First Trust NASDAQ Technology Dividend Index Fund (TDIV US) – Portfolio Construction Methodology

The underlying Nasdaq Technology Dividend Index provides exposure to up to 100 Technology and Telecommunications companies listed on Nasdaq/NYSE/NYSE American/Cboe that pay regular dividends. Eligibility requires ICB Technology or Telecommunications classification, market cap ≥ USD 500 million, three-month ADTV ≥ USD 1 million, at least 0.5% dividend yield, no dividend per-share cuts over the prior 12 months, and ≥3 months of trading history; only one line per issuer is allowed (highest ADTV if multiple). Constituents are the 100 names with the highest trailing 12-month dividend paid per share. The index uses modified dividend-value weighting with fixed sector targets: Technology 80%, Telecom 20%. Single-name caps: Technology ≤8% overall, with only the five largest tech names allowed >4% (others ≤4%); Telecom names ≤2%. Reconstitutions occur semi-annually in March/September; weights rebalance quarterly.

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