I N C O M E A L L O C AT I O N C L O S E D - E N D P O R T F O L I O
1ST QUARTER 2017 SERIES
THE MULTI-SEC TOR APPROACH
PORTFOLIO SUMMARY
The Income Allocation Closed-End 1Q ‘17 (The Income Allocation Closed-End Portfolio) is a unit
investment trust designed to enable investors who are seeking a high rate of current monthly income to
reduce some of the volatility typically associated with high-income investments. To accomplish this, the
portfolio is diversified across a broad range of closed-end funds. Because different sectors follow
different cycles and react differently to changes in global economies and interest rates, spreading assets
across this spectrum of securities has the potential to reduce the overall risk of the portfolio.
Initial Offering Date:
1/10/2017
Initial Public Offering Price:
$10.00 per Unit
Portfolio Ending Date:
4/9/2018
Estimated Net Annual Distribution per Unit:*
$0.7727
CUSIPs:
30302C 261(c) 279(r)
CLOSED-END FEATURES
Fee Accounts CUSIPs:
30302C 287(c) 295(r)
P O R T F O L I O C O N T R O L | Unlike open-end mutual funds, closed-end funds maintain a relatively
fixed pool of investment capital. This allows portfolio managers to better adhere to their investment
philosophies through greater flexibility and control. In addition, closed-end funds don’t have to manage
fund liquidity to meet potentially large redemptions.
Ticker Symbol:
D I V E R S I F I C AT I O N | The portfolio offers investors diversification by investing in a broad range of
closed-end funds that are further diversified across hundreds of individual issues. Diversification does not
guarantee a profit or protect against loss.
I N C O M E D I S T R I B U T I O N S | Closed-end funds are structured to generally provide a more
stable income stream than other managed fixed-income investment products because they are not
subjected to cash inflows and outflows, which can dilute dividends over time. However, as a result of
bond calls, redemptions and advanced refundings, which can dilute a fund’s income, the portfolio cannot
guarantee consistent income.
FBITRX
*The estimate is based on annualizing the most recent distribution declared by the issuers of the
securities included in the portfolio. As a result of bond calls, redemptions and advanced
refundings, which can dilute a fund’s income, there is no guarantee that the issuers of the
securities included in the portfolio will declare distributions in the future or that, if declared,
they will remain at current levels.
PORTFOLIO OBJEC TIVES
This unit investment trust seeks high current monthly income, with capital
appreciation as a secondary objective. There is, however, no assurance that the
objectives will be achieved.
You should consider the portfolio’s investment objectives, risks, and charges
and expenses carefully before investing. Contact your financial advisor or
call First Trust Portfolios L.P. at the number listed below to request a
prospectus, which contains this and other information about the portfolio.
Read it carefully before you invest.
RISK CONSIDERATIONS
An investment in this unmanaged unit investment trust should
be made with an understanding of the risks associated with an
investment in a portfolio of closed-end funds.
Closed-end funds are subject to various risks, including
management’s ability to meet the fund’s investment objective,
and to manage the fund’s portfolio when the underlying
securities are redeemed or sold, during periods of market
turmoil and as investors’ perceptions regarding the funds or
their underlying investments change. Unlike open-end funds,
which trade at prices based on a current determination of the
fund’s net asset value, closed-end funds frequently trade at a
discount to their net asset value in the secondary market.
Certain closed-end funds may employ the use of leverage, which
increases the volatility of such funds.
Certain of the closed-end funds invest in common stocks.
Common stocks are subject to risks such as an economic
recession and the possible deterioration of either the financial
condition of the issuers of the equity securities or the general
condition of the stock market.
Certain of the closed-end funds invest in options. Options are
subject to various risks including that their value may be
adversely affected if the market for the option becomes less
liquid or smaller. In addition, options will be affected by changes
in the value and dividend rates of the stock subject to the
option, an increase in interest rates, a change in the actual and
perceived volatility of the stock market and the common stock
and the remaining time to expiration.
Certain of the closed-end funds invest in senior loans. The yield
on closed-end funds which invest in senior loans will generally
decline in a falling interest rate environment and increase in a
rising interest rate environment. Senior loans are generally
below investment grade quality (“junk” bonds). An investment
in senior loans involves the risk that the borrowers may default
on their obligations to pay principal or interest when due.
Certain of the closed-end funds invest in U.S. Treasury
obligations, which are subject to numerous risks including
higher interest rates, economic recession and deterioration of
the bond market or investors’ perceptions thereof.
Certain of the closed-end funds invest in high-yield securities or
“junk” bonds. Investing in high-yield securities should be viewed
as speculative and you should review your ability to assume the
risks associated with investments which utilize such securities.
High-yield securities are subject to numerous risks, including
higher interest rates, economic recession, deterioration of the
junk bond market, possible downgrades and defaults of interest
and/or principal. High-yield security prices tend to fluctuate
more than higher rated securities and are affected by short-term
credit developments to a greater degree.
Certain of the closed-end funds invest in investment grade
securities. Investment grade bonds are subject to numerous risks
including higher interest rates, economic recession,
deterioration of the investment grade security market or
investors’ perception thereof, possible downgrades and defaults
of interest and/or principal.
Certain of the closed-end funds invest in floating-rate securities.
A floating-rate security is an instrument in which the interest
rate payable on the obligation fluctuates on a periodic basis
based upon changes in an interest rate benchmark. As a result,
the yield on such a security will generally decline in a falling
interest rate environment, causing the trust to experience a
reduction in the income it receives from such securities.
Certain of the closed-end funds invest in limited duration bonds.
Limited duration bonds are subject to interest rate risk, which is
the risk that the value of a security will fall if interest rates
increase. While limited duration bonds are generally subject to
less interest rate sensitivity than longer duration bonds, there
can be no assurance that interest rates will not rise during the
life of the trust.
PLEASE SEE THE REVERSE SIDE FOR ADDITIONAL RISK CONSIDERATIONS
First Trust Portfolios L.P. | Member SIPC | Member FINRA
1-800-621-1675 | www.ftportfolios.com
1ST QUARTER 2017 SERIES
I N C O M E A L L O C AT I O N C L O S E D - E N D P O R T F O L I O
HOLDINGS
TICKER NAME
GENERAL EQUITY FUNDS
LCM
Advent/Claymore Enhanced Growth & Income Fund
NFJ
AllianzGI NFJ Dividend, Interest & Premium Strategy Fund
BDJ
BlackRock Enhanced Equity Dividend Trust
EVT
Eaton Vance Tax-Advantaged Dividend Income Fund
GDV
The Gabelli Dividend & Income Trust
GAB
The Gabelli Equity Trust Inc.
USA
Liberty All-Star Equity Fund
RVT
Royce Value Trust, Inc.
HIGH-YIELD BOND FUNDS
BGH
Barings Global Short Duration High Yield Fund
DHY
Credit Suisse High Yield Bond Fund
DSL
DoubleLine Income Solutions Fund
IVH
Ivy High Income Opportunities Fund
CIF
MFS Intermediate High Income Fund
PHT
Pioneer High Income Trust
EAD
Wells Fargo Income Opportunities Fund
HIX
Western Asset High Income Fund II Inc.
INVESTMENT GRADE BOND FUNDS
BHK
BlackRock Core Bond Trust
JHS
John Hancock Income Securities Trust
WEA
Western Asset Premier Bond Fund
LOAN PARTICIPATION FUNDS
AFT
Apollo Senior Floating Rate Fund Inc.
BGX
Blackstone/GSO Long-Short Credit Income Fund
EFR
Eaton Vance Senior Floating-Rate Trust
VTA
Invesco Dynamic Credit Opportunities Fund
VVR
Invesco Senior Income Trust
JQC
Nuveen Credit Strategies Income Fund
JSD
Nuveen Short Duration Credit Opportunities Fund
PHD
Pioneer Floating Rate Trust
TLI
Western Asset Corporate Loan Fund Inc.
SPECIALIZED EQUITY FUNDS
DSE
Duff & Phelps Select Energy MLP Fund Inc.
IRR
Voya Natural Resources Equity Income Fund
U.S. GOVERNMENT BOND FUNDS
MGF
MFS Government Markets Income Trust
WIW
Western Asset/Claymore Inflation-Linked Opportunities & Income Fund
WORLD EQUITY FUNDS
CHW
Calamos Global Dynamic Income Fund
IGD
Voya Global Equity Dividend and Premium Opportunity Fund
WORLD INCOME FUNDS
FAX
Aberdeen Asia-Pacific Income Fund, Inc.
FCO
Aberdeen Global Income Fund, Inc.
EDD
Morgan Stanley Emerging Markets Domestic Debt Fund, Inc.
EDI
Stone Harbor Emerging Markets Total Income Fund
TEI
Templeton Emerging Markets Income Fund
GIM
Templeton Global Income Fund
SALES CHARGES (BASED ON A $10 PUBLIC OFFERING PRICE)
PRICE*
Initial 1.00%
Deferred 1.45%
0.50%
2.95%
$8.50
12.96
8.22
21.12
20.42
5.63
5.35
13.57
Creation & Development Fee:
Maximum Sales Charge:
19.45
2.67
19.09
14.86
2.58
9.83
8.49
7.18
The creation and development fee is a charge of $.050 per unit collected at the end of the initial offering
period. If the price you pay exceeds $10 per unit, the creation and development fee will be less than 0.50%;
if the price you pay is less than $10 per unit, the creation and development fee will exceed 0.50%.
13.13
14.13
13.10
17.51
15.73
14.76
12.26
4.59
8.77
17.60
11.94
11.47
7.88
6.65
5.03
11.08
7.18
6.96
4.73
8.08
7.29
14.13
11.17
6.49
*As of the close of business on 1/6/17. Market values are for reference only and are not indicative of your
individual cost basis.
NOT FDIC INSURED | NOT BANK GUARANTEED | MAY LOSE VALUE
STANDARD ACCOUNTS
Transactional Sales Charges:
The deferred sales charge will be deducted in three monthly installments commencing 4/20/17.
FEE/WRAP ACCOUNTS*
Maximum Sales Charge:
0.50%
*The maximum sales charge for investors in fee accounts consists of the creation and development fee.
Investors in fee accounts are not assessed any transactional sales charges. Standard accounts sales charges
apply to units purchased as an ineligible asset.
In addition to the sales charges listed, UITs are subject to annual operating expenses and organization costs.
VOLUME DISCOUNTS
If you invest at least $50,000, the maximum sales charge is reduced as follows:
INITIAL PURCHASES
$50,000 but less than $100,000
$100,000 but less than $250,000
$250,000 but less than $500,000
$500,000 but less than $1,000,000
$1,000,000 or more
MAXIMUM SALES CHARGE
2.70%
2.45%
2.20%
1.95%
1.40%
HOLDINGS ANALYSIS
l General Equity Funds
l High-Yield Bond Funds
l Investment Grade Bond Funds
l Loan Participation Funds
l Specialized Equity Funds
l U.S. Government Bond Funds
l World Equity Funds
l World Income Funds
20.00%
20.00%
7.50%
22.50%
5.00%
5.00%
5.00%
15.00%
The holdings analysis is determined as of the initial date of deposit and may differ slightly from what is
indicated above due to the requirement that only whole shares be purchased for the portfolio and will likely
vary thereafter due to market fluctuations in the underlying securities.
ADDITIONAL RISK CONSIDERATIONS
Certain of the closed-end funds invest in
securities issued by foreign issuers. Such
securities are subject to certain risks, including
currency and interest rate fluctuations,
nationalization or other adverse political or
economic developments, lack of liquidity of
certain foreign markets, withholding, the lack
of adequate financial information, and
exchange control restrictions impacting
foreign issuers. Risks associated with investing
in foreign securities may be more pronounced
in emerging markets where the securities
markets are substantially smaller, less liquid,
less regulated and more volatile than the U.S.
and developed foreign markets.
Although this portfolio terminates in
approximately 15 months, the strategy is longterm. Investors should consider their ability to
pursue investing in successive portfolios, if
available. There may be tax consequences
unless units are purchased in an IRA or other
qualified plan.
It is important to note that an investment can
be made in the underlying funds directly
rather than through the trust. These direct
investments can be made without paying the
trust’s sales charge, operating expenses and
organizational costs.
The value of the securities held by the trust
may be subject to steep declines or increased
volatility due to changes in performance or
perception of the issuers.
For a discussion of additional risks of investing
in the trust see the “Risk Factors” section of the
prospectus.
IC1QFS1Q0117