First Trust Launches the FT Cboe Vest Gold Strategy Target Income ETF (IGLD) - Seite 3
Investors buying or selling fund shares on the secondary market may incur customary brokerage commissions. Market prices may differ to some degree from the net asset value of the shares. Investors who sell fund shares may receive less than the share’s net asset value. Shares may be sold throughout the day on the exchange through any brokerage account. However, unlike mutual funds, shares may only be redeemed directly from a fund by authorized participants, in very large creation/redemption units. If a fund’s authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a discount to a fund’s net asset value and possibly face delisting.
The use of options and other derivatives can lead to losses because of adverse movements in the price or value of the underlying asset, index or rate, which may be magnified by certain features of the derivatives.
A fund may invest in FLEX Options that reference an ETF, which subjects a fund to certain of the risks of owning shares of an ETF as well as the types of instruments in which the reference ETF invests.
Because a fund may hold FLEX Options that reference the index and/or reference ETFs, a fund has exposure to the equity securities markets.
The FLEX Options held by a fund will be exercisable at the strike price only on their expiration date. Prior to the expiration date, the value of the FLEX Options will be determined based upon market quotations or other recognized pricing methods.
There can be no guarantee that a liquid secondary trading market will exist for the FLEX Options and FLEX options may be less liquid than exchange-traded options.
The fund is subject to credit, call, prepayment, and interest rate risks. Credit risk is the risk that an issuer of a security will be unable or unwilling to make dividend, interest and/or principal payments when due and is heightened for the floating rate loans. Call risk and prepayment are the risks that if an issuer redeems or prepays higher-yielding debt instruments held by the fund, fund income may decline. Interest rate risk is the risk that the value of the fund’s securities will decline in relation to the value of new securities issued in a period of rising interest rates.