Correspondence 0001445546-23-002339 from FT 10662 (CIK 0001960249)
FT 10662 (CIK 0001960249)
Date: April 6, 2023 · CIK: 0001960249 · Accession: 0001445546-23-002339
AI Filing Summary & Sentiment
File numbers found in text: 333-270035
Letter
Division of Investment Management Re: FT 10662 40/60 Strategic Allocation Port. 2Q '23 - Term 7/16/24 (the “Trust”) CIK No. 0001960249 File No. 333-270035
Dear Mr. Cowan:
We received your comments regarding the Registration Statement for the above captioned Trust. This letter serves to respond to your comments.
Comments
Portfolio
1.Please disclose how a company’s debt-to-equity and beta are evaluated in determining a company’s ranking (e.g., do companies with low risk and low volatility receive a higher ranking?).
Response:In accordance with the Staff’s comment, the disclosure will be revised as follows:
Risk Model
- Debt-to-equity. Compares a company's long-term debt to their stockholder's equity. Higher levels of this ratio are associated with higher risk, lower levels with lower risk. Companies with a lower debt-to-equity ratio receive a higher ranking.
- Beta. Compares a security's volatility relative to the market. A security with a beta less than 1 would generally be considered lower risk than the market. A security with a beta more than 1
would generally be considered higher risk than the market. Companies with a lower beta receive a higher ranking.
- Earnings variability. Compares a company's trailing 12-months earnings per share from the previous five years against a straight, or linear, trend line. Companies that have more consistent earnings growth receive a higher ranking.
The Trust confirms corresponding changes will be made to the Value & International Model and the Growth Model.
2.Please disclose how the earning variable is ranked with a company’s debt-to-equity and beta (e.g., how are the three factors weighted from highest to lowest?)
Response:The Trust notes that the factors are equally weighted within each Model. The disclosure will be revised accordingly to clarify this.
3.Please disclose how the factors under “Risk Model”, “Value & International Model” and “Growth Model” are ranked.
Response:The Trust notes that the factors are equally weighted within each Model. The disclosure will be revised accordingly to clarify this.
4.Please disclose whether price-to-cash flow can be used in making a growth determination.
Response: The Trust notes the disclosure, as currently presented, is accurate. The growth and value/international models are multi-factor models encompassing a variety of factors to provide broad diversification within each sleeve. The “price-to-cash flow” factor is a commonly used metric for classifying and valuing stocks, which can be used in making a growth determination. The research department considers the “price-to-cash flow” metric in both models and as such, the metric is included under both models.
Risk Factors
5.If the underlying ETFs invest in bonds that reference LIBOR, please add risk disclosure.
Response:In accordance with the Staff’s comment, if the Trust’s final portfolio has exposure to funds that invest in bonds that reference LIBOR, appropriate disclosure will be added to the Trust’s prospectus.
6.If the Funds held by the Trust invest in subprime residential mortgage loans, please add relevant risk disclosure.
Response:In accordance with the Staff’s comment, if the Trust’s final portfolio has exposure to funds that invest in subprime residential mortgage loans, appropriate disclosure will be added to the Trust’s prospectus.
We appreciate your prompt attention to this Registration Statement. If you have any questions or comments or would like to discuss our responses to your questions, please feel free to contact Brian D. Free at (312) 845-3017 or the undersigned at (312) 845-3721.
Very truly yours,
Chapman and Cutler llp
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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
April 6, 2023
Mark Cowan
U.S. Securities and Exchange Commission
Division of Investment Management
Disclosure Review Office
100 F Street, N.E.
Washington, D.C. 20549
Re:
FT 10662
40/60 Strategic Allocation Port. 2Q '23 - Term 7/16/24
(the “Trust”)
CIK No. 0001960249 File No. 333-270035
Dear Mr. Cowan:
We received your comments
regarding the Registration Statement for the above captioned Trust. This letter serves to respond to your comments.
Comments
Portfolio
1.Please
disclose how a company’s debt-to-equity and beta are evaluated in determining a company’s ranking (e.g., do companies with
low risk and low volatility receive a higher ranking?).
Response:In
accordance with the Staff’s comment, the disclosure will be revised as follows:
Risk Model
- Debt-to-equity. Compares a company's long-term debt
to their stockholder's equity. Higher levels of this ratio are associated with higher risk, lower levels with lower risk. Companies with
a lower debt-to-equity ratio receive a higher ranking.
- Beta. Compares a security's volatility relative
to the market. A security with a beta less than 1 would generally be considered lower risk than the market. A security with a beta more
than 1
would generally be considered higher risk than the
market. Companies with a lower beta receive a higher ranking.
- Earnings variability. Compares a company's trailing
12-months earnings per share from the previous five years against a straight, or linear, trend line. Companies that have more consistent
earnings growth receive a higher ranking.
The Trust confirms corresponding
changes will be made to the Value & International Model and the Growth Model.
2.Please
disclose how the earning variable is ranked with a company’s debt-to-equity and beta (e.g., how are the three factors weighted from
highest to lowest?)
Response:The
Trust notes that the factors are equally weighted within each Model. The disclosure will be revised accordingly to clarify this.
3.Please
disclose how the factors under “Risk Model”, “Value & International Model” and “Growth Model”
are ranked.
Response:The
Trust notes that the factors are equally weighted within each Model. The disclosure will be revised accordingly to clarify this.
4.Please
disclose whether price-to-cash flow can be used in making a growth determination.
Response: The
Trust notes the disclosure, as currently presented, is accurate. The growth and value/international models are multi-factor models encompassing
a variety of factors to provide broad diversification within each sleeve. The “price-to-cash flow” factor is a commonly used
metric for classifying and valuing stocks, which can be used in making a growth determination. The research department considers the “price-to-cash
flow” metric in both models and as such, the metric is included under both models.
Risk Factors
5.If
the underlying ETFs invest in bonds that reference LIBOR, please add risk disclosure.
Response:In
accordance with the Staff’s comment, if the Trust’s final portfolio has exposure to funds that invest in bonds that reference
LIBOR, appropriate disclosure will be added to the Trust’s prospectus.
6.If
the Funds held by the Trust invest in subprime residential mortgage loans, please add relevant risk disclosure.
Response:In
accordance with the Staff’s comment, if the Trust’s final portfolio has exposure to funds that invest in subprime residential
mortgage loans, appropriate disclosure will be added to the Trust’s prospectus.
We appreciate your prompt attention
to this Registration Statement. If you have any questions or comments or would like to discuss our responses to your questions, please
feel free to contact Brian D. Free at (312) 845-3017 or the undersigned at (312) 845-3721.
Very truly yours,
Chapman and Cutler llp
By:
/s/ Daniel J. Fallon
Daniel J. Fallon