Rule 497(k)
File No. 333-182308
FIRST TRUST
FIRST TRUST EXCHANGE-TRADED FUND VI
SUMMARY PROSPECTUS
International Multi-Asset Diversified Income Index Fund
Ticker Symbol: YDIV
Exchange: NASDAQ(R)
Before you invest, you may want to review the Fund's prospectus, which contains
more information about the Fund and its risks. You can find the Fund's
prospectus and other information about the Fund, including the statement of
additional information and most recent reports to shareholders, online at
http://www.ftportfolios.com/retail/ETF/ETFfundnews.aspx?Ticker=YDIV. You can
also get this information at no cost by calling (800) 621-1675 or by sending an
e-mail request to info@ftportfolios.com. The Fund's prospectus and statement of
additional information, both dated August 23, 2013, are all incorporated by
reference into this Summary Prospectus.
INVESTMENT OBJECTIVE
International Multi-Asset Diversified Income Index Fund (the "Fund") seeks
investment results that correspond generally to the price and yield (before fees
and expenses) of an index called the NASDAQ International Multi-Asset
Diversified Income Index (the "Index").
August 23, 2013
FEES AND EXPENSES OF THE FUND
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. Investors purchasing and selling shares may be subject
to costs (including customary brokerage commissions) charged by their broker,
which are not reflected in the table below.
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) None
ANNUAL FUND OPERATING EXPENSES (Expenses that you pay each year as a percentage
of the value of your investment)
Management Fees 0.70%
Distribution and Service (12b-1) Fees (1) 0.00%
Other Expenses (2)(3) 0.00%
Acquired Fund Fees and Expenses (2)(3) 0.09%
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Total Annual Fund Operating Expenses 0.79%
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EXAMPLE
The example below is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. This example does not take
into account customary brokerage commissions that you pay when purchasing or
selling shares of the Fund in the secondary market.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated. The example also assumes that your investment has a 5% return each
year and that the Fund's annual operating expenses remain at current levels
until August 23, 2014 and thereafter at 1.04% to represent the imposition of
the 12b-1 fee of 0.25% per annum of the Fund's average daily net assets.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 YEAR 3 YEARS
$81 $306
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(1) Although the Fund has adopted a 12b-1 plan that permits it to pay up to
0.25% per annum, it will not pay 12b-1 fees at any time before August 23,
2014.
(2) "Other Expenses" and "Acquired Fund Fees and Expenses" are estimates
based on the expenses the Fund expects to incur for the current fiscal
year.
(3) Pursuant to the Investment Management Agreement, First Trust will manage
the investment of the Fund's assets and will be responsible for the
Fund's expenses, including the cost of transfer agency, custody, fund
administration, legal, audit, license and other services, but excluding
fee payments under the Investment Management Agreement, interest, taxes,
brokerage commissions, acquired fund fees and expenses and other expenses
connected with the execution of portfolio transactions, distribution and
service fees, pursuant to a 12b-1 plan, if any, and extraordinary
expenses.
PORTFOLIO TURNOVER
The Fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund's
performance.
PRINCIPAL INVESTMENT STRATEGIES
The Fund will normally invest at least 90% of its net assets (plus the amount of
any borrowings for investment purposes) in (1) non-U.S. dividend-paying equity
securities and/or depositary receipts, (2) non-U.S. real estate investment
trusts ("REITs"), (3) non-U.S. preferred securities, (4) infrastructure
companies and (5) an exchange-traded fund ("ETF") that invests in non-U.S. fixed
income securities, all of which comprise the Index (each, an "Index Segment").
The ETF in which the Fund invests may invest in high yield fixed income
securities, commonly referred to as "junk" bonds. Infrastructure companies
include equity securities of companies classified as utilities and royalty
trusts by the Industry Classification Benchmark ("ICB"). Although many of the
infrastructure companies in which the Fund invests will be non-U.S. companies,
certain of the royalty trusts may be domiciled in the United States or trade on
an exchange located in the United States.
In general, "non-U.S." shall mean securities issued or guaranteed by companies
organized under the laws of countries other than the United States (including
emerging markets), securities issued or guaranteed by foreign, national,
provincial, state, municipal or other governments with taxing authority or by
their agencies or instrumentalities and debt obligations of supranational
governmental entities such as the World Bank or European Union. The Index is
designed to provide access to a diversified portfolio of small, mid and large
capitalization income producing securities. The Index will be comprised of the
five Index Segments in the following manner:
INDEX SEGMENT PERCENTAGE OF THE INDEX
Dividend-paying equity securities 25%
REITs 20%
Preferred securities 20%
Infrastructure companies 20%
Fixed income ETF 15%
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The Fund, using an indexing investment approach, attempts to replicate, before
fees and expenses, the performance of the Index. First Trust Advisors L.P.
("First Trust" or the "Advisor"), the Fund's investment advisor, seeks a
correlation of 0.95 or better (before fees and expenses) between the Fund's
performance and the performance of the Index; a figure of 1.00 would represent
perfect correlation. First Trust will regularly monitor the Fund's tracking
accuracy and will seek to maintain an appropriate correlation.
The Index is owned and was developed by The NASDAQ(R) OMX Group, Inc. (the
"Index Provider"). The Index Provider also calculates and maintains the Index.
The Index is designed to provide access to a diversified portfolio of non-U.S.
securities. The Index employs a modified market cap weighting methodology in
which larger companies receive a larger Index weighting. The Index weighting
methodology also includes caps or ceilings to prevent high concentrations among
larger stocks and assigns a pre-set weight to the five Index Segments at each
quarterly rebalance. Each Index Segment has a set of separate and distinct
eligibility rules and weighting procedures as described in this prospectus under
"Index Information."
The Index Provider evaluates the Index components quarterly in March, June,
September and December of each year for eligibility, using market data through
the end of January, April, July and October, respectively. Eligible components
for the Index are identified as such using the eligibility criteria set forth in
this Prospectus under "Index Information." The Index is rebalanced quarterly.
Rebalancing is effective as of the market close of the third Friday in March,
June, September and December. The reference dates for the data used in the
rebalancing are at the close of trading on the last trading day in February,
May, August and November, respectively. As of August 8, 2013, the Index was
comprised of 126 securities.
The Fund intends to invest entirely in securities included in the Index;
however, there may also be instances in which the Fund may be underweighted or
overweighted in certain securities in the Index, not invest in certain
securities included in the Index, purchase securities not in the Index that are
appropriate to substitute for certain securities in the Index or utilize various
combinations of the above techniques in seeking to track the Index.
PRINCIPAL RISKS
You 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. There can be no
assurance that the Fund's investment objective will be achieved.
CREDIT RISK. An issuer of a security may be unable or unwilling to make
dividend, interest and/or principal payments when due and the related risk that
the value of a security may decline because of concerns about the issuer's
ability to make such payments. Credit risk may be heightened if the ETF in which
the Fund invests holds "high yield" or "junk" securities. Such securities, while
generally offering higher yields than investment grade debt with similar
maturities, involve greater risks, including the possibility of dividend or
interest deferral, default or bankruptcy, and are regarded as predominantly
speculative with respect to the issuer's capacity to pay dividends or interest
and repay principal.
CURRENCY RISK. Because the Fund's net asset value is determined on the basis of
U.S. dollars and the Fund invests in foreign securities, you may lose money if
the local currency of a foreign market depreciates against the U.S. dollar, even
if the local currency value of the Fund's holdings goes up.
DEPOSITARY RECEIPTS RISK. Depositary receipts may be less liquid than the
underlying shares in their primary trading market. Any distributions paid to the
holders of depositary receipts are usually subject to a fee charged by the
depositary. Holders of depositary receipts may have limited voting rights, and
investment restrictions in certain countries may adversely impact the value of
depositary receipts because such restrictions may limit the ability to convert
shares into depositary receipts and vice versa. Such restrictions may cause
shares of the underlying issuer to trade at a discount or premium to the market
price of the depositary receipts.
ETF RISK. An ETF trades like common stock and represents a portfolio of
securities. The risks of owning an ETF generally reflect the risks of owning the
underlying securities, although lack of liquidity in an ETF could result in it
being more volatile and ETFs have management fees that increase their costs.
FIXED INCOME SECURITIES RISK. The Fund invests in an ETF that invests in fixed
income securities. Fixed income securities are subject to credit risk and
interest rate risk. The ETF may invest in high yield fixed income securities,
commonly referred to as "junk" bonds.
HIGH YIELD SECURITIES RISK. The ETF in which the Fund invests may invest in high
yield securities, or "junk" bonds. High yield securities are subject to greater
market fluctuations and risk of loss than securities with higher ratings, and
therefore, may be highly speculative. These securities are issued by companies
that may have limited operating history, narrowly focused operations, and/or
other impediments to the timely payment of periodic interest and principal at
maturity. If the economy slows down or dips into recession, the issuers of high
yield securities may not have sufficient resources to continue making timely
payment of periodic interest and principal at maturity. The market for high
yield securities is smaller and less liquid than that for investment grade
securities. High yield securities are generally not listed on a national
securities exchange but trade in the over-the-counter markets. Due to the
smaller, less liquid market for high yield securities, the bid-offer spread on
such securities is generally greater than it is for investment grade securities
and the purchase or sale of such securities may take longer to complete.
INDEX CORRELATION RISK. You should anticipate that the value of Fund shares will
decline more or less in correlation with any decline in the value of the Fund's
Index.
INFRASTRUCTURE COMPANIES RISK. The Fund invests in infrastructure companies and
is subject to certain risks inherent in investing in these types of securities.
Infrastructure companies may be directly affected by energy commodity prices,
especially those infrastructure companies which own the underlying energy
commodity. A decrease in the production or availability of natural gas, natural
gas liquids, crude oil, coal or other energy commodities or a decrease in the
volume of such commodities available for transportation, processing, storage or
distribution may adversely impact the financial performance of infrastructure
companies. Infrastructure companies are subject to significant federal, state
and local government regulation in virtually every aspect of their operations,
including how facilities are constructed, maintained and operated, environmental
and safety controls, and the prices they may charge for products and services.
Various governmental authorities have the power to enforce compliance with these
regulations and the permits issued under them and violators are subject to
administrative, civil and criminal penalties, including civil fines, injunctions
or both. Stricter laws, regulations or enforcement policies could be enacted in
the future which would likely increase compliance costs and may adversely affect
the financial performance of infrastructure companies. Natural disasters, such
as hurricanes in the Gulf of Mexico, also may impact infrastructure companies.
Certain infrastructure companies in the utilities industry are subject to the
imposition of rate caps, increased competition due to deregulation, the
difficulty in obtaining an adequate return on invested capital or in financing
large construction projects, the limitations on operations and increased costs
and delays attributable to environmental considerations, and the capital
market's ability to absorb utility debt. In addition, taxes, government
regulation, global politics, price and supply fluctuations, volatile interest
rates and energy conservation may cause difficulties for these companies. Such
issuers have been experiencing certain of these problems to varying degrees.
INTEREST RATE RISK. The Fund is subject to interest rate risk because the value
of the debt securities held by the ETF, preferred securities held by the Fund,
and REITs in which the Fund invests will decline with rising market interest
rates. Interest rate risk is generally lower for shorter-term investments and
higher for longer-term investments. Increases in interest rates typically lower
the present value of a REIT's future earnings stream, and may make financing
property purchases and improvements more costly. Because the market price of
REIT stocks may change based upon investors' collective perceptions of future
earnings, the value of the Fund will generally decline when investors anticipate
or experience rising interest rates.
MARKET RISK. Market risk is the risk that a particular security owned by the
Fund or shares of the Fund in general may fall in value. Securities are subject
to market fluctuations caused by such factors as economic, political, regulatory
or market developments, changes in interest rates and perceived trends in
securities prices. Overall securities values could decline generally or could
underperform other investments.
NEW FUND RISK. The Fund currently has fewer assets than larger funds, and like
other relatively new funds, large inflows and outflows may impact the Fund's
market exposure for limited periods of time. This impact may be positive or
negative, depending on the direction of market movement during the period
affected.
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.
NON-U.S. SECURITIES AND EMERGING MARKETS RISK. The Fund invests in securities of
non-U.S. issuers, including U.S. dollar-denominated securities of non-U.S.
issuers traded in the United States. 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; currency exchange rates; excessive
taxation; government seizure of assets; different legal or accounting standards
and less government supervision and regulation of exchanges in foreign
countries. These risks may be heightened for securities of companies located in,
or with significant operations in, emerging market countries.
PREFERRED SECURITIES RISK. Preferred securities combine some of the
characteristics of both common stocks and bonds. Preferred securities are
typically subordinated to bonds and other debt instruments in a company's
capital structure, in terms of priority to corporate income, and therefore will
be subject to greater credit risk than those debt instruments. Preferred
securities are also subject to credit risk, interest rate risk and income risk.
REIT INVESTMENT RISK. The Fund invests in REITs. Therefore, the Fund is subject
to the risks associated with investing in real estate, which may include, but
are not limited to, fluctuations in the value of underlying properties; defaults
by borrowers or tenants; market saturation; changes in general and local
operating expenses; and other economic, political or regulatory occurrences
affecting companies in the real estate industry. In addition to risks related to
investments in real estate generally, investing in REITs involves certain other
risks related to their structure and focus, which include, but are not limited
to, dependency upon management skills, limited diversification, the risks of
locating and managing financing for projects, heavy cash flow dependency,
possible default by borrowers, the costs and potential losses of
self-liquidation of one or more holdings, the risk of a possible lack of
mortgage funds and associated interest rate risks, overbuilding, property
vacancies, increases in property taxes and operating expenses, changes in zoning
laws, losses due to environmental damages, changes in neighborhood values and
appeal to purchases, the possibility of failing to maintain exemptions from
registration under the 1940 Act and, in many cases, relatively small market
capitalization, which may result in less market liquidity and greater price
volatility.
REITs are also subject to the risk that the real estate market may experience an
economic downturn generally, which may have a material effect on the real estate
in which the REITs invest and their underlying portfolio securities.
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 securities may be
issued by companies concentrated in a particular industry. 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.
SMALLER COMPANY RISK. The Fund invests in small and mid capitalization
companies. Such companies may be more vulnerable to adverse general market or
economic developments, and their securities may be less liquid and may
experience greater price volatility than larger, more established companies as a
result of several factors, including limited trading volumes, products or
financial resources, management inexperience and less publicly available
information. Accordingly, such companies are generally subject to greater market
risk than larger, more established companies.
UTILITIES COMPANIES RISK. The Fund invests in the securities of utilities
companies. Utilities companies are subject to the imposition of rate caps,
increased competition due to deregulation, the difficulty in obtaining an
adequate return on invested capital or in financing large construction projects,
the limitations on operations and increased costs and delays attributable to
environmental considerations, and the capital market's ability to absorb utility
debt. In addition, taxes, government regulation, global politics, price and
supply fluctuations, volatile interest rates and energy conservation may cause
difficulties for utilities. Utilities issuers have been experiencing certain of
these problems to varying degrees.
PERFORMANCE
The Fund has not yet commenced operations and, therefore, does not have a
performance history. Once available, the Fund's performance information will be
available on the Fund's website at www.ftportfolios.com.
MANAGEMENT
INVESTMENT ADVISOR
First Trust Advisors L.P. ("First Trust" or the "Advisor")
PORTFOLIO MANAGERS
The Fund's portfolio is managed by a team (the "Investment Committee")
consisting of:
o Daniel J. Lindquist, Chairman of the Investment Committee and
Managing Director of First Trust;
o Jon C. Erickson, Senior Vice President of First Trust;
o David G. McGarel, Chief Investment Officer and Managing Director of
First Trust;
o Roger F. Testin, Senior Vice President of First Trust; and
o Stan Ueland, Senior Vice President of First Trust.
Each Investment Committee member has served as a part of the portfolio
management team of the Fund since inception.
PURCHASE AND SALE OF FUND SHARES
The Fund issues and redeems shares on a continuous basis, at net asset value,
only in Creation Units consisting of 50,000 shares. The Fund's Creation Units
are issued for securities in which the Fund invests and/or cash, and redeemed
for securities and/or cash, and only to and from broker-dealers and large
institutional investors that have entered into participation agreements. Shares
of the Fund trade on NASDAQ(R) at market prices rather than net asset value,
which may cause the shares to trade at a price greater than net asset value
(premium) or less than net asset value (discount).
TAX INFORMATION
The Fund's distributions are taxable and will generally be taxed as ordinary
income or capital gains. Distributions on shares held in a tax deferred account,
while not immediately taxable, will be subject to tax when the shares are no
longer held in a tax deferred account.
PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If you purchase shares of the Fund through a broker-dealer or other financial
intermediary (such as a bank), First Trust and First Trust Portfolios L.P., the
Fund's distributor, may pay the intermediary for the sale of Fund shares and
related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend the Fund over another investment. Ask your salesperson or visit your
financial intermediary's website for more information.
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