First Trust Nasdaq Lux Digital Health Solutions ETF (EKG US) – Portfolio Construction Methodology

The underlying Nasdaq Lux Health Tech Index delivers global exposure to companies operating at the intersection of healthcare and technology as classified by Lux Capital. The universe comprises common stocks, ordinary shares and depositary receipts listed on Nasdaq-eligible global exchanges that Lux designates as digital health companies. Each security must have free-float market cap of at least USD 500 million and a three-month average daily trading value of at least USD 3 million, with only one, typically most liquid, line per issuer included. To remain in the index, a constituent must either have revenue growth of at least 7% in one of the two most recent fiscal years or a market cap of at least USD 50 billion, while new additions must have revenue growth of at least 10% in each of the prior two years. Constituents are weighted by free-float market cap subject to an 8% cap per stock, with periodic reconstitutions and rebalances aligning membership and weights to the updated digital health universe.

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