First Trust Advisors L.P. (“First
Trust”) today announced the anticipated launch of the First Trust
NASDAQ® Clean Edge® Smart Grid Infrastructure Index Fund. This
exchange-traded fund (ETF) is expected to begin trading on November
17 on The NASDAQ® Stock Market under the ticker symbol (GRID). This
ETF seeks investment results that correspond generally to the price
and yield (before the fund’s fees and expenses) of an equity index
called the NASDAQ OMX® Clean Edge® Smart Grid Infrastructure
IndexSM. The Index is designed to act as a transparent and liquid
benchmark for the grid and energy infrastructure sector.
"With a growing demand for electricity
and the increasingly inefficient infrastructure, the current power
grid is unable to keep up with 21st century technology," according
to Ryan Issakainen, Vice President and ETF Analyst at First Trust.
"There's a growing movement towards a next generation power grid -
Smart Grid. Electricity is one of the largest and most
capital-intensive sectors in our economy and we are tremendously
excited about the potential that an investment in this industry
represents."
The Index includes companies that are
primarily engaged and involved in electric grid, electric meters
and devices, networks, energy storage and management, and enabling
software used by the smart grid infrastructure sector. First Trust
will be the investment advisor for the ETF.
About
The Clean Edge®
Smart Grid Infrastructure Index
Fund
The Index is a modified-market
capitalization weighted index that includes companies that are
primarily engaged and involved in electric grid, electric meters
and devices, networks, energy storage and management, and
industry-related software. The index is jointly owned by the NASDAQ
OMX Group, Inc. and Clean Edge, Inc. The index is administered by
NASDAQ OMX Group, Inc.
About
First Trust Advisors L.P.
Based in Wheaton, Illinois, First Trust
Advisors L.P., and its affiliate First Trust Portfolios L.P., are
privately-held companies which provide a variety of investment
services, including asset management, financial advisory services,
and municipal and corporate investment banking, with collective
assets under management or supervision of over $24 billion as of
October 30, 2009 through closed-end funds, unit investment trusts,
mutual funds, separate managed accounts and exchange-traded
funds.
For more information, please visit
www.ftportfolios.com.
Principal Risk Factors
The information in the prospectus is not
complete and may be changed. We may not sell these securities until
the registration statement filed with the Securities and Exchange
Commission is effective. The prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
An investor should consider the
fund’s investment objectives, risks, charges and expenses carefully
before investing. Contact First Trust Portfolios L.P. at
1-800-621-1675 or visit www.ftportfolios.com to
obtain a prospectus or summary prospectus which contains this and
other information about the fund. The prospectus or summary
prospectus should be read carefully before investing.
An investor could lose money by
investing in the Fund. An investment in the Fund is not a deposit
of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency.
MARKET RISK. Market risk is the
risk that a particular stock owned by the Fund, Shares of the Fund
or stocks in general may fall in value. Shares are subject to
market fluctuations caused by such factors as economic, political,
regulatory or market developments, changes in interest rates and
perceived trends in stock prices. Overall stock values could
decline generally or could underperform other investments.
NON-CORRELATION RISK. The Fund’s
return may not match the return of the Index for a number of
reasons. For example, the Fund incurs operating expenses not
applicable to the Index, and may incur costs in buying and selling
securities, especially when rebalancing the Fund’s portfolio
holdings to reflect changes in the composition of the Index. In
addition, the Fund’s portfolio holdings may not exactly replicate
the securities included in the Index or the ratios between the
securities included in the Index.
REPLICATION MANAGEMENT RISK. The
Fund is exposed to additional market risk due to its policy of
investing principally in the securities included in the Index. As a
result of this policy, securities held by the Fund will generally
not be bought or sold in response to market fluctuations and the
Fund will be concentrated in smart grid companies. Therefore, the
Fund will generally not sell a stock because the stock’s issuer is
in financial trouble, unless that stock is removed or is
anticipated to be removed from the Index.
NON-DIVERSIFICATION RISK. The
Fund is classified as “non-diversified” under the Investment
Company Act of 1940, as amended (the “1940 Act”). As a result, the
Fund is only limited as to the percentage of its assets which may
be invested in the securities of any one issuer by the
diversification requirements imposed by the Internal Revenue Code
of 1986, as amended (the “Code”). The Fund may invest a relatively
high percentage of its assets in a limited number of issuers.
SMART GRID RISK. The Fund will be
concentrated in smart grid companies. Smart grid companies can be
negatively affected by high costs of research and development, high
capital requirements for implementation, uncertain government
regulations and input, limited ability of industrial and utility
companies to quickly transform their businesses in order to
implement new technologies and uncertainty of the ability of new
products to penetrate established industries. Smart grid companies
are often reliant upon contracts with government and commercial
customers which may expire from time to time. Such companies are
also affected by the general business conditions within the
industrial, utility, information technology and telecommunications
sectors and the overall global economy.
NON-U.S. SECURITIES RISK. The
Fund invests in securities of non-U.S. issuers. Such securities are
subject to higher volatility than securities of domestic issuers
due to possible adverse political, social or economic developments;
restrictions on foreign investment or exchange of securities; lack
of liquidity; excessive taxation; government seizure of assets;
different legal or accounting standards; and less government
supervision and regulation of exchanges in foreign countries.
CURRENCY RISK. Because the Fund’s
NAV is determined on the basis of U.S. dollars, an investor may
lose money if the local currency of a foreign market depreciates
against the U.S. dollar, even if the local currency value of a
Fund’s holdings goes up.
NASDAQ®, NASDAQ OMX®, and Clean Edge®
are the registered trademarks (the “Marks”) of The NASDAQ OMX
Group, Inc. (“NASDAQ OMX”) and Clean Edge, Inc. (“Clean Edge”)
respectively. NASDAQ OMX® and Clean Edge® are, collectively with
their affiliates, the “Corporations”. The Marks are licensed for
use by First Trust Advisors L.P. The Fund has not been passed on by
the Corporations as to its legality or suitability. The Fund is not
issued, endorsed, sold or promoted by the Corporations. The Fund
should not be construed in any way as investment advice by the
Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO
LIABILITY WITH RESPECT TO THE FUND.
Not FDIC Insured • Not Bank Guaranteed •
May Lose Value
First Trust NASDAQ Clean... (NASDAQ:GRID)
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