Correspondence 0001445546-23-006150 from FIRST TRUST EXCHANGE-TRADED FUND VI (CIK 0001552740)
FIRST TRUST EXCHANGE-TRADED FUND VI (CIK 0001552740)
Date: Sept. 22, 2023 · CIK: 0001552740 · Accession: 0001445546-23-006150
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File numbers found in text: 333-182308, 811-22717
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Chapman and Cutler LLP
320 South Canal Street, 27th Floor
Chicago, Illinois 60606
T 312.845.3000
F 312.701.2361
www.chapman.com
September 22, 2023
VIA EDGAR
CORRESPONDENCE
Emily Rowland
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re:
First Trust Exchange-Traded Fund VI (the “Trust”)
File Nos. 333-182308; 811-22717
Dear Ms. Rowland:
This letter responds
to your comments regarding the registration statement filed on Form N-1A for First Trust Exchange-Traded Fund VI (the “Trust”)
with the staff of the Securities and Exchange Commission (the “Staff”) on June 7, 2023 (the “Registration
Statement”). The Registration Statement relates to the First Trust S&P 500 Diversified Dividend Aristocrats ETF (the “Fund”),
a series of the Trust. Capitalized terms used herein, but not otherwise defined, have the meanings ascribed to them in the Registration
Statement.
Comment
1 – General
The Staff reminds
the Registrant and its management that they are responsible for the accuracy and adequacy of the disclosures, notwithstanding any review,
comments, action or absence of action by the Staff. Where a comment is made in one location, it is applicable to all similar disclosures
appearing elsewhere in the Registration Statement. Please ensure that corresponding changes are made to all similar disclosure.
Please provide responses
to all of the Staff’s comments on EDGAR at least five days before the effective date of the Registration Statement.
Please also change
the Fund’s name on EDGAR prior to the effective date of the Registration Statement.
Response
to Comment 1
The Registrant confirms
that corresponding changes made in response to the Staff’s comments have been made to any similar disclosure throughout the Registration
Statement, that it will provide the Staff with a response letter in the form of correspondence at least five days before effectiveness
and that it will change the Fund’s name on EDGAR prior to effectiveness.
Comment
2 – Principal Investment Strategies
Please add an 80%
policy in investments in dividend-paying securities in the S&P 500 Sector-Neutral Dividend Aristocrats Index.
If accurate, please
also disclose that the Fund’s Names Rule policy may be changed by the board without shareholder approval upon 60 days’ prior
notice.
Response
to Comment 2
Pursuant to the Staff’s
comment, the following disclosure has been added to the first paragraph of the section entitled “Principal Investment Strategies”:
The Fund will invest at least 80% of
the Fund’s net assets (plus any borrowings for investment purposes)
in dividend-paying securities.
In addition, pursuant
to the Staff’s comment, the following disclosure has been added to the section entitled “Additional Information on the Fund’s
Investment Objective and Strategies”:
The Fund has adopted a non-fundamental
investment policy pursuant to Rule 35d-1 under the 1940 Act (the “Name Policy”) whereby the Fund, under normal market
conditions, invests at least 80% of its net assets (plus any borrowings for investment purposes) in dividend-paying securities. The Name
Policy may be changed by the Board of Trustees without shareholder approval upon 60 days’ prior written notice.
Comment
3 – Principal Investment Strategies
The Staff notes that
the Names Rule policy in Item 9 has a 90% investment threshold while the threshold disclosed in Item 4 is 80%. Please reconcile.
Response
to Comment 3
The disclosure has
been revised to clarify that the Fund has a policy to invest 90% of its net assets in the securities comprising the Index.
Comment
4 – Principal Investment Strategies
Please specify the
number of constituents in the Index as of a given date.
Response
to Comment 4
Pursuant to the Staff’s
comment, the following disclosure has been added to the section entitled “Principal Investment Strategies”:
As of August 31, 2023, the Index was
composed of 98 securities.
-2-
Comment
5 – Principal Investment Strategies
The Staff notes the
following disclosures set forth in the section entitled “Principal Investment Strategies”:
As of _________, 2023,
the Index had significant exposure to ____________________ companies, although this may change from time to time. To the extent the Fund
invests a significant portion of its assets in a given jurisdiction or investment sector, the Fund may be exposed to the risks associated
with that jurisdiction or investment sector.
Please use the most
recent practicable date for purposes of completing this disclosure. Please also add appropriate risk disclosure for any industry, group
of industries or sector in which the Fund invests a significant portion of its assets.
Please also consider
adding the following sentence immediately following the first sentence in the referenced disclosure:
As a result, the Fund
may have significant investments in a given jurisdiction, investment sector or industry that it may not have had as of a previous date.
Please also insert
throughout the Registration Statement the word “industry” where there are references to “jurisdiction or investment
sector.”
Response
to Comment 5
Pursuant to the Staff’s
comment, the disclosure has been revised as set forth below:
As of August 31, 2023,
the Index had significant exposure to information technology companies, although this may change from time to time. The Fund’s investments
will as the Index changes and, as a result, the Fund may have significant investments in a given jurisdiction, investment sector or industry
that it may not have had as of August 31, 2023.
Comment
6 – Principal Risks
Please delete the
following disclosure set forth in the first paragraph of the section entitled “Principal Risks”:
The order of the below
risk factors does not indicate the significance of any particular risk factor.
The Staff also notes
that the principal risks appear in alphabetical order. Please order the risks to prioritize the risks that are most likely to adversely
affect the Fund’s net asset value, yield and total return.
-3-
Response
to Comment 6
The Registrant respectfully
declines to revise the disclosure as requested by the Staff. Ultimately, the Registrant has reached the same conclusion as many other
industry participants and declines to make the requested revisions as it believes the disclosure is compliant with the requirements of
Form N-1A. The Registrant continues to evaluate its approach to the ordering of risk factors in light of recent Securities and Exchange
Commission guidance.
Comment
7 – Principal Risks
The Staff notes “New
Fund Risk” set forth in the section entitled “Principal Risks.” Please delete this risk factor as the Fund is not a
new fund.
Response
to Comment 7
Pursuant to the Staff’s
comment, the referenced disclosure has been deleted.
Comment
8 – Principal Risks
If there will be significant
portfolio reconditioning as a result of the change in the Fund’s investment strategy, please disclose the tax consequences to new
and existing shareholders as a result of such change.
Response
to Comment 8
The Fund effectuates
creations and redemptions in-kind, rather than in cash, and will use this mechanism to effectuate the repositioning of its portfolio in
connection with the change in the Index it seeks to track. Accordingly, portfolio turnover in connection with the Index change has been
judged to be unlikely to cause material adverse tax consequences to existing and new investors. Additionally, in the unlikely event that
the creation and redemption process does not prevent the Fund from incurring material capital gains tax liabilities in connection with
its portfolio repositioning, the Fund has over $1 million in non-expiring capital loss carryforward to offset those capital gains.
Comment
9 – Annual Total Return
The Staff notes the
section entitled “Annual Total Return.” Please consider renaming the section to “Fund Performance.”
Response
to Comment 9
The Registrant respectfully
declines to make the requested change as the current section title is compliant with Form N-1A.
-4-
Comment
10 – Annual Total Return
The Staff notes the
following disclosure set forth in the section entitled “Annual Total Return”:
The bar chart and
table below illustrate the annual calendar year returns of the Fund based on net asset value as well as the average annual Fund and Index
returns.
Please consider whether
this sentence is necessary given the rest of the disclosure. If not, please delete the disclosure.
Response
to Comment 10
The Registrant has
thoughtfully considered the Staff’s comment and ultimately determined to keep the disclosure in its current form as such disclosure
is compliant with the requirements of Form N-1A.
Comment
11 – Annual Total Return
The Staff notes the
second sentence of the second paragraph set forth in the section entitled “Annual Total Return.” Please consider revising
“based on the Index” to “based on the new Index.”
Response
to Comment 11
Pursuant to the Staff’s
comment, the referenced disclosure has been revised as set forth below.
Therefore, any Fund performance and
historical returns shown below that incorporate Fund performance prior to October 3, 2023 reflect performance of the Fund based on the
Nasdaq Riskalyze US Large Cap Select Dividend IndexTM and are not necessarily indicative of the performance that the Fund,
based on the S&P 500 Sector-Neutral Dividend Aristocrats Index, would have generated.
Comment
12 – Annual Total Return
The Staff notes the
chart entitled “First Trust S&P 500 Diversified Dividend Aristocrats ETF Calendar Year Total Returns as of 12/31” set
forth in the section entitled “Annual Total Return.” Please update the chart to include data from 2022. Please also update
the footnote to the chart to account for data through June 2023.
Response
to Comment 12
Pursuant to the Staff’s
comment, the referenced disclosure has been revised accordingly.
-5-
Comment
13 – Annual Total Return
The Staff notes the
table entitled “Average Annual Total Returns for the Periods Ended December 31, 2021” set forth in the section entitled “Annual
Total Return.” Please update the table to include data from 2022.
Response
to Comment 13
Pursuant to the Staff’s
comment, the referenced disclosure has been revised accordingly.
Comment
14 – Additional Information on the Fund’s Investment Objective and Strategies
Please provide the
information required by Instruction 4 (i.e., any policy to concentrate in securities of issuers in a particular industry or group
of industries) and Instruction 7 of Item 9(b)(1) of Form N-1A (i.e., active and frequent trading of portfolio securities).
Response
to Comment 14
Pursuant to the Staff’s
comment, the following disclosure has been added to the section entitled “Additional Information on the Fund’s Investment
Objective and Strategies”:
The Index is reconstituted annually
and rebalanced quarterly, and the Fund will make corresponding changes to its portfolio shortly after the Index changes are made public.
The Index’s quarterly rebalance schedule may cause the Fund to experience a higher rate of portfolio turnover. The Fund will be
concentrated (i.e., invest more than 25% of Fund assets) in an industry or a group of industries to the extent that the Index is
so concentrated.
The Registrant respectfully
declines to make any additional disclosures regarding the impact of such portfolio turnover to shareholders as this Fund effectuates creations
and redemptions in-kind. These in-kind transactions are used to make changes to the Fund’s portfolio and generally do not trigger
adverse tax consequences as such transactions do not constitute taxable events.
Comment
15 – Additional Information on the Fund’s Investment Objective and Strategies
The Registrant declines
to make the requested revision as the Names Rule, as amended on September 20, 2023, generally requires registrants to value derivatives
based upon their notional value when determining compliance with the Names Rule.
Response
to Comment 15
The Registrant declines
to make the requested revision as the Name Rule, as amended on September 20, 2023, generally requires registrants to value derivatives
based upon their notional value when determining compliance with the Names Rule.
-6-
Comment
16 – Fund Investments
Please consider adding
“Derivative Instruments” as a principal or non-principal investment under the section entitled “Fund Investments.”
Response
to Comment 16
The Registrant has
considered the Staff’s comment and ultimately declined to make the suggested revision as the Fund does not intend to invest in derivatives
on a principal or non-principal basis at this time. The reference to derivatives in the Item 9 disclosure is meant to reserve the right
to utilize derivatives at a future date, at which point additional disclosures regarding the use and risk of derivatives will be included
in the prospectus.
Comment
17 – Risks of Investing in the Fund
The Staff notes “Failure
to Qualify as a Regulated Investment Company Risk” set forth in the section entitled “Risks of Investing in the Fund.”
Please add a statement to this disclosure regarding the how the Fund’s shareholders would be impacted if the Fund failed to qualify
as a RIC.
Response
to Comment 17
Pursuant to the Staff’s
comment, the referenced disclosure has been revised to include the following disclosure:
If the Fund fails to qualify as a regulated
investment company, distributions to the Fund’s shareholders generally would be eligible (i) for treatment as qualified dividend
income in the case of individual shareholders and (ii) for the dividends received deduction in the case of corporate shareholders. See
“Federal Tax Matters.”
Comment
18 – Total Return Information
The Staff notes the
table entitled “First Trust S&P Diversified Dividend Aristocrats ETF (KNGZ) Total Returns as of March 31, 2022” set forth
in the section entitled “Total Return Information.” Please update the table to include data from 2023.
Response
to Comment 18
Pursuant to the Staff’s
comment, the referenced disclosure has been revised accordingly.
-7-
Comment
19 – Statement of Additional Information
Regarding the disclosure
on derivative actions, the Staff reiterates in full the comments provided on the Declaration of Trust disclosure for the First Trust Multi-Manager
International ETF.
Response
to Comment 19
The Registrant and
the Advisor have considered the Staff’s comment and respectfully decline to make the requested changes. The Registrant and the Advisor
believe that the disclosure, as currently presented, is appropriate for investor comprehension.
Comment
20 – Statement of Additional Information
Regarding the disclosure
on fiduciary duties, the Staff reiterates in full the comments provided on the Declaration of Trust disclosure for the FT Cboe Vest Rising
Dividend Achievers Target Income ETF.
Response
to Comment 20
The Registrant notes
that the Declaration contains a provision that clarifies that the Trustees of the Trust are not subject to the law in Massachusetts or
other states relating to the duties and liabilities of trustees of donative trusts (a trust that establishes a gift of an interest in
property to a beneficiary) or probate trusts (a trust which allows a person to place an asset into trust and retain control and access)
or similar common law trusts, but are subject only to the law in Massachusetts relating to the trustees of Massachusetts business trusts
under Chapter 182 of the Massachusetts General Laws. This provision does not eliminate the fiduciary duties of the trust’s Trustees,
but limits those duties to the duties of trustees of Massachusetts business trusts. In addition, as noted, the Trustees remain fully subject
to their duties under the federal securities laws. Pursuant to the Staff’s request, the below disclosure has been added to each
Fund’s SAI. The Registrant beli