more diverse than our benchmark, which only holds 12 companies and is utterly dominated by Samsung. Instead, semiconductors outweigh phones & handheld devices as we see it. tilts much smaller than the industry due to a tiered equal-weight structure. Geographically, is far more US-centric compared to the benchmark, which holds no US companies. In fairness, pure play coverage of the space may be impossible, and our benchmark is so narrow as to be uninvestible in a plain ETF. Investors haven't answered 's call: We see fund closure risk and thin trading volume. MSCI ESG ANALYTICS INSIGHT The MSCI ESG Fund Quality Score measures the ability of ETF underlying holdings to manage key medium to long-term risks and opportunities arising from environmental, social, and governance factors, as determined by MSCI ESG Research LLC. As of December 13, 2018 the First Trust NASDAQ Smartphone Index Fund MSCI ESG Fund Quality Score is 5.78 out of 10. SUMMARY DATA Issuer Inception Date Legal Structure Expense Ratio Assets Under Management Average Daily $ Average Spread (%) PORTFOLIO DATA Weighted Average Market Cap Price / Earnings Ratio Price / Book Ratio Distribution Yield Next Ex-Dividend Date Number of Holdings First Trust 02/17/11 Open-Ended Fund 0.70% $13.44M $476.93K 0.41% $91.37B % 12/18/18 53 The fund s Peer Rank reflects the ranking of a fund s MSCI ESG Fund Quality Score against the scores of other funds within the same peer group, as defined by the Thomson Reuters Lipper Global Classification. ranks in the 40th percentile within its peer group and in the 60th percentile within the global universe of all funds in MSCI ESG Fund Metrics coverage. INDEX DATA Index Tracked Index Weighting Methodology Index Selection Methodology NASDAQ CTA Smartphone Index Tiered Market Cap Thomson Reuters Global Phones & Handheld Devices Total Return Index

2 1 Year Daily Price ($) `18 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 80k PERFORMANCE [as of 12/13/18] 1 MONTH 3 MONTHS YTD 1 YEAR 3 YEARS 5 YEARS 10 YEARS -0.75% -7.41% % % 9.72% 8.27% -- (NAV) -1.17% -7.79% % % 9.54% 8.26% -- NASDAQ CTA Smartphone Index -1.12% -7.84% % % 10.22% 9.20% -- Thomson Reuters Global Phones & Handheld Devices Total Return Index % % % 10.18% 12.37% All returns over 1 year are annualized. All returns are total returns unless otherwise stated. TOP 10 COUNTRIES United States 38.20% Finland 3.79% Taiwan, Province of China 15.86% Canada 3.24% Japan 11.95% France 2.30% Hong Kong 10.00% Sweden 2.05% Korea, Republic of 6.98% China 1.61% TOP 10 SECTORS Computer Hardware 19.88% Household Electronics 6.61% Semiconductors 19.46% Integrated Telecommunic 4.88% Phones & Handheld Devic 12.40% Specialized REITs 3.89% Wireless Telecommunicat 9.22% Electrical Components & 3.22% Communications & Netwo 7.71% Auto & Truck Manufacture 2.08% TOP 10 HOLDINGS Nokia Oyj Sponsored ADR 3.93% HTC Corporation 3.14% Lenovo Group Limited 3.92% FIH Mobile Ltd. 2.99% Sony Corporation 3.31% Kyocera Corporation 2.98% Wistron Corporation 3.19% Samsung Electronics Co., 2.96% LG Electronics Inc. 3.18% Inventec Corporation 2.86% Total Top 10 Weighting 32.46%

3 PORTFOLIO MANAGEMENT TAX EXPOSURES FUND STRUCTURE Expense Ratio Median Tracking Difference (12 Mo) Max. Upside Deviation (12 Mo) Max. Downside Deviation (12 Mo) 0.70% -0.99% -0.08% -2.43% Max LT/ST Capital Gains Rate Capital Gains Distributions (3 Year) Tax on Distributions Distributes K % / 39.60% -- Qualified dividends No Legal Structure OTC Derivative Use Securities Lending Active Securities Lending Split (Fund/Issuer) ETN Counterparty Open-Ended Fund No Yes 100% / 0% N/A ETN Counterparty Risk N/A Fund Closure Risk High Portfolio Disclosure Daily

4 Daily Spread 0.9% FACTSET ANALYTICS BLOCK LIQUIDITY As of 12/14/18 0.7% 0.5% 0.3% 0.1% This measurement shows how easy it is to trade a $1 million USD block of. is rated a 3 out of 5. Premium/Discount 2.0% TRADABILITY Avg. Daily Share 9, % Average Daily $ $476.93K -2.0% Median Daily Share 1, % 80k 60k 40k 20k Median Daily ($) Average Spread (%) Average Spread ($) $96.18K 0.41% $0.19 Feb Apr May Jul Aug Oct Dec Median Premium / Discount (12 Mo) -0.14% Max. Premium / Discount (12 Mo) 1.47% / -1.99% Impediment to Creations None Market Hours Overlap 51.00% Creation Unit Size (Shares) 50,000 Creation Unit/Day (45 Day Average) 0.03 Creation Unit Cost (%) 0.05% Underlying / Unit 0.55% Open Interest on ETF Options -- Net Asset Value (Yesterday) $44.84 ETF.com Implied Liquidity 3 SECTOR/INDUSTRY BREAKDOWN TOP 10 HOLDINGS PERFORMANCE STATISTICS Computer Hardware 19.88% 83.51% Nokia Oyj Sponsored ADR Lenovo Group Limited Sony Corporation 3.93% 3.92% 3.31% Goodness of Fit (R2) Beta Up Beta Semiconductors 19.46% -- Wistron Corporation 3.19% Down Beta 0.30 Phones & Handheld Devices Wireless Telecommunications Services 12.40% 16.49% 9.22% -- LG Electronics Inc. HTC Corporation FIH Mobile Ltd. Kyocera Corporation Samsung Electronics Co., Ltd. 3.18% 3.14% 2.99% 2.98% 2.96% Downside Standard Deviation 1.28% Thomson Reuters Global Phones & Handheld Devices Total Return Index

5 Communications & Networking Household Electronics Integrated Telecommunications Services 7.71% % % -- Inventec Corporation Total Top 10 Weighting 2.86% 32.46% MSCI ESG RATINGS MSCI ESG Quality Score Peer Group Percentile Rank Global Percentile Rank SRI Screening Criteria Exposure 5.78 / % Specialized REITs Electrical Components & Equipment 3.89% % -- Exposure to Sustainable Impact Solutions Weighted Average Carbon Intensity (t CO2e/$M Sales) 4.83% Auto & Truck Manufacturers 2.08% -- BENCHMARK COMPARISON HOLDINGS Number of Holdings 53 COUNTRIES United States 38.20% 83.61% Taiwan, Province of China 15.86% 0.14% Constituents Shared Holdings Shared Holdings Weight % Japan 11.95% -- Hong Kong 10.00% 0.10% Korea, Republic of 6.98% 16.14% Finland 3.79% -- Canada 3.24% -- France 2.30% -- Sweden 2.05% -- BENCHMARK COMPARISON SUMMARY Number of Holdings Weighted Average Market Cap $91.37B $939.17B China 1.61% -- REGIONS Asia-Pacific 46.40% 16.39% Price / Earnings Ratio Price / Book Ratio Dividend Yield % 1.63% North America 41.44% 83.61% Concentration Medium High Europe 12.16% -- ECONOMIC DEVELOPMENT Developed Countries 97.54% % Emerging Countries 2.46% --

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