Fund Description: First Trust Institutional Preferred Securities and 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 Institutional Preferred Securities and Income ETF seeks total return and to provide current income. The Fund is an actively managed ETF and thus, does not seek to replicate the performance of a specific index, but rather uses an active investment strategy to meet its investment objective. Accordingly, the ETF’s Sub-Advisor 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 invests at least 80% of its net assets (including investment borrowings) in institutional preferred securities and income-producing debt securities. Preferred securities are a type of equity security that have preference over common stock in the payment of distributions and the liquidation of a company’s assets, but are generally junior to all forms of the company’s debt, including both senior and subordinated debt. The Fund’s investments in preferred securities will primarily be in institutional preferred securities. Institutional preferred securities are targeted to institutional, rather than retail, investors, are generally traded over-the-counter. They are typically issued in large, institutional lot sizes by U.S. and non-U.S. financial services companies and other companies. In selecting securities for the Fund, the investment strategy of the Fund’s sub-advisor is driven by comprehensive analysis of institutional preferred securities and Income Securities with a goal of investing in securities representing the best relative value in the market. The style of active management by the Fund’s sub-advisor combines a bottom-up and top-down approach to security selection that encompasses three significant areas of analysis: credit fundamentals; relative value; and technical aspects of the securities, which may include, but are not limited to, interest rate sensitivity, call features, maturities, trading volumes, liquidity and pricing inefficiencies. The bottom-up analysis focuses on individual security analysis, idiosyncratic risks, credit fundamentals and opportunistic trading. The top-down analysis focuses on sector and industry analysis, duration and interest rate analysis, capital structure positioning and systemic risks. The preferred securities held by the Fund are expected to be issued by companies in the financial, communications, consumer, government, utilities, energy, materials, industrial and technology sectors. The Fund will concentrate its investments by investing at least 25% of its total assets in the group of industries that comprise the financial sector, which includes banks, thrifts, brokerage firms, broker-dealers, investment banks, finance companies and companies involved in the insurance industry. The Fund may also invest in retail preferred securities and floating-rate and fixed-to-floating rate securities. FUND MANAGEMENT: First Trust Advisors L.P. serves as investment advisor to the Fund. Stonebridge Advisors LLC serves as the Sub-Advisor to the Fund.