Fund Description: First Trust Municipal High Income ETF is a non-diversified actively managed exchange-traded fund or Actively Managed ETF which is a separate investment portfolio of the First Trust Exchange-Traded Fund III, an open-end investment management company. INVESTMENT OBJECTIVE: The First Trust Municipal High Income ETF seek to provide federally tax-exempt income, and its secondary objective will be long term capital appreciation. The Fund is an actively managed ETF and thus does not seek to replicate the performance of a specific index. Rather, the Adviser has discretion on a daily basis to actively manage the Fund’s portfolio in accordance with the Fund’s investment objective. FUND STRATEGY: Under normal market conditions, the Fund seeks to achieve its investment objectives by investing at least 80% of its net assets (including investment borrowings) in municipal debt securities that pay interest that is exempt from regular federal income taxes (collectively, Municipal Securities). Municipal Securities are generally issued by or on behalf of states, territories or possessions of the U.S. and the District of Columbia and their political subdivisions, agencies, authorities and other instrumentalities. The types of Municipal Securities in which the Fund may invest include municipal lease obligations (and certificates of participation in such obligations), municipal general obligation bonds, municipal revenue bonds, municipal notes, municipal cash equivalents, private activity bonds (including without limitation industrial development bonds), and pre-refunded and escrowed to maturity bonds. In addition, Municipal Securities include inverse floating rate securities issued by tender option bond (TOB) trusts and securities issued by custodial receipt trusts, each of which are investment vehicles the underlying assets of which are municipal bonds. The Fund may invest in Municipal Securities of any duration and any maturity, however the Fund expects the weighted average maturity of the Fund will be less than or equal to 14 years. The Fund will invest at least 50% of its net assets in Municipal Securities that are, at the time of investment, rated below investment grade. The Municipal Securities in which the Fund will invest to satisfy this requirement may include Municipal Securities that are currently in default and not expected to pay the current coupon (Distressed Municipal Securities). The Fund may invest up to 10% of its net assets in Distressed Municipal Securities. FUND MANAGEMENT: First Trust Advisors L.P. serves as the investment advisor to the Fund.