First Trust Expands Its Autocallable Income ETFs with ACYB

• ACYB provides a single-ticker solution to access autocallable strategies, seeking income generation while limiting downside market volatility.

WHEATON, Ill.--(BUSINESS WIRE)-- First Trust Advisors L.P. ("First Trust"), a leading exchange-traded fund ("ETF") provider and asset manager, announced it has launched the FT Vest Laddered Autocallable Buffer & Resilient Income ETF (NYSE Arca: ACYB) (the “fund”).

ACYB is an actively managed ETF that seeks to provide investors with distributions while providing reduced downside risk to equity markets. The fund seeks to achieve its objective by entering into swap agreements and/or option contracts structured similarly to swap agreements that seek to deliver returns that reflect the performance of a laddered portfolio of theoretically created Synthetic Autocallable Contracts (“autocallables”).^ These contracts are designed to replicate the defined return characteristics of autocallable yield notes, which are debt instruments linked to equity market performance and seek to provide income when certain market conditions are met.

Rather than investing in a single contract at a time, the fund takes a laddered approach, seeking, on a recurring basis, exposure to a diversified series of autocallables with staggered maturities and call observation dates. Each Synthetic Autocallable Contract is linked to one or more broad-based U.S. equity indices — the S&P 500® Index (“SPX”), the Nasdaq-100 Index® (“NDX”) and the Russell 2000® Index (“RTY”) — or to exchange-traded funds that seek to track the performance of such indices, with outcomes based on the value of the worst-performing of the three.

Unlike autocallable strategies that condition income on a “coupon barrier,” the coupon payments on the fund’s Synthetic Autocallable Contracts are fixed and non-contingent, and are made on each scheduled observation date regardless of the performance of the underlying indices. Downside risk is instead addressed through a “maturity buffer,” which is designed to absorb an initial portion of the worst-performing index’s losses — typically between 10% and 15% — at a contract’s maturity.1

ACYB is the newest addition to First Trust’s autocallable suite of Target Outcome ETFs, joining the FT Vest Laddered Autocallable Barrier & Resilient Income ETF (ACYS), FT Vest Laddered Autocallable Barrier & Income ETF (ACYN), and FT Vest Autocallable Barrier & High Income ETF (ACYQ). Together, the funds offer advisors a range of autocallable income solutions with differing levels of downside protection and income potential. The fund is sub-advised by Vest Financial LLC (“Vest”), the creator of Target Outcome Investments® and Target Buffer® strategies.

“Income investors have had to choose between yield and protection for a long time,” said Ryan Issakainen, CFA, Senior Vice President and ETF Strategist at First Trust. “ACYB aims to deliver a steadier, more resilient income stream, while attempting to limit downside risk that's core to the Target Outcome suite.”

As each Synthetic Autocallable Contract underlying the fund matures or is automatically called, it is replaced, or “rolled,” into a new contract with a maturity date and call observation dates that extend beyond those of the fund’s remaining contracts. Each time a contract rolls, its coupon rate, maturity buffer level, and the initial values of the underlying indices are reset to prevailing market conditions. First Trust believes this laddered structure helps diversify the fund’s exposure across multiple entry points and time periods, seeking to reduce the risk of concentrating income and downside protection in a single market environment. Call observation dates for the fund’s Synthetic Autocallable Contracts occur on a quarterly basis. A contract is automatically called if the worst-performing underlying index is at or above its initial value on an observation date, at which point its notional amount is returned and reinvested into a new contract at prevailing terms. The fund intends to make distributions monthly, sourced primarily from the coupon payments of the Synthetic Autocallable Contracts.

“Advisors tell us the hardest conversation in the structured investments space is explaining to a client why they did not receive a coupon payment. With ACYB, the coupon is set when each contract is established rather than tied to where the indexes close, so the equity-linked downside risk to principal is measured at maturity. That is a strategy an advisor can actually utilize,” said Jeff Chang, President of Vest Financial LLC, the fund’s sub-advisor.

Karan Sood and Trevor Lack, of Vest, will serve as portfolio managers for the fund. The portfolio managers are jointly and primarily responsible for the day-to-day management of the fund.

For more information about First Trust, please contact Ryan Issakainen at (630) 765-8689 or [email protected].

Diversification does not guarantee a profit or protect against loss.

^The fund invests in a basket of short-term (i.e., generally less than 12 months) U.S. Treasury securities, including for purposes of collateralizing swap agreements, and in box spreads. The fund may also maintain a sizeable cash position from time to time. During such times, the fund may earn less income than it otherwise would had it invested such cash and therefore be less likely to achieve its investment objective. The fund’s investment strategy may include active and frequent trading. The fund will not invest 25% or more of the value of its total assets in securities of issuers in any one industry or group of industries, except to the extent that an industry or group of industries comprise more than 25% of the underlying referenced indices or ETFs of the Synthetic Autocallable Contracts. This restriction does not apply to obligations issued or guaranteed by the U.S. government, its agencies or instrumentalities, or securities of other investment companies.

1The maturity buffer level of the Synthetic Autocallable Contracts will typically be set between 85% to 90% of the initial value of each underlying asset. The buffer is only provided by the Synthetic Autocallable Contracts and the fund itself does not provide any stated buffer against losses.

About First Trust

First Trust is a federally registered investment advisor and serves as the fund’s investment advisor. First Trust and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately held companies that provide a variety of investment services. First Trust has collective assets under management or supervision of approximately $378 billion as of August 31, 2026, through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts. First Trust is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. First Trust and FTP are based in Wheaton, Illinois. For more information, visit www.ftportfolios.com

About Vest:

Vest delivers the benefits of derivatives with precise, outcome-driven solutions—bringing more certainty and clarity to portfolios. Vest’s Target Outcome Investments® simplify derivative strategies into trusted, outcome-focused products, accessible through a broad range of investment solutions. As the leader in Target Buffer ETFs® and creators of over 250 innovative products, Vest manages $70B+ in AUM/AUA with a pristine track record of target delivery. Combining technical mastery, practical execution, and trusted relationships, Vest is committed to making derivatives work for everyone.

The fund includes complex features that make it difficult for investors to fully understand its characteristics and underlying risks.

You should consider the fund’s investment objectives, risks, and charges and expenses carefully before investing. Contact First Trust Portfolios L.P. at 1-800-621-1675 or visit www.ftportfolios.com to obtain a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

Risk Considerations

You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.

There can be no assurance that an active trading market for fund shares will develop or be maintained.

Unlike mutual funds, shares of the fund 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 premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.

A fund may seek to replicate autocallable yield notes, which differ from traditional debt securities and do not guarantee principal return. These notes cap upside potential due to the automatic call feature, which may limit returns compared to direct investments in the underlying assets. If called early, investors miss remaining coupon payments and may not find comparable reinvestment opportunities. If not called and the maturity barrier is breached, investors may incur losses even if some underlying assets perform well. Returns are based only on performance at call or maturity dates.

A Box Spread is an options strategy with risk and return characteristics similar to cash equivalents. It consists of a synthetic long position (buying a call and selling a put at the same strike price) and a synthetic short position (buying a put and selling a call at a different strike price) on the same reference asset with the same expiration date. This structure aims to eliminate market risk tied to price movements. However, modifying or closing individual options before expiration can reintroduce risk. The strategy's effectiveness depends on market conditions, interest rates, and the availability of counterparties. If it fails, the fund may be exposed to equity market risks, particularly fluctuations in the S&P 500 Index.

There is no guarantee that a Synthetic Autocallable Contract will provide its intended buffer against losses of the worst performing underlying asset. If the maturity buffer level is breached on the maturity date, a portion of the contract's initial notional amount will be forfeited based on the loss of the worst performing underlying asset, less the applicable buffer. Despite the buffer and the risk mitigation intended by a laddered portfolio, a fund could lose nearly all of the amount invested in a Synthetic Autocallable Contract, and shareholders could lose their entire investment in a fund.

A fund that effects all or a portion of its creations and redemptions for cash rather than in-kind may be less tax-efficient.

A fund may be subject to the risk that a counterparty will not fulfill its obligations which may result in significant financial loss to a fund. A fund that expects to trade with a limited number of counterparties will have higher counterparty risk.

An issuer or other obligated party of a derivative instrument may be unable or unwilling to make dividend, interest and/or principal payments when due and the value of a security may decline as a result.

Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. For example, changes in governmental fiscal and regulatory policies, disruptions to banking and real estate markets, actual and threatened international armed conflicts and hostilities, and public health crises, among other significant events, could have a material impact on the value of the fund's investments.

A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

The use of derivatives instruments involves different and possibly greater risks than investing directly in securities including counterparty risk, valuation risk, volatility risk, and liquidity risk. Further, losses because of adverse movements in the price or value of the underlying asset, index or rate may be magnified by certain features of the derivatives.

A fund may be required to reduce its distributions if it has insufficient income. Substantial uncertainties exist related to the calculation of income from Synthetic Autocallable Contracts. A significant portion of distributions may be subject to tax at higher effective tax rates.

Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

Stocks with growth characteristics tend to be more volatile than certain other stocks and their prices may fluctuate more dramatically than the overall stock market.

A fund may be a constituent of one or more indices or models which could greatly affect a fund's trading activity, size and volatility.

As inflation increases, the present value of a fund's assets and distributions may decline.

Information technology companies are subject to certain risks, including rapidly changing technologies, short product life cycles, fierce competition, aggressive pricing and reduced profit margins, loss of patent, copyright and trademark protections, cyclical market patterns, evolving industry standards and regulation and frequent new product introductions.

Interest rate risk is the risk that the value of the debt securities in a fund's portfolio will decline because of rising interest rates. Interest rate risk is generally lower for shorter term debt securities and higher for longer-term debt securities.

The laddered portfolio strategy may not perform as intended and may fail to provide expected risk mitigation during prolonged unfavorable market conditions, if multiple Synthetic Autocallable Contracts breach coupon or maturity barriers across periods, or if a fund is unable to effectively roll these contracts at call or maturity.

Large capitalization companies may grow at a slower rate than the overall market.

Leverage may result in losses that exceed the amount originally invested and may accelerate the rates of losses. Leverage tends to magnify, sometimes significantly, the effect of any increase or decrease in a fund's exposure to an asset or class of assets and may cause the value of a fund's shares to be volatile and sensitive to market swings.

Certain fund investments may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. Illiquid securities may trade at a discount and may be subject to wide fluctuations in market value.

The portfolio managers of an actively managed portfolio will apply investment techniques and risk analyses that may not have the desired result.

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.

Large inflows and outflows may impact a new fund's market exposure for limited periods of time.

A fund classified as "non-diversified" may invest a relatively high percentage of its assets in a limited number of issuers. As a result, a fund may be more susceptible to a single adverse economic or regulatory occurrence affecting one or more of these issuers, experience increased volatility and be highly concentrated in certain issuers.

A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.

The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.

A fund with significant exposure to a single asset class, country, region, industry, or sector may be more affected by an adverse economic or political development than a broadly diversified fund.

Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.

If, in any year, a fund which intends to qualify as a Registered Investment Company (RIC) under the applicable tax laws fails to do so, it would be taxed as an ordinary corporation.

Swap agreements may involve greater risks than direct investment in securities and could result in losses if the underlying reference asset does not perform as anticipated. In addition, many swaps trade over-the-counter and may be considered illiquid.

A fund may use swap agreements that seek to replicate the return characteristics of autocallable yield notes. Swap positions may require a fund to recognize income without receiving cash. Because a fund that intends to qualify as a regulated investment company (RIC) must distribute substantially all of its taxable income, which is based on gross income, it may be required to make distributions without having received corresponding cash. In such cases, a fund may need to sell assets or borrow to meet this requirement, which could adversely affect returns.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.

Securities issued or guaranteed by federal agencies and U.S. government sponsored instrumentalities may or may not be backed by the full faith and credit of the U.S. government.

A fund may hold securities or other assets that may be valued on the basis of factors other than market quotations. This may occur because the asset or security does not trade on a centralized exchange, or in times of market turmoil or reduced liquidity. Portfolio holdings that are valued using techniques other than market quotations, including "fair valued" assets or securities, may be subject to greater fluctuation in their valuations from one day to the next than if market quotations were used. There is no assurance that a fund could sell or close out a portfolio position for the value established for it at any time.

A fund may invest in securities that exhibit more volatility than the market as a whole.

First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.

The Target Outcome registered trademarks are registered trademarks of Vest Financial LLC.

Definitions:

SPX – The S&P 500® Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance.

NDX – The Nasdaq-100 Index® includes 100 of the largest domestic and international non-financial companies listed on The Nasdaq Stock Market based on market capitalization.

RTY – The Russell 2000® Index is comprised of the smallest 2000 companies in the Russell 3000® Index.

View source version on businesswire.com: https://www.businesswire.com/news/home/20261007782946/en/

Ryan Issakainen
First Trust
(630)765-8689
[email protected]

Source: First Trust Advisors L.P.

You May Also Be Interested In

• Stellar Cyber Named a Sample Vendor for Integrated Security Operations Center Systems (ISOC) in Gartner® Hype Cycle™ for Security Operations, 2026
• In HelloNation, Auto Glass Expert Fernando Miranda Discusses What Auto Insurance in Colorado Covers
• Ron Yeffet: Why Energy Now Comes Before Property in Client Conversations