ETF Research Center

First Trust ISE Water Index Fund seeks investment results that correspond to the ISE Water Index.

FUND BASICS
Category	US Equities
Fund Sponsor	First Trust Advisors LP
Website	www.ftportfolios.com
Inception date	May 11, 2007
Assets (mns)	$573
Currency	USD
Expense ratio	55 bp
Distributions	Quarterly

FUND STRUCTURE
Regulation	Open-Ended Fund
Custodian	Bank of New York Mellon
Weighting	Tiered
Index replication	Full
Uses derivatives	No
Options available	Yes

SECTOR BREAKDOWN

CONSTITUENT BREAKDOWN
No. of constituents	37
Wgt avg mkt cap (mns)	$14,212
Large cap (>$10bn)	31.9%
Mid cap ($2-10bn)	47.8%
Small cap (<$2bn)	20.3%
Developed mkts	97.8%
Emerging mkts	2.2%

TOP TEN HOLDINGS
Total	39.1 %
AGILENT TECHNOLOGIES INC	4.4 %
AECOM TECHNOLOGY CORP	4.3 %
AQUA AMERICA INC	4.1 %
DANAHER CORP	4.0 %
PENTAIR PLC	4.0 %
AMERICAN WATER WORKS CO INC	3.8 %
XYLEM INC	3.8 %
IDEX CORP	3.7 %
ROPER INDUSTRIES INC	3.6 %
FLOWSERVE CORP	3.5 %

TOP COUNTRY EXPOSURE
	UNITED STATES	92.2 %
	BRITAIN	4.0 %
	BRAZIL	2.1 %
	BRITISH VIRGIN ISLANDS	1.7 %

HISTORICAL PERFORMANCE info

	Custom date range	Compare to
	thru

Standardized Annual Returns (thru December 31)
Year-to-date	1 year	5 years	10 years	Since Incep.
37.4%	37.4%	13.1%	13.3%	9.6%

Market Correlations
versus...	Beta	R-squared
S&P500	1.00	73%
MSCI EAFE	0.99	59%
MSCI Emg. Mkts.	0.63	42%

Technical Indicators
Recent close	$61.97
30d moving avg.	$60.15
Annualized volatility	14.1%
Short interest (ETF)	0.1%
Short interest (Underlying)	4.9%
Relative strength (RSI)	80

Liquidity measures
Avg. volume (thou.)	20
Turnover	0.2%
Bid/Ask (% of price)	0.10%
ADV underlying (mns)	$6,016

Distributions

FINDING ALTERNATIVE FUNDS

Below is a list of 20 potential alternatives to the First Trust ISE Water ETF based on the alternatives' overlap in portfolio holdings with FIW. Consider funds with lower expense ratios and/or higher ALTAR Score™ ratings as possible alternatives.

Benchmark ticker:

FIW

Expense:

55 bp

ALTAR Score™:

3.5%

ALTERNATIVE ETFs BASED ON OVERLAP WITH FIW
Ticker	Fund Name	Overlap¹ vs FIW (%)	Expense ratio (bp)	Savings vs FIW (bp)	ALTAR Score™ (%)	ALTAR vs FIW (%)
PHO	Invesco Water Resources	65.1	60	-5	3.8	+0.3
CGW	Invesco S&P Global Water	37.6	62	-7	3.9	+0.4
TBLU	Tortoise Water Fund	36.1	40	15	4.4	+0.9
PIO	Invesco Global Water	28.4	75	-20	3.9	+0.4
XKII	SPDR Kensho Intelligent Structures	22.2	45	10	6.0	+2.5
KSCD	KFA Small Cap Quality Dividend Index	14.2	51	4	4.8	+1.3
PUI	Invesco DWA Utilities Momentum	14.1	60	-5	3.8	+0.3
SMDV	ProShares Russell 2000 Dividend Growers	12.8	40	15	5.4	+1.9
PZD	Invesco Cleantech	10.1	68	-13	4.4	+0.8
DIET	Defiance Next Gen Food & Agriculture	9.9	30	25	5.5	+2.0
PRN	Invesco DWA Industrials Momentum	9.3	60	-5	13.5	+10.0
GRES	Index IQ Global Resources	9.0	77	-22	5.8	+2.2
RGI	Invesco S&P Equal Weight Industrials	8.5	40	15	6.5	+3.0
IFRA	iShares U.S. Infrastructure	8.5	40	15	5.2	+1.7
PAVE	Global X U.S. Infrastructure Development	8.1	47	8	5.5	+2.0
TMDV	ProShares Russell US Dividend Growers	7.5	35	20	4.8	+1.3
NOBL	ProShares S&P500 Aristocrats	7.0	35	20	5.7	+2.2
KNG	Cboe Vest S&P 500 Dividend Aristocrats Target Income	6.9	75	-20	5.3	+1.8
SUSA	iShares MSCI USA ESG Select	6.6	25	30	4.9	+1.4
EVX	VanEck Vectors Environmental Services ETF	6.6	56	-1	5.0	+1.5

¹Overlap is the percentage of holdings by weight that are identical. For example, if Fund A has a 2% position in Apple, Inc. (AAPL) and Fund B has a 5% position, their overlapping position in AAPL is 2%.

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RESULTS & ESTIMATES

	2014	2015	2016	2017	2018	2019E	2020E
Sales per share	**	**	**	**	**	**	**
Earnings per share	**	**	**	**	**	**	**
Dividends per share	**	**	**	**	**	**	**
Book value per share	**	**	**	**	**	**	**

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

Sales per share growth		**%	**%	**%	**%	**%	**%
EPS growth		**%	**%	**%	**%	**%	**%

OTHER FUNDAMENTAL METRICS

Long term EPS growth est.	**%		Debt-to-equity	**x
Asset turnover	**%		Assets-to-equity	**x

Return on equity

Revision activity*

*Six months ago = 100

Net margins

Compound annual growth rates

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VALUATION METRICS

	2018	2019E	2020E
Price-to-sales	**	**	**
Price-to-earnings	**	**	**
Price-to-cash flow	**	**	**
Price-to-growth	**	**	**
Price-to-book value	**	**	**
Yield	**	**	**

Historical valuation trends

Forward multiple:	First Trust ISE Water
Relative to:	S&P500	MSCI EAFE	MSCI Emg. Mkts.	Other ETF:

AVOID

Not worthwhile for most investors. A rating of AVOID is assigned to ETFs with ALTAR Scores in the lowest quintile (the bottom 20%) of their category. Often, funds in this category consist of stocks with little if any history or expectation of profitability, and as a result our fundamentally-driven analysis may not be relevant.

ALTAR Score™

Calculation of ALTAR Score™
Avg. Return on Equity	13.4	%
Divided by: Fwd. P/BV	3.3	x
Less: Expense ratio	55	bp
Equals: ALTAR Score	3.5	%

More information on ALTAR Score™

MODERN PORTFOLIO THEORY info

CONSENSUS RECOMMENDATIONS: FUND CONSTITUENTS

COMPOSITE RATING	1.64	CATEGORY AVERAGE	1.55

The composite rating is a weighted average of analysts' consensus recommendations for individual ETF constituents, based on the following scale: BUY = 1; OVERWEIGHT = 1.5, HOLD = 2; UNDERWEIGHT = 2.5; and SELL = 3. Readers are cautioned that because analyst ratings tend to be inflated, the composite score may be more useful as a relative measure of sentiment between funds rather than as a stand-alone recommendation.