<PAGE> 1
FIRST DEFINED PORTFOLIO FUND, LLC
ANNUAL REPORT
FOR THE PERIOD ENDED DECEMBER 31, 1999
<PAGE> 2
TABLE OF CONTENTS
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Page
----
<S> <C>
Shareholder Letter 2
Portfolio of Investments 3
Statements of Assets and Liabilities 14
Statements of Operations 16
Statements of Changes in Net Assets 18
Statements of Changes in Net Assets-Capital Stock Activity 20
Financial Highlights 22
Notes to Financial Statements 33
Independent Auditors' Opinion 38
</TABLE>
Page 1
<PAGE> 3
SHAREHOLDER LETTER
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
Dear Shareholders:
Despite a rising interest rate environment since the October 6, 1999 launch
of the First Defined Portfolio Fund, LLC U.S. stock market indexes staged an
impressive rally through the period ended December 31, 1999. Over this period
the S&P 500 returned 11.15%, the Dow Jones Industrial Average returned 8.96%
and the Nasdaq Composite returned an incredible 42.51%. Technology shares led
the market higher as the U.S. economy remained strong and investors' fears of
Y2K-related disruptions subsided. Trading activity during the quarter was
characterized by heavy investor demand for early stage growth companies,
particularly technology and communications-related shares, at the expense of
value stocks. Overall, the disparity in returns between growth and value
segments of the market was substantial with the S&P/Barra Growth index
outperforming its Value counterpart by nearly 8% over this span.
The outlook for U.S. stocks remains bullish on balance as we enter 2000 due
in large part to the booming U.S. economy. While negative factors such as
further Federal Reserves interest rate hikes, lofty valuation levels and poor
market breadth may result in a correction sometime during the next year,
expected strength in U.S. corporate earnings should ultimately result in
higher stock prices over time in our opinion.
The approach to investing on behalf of the First Defined Portfolio Fund, LLC
remains consistent as we strive to invest in concentrated portfolios using a
disciplined approach. Within each of the sector-oriented portfolios our
objective is to continue to search for those companies which we feel have the
ability to continue creating shareholder value into the future. Likewise,
portfolios derived from indexes will continue to employ quantitative
strategies that based upon historical evidence and common sense allow
investors the opportunity to obtain risk-adjusted returns greater than that
of the index itself.
/s/ James A. Bowen
James A. Bowen
President of the First Defined
Portfolio Fund, LLC
Page 2
<PAGE> 4
THE DOW(SM) TARGET 5 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
COMMON STOCKS - 102.1%
<S> <C>
MATERIALS - 26.2%
319 duPont (EI) deNemours $ 21,014
--------
RETAILING- 24.4%
643 Sears, Roebuck & Company 19,571
--------
CAPITAL GOODS - 20.8%
354 Caterpillar, Inc. 16,660
--------
FOOD BEVERAGE & TOBACCO - 16.2%
561 Philip Morris Companies, Inc. 13,008
--------
AUTOMOBILE & COMPONENTS - 14.5%
414 Goodyear Tire & Rubber Company 11,670
--------
TOTAL COMMON STOCKS 81,923
(Cost $101,986) --------
TOTAL INVESTMENTS - 102.1% 81,923
(Cost $101,986)
NET OTHER ASSETS AND LIABILITIES - (2.1)% (1,724)
--------
NET ASSETS- 100.0% $ 80,199
========
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
Page 3
<PAGE> 5
THE DOW(SM) DART 10 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ------ -----
<S> <C>
COMMON STOCKS - 92.9%
CAPITAL GOODS - 27.3%
231 Boeing Company $ 9,601
180 Caterpillar, Inc. 8,471
164 Honeywell International, Inc. 9,461
--------
27,533
--------
AUTOMOBILE & COMPONENTS - 11.3%
157 General Motors Corp. 11,412
--------
BANKS - 10.8%
86 Morgan (J P) & Company 10,890
--------
PHARMACEUTICALS & BIOTECHNOLOGY - 10.1%
152 Merck & Company, Inc. 10,193
--------
RETAILING - 9.5%
314 Sears, Roebuck & Company 9,557
--------
TECHNOLOGY HARDWARE & EQUIPMENT - 8.7%
81 International Business Machines Corp. 8,748
--------
CONSUMER DURABLES & APPAREL -8.6%
131 Eastman Kodak Company 8,679
--------
FOOD BEVERAGE & TOBACCO - 6.6%
288 Philip Morris Companies, Inc. 6,678
--------
TOTAL COMMON STOCKS 93,690
(Cost $101,958) --------
TOTAL INVESTMENTS - 92.9% 93,690
(Cost $101,958)
NET OTHER ASSETS AND LIABILITIES - 7.1% 7,173
--------
NET ASSETS- 100.0% $100,863
========
</TABLE>
- -------------------------------------------------------------------------------
* Non-income producing securities.
See Notes to Financial Statements.
Page 4
<PAGE> 6
GLOBAL TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 96.4%
HONG KONG - 32.2%
18,000 Amoy Properties Ltd. $ 15,167
12,000 Great Eagle Holdings Ltd. 21,303
2,000 Hang Lung Development Company 2,264
25,000 Henderson Investment Ltd. 26,050
13,000 Hysan Development Company Ltd. 16,473
--------
81,257
--------
UNITED KINGDOM - 36.4%
4,744 Allied Domecq Plc* 23,315
2,777 Blue Circle Industries Plc* 15,891
3,017 British Airways Plc* 19,640
3,185 Marks & Spencer Plc 15,177
2,742 Tate & Lyle Plc 17,982
--------
92,005
--------
UNITED STATES - 27.8%
303 Caterpillar, Inc. 14,260
273 duPont (EI) deNemours 17,984
354 Goodyear Tire & Rubber Company 9,978
480 Philip Morris Companies, Inc. 11,130
551 Sears, Roebuck & Company 16,771
--------
70,123
--------
TOTAL COMMON STOCKS 243,385
(Cost $251,779) --------
TOTAL INVESTMENTS - 96.4% 243,385
(Cost $251,779)
NET OTHER ASSETS AND LIABILITIES - 3.6% 9,107
--------
NET ASSETS- 100.0% $252,492
========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
<TABLE>
Industry diversification as a percentage of net assets.
<S> <C>
Real Estate 32.2%
Food Beverage & Tobacco 20.8%
Retail 12.7%
Capital Goods 11.9%
Transportation 7.8%
Materials 7.1%
Automobile & Components 3.9%
Net Other Assets and Liabilities 3.6%
--------
100.0%
========
</TABLE>
See Notes to Financial Statements.
Page 5
<PAGE> 7
S&P TARGET 10 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 67.6%
TECHNOLOGY HARDWARE & EQUIPMENT - 22.5%
188 Motorola, Inc. $ 27,683
333 Nortel Networks Corp. 33,633
--------
61,316
--------
RETAILING - 19.3%
288 Best Buy Company, Inc.* 14,454
410 Circuit City Stores, Inc. 18,475
452 The Limited, Inc. 19,577
--------
52,506
--------
MATERIALS - 8.3%
274 Alcoa, Inc. 22,742
--------
HEALTH CARE EQUIPMENT & SERVICES- 7.4%
378 United HealthCare Corp. 20,081
--------
DIVERSIFIED FINANCIALS - 5.8%
126 Citigroup, Inc. 7,001
61 Morgan Stanley Dean Witter & Company 8,708
--------
15,709
--------
SOFTWARE & SERVICES - 4.3%
368 Unisys Corp. 11,753
--------
TOTAL COMMON STOCKS 184,107
(Cost $151,267) --------
TOTAL INVESTMENTS - 67.6% 184,107
(Cost $151,267)
NET OTHER ASSETS AND LIABILITIES - 32.4% 88,406
--------
NET ASSETS- 100.0% $272,513
========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
See Notes to Financial Statements.
Page 6
<PAGE> 8
NASDAQ TARGET 15 PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 82.5%
TECHNOLOGY HARDWARE & EQUIPMENT - 47.1%
150 Altera Corp.* $ 7,434
103 Apple Computer, Inc.* 10,590
152 Atmel Corp.* 4,494
53 Comverse Technology, Inc.* 7,672
682 Intel Corp. 56,137
39 Microchip Technology, Inc.* 2,669
1,137 Sun Microsystems, Inc.* 88,047
115 Vitesse Semiconductor Corp.* 6,030
218 Xilinx, Inc.* 9,912
--------
192,985
--------
SOFTWARE & SERVICES - 32.0%
92 Adobe Systems, Inc. 6,187
55 CNET, Inc.* 3,121
1,089 Oracle Corp.* 122,036
--------
131,344
--------
PHARMACEUTICALS & BIOTECHNOLOGY - 2.3%
114 Biogen, Inc.* 9,633
--------
HEALTH CARE EQUIPMENT & SERVICES - 0.6%
48 VISX, Inc.* 2,484
--------
CAPITAL GOODS - 0.5%
44 Fastenal Company 1,977
--------
TOTAL COMMON STOCKS 338,423
(Cost $257,256) --------
TOTAL INVESTMENTS - 82.5% 338,423
(Cost $257,256)
NET OTHER ASSETS AND LIABILITIES - 17.5% 71,673
--------
NET ASSETS- 100.0% $410,096
========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
See Notes to Financial Statements.
Page 7
<PAGE> 9
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 94.0%
TECHNOLOGY HARDWARE & EQUIPMENT - 24.0%
163 Intel Corp. $ 13,417
150 KLA-Tencor Corp.* 16,706
--------
30,123
--------
AUTOMOBILE & COMPONENTS - 22.9%
172 Ford Motor Company 9,191
229 General Motors Corp. 19,465
--------
28,656
--------
SOFTWARE & SERVICES - 20.7%
176 America Online, Inc.* 13,277
108 Microsoft Corp.* 12,609
--------
25,886
--------
PHARMACEUTICALS & BIOTECHNOLOGY - 7.2%
136 Lilly (Eli) & Company 9,044
--------
TELECOMMUNICATIONS SERVICES - 7.0%
174 AT&T Corp. 8,831
--------
CAPITAL GOODS - 6.4%
206 Tyco International Ltd. 8,008
--------
BANKS - 5.8%
347 Firstar Corp. 7,331
--------
TOTAL COMMON STOCKS 117,879
(Cost $102,397) --------
TOTAL INVESTMENTS - 94.0% 117,879
(Cost $102,397)
NET OTHER ASSETS AND LIABILITIES - 6.0% 7,492
--------
NET ASSETS- 100.0% $125,371
========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities
See Notes to Financial Statements.
Page 8
<PAGE> 10
FIRST TRUST ENERGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 99.3%
ENERGY EQUIPMENT & SERVICES - 59.0%
148 Baker Hughes, Inc. $ 3,117
135 BJ Services Company* 5,645
113 Cooper Cameron Corp.* 5,530
128 Diamond Offshore Drilling, Inc. 3,912
528 Global Industries Ltd.* 4,554
260 Global Marine, Inc.* 4,323
105 Halliburton Company 4,226
171 Nabors Industries, Inc.* 5,290
196 Noble Drilling Corp.* 6,419
224 Petroleum Geo-Services, ADR* 3,990
199 Santa Fe International Corp. 5,149
69 Schlumberger Ltd. 3,881
168 Tidewater, Inc. 6,048
153 Transocean Sedco Forex, Inc. 5,166
---------
67,250
---------
OIL & GAS - 32.7%
116 Barrett Resources Corp.* 3,415
77 Bp Amoco Plc, Sponsored ADR 4,567
48 Chevron Corp. 4,158
68 ENI Spa, Sponsored ADR* 3,749
56 Exxon Mobil Corp. 4,512
72 Royal Dutch Petroleum 4,352
68 Texaco, Inc. 3,693
68 Total Fina Sa, Sponsored ADR 4,709
69 Vastar Resources, Inc. 4,071
---------
37,226
---------
MULTI-UTILITIES - 4.0%
104 Enron Corp. 4,615
---------
GAS UTILITIES - 3.6%
106 El Paso Energy Corp. 4,114
---------
TOTAL COMMON STOCKS 113,205
(Cost $100,801) ---------
TOTAL INVESTMENTS - 99.3% 113,205
(Cost $100,801)
NET OTHER ASSETS AND LIABILITIES - 0.7% 781
---------
NET ASSETS- 100.0% $113,986
=========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
ADR American Depositary Receipt
See Notes to Financial Statements.
Page 9
<PAGE> 11
FIRST TRUST FINANCIAL SERVICES PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 83.2%
DIVERSIFIED FINANCIALS - 50.2%
24 American Express Company $ 3,990
118 Axa Financial, Inc. 3,997
84 Capital One Financial Corp. 4,048
98 Charles Schwab & Company, Inc.* 3,761
75 Citigroup, Inc. 4,167
102 Countrywide Credit Industries, Inc. 2,575
63 Federal Home Loan Mortgage Corp. 2,965
52 Federal National Mortgage Association 3,247
107 Franklin Resources, Inc. 3,431
82 Household International, Inc. 3,054
56 Lehman Brothers Holdings, Inc. 4,742
144 MBNA Corp. 3,924
49 Merrill Lynch & Company, Inc. 4,091
37 Morgan Stanley Dean Witter & Company 5,282
120 Price (T. Rowe) Associates Inc. 4,432
41 Providian Financial Corp. 3,734
51 State Street Corp. 3,726
--------
65,166
--------
INSURANCE - 16.8%
78 AFLAC, Inc. 3,681
131 Allstate Corp. 3,144
38 American International Group, Inc. 4,109
66 Chubb Corp. 3,717
69 MGIC Investment Corp. 4,153
40 Progressive Corp. 2,925
--------
21,729
--------
BANKS - 16.2%
59 Bank Of America Corp. 2,961
142 Charter One Financial, Inc. 2,716
44 Chase Manhattan Corp. 3,418
90 Fleet Boston Financial Corp. 3,133
109 U.S. Bancorp 2,596
112 Washington Mutual Savings Bank 2,912
82 Wells Fargo & Company 3,316
--------
21,052
--------
TOTAL COMMON STOCKS 107,947
(Cost $102,998) --------
TOTAL INVESTMENTS - 83.2% 107,947
(Cost $102,998)
NET OTHER ASSETS AND LIABILITIES - 16.8% 21,749
--------
NET ASSETS- 100.0% $129,696
========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
See Notes to Financial Statements.
Page 10
<PAGE> 12
FIRST TRUST INTERNET PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 90.4%
TECHNOLOGY HARDWARE & EQUIPMENT - 43.2%
30 Broadcom Corp.* $ 8,171
48 Cisco Systems, Inc.* 5,142
79 Dell Computer Corp.* 4,029
46 EMC Corp.* 5,026
92 Exodus Communications, Inc.* 8,171
75 Gateway, Inc.* 5,405
36 Hewlett-Packard Company 4,102
44 Intel Corp. 3,622
27 International Business Machines Corp. 2,916
51 Lucent Technologies, Inc. 3,815
65 Nortel Networks Corp. 6,565
36 PMC Sierra, Inc.* 5,771
111 Qwest Communications International, Inc.* 4,773
70 Sun Microsystems, Inc.* 5,421
58 Tellabs, Inc.* 3,723
78 Vitesse Semiconductor Corp.* 4,090
--------
80,742
--------
SOFTWARE & SERVICES - 34.4%
64 America Online, Inc.* 4,828
75 Broadvision, Inc.* 12,755
39 Check Point Software Technology Ltd.* 7,751
32 CMGI, Inc.* 8,860
77 Earthlink Network, Inc.* 3,272
113 Intuit, Inc.* 6,773
36 Microsoft Corp.* 4,203
72 Oracle Corp.* 8,069
18 Yahoo!, Inc.* 7,788
--------
64,299
--------
DIVERSIFIED FINANCIALS - 4.7%
98 Charles Schwab & Company, Inc.* 3,761
111 Knight/Trimark Group, Inc.* 5,106
--------
8,867
--------
COMMERCIAL SERVICES - 4.1%
54 TMP Worldwide, Inc.* 7,668
--------
TELECOMMUNICATIONS SERVICES - 4.0%
76 AT&T Corp. 3,857
69 MCI Worldcom, Inc.* 3,661
--------
7,518
--------
TOTAL COMMON STOCKS 169,094
(Cost $102,714) --------
TOTAL INVESTMENTS - 90.4% 169,094
(Cost $102,714)
NET OTHER ASSETS AND LIABILITIES - 9.6% 17,942
--------
NET ASSETS- 100.0% $187,036
========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
See Notes to Financial Statements.
Page 11
<PAGE> 13
FIRST TRUST PHARMACEUTICAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 79.3%
PHARMACEUTICALS - 66.2%
135 Abbott Laboratories $ 4,902
119 American Home Products Corp. 4,692
73 Bristol-Myers Squibb Company 4,686
147 Elan Corp. Plc, Sponsored ADR* 4,337
95 Glaxo Wellcome Plc, Sponsored ADR 5,308
54 Johnson & Johnson 5,029
150 Jones Pharmaceuticals, Inc. 6,516
77 Lilly (Eli) & Company 5,121
76 Merck & Company, Inc. 5,096
269 Mylan Laboratories, Inc. 6,775
67 Novatis Ag, ADR* 4,919
138 Pfizer, Inc. 4,476
43 Roche Holdings Ltd., ADR 5,104
113 Schering-Plough Corp. 4,767
86 Smithkline Beecham Plc, ADR 5,542
75 Warner-Lambert Company 6,145
161 Watson Pharmaceuticals, Inc.* 5,766
--------
89,181
--------
BIOTECHNOLOGY - 13.1%
122 Amgen, Inc.* 7,328
63 Biogen, Inc.* 5,324
110 Genzyme Corp.* 4,950
--------
17,602
--------
TOTAL COMMON STOCKS 106,783
(Cost $101,934) --------
TOTAL INVESTMENTS - 79.3% 106,783
(Cost $101,934)
NET OTHER ASSETS AND LIABILITIES - 20.7% 27,932
--------
NET ASSETS- 100.0% $134,715
========
</TABLE>
- --------------------------------------------------------------------------------
* Non-income producing securities.
ADR American Depositary Receipt
See Notes to Financial Statements.
Page 12
<PAGE> 14
FIRST TRUST TECHNOLOGY PORTFOLIO
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C>
COMMON STOCKS - 85.6%
TECHNOLOGY HARDWARE & EQUIPMENT - 55.5%
90 Altera Corp.* $ 4,461
50 Applied Materials, Inc.* 6,334
57 Cisco Systems, Inc.* 6,106
93 Dell Computer Corp.* 4,743
55 EMC Corp.* 6,009
89 Gateway, Inc.* 6,414
43 Hewlett-Packard Company 4,899
52 Intel Corp. 4,280
32 International Business Machines Corp. 3,456
60 Lucent Technologies, Inc. 4,489
124 Maxim Integrated Products, Inc.* 5,851
76 Nortel Networks Corp. 7,676
54 Solectron Corp.* 5,137
84 Sun Microsystems, Inc.* 6,505
68 Tellabs, Inc.* 4,365
47 Texas Instruments, Inc. 4,553
92 Vitesse Semiconductor Corp.* 4,824
--------
90,102
--------
SOFTWARE & SERVICES - 24.3%
46 Check Point Software Technology Ltd.* 9,143
150 Compuware Corp.* 5,587
43 Microsoft Corp.* 5,020
86 Oracle Corp.* 9,637
103 SAP Aktiengesellschaft, ADR* 5,362
69 Synopsys, Inc.* 4,606
--------
39,355
--------
TELECOMMUNICATIONS SERVICES - 3.1%
158 ECI Telecom Ltd. 4,997
--------
CAPITAL GOODS - 2.7%
54 BMC Software, Inc.* 4,317
--------
TOTAL COMMON STOCKS 138,771
(Cost $102,638) --------
TOTAL INVESTMENTS - 85.6% 138,771
(Cost $102,638)
NET OTHER ASSETS AND LIABILITIES - 14.4% 23,420
--------
NET ASSETS- 100.0% $162,191
========
</TABLE>
- -------------------------------------------------------------------------------
* Non-income producing securities.
ADR American Depositary Receipt
See Notes to Financial Statements.
Page 13
<PAGE> 15
STATEMENTS OF ASSETS AND LIABILITIES
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
<TABLE>
<CAPTION>
The Dow(SM) The Dow(SM) Global S&P
Target 5 DART 10 Target 15 Target 10
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(See portfolios of investments) (a): ............................ $ 81,923 $ 93,690 $ 243,385 $ 184,107
--------- --------- --------- ---------
Cash ................................................................ 27,852 37,406 23,314 113,371
Dividends Receivable ................................................ 417 398 1,340 42
Receivable from Advisor ............................................. 888 764 710 715
--------- --------- --------- ---------
Total Assets ................................................ 111,080 132,258 268,749 298,235
--------- --------- --------- ---------
LIABILITIES:
Payable for Membership Interests redeemed ........................... -- -- -- --
Investment advisory fee payable ..................................... 123 146 344 240
Payable to Administrator ............................................ 2,956 3,011 655 2,114
Trustees fee payable ................................................ 14,055 14,266 1,902 9,511
Accrued legal and audit fees ........................................ 8,988 9,123 9,123 9,123
Distribution fee payable ............................................ 51 61 143 100
Printing fees payable ............................................... 1,427 1,448 1,448 1,448
Custodian fee payable ............................................... 2,395 2,395 2,395 2,395
Accrued expenses and other payables ................................. 886 945 247 791
--------- --------- --------- ---------
Total Liabilities ............................................ 30,881 31,395 16,257 25,722
--------- --------- --------- ---------
NET ASSETS .......................................................... $ 80,199 $ 100,863 $ 252,492 $ 272,513
========= ========= ========= =========
(a) Investments, at cost ............................................ $ 101,986 $ 101,958 $ 251,779 $ 151,267
========= ========= ========= =========
NET ASSETS consist of:
Undistributed net investment income/(accumulated net
investment loss)................................................... $ 467 $ 246 $ 1,590 $ (423)
Net unrealized appreciation/(depreciation) of securities ............ (20,063) (8,268) (8,394) 32,840
Paid-in capital ..................................................... 99,795 108,885 259,296 240,096
--------- --------- --------- ---------
Total Net Assets ............................................... $ 80,199 $ 100,863 $ 252,492 $ 272,513
========= ========= ========= =========
NET ASSET VALUE, offering price and redemption price
of Membership Interest outstanding ................................ $ 8.04 $ 9.22 $ 9.71 $ 11.83
========= ========= ========= =========
Number of Membership Interests outstanding .......................... 9,975 10,939 25,999 23,037
========= ========= ========= =========
</TABLE>
See Notes to Financial Statements.
Page 14
<PAGE> 16
<TABLE>
<CAPTION>
First Trust First Trust
NASDAQ 10 Uncommon First Trust Financial First Trust First Trust First Trust
Target 15 Values Energy Services Internet Pharmaceutical Technology
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 338,423 $ 117,879 $ 113,205 $ 107,947 $ 169,094 $ 106,783 $ 138,771
--------- --------- --------- --------- --------- --------- ---------
97,613 32,149 14,998 38,243 46,391 52,765 42,528
2 97 40 134 25 56 10
660 679 512 549 735 672 581
--------- --------- --------- --------- --------- --------- ---------
436,698 150,804 128,755 146,873 216,245 160,276 181,890
--------- --------- --------- --------- --------- --------- ---------
2,149 -- -- -- -- -- 102
248 159 150 157 185 157 170
1,929 2,071 361 743 2,654 2,070 1,129
8,560 9,511 951 2,853 12,364 9,511 4,755
9,123 9,123 9,124 9,123 9,123 9,123 9,123
103 66 63 65 77 65 71
1,448 1,448 1,448 1,448 1,448 1,448 1,448
2,395 2,395 2,395 2,395 2,395 2,395 2,395
647 660 277 393 963 792 506
--------- --------- --------- --------- --------- --------- ---------
26,602 25,433 14,769 17,177 29,209 25,561 19,699
--------- --------- --------- --------- --------- --------- ---------
$ 410,096 $ 125,371 $ 113,986 $ 129,696 $ 187,036 $ 134,715 $ 162,191
========= ========= ========= ========= ========= ========= =========
$ 257,256 $ 102,397 $ 100,801 $ 102,998 $ 102,714 $ 101,934 $ 102,638
========= ========= ========= ========= ========= ========= =========
$ (603) $ (174) $ (125) $ (49) $ (427) $ (207) $ (394)
81,167 15,482 12,404 4,949 66,380 4,849 36,133
329,532 110,063 101,707 124,796 121,083 130,073 126,452
--------- --------- --------- --------- --------- --------- ---------
$ 410,096 $ 125,371 $ 113,986 $ 129,696 $ 187,036 $ 134,715 $ 162,191
========= ========= ========= ========= ========= ========= =========
$ 14.60 $ 11.40 $ 11.23 $ 10.49 $ 16.33 $ 10.37 $ 13.41
========= ========= ========= ========= ========= ========= =========
28,097 11,000 10,153 12,360 11,452 12,987 12,094
========= ========= ========= ========= ========= ========= =========
</TABLE>
See Notes to Financial Statements.
Page 15
<PAGE> 17
Statements of Operations
First Defined Portfolio Fund, LLC
For the Period Ended December 31, 1999*
<TABLE>
<CAPTION>
The Dow(SM) The Dow(SM) Global S&P
Target 5 DART 10 Target 15 Target 10
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Dividends ........................................... $ 768 $ 605 $ 2,541 $ 173
Foreign withholding tax on dividend income .......... -- -- (109) --
-------- -------- -------- --------
Total investment income ................... 768 605 2,432 173
-------- -------- -------- --------
EXPENSES:
Investment advisory fee ............................. 123 146 344 240
Administration fee .................................. 3,457 3,457 3,457 3,457
Fund Accounting fee ................................. 5,959 5,959 5,959 5,959
Transfer Agency fee ................................. 5,369 5,424 3,068 4,527
Trustees' fees and expenses ......................... 14,055 14,266 1,902 9,511
Legal and audit fees ................................ 8,988 9,123 9,123 9,123
Custodian fees ...................................... 3,814 3,814 3,814 3,814
Distribution fee .................................... 51 61 143 100
Printing fees ....................................... 1,427 1,448 1,448 1,448
Other ............................................... 886 945 246 791
Fees waived and/or expenses reimbursed by investment
advisor ................................... (43,828) (44,284) (28,662) (38,374)
-------- -------- -------- --------
Net expenses .............................. 301 359 842 596
-------- -------- -------- --------
NET INVESTMENT INCOME/(LOSS) ........................ 467 246 1,590 (423)
-------- -------- -------- --------
UNREALIZED APPRECIATION/(DEPRECIATION)
OF INVESTMENTS FROM:
Securities ....................................... (20.063) (8,268) (8,394) 32,840
-------- -------- -------- --------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ......................... $(19,596) $ (8,022) $ (6,804) $ 32,417
======== ======== ======== ========
</TABLE>
* The Funds commenced operations on October 6, 1999.
See Notes to Financial Statements.
Page 16
<PAGE> 18
<TABLE>
<CAPTION>
First Trust First Trust
NASDAQ 10 Uncommon First Trust Financial First Trust First Trust First Trust
Target 15 Values Energy Services Internet Pharmaceutical Technology
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 12 $ 219 $ 244 $ 338 $ 32 $ 179 $ 25
-- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
12 219 244 338 32 179 25
-------- -------- -------- -------- -------- -------- --------
248 159 150 157 185 157 170
3,457 3,457 3,457 3,457 3,457 3,457 3,457
5,959 5,959 5,959 5,959 5,959 5,959 5,959
4,342 4,484 2,774 3,156 5,066 4,482 3,542
8,560 9,511 951 2,853 12,364 9,511 4,755
9,123 9,124 9,124 9,123 9,123 9,123 9,123
3,814 3,814 3,814 3,814 3,814 3,814 3,814
103 66 63 65 77 65 71
1,448 1,448 1,448 1,448 1,448 1,448 1,448
647 659 277 392 963 791 506
(37,086) (38,288) (27,648) (30,037) (41,997) (38,421) (32,426)
-------- -------- -------- -------- -------- -------- --------
615 393 369 387 459 386 419
-------- -------- -------- -------- -------- -------- --------
(603) (174) (125) (49) (427) (207) (394)
-------- -------- -------- -------- -------- -------- --------
81,167 15,842 12,404 4,949 66,380 4,849 36,133
-------- -------- -------- -------- -------- -------- --------
$ 80,564 $ 15,668 $ 12,279 $ 4,900 $ 65,953 $ 4,642 $ 35,739
======== ======== ======== ======== ======== ======== ========
</TABLE>
See Notes to Financial Statements.
Page 17
<PAGE> 19
STATEMENTS OF CHANGES IN NET ASSETS
FIRST DEFINED PORTFOLIO FUND, LLC
FOR THE PERIOD ENDED DECEMBER 31, 1999*
<TABLE>
<CAPTION>
THE DOW(SM) THE DOW(SM) GLOBAL S&P
Target 5 DART 10 TARGET 15 TARGET 10
Portfolio PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net investment income/(loss) ................................... $ 467 $ 246 $ 1,590 $ (423)
Net unrealized appreciation/(depreciation) of securities
during the period ............................................. (20,063) (8,268) (8,394) 32,840
--------- --------- --------- ---------
Net increase/(decrease) in net assets resulting from operations (19,596) (8,022) (6,804) 32,417
Net increase in net assets from Membership Interest transactions 99,795 108,885 259,296 240,096
--------- --------- --------- ---------
Net increase in net assets ..................................... 80,199 100,863 252,492 272,513
NET ASSETS:
Beginning of period ............................................ -- -- -- --
--------- --------- --------- ---------
End of period .................................................. $ 80,199 $ 100,863 $ 252,492 $ 272,513
========= ========= ========= =========
Undistributed net investment income/(accumulated net
investment loss) at end of period .............................. $ 467 $ 246 $ 1,590 $ (423)
========= ========= ========= =========
</TABLE>
* The Funds commenced operations on October 6, 1999.
See Notes to Financial Statements.
Page 18
<PAGE> 20
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
NASDAQ 10 UNCOMMON FIRST TRUST FINANCIAL FIRST TRUST FIRST TRUST FIRST TRUST
TARGET 15 VALUES ENERGY SERVICES INTERNET PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ (603) $ (174) $ (125) $ (49) $ (427) $ (207) $ (394)
81,167 15,842 12,404 4,949 66,380 4,849 36,133
- --------- --------- --------- --------- --------- --------- ---------
80,564 15,668 12,279 4,900 65,953 4,642 35,739
329,532 110,063 101,707 124,796 121,083 130,073 126,452
- --------- --------- --------- --------- --------- --------- ---------
410,096 125,731 113,986 129,696 187,036 134,715 162,191
-- -- -- -- -- -- --
- --------- --------- --------- --------- --------- --------- ---------
$ 410,096 $ 125,731 $ 113,986 $ 129,696 $ 187,036 $ 134,715 $ 162,191
========= ========= ========= ========= ========= ========= =========
$ (603) $ (174) $ (125) $ (49) $ (427) $ (207) $ (394)
========= ========= ========= ========= ========= ========= =========
</TABLE>
Page 19
See Notes to Financial Statements.
<PAGE> 21
STATEMENT OF CHANGES IN NET ASSETS - CAPITAL STOCK ACTIVITY
FIRST DEFINED PORTFOLIO FUND, LLC
FOR THE PERIOD ENDED DECEMBER 31, 1999*
<TABLE>
<CAPTION>
THE DOW(SM) THE DOW(SM) GLOBAL
TARGET 5 DART 10 TARGET 15
PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- -----------
AMOUNT
<S> <C> <C> <C>
Sold $ 102,000 $ 111,090 $ 264,830
Redeemed (2,205) (2,205) (5,534)
--------- --------- ---------
Net increase $ 99,795 $ 108,885 $ 259,296
========= ========= =========
MEMBERSHIP INTEREST
Sold 10,200 11,161 26,556
Redeemed (225) (222) (557)
--------- --------- ---------
Net increase 9,975 10,939 25,999
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST FINANCIAL FIRST TRUST
ENERGY PORTFOLIO SERVICES PORTFOLIO INTERNET PORTFOLIO
---------------- ------------------ ------------------
<S> <C> <C> <C>
AMOUNT
Sold $ 103,919 $ 127,000 $ 123,405
Redeemed (2,212) (2,204) (2,322)
--------- --------- ---------
Net increase $ 101,707 $ 124,796 $ 121,083
========= ========= =========
MEMBERSHIP INTEREST
Sold 10,374 12,579 11,676
Redeemed (221) (219) (224)
--------- --------- ---------
Net increase 10,153 12,360 11,452
========= ========= =========
</TABLE>
*The Funds commenced operations on October 6, 1999.
See Notes to Financial Statements.
Page 20
<PAGE> 22
<TABLE>
<CAPTION>
FIRST TRUST 10
S&P TARGET 10 NASDAQ TARGET 15 UNCOMMON VALUES
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ---------------- ----------------
<S> <C> <C>
$ 242,515 $ 334,969 $ 112,269
(2,419) (5,437) (2,206)
------------ --------- ---------
$ 240,096 $ 329,532 $ 110,063
============ ========= =========
23,275 28,537 11,219
(238) (440) (219)
------------ --------- ---------
23,037 28,097 11,000
============ ========= =========
</TABLE>
<TABLE>
<CAPTION>
FIRST TRUST FIRST TRUST
PHARMACEUTICAL TECHNOLOGY
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C>
$ 132,285 $ 128,768
(2,212) (2,316)
--------- ---------
$ 130,073 $ 126,452
========= =========
13,207 12,320
(220) (226)
--------- ---------
12,987 12,094
========= =========
</TABLE>
See Notes to Financial Statements.
Page 21
<PAGE> 23
FINANCIAL HIGHLIGHTS
THE DOW(SM) TARGET 5 PORTFOLIO
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/99*
--------------
<S> <C>
Net asset value, beginning of period $ 10.00
-----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05
Net unrealized loss on investments (2.01)
-----------
Total from investment operations (1.96)
-----------
Net asset value, end of period $ 8.04
===========
TOTAL RETURN+ (19.60)%
===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 80
Ratio of operating expenses to average net assets 1.47%**
Ratio of net investment income to average net assets 2.28%**
Portfolio turnover rate --
Ratio of operating expenses to average net assets without fee
waivers and expenses reimbursed 215.88%**
</TABLE>
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
See Notes to Financial Statements.
Page 22
<PAGE> 24
FINANCIAL HIGHLIGHTS
THE DOW(SM) DART 10 PORTFOLIO
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/99*
----------
<S> <C>
Net asset value, beginning of period $10.00
---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.02
Net unrealized loss on investments (0.80)
---------
Total from investment operations (0.78)
---------
Net asset value, end of period $ 9.22
=========
TOTAL RETURN+ (7.80)%
=========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 101
Ratio of operating expenses to average net assets 1.47%**
Ratio of net investment income to average net assets 1.01%**
Portfolio turnover rate --
Ratio of operating expenses to average net assets without
fee waivers and expenses reimbursed 182.94%**
</TABLE>
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
See Notes to Financial Statements.
Page 23
<PAGE> 25
Financial Highlights
Global Target 15 Portfolio
For a Membership Interest outstanding throughout the period.
<TABLE>
<CAPTION>
Period
Ended
12/31/99*
----------
<S> <C>
Net asset value, beginning of period $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.06
Net unrealized loss on investments (0.35)
----------
Total from investment operations (0.29)
----------
Net asset value, end of period $ 9.71
==========
TOTAL RETURN+ (2.90)%
==========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 252
Ratio of operating expenses to average net assets 1.47%**
Ratio of net investment income to average net assets 2.77%**
Portfolio turnover rate --
Ratio of operating expenses to average net assets without
fee waivers and expenses reimbursed 51.39%**
</TABLE>
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
See Notes to Financial Statements.
Page 24
<PAGE> 26
FINANCIAL HIGHLIGHTS
S&P TARGET 10 PORTFOLIO
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/99*
----------
<S> <C>
Net asset value, beginning of period .................................... $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ..................................................... (0.02)
Net unrealized gain on investments ...................................... 1.85
-------
Total from investment operations ........................................ 1.83
-------
Net asset value, end of period .......................................... $ 11.83
=======
TOTAL RETURN+ ........................................................... 18.30 %
=======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................................... $ 273
Ratio of operating expenses to average net assets........................ 1.47%**
Ratio of net investment loss to average net assets ...................... (1.04)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed ................................................. 96.12%**
</TABLE>
- ------------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
page 25
See Notes to Financial Statements.
<PAGE> 27
FINANCIAL HIGHLIGHTS
NASDAQ TARGET 15 PORTFOLIO
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/99*
---------
<S> <C>
Net asset value, beginning of period .................................... $ 10.00
---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ..................................................... (0.05)++
Net unrealized gain on investments ...................................... 4.65
---------
Total from investment operations ........................................ 4.60
---------
Net asset value, end of period .......................................... $ 14.60
=========
TOTAL RETURN+ ........................................................... 46.00 %
=========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................................... $ 410
Ratio of operating expenses to average net assets ....................... 1.47%**
Ratio of net investment loss to average net assets ...................... (1.44)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed ................................................... 90.16 %**
</TABLE>
- -----------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
++ Per share values have been calculated using the average shares method.
Page 26
See Notes to Financial Statements
<PAGE> 28
FINANCIAL HIGHLIGHTS
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO FOR A MEMBERSHIP INTEREST OUTSTANDING
THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/99*
--------------
<S> <C>
Net asset value, beginning of period .................................... $10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ..................................................... (0.02)
Net unrealized gain on investments ...................................... 1.42
-------
Total from investment operations ........................................ 1.40
-------
Net asset value, end of period .......................................... $ 11.40
=======
TOTAL RETURN+ ........................................................... 14.00 %
=======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................................... $ 125
Ratio of operating expenses to average net assets........................ 1.47.%**
Ratio of net investment loss to average net assets ...................... (0.65)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed ................................................... 144.82.%**
</TABLE>
- -----------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
Page 27
See Notes to Financial Statements
<PAGE> 29
FINANCIAL HIGHLIGHTS
FIRST TRUST ENERGY PORTFOLIO
FOR A MEMBERSHIP INTEREST OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/99*
--------------
<S> <C>
Net asset value, beginning of period .................................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss...................................................... (0.01)
Net unrealized gain on investments ...................................... 1.24
------
Total from investment operations ........................................ 1.23
------
Net asset value, end of period .......................................... $11.23
======
TOTAL RETURN+ ........................................................... 12.30%
======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................................... $ 114
Ratio of operating expenses to average net assets ....................... 1.47%**
Ratio of net investment loss to average net assets ...................... (0.50)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed .................................................... 111.63%**
</TABLE>
- ------------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
Page 28
See Notes to Financial Statements
<PAGE> 30
Financial Highlights
First Trust Financial Services Portfolio For a Membership Interest outstanding
throughout the period.
<TABLE>
<CAPTION>
Period
Ended
12/31/99*
--------------
<S> <C>
Net asset value, beginning of period .................................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ..................................................... (0.00)#
Net unrealized gain on investments ...................................... 0.49
------
Total from investment operations ........................................ 0.49
------
Net asset value, end of period .......................................... $10.49
------
TOTAL RETURN+ ........................................................... 4.90%
======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .................................... $ 130
Ratio of operating expenses to average net assets ....................... 1.47%**
Ratio of net investment loss to average net assets ..................... (0.19)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed .................................................... 115.6%**
</TABLE>
- ------------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
# Amount represents less than $0.01 per share.
Page 29
See Notes to Financial Statements
<PAGE> 31
Financial Highlights
First Trust Internet Portfolio
For a Membership Interest outstanding throughout the period.
<TABLE>
<CAPTION>
Period
Ended
12/31/99*
--------------
<S> <C>
Net asset value, beginning of period .................................... $ 10.00
-------
Income from investment operations:
Net investment loss ..................................................... (0.04)
Net unrealized gain on investments ...................................... 6.37
-------
Total from investment operations ........................................ 6.33
-------
Net asset value, end of period .......................................... $ 16.33
=======
Total return+ ........................................................... 63.30%
=======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)..................................... $ 187
Ratio of operating expenses to average net assets ....................... 1.47%**
Ratio of net investment loss to average net assets....................... (1.37)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed ................................................... 136.02%**
</TABLE>
- -------------------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
Page 30
See Notes to Financial Statements
<PAGE> 32
Financial Highlights
First Trust Pharmaceutical Portfolio
For a Membership Interest outstanding throughout the period.
<TABLE>
<CAPTION>
Period
Ended
12/31/99*
--------------
<S> <C>
Net asset value, beginning of period .................................... $ 10.00
-------
Income from investment operations:
Net investment loss ..................................................... (0.02)
Net unrealized gain on investments ...................................... 0.39
-------
Total from investment operations ........................................ 0.37
-------
Net asset value, end of period .......................................... $ 10.37
=======
Total return+ ........................................................... 3.70%
=======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) .................................... $ 135
Ratio of operating expenses to average net assets ....................... 1.47%**
Ratio of net investment loss to average net assets ...................... (0.79)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed ................................................... 147.68%**
</TABLE>
- --------------------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
Page 31
See Notes to Financial Statements.
<PAGE> 33
Financial Highlights
First Trust Technology Portfolio
For a Membership Interest outstanding throughout the period.
<TABLE>
<CAPTION>
Period
Ended
12/31/99*
--------------
<S> <C>
Net asset value, beginning of period .................................... $ 10.00
-------
Income from investment operations:
Net investment loss ..................................................... (0.03)
Net unrealized gain on investments ...................................... 3.44
-------
Total from investment operations ........................................ 3.41
-------
Net asset value, end of period .......................................... $ 13.41
=======
Total return+............................................................. 34.10%
=======
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) .................................... $ 162
Ratio of operating expenses to average net assets (a) ................... 1.47%**
Ratio of net investment loss to average net assets ...................... (1.38)%**
Portfolio turnover rate ................................................. --
Ratio of operating expenses to average net assets without fee waivers and
expenses reimbursed ................................................... 115.26%**
</TABLE>
- --------------------
* The Fund commenced operations on October 6, 1999.
** Annualized.
+ Total return is not annualized for periods less than one year. The total
return would have been lower if certain fees had not been waived and
expenses reimbursed by the investment advisor.
Page 32
See Notes to Financial Statements.
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES
First Defined Portfolio Fund, LLC (the "Registrant") was organized as a
"Delaware limited liability company" on January 8, 1999 under the laws of the
State of Delaware. The Registrant is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended (the "1940
Act"), as a non-diversified, open-end management investment company. The
Registrant offers eleven managed investment portfolios that may be divided into
two general categories: The Dow(SM) Target 5 Portfolio, The Dow(SM) DART 10
Portfolio, Global Target 15 Portfolio, S&P Target 10 Portfolio, NASDAQ Target 15
Portfolio and First Trust 10 Uncommon Values Portfolio, (the "Strategy Funds");
and, First Trust Energy Portfolio, First Trust Financial Services Portfolio,
First Trust Internet Portfolio, First Trust Pharmaceutical Portfolio, and First
Trust Technology Portfolio, (the "Sector Funds"), (each, a "Fund", collectively,
the "Funds"). Under Delaware law, a limited liability company does not issue
shares of stock. Instead, ownership rights are contained in membership interests
(each, an "Interest", collectively, the "Interests"). Each Interest represents
an undivided interest in the net assets of a Fund's portfolio. Fund Interests
are not offered directly to the public. Fund Interests are sold only to American
Skandia Life Assurance Corporation Variable Account B ("Account B") to fund the
benefits of variable annuity policies (the "Policies") issued by American
Skandia. The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their financial
statements. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
PORTFOLIO VALUATION:
Generally, a Fund's investments are valued at market value or, in the absence of
market value with respect to any portfolio securities, at fair value as
determined by, or under the direction of, the Board of Trustees. Portfolio
securities for which the primary market is a domestic or foreign exchange, or
which are traded over-the-counter and quoted on the NASDAQ System, are valued at
the last sale price on the day of valuation or, if there was no sale that day,
at the last reported bid price using prices as of the close of trading.
Portfolio securities not quoted on the NASDAQ System that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, are valued at the most recently
quoted bid price provided by the principal market makers. Securities for which
quotations are not readily available are valued at fair value as determined
under the direction of the Board of Trustees. Short-term investments that mature
in 60 days or less are valued at amortized cost.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the New York Stock Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the New York Stock
Exchange that will not be reflected in the computation of a Fund's net asset
value. If events materially affecting the value of such securities occur during
such period, these securities will be valued at their fair value according to
procedures decided upon in good faith by the Registrant's Board of Trustees. All
securities and other assets of a Fund initially expressed in foreign currencies
will be converted to U.S. dollars using exchange rates in effect at the time of
valuation.
Page 33
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income is not accrued
until settlement date. Each Fund instructs the custodian to segregate assets of
the Fund with a current value at least equal to the amount of its when-issued
purchase commitments.
FOREIGN CURRENCY:
The books and records of the Funds are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investment securities and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses which result from changes in foreign currency exchange rates have been
included in the unrealized appreciation/(depreciation) of investments and net
other assets. Net realized foreign currency gains and losses include the effect
of changes in exchange rates between trade date and settlement date on
investment security transactions, foreign currency transactions and interest and
dividends received. The portion of foreign currency gains and losses related to
fluctuation in exchange rates between the initial purchase trade date and
subsequent sale trade date is included in realized gains and losses on
investment securities sold.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income and net realized long-term and short-term
capital gains of all Funds may be paid with such frequency (monthly or
otherwise) as the Board of Trustees may determine from time to time. All
dividends paid by a Fund will be reinvested into additional Interests.
FEDERAL INCOME TAXES:
The Registrant is a limited liability company with all of its interests owned by
a single entity (Account B). Accordingly, the Registrant is part of the
operations of American Skandia and is not taxed separately. The Registrant does
not intend to qualify as a "regulated investment company" under Subchapter M of
the Internal Revenue Code. Under current tax law, interest, dividend income and
capital gains of the Registrant are not currently taxable when left to
accumulate within a variable annuity contract. As such, no federal income tax
provision is required.
EXPENSES:
Expenses that are directly related to one of the Funds are charged directly to
that Fund. General expenses of the Registrant are allocated to all the Funds
based upon the relative net assets of each Fund.
Page 34
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
2. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS
First Trust Advisors L.P. ("First Trust") is a limited partnership with one
limited partner, Grace Partners of DuPage L.P., and one general partner, Nike'
Securities Corporation. First Trust serves as investment advisor to the Funds
pursuant to an Investment Advisory and Management Agreement. First Trust
provides each Fund with discretionary investment services and certain
administrative services necessary for the management of the portfolios. For its
investment advisory and management services, First Trust is entitled to a
monthly fee calculated at an annual rate of 0.60% of each Funds average daily
net assets.
From time to time First Trust may waive a portion or all of the fees otherwise
payable to it and/or reimburse expenses. First Trust has voluntarily undertaken
to waive its fees and reimburse expenses through September 30, 2000, so that
total expenses do not exceed 1.47% of each Fund's average daily net assets. The
fees waived and reimbursed, for the period ended December 31, 1999, by the
advisor, are as follows:
<TABLE>
<CAPTION>
Fees Waived Expenses Reimbursed
----------- -------------------
<S> <C> <C>
The Dow(SM) Target 5 Portfolio ......... $123 $43,705
The Dow(SM) DART 10 Portfolio .......... 146 44,138
Global Target 15 Portfolio ............. 344 28,318
S&P Target 10 Portfolio ................ 240 38,134
NASDAQ Target 15 Portfolio ............. 248 36,838
First Trust 10 Uncommon Values Portfolio 159 38,129
First Trust Energy Portfolio ........... 150 27,498
First Trust Financial Services Portfolio 157 29,880
First Trust Internet Portfolio ......... 185 41,812
First Trust Pharmaceutical Portfolio ... 157 38,264
First Trust Technology Portfolio ....... 170 32,256
</TABLE>
PFPC Inc., (formerly known as First Data Investor Services Group, Inc.) an
indirect wholly-owned subsidiary of PNC Bank Corporation, serves as the Fund's
administrator. PFPC Inc. (PFPC), as Administrator, is paid the minimum of
$50,000 per Fund annually or at an annual rate of 0.10% for the first billion
aggregate average daily net assets of the Registrant, 0.08% for the next billion
aggregate average daily net assets Registrant and 0.06% for aggregate average
daily net assets of the Registrant exceeding two billion. In addition, PFPC also
provides certain fund accounting, custody administration and transfer agency
services in accordance with certain fee arrangements.
The Chase Manhattan Bank ("Chase") serves as the custodian to the Funds.
No officer or employee of First Trust or Nike' Securities L.P. (Nike'
Securities) received any compensation from the Registrant for serving as an
officer or Trustee of the Registrant. The Registrant pays each Trustee who is
not an officer or employee of First Trust or Nike' Securities or any of their
affiliates $15,000 per annum plus $125 per portfolio per regularly scheduled
meeting attended, $500 per committee meeting attended and reimbursement for
travel and out-of-pocket expenses.
Page 35
<PAGE> 37
Notes of Financial Statements -- (Continued)
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
3. 12b-1 SERVICING PLAN
The Registrant, on behalf of each Fund, has adopted a 12b-1 Service Plan, (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act, which provides that Interests
of each of the Funds will be subject to an annual service fee.
Nike' Securities serves as the selling agent and distributor of Interests of the
Funds. In this capacity, Nike' Securities manages the offering of the Funds'
Interests and is responsible for all sales and promotional activities. The Plan
reimburses Nike' Securities for its costs in connection with these activities.
Nike' Securities also uses the service fee to compensate American Skandia for
providing account services to policy owners. These services include establishing
and maintaining policy owner accounts, answering inquiries, and providing
personal services to policy owners. Each Fund may spend up to 0.25 of 1% per
year, of the average daily net assets of its Interests, as a service fee under
the Plan. In addition, the Plan permits First Trust to use a portion of its
advisory fee to compensate Nike' Securities for expenses incurred in connection
with the sales and distribution of a Fund's Interest including, without
limitation, expenses of preparing, printing and distributing prospectuses to
persons other than Interest holders or policy owners, as well as compensating
its sales force, printing and distributing advertising and sales literature and
reports to Interests holders and policy owners used in connection with the sale
of a Fund's Interests, certain other expenses associated with the distribution
of the Funds, and any distribution-related expenses that may be authorized by
the Trustees.
4. PURCHASES AND SALES OF SECURITIES
Purchases and proceeds from sales of securities, excluding U.S. Government and
short-term investments, for the period ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
The Dow(SM) Target 5 Portfolio ....................................... $101,986 $ --
The Dow(SM) DART 10 Portfolio ........................................ 101,958 --
Global Target 15 Portfolio ........................................... 251,779 --
S&P Target 10 Portfolio .............................................. 151,267 --
NASDAQ Target 15 Portfolio ........................................... 257,256 --
First Trust 10 Uncommon Values Portfolio ............................. 102,397 --
First Trust Energy Portfolio ......................................... 100,801 --
First Trust Financial Services Portfolio ............................. 102,998 --
First Trust Internet Portfolio ....................................... 102,714 --
First Trust Pharmaceutical Portfolio ................................. 101,934 --
First Trust Technology Portfolio ..................................... 102,638 --
</TABLE>
5. MEMBERSHIP INTEREST
The Registrant has authorized an unlimited number of Membership Interests
without par value of one or more series.
Page 36
<PAGE> 38
Notes of Financial Statements -- (Continued)
FIRST DEFINED PORTFOLIO FUND, LLC
DECEMBER 31, 1999
6. CONCENTRATION OF RISK
The Funds may invest in foreign securities. Investing in securities of foreign
companies and foreign governments involves special risks and considerations not
typically associated with investing in the securities of U.S. companies and the
U.S. government. These risks include re-valuation of currencies and future
adverse political and economic developments. These risks are heightened for
investments in emerging market countries. Moreover, securities of many foreign
companies and foreign governments and their markets may be less liquid and their
prices more volatile than those of securities of comparable U.S. companies and
the U.S. government. Each Fund may invest up to 15% of its net assets in
illiquid securities, including securities that are not readily marketable,
securities that are restricted as to disposition under Federal securities laws
or otherwise, repurchase agreements maturing in more than seven days, interest
only and principal only mortgage-backed securities, certain options traded in
the over-the-counter market and the securities to which such options relate. In
purchasing securities which cannot be sold by a Fund without registration under
the Securities Act of 1933, as amended, a Fund will endeavor to obtain the right
to registration at the expense of the issuer. There generally will be a lapse of
time between the decision by a Fund to sell any such security and the
registration of the security permitting the sale. During any such period, the
security will be subject to market fluctuations.
Each Fund is classified as "non-diversified" and is limited as to the percentage
of its assets which may be invested in securities of any one issuer only by its
own investment restrictions and diversification requirements. A Fund may
therefore invest a relatively high percentage of its assets in a limited number
of issuers. This can expose each Fund to potentially greater market fluctuations
than might be experienced by a diversified fund. Each Fund may be more
susceptible to any single economic, political or regulatory occurrence and to
the financial conditions of the issuer in which it invest.
7. SUBSEQUENT EVENT (UNAUDITED)
A special meeting of the First Defined Portfolio Fund, LLC interest holders was
held on January 14, 2000. The results are as follows:
PROPOSAL
To approve a new Investment Advisory and Management Agreement between First
Trust Advisors L.P. and the Fund on behalf of its respective series as a result
of the change in control of First Trust, due to the death of Mr. Robert Van
Kampen, its controlling person.
<TABLE>
<CAPTION>
Membership Interests:
---------------------------------------------
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
The Dow(SM) Target 5 Portfolio ......... 9,988 -- --
The Dow(SM) DART 10 Portfolio .......... 9,990 -- --
Global Target 15 Portfolio ............. 24,976 -- --
S&P Target 10 Portfolio ................ 9,990 -- --
NASDAQ Target 15 Portfolio ............. 9,990 -- --
First Trust 10 Uncommon Values Portfolio 9,991 -- --
First Trust Energy Portfolio ........... 9,990 -- --
First Trust Financial Services Portfolio 9,990 -- --
First Trust Internet Portfolio ......... 9,990 -- --
First Trust Pharmaceutical Portfolio ... 9,990 -- --
First Trust Technology Portfolio ....... 9,990 -- --
</TABLE>
Page 37
<PAGE> 39
INDEPENDENT AUDITORS' REPORT
TO THE INTEREST HOLDERS AND BOARD OF TRUSTEES OF FIRST DEFINED PORTFOLIO FUND,
LLC:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the First Defined Portfolio Fund,
LLC (comprising, respectively, The Dow(SM) Target 5 Portfolio, The Dow(SM) DART
10 Portfolio, Global Target 15 Portfolio, S&P Target 10 Portfolio, NASDAQ Target
15 Portfolio, First Trust 10 Uncommon Values Portfolio, First Trust Energy
Portfolio, First Trust Financial Services Portfolio, First Trust Internet
Portfolio, First Trust Pharmaceutical Portfolio, and First Trust Technology
Portfolio) (collectively the "Fund"), as of December 31, 1999, and their related
statements of operations, changes in net assets and financial highlights for the
period from October 6, 1999 (commencement of operations) to December 31, 1999.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1999, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios comprising First Defined Portfolio Fund, LLC
at December 31, 1999, the results of their operations, their changes in net
assets and the financial highlights for the period from October 6, 1999
(commencement of operations) to December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
/S/ Ernst & Young LLP
---------------------
Boston, Massachusetts
February 2, 2000
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