Income Quality Covered Call Portfolio - docs.aamlive.com · A portfolio pursuing a covered call option writing strategy consisting of common stocks of domestic companies and U.S

A portfolio pursuing a coveredcall option writing strategy

consisting of common stocksof domestic companies and

U.S. Treasury obligations.The stocks are subject to

call options.

Prospectus

October 10, 2018

As with any investment, the Securities andExchange Commission has not approvedor disapproved of these securities orpassed upon the adequacy or accuracy ofthis prospectus. Any contrary representa-tion is a criminal offense.

Income Quality Covered Call Portfolio - 15 Month,Series 2018-4Q

(Advisors Disciplined Trust 1896)

IINNVVEESSTTMMEENNTT OOBBJJEECCTTIIVVEE

The trust seeks to provide income and limitedcapital appreciation potential. There is no assurancethe trust will achieve its objective.

PPRRIINNCCIIPPAALL IINNVVEESSTTMMEENNTT SSTTRRAATTEEGGYY

The trust seeks to achieve its objective by imple-menting a covered call strategy against a portfolio ofcommon stocks (the “Stocks”) and by investing inU.S. Treasury obligations (the “Treasury Obligations”).Each Stock is subject to a contractual right, in theform of Long Term Equity AnticiPation Securities(“LEAPS®”) which give the holder of the LEAPS®

the right to buy the corresponding Stock at a prede-termined price from the trust on any business dayprior to the expiration of the LEAPS®. The writingof the LEAPS® generates premium income which isused to purchase the Treasury Obligations.

We* selected the Stocks for the portfolio bybeginning with domestic companies that have mar-ket capitalizations in excess of $12.5 billion as of thetrust’s inception. We based our final selections oneach company’s economic sector, financial strength,past earnings and revenue trends, projected earningsand revenue growth rates, current valuation and cur-rent dividend level, although a security does not haveto pay a dividend to qualify for inclusion in theportfolio. This approach sought to generate a port-folio primarily consisting of quality income-orientedsecurities.

Each LEAPS® is issued by The Options ClearingCorporation (“OCC”) in the form of an Americanstyle option, which means that it will be exercisable atthe strike price on any business day prior to its expira-tion date. The expiration date for each of theLEAPS® included in the trust is January 18, 2020.As of the close of business on the business day preced-ing the inception date of the trust, the strike price of

the LEAPS® in the trust is equal to approximately120.94% of the closing market price on that date ofthe Stocks deposited in the trust. Because the Stocksare subject to LEAPS®, the trust gives up any appreci-ation in price of the Stocks above the strike price. See“Understanding Your Investment—The Covered CallStrategy” for more information about how this invest-ment strategy operates.

PPRRIINNCCIIPPAALL RRIISSKKSS

As with all investments, you can lose money byinvesting in this trust. The trust also might not per-form as well as you expect. This can happen for rea-sons such as these:

• SSeeccuurriittyy pprriicceess wwiillll fflluuccttuuaattee. The value of yourinvestment may fall over time.

• TThhee iissssuueerr ooff aa sseeccuurriittyy mmaayy bbee uunnwwiilllliinngg oorruunnaabbllee ttoo mmaakkee ddiivviiddeenndd ppaayymmeennttss iinn tthhee ffuuttuurree..This may reduce the level of dividends the trustreceives which would reduce your income andcause the value of your units to fall.

• TThhee ffiinnaanncciiaall ccoonnddiittiioonn ooff aann iissssuueerr mmaayy wwoorrsseennoorr iittss ccrreeddiitt rraattiinnggss mmaayy ddrroopp,, rreessuullttiinngg iinn aa rreedduucc--ttiioonn iinn tthhee vvaalluuee ooff yyoouurr uunniittss.. This may occur atany point in time, including during the primaryoffering period.

• TThhee vvaalluuee ooff tthhee LLEEAAPPSS®® rreedduucceess tthhee vvaalluuee ooffyyoouurr uunniittss.. As the value of the LEAPS®

increases, it has a negative impact on the valueof your units. The value of a LEAPS® does notincrease or decrease at the same rate as theunderlying Stock.

• AAss tthhee wwrriitteerr ((sseelllleerr)) ooff LLEEAAPPSS®®,, tthhee ttrruusstt ffoorrggooeesstthhee ooppppoorrttuunniittyy ttoo pprrooffiitt ffrroomm iinnccrreeaasseess iinn tthheemmaarrkkeett vvaalluuee ooff tthhee SSttoocckkss aabboovvee tthhee ssuumm ooff tthheepprreemmiiuumm aanndd tthhee ssttrriikkee pprriiccee ooff tthhee LLEEAAPPSS®®,, bbuuttrreettaaiinnss tthhee rriisskk ooff lloossss sshhoouulldd tthhee pprriiccee ooff tthheeSSttoocckkss ddeecclliinnee..

2 Investment Summary

INVESTMENT SUMMARY

* “AAM,” “we” and related terms mean Advisors Asset Management,Inc., the trust sponsor, unless the context clearly suggests otherwise.

• TThhee LLEEAAPPSS®® mmaayy bbee eexxeerrcciisseedd oonn aannyy bbuussiinneessssddaayy pprriioorr ttoo eexxppiirraattiioonn rreessuullttiinngg iinn tthhee SSttoocckkssbbeeiinngg ssoolldd ttoo tthhee ooppttiioonn hhoollddeerrss ooff tthhee LLEEAAPPSS®®

pprriioorr ttoo tthhee tteerrmmiinnaattiioonn ooff tthhee ttrruusstt wwhhiicchh ccoouullddttrriiggggeerr aaddvveerrssee ttaaxx ccoonnsseeqquueenncceess..

• TThhee vvaalluuee ooff tthhee TTrreeaassuurryy OObblliiggaattiioonnss wwiillll ggeenneerr--aallllyy ffaallll iiff iinntteerreesstt rraatteess,, iinn ggeenneerraall,, rriissee.. No onecan predict whether interest rates will rise or fallin the future.

• WWee ddoo nnoott aaccttiivveellyy mmaannaaggee tthhee ppoorrttffoolliioo.. Exceptin limited circumstances, the trust will generallyhold, and continue to buy, the same Stocks andTreasury Obligations even if their market valuedeclines and will generally hold, and continue towrite, the same call options, even if the marketvalue of the Stocks increases.

Investment Summary 3

WWHHOO SSHHOOUULLDD IINNVVEESSTT

You should consider this investment if you:

• want to own a defined portfolio of stockssubject to LEAPS® along with TreasuryObligations.

• want the potential to receive income and limit-ed capital appreciation.

• are comfortable with a covered call optioninvestment strategy.

You should not consider this investment if you:

• are uncomfortable with the risks of an unman-aged investment in common stocks subject toLEAPS® along with Treasury Obligations.

• seek capital preservation or the potential forunlimited capital appreciation.

• are uncomfortable with a covered call optioninvestment strategy.

FFEEEESS AANNDD EEXXPPEENNSSEESS

The amounts below are estimates of the direct andindirect expenses that you may incur based on a $10unit price. Actual expenses may vary.

AAss aa %% AAmmoouunnttooff $$11,,000000 ppeerr 110000

SSaalleess FFeeee IInnvveesstteedd UUnniittss

Initial sales fee 0.00% $0.00Deferred sales fee 1.35 13.50Creation & development fee 0.50 5.00Maximum sales fee 1.85% $18.50

OOrrggaanniizzaattiioonn CCoossttss 0.49% $4.90

AAss aa %% AAmmoouunnttAAnnnnuuaall ooff NNeett ppeerr 110000ooppeerraattiinngg eexxppeennsseess AAsssseettss UUnniittss

Trustee fee & expenses 0.19% $1.89Supervisory, evaluation

and administration fees 0.10 1.00Total 0.29% $2.89

The initial sales fee is the difference between thetotal sales fee (maximum of 1.85% of the unit offer-ing price) and the sum of the remaining deferred salesfee and the total creation and development fee. Thedeferred sales fee is fixed at $0.135 per unit and willbe paid on January 20, 2019. The creation and devel-opment fee is fixed at $0.05 per unit and is paid atthe end of the initial offering period (anticipated to beapproximately three months). When the public offer-ing price per unit is less than or equal to $10, you willnot pay an initial sales fee. When the public offeringprice per unit is greater than $10 per unit, you willpay an initial sales fee.

EEXXAAMMPPLLEE

This example helps you compare the cost of thistrust with other unit trusts and mutual funds. In theexample we assume that the expenses do not changeand that the trust’s annual return is 5%. Your actualreturns and expenses will vary. Based on these assump-tions, you would pay these expenses for every $10,000you invest in the trust:

1 year $26515 months (approximate life of trust) $273

These amounts are the same regardless of whetheryou sell your investment at the end of a period or con-tinue to hold your investment.


ESSENTIAL INFORMATION

Unit price at inception $10.0000

Inception date October 10, 2018Termination date January 23, 2020LEAPS® expiration date January 18, 2020

Distribution dates 25th day of March, June,September and December

Record dates 10th day of March, June,September and December

Initial distribution date March 25, 2019Initial record date March 10, 2019

CUSIP NumbersStandard Accounts 00778T585Fee Based Accounts 00778T601

Ticker Symbol IQCVLX

Minimum investment $1,000/100 units

Tax Structure Regulated Investment Company

Income Quality Covered Call Portfolio - 15 Month, Series 2018-4Q(Advisors Disciplined Trust 1896)PortfolioAs of the trust inception date, October 10, 2018

COMMON STOCKS — 100.37%

Communication Services — 15.85%

200 EA Electronic Arts, Inc. (5) 3.87% $109.49 $21,898100 FB Facebook, Inc. (5) 2.79 157.90 15,790100 NFLX Netflix, Inc. (5) 6.28 355.71 35,571300 VZ Verizon Communications, Inc. 2.91 54.99 16,497

Consumer Discretionary — 8.01%

500 GM General Motors Company 2.88 32.65 16,325100 MAR Marriott International, Inc. 2.11 119.77 11,977200 TGT Target Corporation 3.02 85.66 17,132

Consumer Staples — 9.94%

100 STZ Constellation Brands, Inc. 3.99 226.27 22,627600 KR The Kroger Company 2.96 27.92 16,752300 MNST Monster Beverage Corporation (5) 2.99 56.55 16,965

Energy — 9.74%

100 EOG EOG Resources, Inc. 2.34 132.35 13,235100 PXD Pioneer Natural Resources Company 3.32 187.92 18,792200 VLO Valero Energy Corporation 4.08 115.66 23,132

Financials — 8.00%

300 SCHW The Charles Schwab Corporation 2.76 52.17 15,651200 C Citigroup, Inc. 2.54 71.89 14,378200 DFS Discover Financial Services 2.70 76.59 15,318

Health Care — 10.42%

200 ABBV AbbVie, Inc. 3.34 94.57 18,914100 ALXN Alexion Pharmaceuticals, Inc. (5) 2.31 130.58 13,058100 UNH UnitedHealth Group, Inc. 4.77 270.11 27,011

Industrials — 8.86%

100 HON Honeywell International, Inc. 2.84 160.94 16,094300 LUV Southwest Airlines Company 3.15 59.49 17,847100 UNP Union Pacific Corporation 2.87 162.39 16,239

Continued


Percentage of Market Cost ofNumber Ticker Aggregate Offering Value per Securities

of Shares Symbol Issuer(1) Price Share(2) to Trust(2)

Income Quality Covered Call Portfolio - 15 Month, Series 2018-4Q(Advisors Disciplined Trust 1896)Portfolio (Continued)As of the trust inception date, October 10, 2018

COMMON STOCKS (CONTINUED)

Information Technology — 23.03%

100 ADBE Adobe Systems, Inc. (5) 4.49% $254.16 $25,416100 AAPL Apple, Inc. 4.01 226.87 22,687100 AVGO Broadcom, Inc. 4.32 244.70 24,470100 LRCX Lam Research Corporation 2.55 144.47 14,447100 MA Mastercard, Inc. 3.70 209.76 20,976200 MSFT Microsoft Corporation 3.96 112.26 22,452

Materials — 6.52%

400 IP International Paper Company 3.15 44.64 17,856300 NUE Nucor Corporation 3.37 63.70 19,110

TOTAL COMMON STOCKS 100.37% $568,617

TREASURY OBLIGATIONS — 5.41%

United States Treasury Note/Bond, 1.50%, Due 2/28/2019 1.41% $8,000 $7,973United States Treasury Note/Bond, 1.125%, Due 5/31/2019 1.40 8,000 7,930United States Treasury Note/Bond, 1.00%, Due 8/31/2019 1.39 8,000 7,885United States Treasury Note/Bond, 1.00%, Due 11/30/2019 1.21 7,000 6,865

TOTAL TREASURY OBLIGATIONS 5.41% $30,653

Continued


Percentage of Cost ofName of Issuer and Title of Aggregate Offering Par SecuritiesTreasury Obligation(1) Price Value to Trust(2)

Percentage of Market Cost ofNumber Ticker Aggregate Offering Value per Securities

of Shares Symbol Issuer(1) Price Share(2) to Trust(2)

Income Quality Covered Call Portfolio - 15 Month, Series 2018-4Q(Advisors Disciplined Trust 1896)Portfolio (Continued)As of the trust inception date, October 10, 2018

LONG TERM EQUITY ANTICIPATION SECURITIES (“LEAPS®”) — (5.78)% (3)

Electronic Arts, Inc. (purchase right at $135.00 per share) (5) (0.29)% 2 $8.20 $(1,640)Facebook, Inc. (purchase right at $185.00 per share) (5) (0.26) 1 14.50 (1,450)Netflix, Inc. (purchase right at $410.00 per share) (5) (0.89) 1 50.60 (5,060)Verizon Communications, Inc. (purchase right at $65.00 per share) (5) (0.06) 3 1.20 (360)General Motors Company (purchase right at $40.00 per share) (5) (0.15) 5 1.67 (835)Marriott International, Inc. (purchase right at $145.00 per share) (5) (0.09) 1 5.00 (500)Target Corporation (purchase right at $100.00 per share) (5) (0.15) 2 4.35 (870)Constellation Brands, Inc. (purchase right at $270.00 per share) (5) (0.16) 1 8.80 (880)The Kroger Company (purchase right at $35.00 per share) (5) (0.14) 6 1.36 (816)Monster Beverage Corporation (purchase right at $70.00 per share) (5) (0.16) 3 2.95 (885)EOG Resources, Inc. (purchase right at $155.00 per share) (5) (0.14) 1 7.80 (780)Pioneer Natural Resources Company (purchase right at

$220.00 per share) (5) (0.33) 1 18.40 (1,840)Valero Energy Corporation (purchase right at $140.00 per share) (5) (0.19) 2 5.45 (1,090)The Charles Schwab Corporation (purchase right at $65.00 per share) (5) (0.11) 3 2.00 (600)Citigroup, Inc. (purchase right at $87.50 per share) (5) (0.11) 2 3.05 (610)Discover Financial Services (purchase right at $95.00 per share) (5) (0.07) 2 2.00 (400)AbbVie, Inc. (purchase right at $115.00 per share) (5) (0.14) 2 3.90 (780)Alexion Pharmaceuticals, Inc. (purchase right at $155.00 per share) (5) (0.18) 1 10.40 (1,040)UnitedHealth Group, Inc. (purchase right at $320.00 per share) (5) (0.22) 1 12.50 (1,250)Honeywell International, Inc. (purchase right at $195.00 per share) (5) (0.06) 1 3.10 (310)Southwest Airlines Company (purchase right at $72.50 per share) (5) (0.16) 3 3.00 (900)Union Pacific Corporation (purchase right at $195.00 per share) (5) (0.12) 1 6.55 (655)Adobe Systems, Inc. (purchase right at $310.00 per share) (5) (0.30) 1 16.75 (1,675)Apple, Inc. (purchase right at $270.00 per share) (5) (0.23) 1 12.73 (1,273)Broadcom, Inc. (purchase right at $290.00 per share) (5) (0.31) 1 17.40 (1,740)Lam Research Corporation (purchase right at $180.00 per share) (5) (0.17) 1 9.80 (980)Mastercard, Inc. (purchase right at $250.00 per share) (5) (0.21) 1 11.95 (1,195)Microsoft Corporation (purchase right at $135.00 per share) (5) (0.17) 2 4.85 (970)International Paper Company (purchase right at $57.50 per share) (5) (0.07) 4 0.93 (372)Nucor Corporation (purchase right at $80.00 per share) (5) (0.14) 3 2.61 (783)

TOTAL LEAPS® (5.78)% $(32,539)

TOTAL 100.00% $566,731

See “Notes to Portfolio”

Percentage of Number Market MarketDescription of Aggregate Offering of Value per Value toCall Options(1) Price Contracts(3) Contract(2) Trust(2)


Notes to Portfolio

(1) Securities are represented by contracts to purchase securities.

(2) The value of common stocks is based on the most recent closing sale price of each security as of the close of regulartrading on the New York Stock Exchange on the business day prior to the trust’s inception date. The value of U.S. Treasuryobligations is based on the current offering side evaluation as of the close of the New York Stock Exchange on the businessday prior to the trust’s inception date. The value of LEAPS® is based on the most recent closing sale price (or current askprice if there is no closing sale price) as of the close of the New York Stock Exchange on the business day prior to the trust’sinception date. The aggregate offering or ask price is greater than the aggregate bid price of securities, which is the basison which redemption prices will be determined for purposes of redemption of units after the initial offering period.

Accounting Standards Codification 820, “Fair Value Measurements” establishes a framework for measuring fair value andexpands disclosure about fair value measurements in financial statements for the trust. The framework under the standardis comprised of a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize theuse of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used tomeasure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the trust has the ability toaccess as of the measurement date.

Level 2: Significant observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities,quoted prices in markets that are not active, and other inputs that are observable or can be corroborated byobservable market data.

Level 3: Significant unobservable inputs that reflect a trust’s own assumptions about the assumptions that marketparticipants would use in pricing an asset or liability.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated withinvesting those securities.

Changes in valuation techniques may result in transfers in or out of an investment’s assigned level as described above.

The following table summarizes the trust’s investments as of the trust’s inception, based on inputs used to value them:

Level 1 Level 2 Level 3

Common Stocks $ 568,617 $ - $ -

Treasury Obligations - 30,653 -

LEAPS® - (32,539) -

Total $ 568,617 $ (1,886) $ -

The cost of the securities to the sponsor and the sponsor’s profit or (loss) (which is the difference between the cost of thesecurities to the sponsor and the cost of the securities to the trust) are $567,740 and $(1,009), respectively.

(3) The LEAPS® can be exercised on any business day prior to their expiration on January 18, 2020. Each contract entitles theholder thereof to purchase 100 shares of the Stock at the strike price.

(4) A Treasury Obligation marked with this note was issued at an original issue discount.

(5) This is a non-income producing security.


TTHHEE CCOOVVEERREEDD CCAALLLL SSTTRRAATTEEGGYY

The strategy followed by the trust is a coveredcall option writing strategy. A writer (seller) of acovered call sells call options against a security cur-rently held by the writer. The writer of a calloption receives a cash premium for selling the calloption but is obligated to sell the security at thestrike price, if the option is exercised. The payorof the option premium, the option holder, has theright, but not the obligation, to purchase the secu-rity at the strike price on any business day prior tothe LEAPS® expiration date. The option writergives up any increase in the covered security abovethe strike price. This strategy may be appropriatefor an investor who is willing to limit the upsidepotential on the security in return for receiving theoption premium. Future series of the trust mayhave different maturity lengths due to the expira-tion dates of the LEAPS® included therein.

On or before the trust’s inception date, thesponsor entered into contracts to buy the Stocks.The sponsor then wrote LEAPS® on each of theStocks and received an option premium. Usingthe option premium proceeds, the sponsorentered into contracts to buy the TreasuryObligations. On the trust’s inception date, thesponsor deposited the Stocks subject to theLEAPS® and the Treasury Obligations with thetrustee on behalf of the trust. At such time thesponsor also assigned the LEAPS® to the trust,giving the option holders the right to purchaseStocks from the trust.

Each LEAPS® gives the option holder theright (but not the obligation) to purchase theStocks from the trust at the strike price on anybusiness day prior to the LEAPS® expiration.The strike price for a Stock held by the trust will

be adjusted downward (but not below zero) uponcertain extraordinary distributions made by theissuers of the Stocks to unitholders before theLEAPS® expiration triggered by certain corporateevents affecting such Stock. See “UnderstandingYour Investment—Investment Risks—LEAPS®”.In calculating the net asset value of a trust unit,the price of a unit is reduced by the value of theLEAPS®.

As of the close of business on the business daypreceding the inception date, the capital apprecia-tion on the Stocks held by the trust is limited to amaximum of approximately 20.94%, because ofthe obligation of the trust to the option holderwith respect to each of the Stocks entitling theoption holder to purchase the Stocks at the strikeprice. The LEAPS® limit the upside potential inthe Stocks to an amount approximately equal tothe strike price. However, as the option premiumreceived in return for writing the LEAPS® wasused to purchase Treasury Obligations, you willreceive interest from the Treasury Obligations dur-ing the life of the trust and your pro rata portionof the principal from the Treasury Obligationsafter the Treasury Obligations’ maturity.

If the market price of a Stock held by thetrust is greater than its strike price, the trust willnot participate in any appreciation in that Stockabove the strike price because it is expected thatthe holder of the related LEAPS® will exerciseits right to purchase that Stock from the trust atthe strike price. If the market price of a Stockheld by the trust is less than its strike price atthe trust’s mandatory termination date, it isexpected that the LEAPS® will expire withoutbeing exercised. To the extent particular Stocksheld by the trust decline in price or fail to appre-ciate to a price equal to the related strike price,the trust will not achieve its maximum potentialappreciation.

Understanding Your Investment 9

UNDERSTANDING YOUR INVESTMENT

The Treasury Obligations included in thetrust are non-callable debt obligations that areissued by and backed by the full faith and creditof the U.S. Government, although units of thetrust are not so backed. Additionally, the U.S.Government assures the timely payment of prin-cipal and interest on the underlying TreasuryObligations in the trust. Of course, this appliesonly to the payment of principal and interest onthe Treasury Obligations and not the unitsthemselves.

Below are sample illustrations of certain pos-sible future market conditions:

• Stock prices increase above the LEAPS®

strike price: The LEAPS® are exercisedand the underlying Stock shares are soldat the strike price. Net proceeds receivedby the trust from the sale of the Stockwill be distributed to unitholders and willnot be reinvested by the trust. Profits arelimited to the premium received fromwriting the LEAPS®, dividends receivedfrom the Stocks prior to their sale fromthe portfolio, interest received from theTreasury Obligations, plus the differencebetween each Stock’s initial price andtheir strike price. Investors will forgo anydividends paid on the Stocks subsequentto their sale from the portfolio. It isimportant to note that writing coveredcalls limits the appreciation potential ofthe underlying Stocks.

• Stock prices remain stable: The LEAPS®

expire worthless and the trust still ownsthe Stock shares. Profits are limited tothe premium received from writing theLEAPS®, plus dividends from theStocks, as well as interest received fromthe Treasury Obligations.

• Stock prices decrease: The LEAPS® expireworthless and the trust still owns theStock shares. The break-even on theStocks is lowered by the premiumreceived from writing the LEAPS®. Inaddition, the trust will receive dividendsfrom the Stocks, and interest from theTreasury Obligations.

HHOOWW TTOO BBUUYY UUNNIITTSS

You can buy units of the trust on any busi-ness day the New York Stock Exchange is open bycontacting your financial professional. Unitprices are available daily on the Internet atwwwwww..AAAAMMlliivvee..ccoomm.. The public offering price ofunits includes:

• the net asset value per unit plus

• organization costs plus

• the sales fee plus

• accrued interest, if any.

The “net asset value per unit” is the value ofthe securities, cash and other assets in the trustreduced by the liabilities of the trust divided bythe total units outstanding. In calculating the netasset value per unit, the value of the Stocks arenetted against the value of the LEAPS®. Weoften refer to the public offering price of units asthe “offer price” or “purchase price.” The offerprice will be effective for all orders received priorto the close of regular trading on the New YorkStock Exchange (normally 4:00 p.m. Easterntime). If we receive your order prior to the closeof regular trading on the New York StockExchange or authorized financial professionalsreceive your order prior to that time and properlytransmit the order to us by the time that we des-ignate, then you will receive the price computed

10 Understanding Your Investment

on the date of receipt. If we receive your orderafter the close of regular trading on the New YorkStock Exchange, if authorized financial profes-sionals receive your order after that time or iforders are received by such persons and are nottransmitted to us by the time that we designate,then you will receive the price computed on thedate of the next determined offer price providedthat your order is received in a timely manner onthat date. It is the responsibility of the authorizedfinancial professional to transmit the orders thatthey receive to us in a timely manner. Certainbroker-dealers may charge a transaction or otherfee for processing unit purchase orders.

VVaalluuee ooff tthhee SSeeccuurriittiieess.. We determine thevalue of the securities as of the close of regulartrading on the New York Stock Exchange oneach day that exchange is open. We generallydetermine the value of the Stocks and LEAPS®

using the last sale price for securities traded on anational securities exchange or a U.S. optionsexchange. For this purpose, the trustee providesus closing prices from a reporting serviceapproved by us. In some cases we will price theStocks and LEAPS® based on the last asked orbid price in the over-the-counter market or byusing other recognized pricing methods. We willdo this if a security is not principally traded on anational securities exchange or a U.S. optionsexchange or if the market quotes are unavailableor inappropriate.

We generally determine the value of theTreasury Obligations during the initial offeringperiod based on the aggregate offering side evalu-ations of the Treasury Obligations determined(a) on the basis of current offering prices of theTreasury Obligations, (b) if offering prices arenot available for any particular TreasuryObligation, on the basis of current offering pricesfor comparable securities, (c) by determining the

value of the Treasury Obligations on the offerside of the market by appraisal, or (d) by anycombination of the above. After the initial offer-ing period ends, we generally determine the valueof the Treasury Obligations as described in thepreceding sentence based on the bid side evalua-tions rather than the offering side evaluations.The offering side price generally represents theprice at which investors in the market are willingto sell a security and the bid side evaluation gen-erally represents the price that investors in themarket are willing to pay to buy a security. Thebid side evaluation is lower than the offering sideevaluation. As a result of this pricing method,unitholders should expect a decrease in the netasset value per unit on the day following the endof the initial offering period equal to the differ-ence between the current offering side evaluationand bid side evaluation of the TreasuryObligations.

Capelogic, Inc., an independent pricing serv-ice, determined the initial prices of the securitiesshown under “Portfolio” in this prospectus asdescribed above at the close of regular trading onthe New York Stock Exchange on the businessday before the date of this prospectus. On thefirst day we sell units we will compute the unitprice as of the close of regular trading on theNew York Stock Exchange or the time the regis-tration statement filed with the Securities andExchange Commission becomes effective, if later.

OOrrggaanniizzaattiioonn CCoossttss.. During the initial offer-ing period, part of the value of the securities rep-resents an amount that will pay the costs of creat-ing your trust. These costs include the costs ofpreparing the registration statement and legaldocuments, federal and state registration fees, theinitial fees and expenses of the trustee and the ini-tial audit. Your trust will reimburse us for thesecosts at the end of the initial offering period or


after six months, if earlier. The value of yourunits will decline when the trust pays these costs.

AAccccrruueedd IInntteerreesstt.. Accrued interest representsunpaid interest on a bond from the last day itpaid interest. Accrued interest on the trust unitsconsists of two elements. The first element arisesas a result of accrued interest which is the accu-mulation of unpaid interest on TreasuryObligations in the trust from the last day onwhich interest was paid on the TreasuryObligations. Interest on the Treasury Obligationsis generally paid semi-annually, although the trustaccrues such interest daily. Because your trustalways has an amount of interest earned but notyet collected, the public offering price of unitswill have added to it the proportionate share ofaccrued interest to the date of settlement. Thesecond element of accrued interest arises becauseof the structure of the trust’s interest account.The trustee has no cash available for distributionto unitholders until it receives interest paymentson the bonds in the trust and may be required toadvance its own funds to make trust interest dis-tributions. As a result, interest account balancesare established to limit the need for the trustee toadvance funds in connection with such interestdistributions. If you sell or redeem your unitsyou will be entitled to receive your proportionateshare of the accrued interest from the purchaser ofyour units.

SSaalleess FFeeee.. The maximum sales fee is shownunder “Fees and Expenses” for your trust and is1.85% of the public offering price per unit atthe time of purchase.

You pay a fee in connection with purchasingunits. We refer to this fee as the “transactionalsales fee”. The transactional sales fee has both aninitial and a deferred component. The transac-tional sales fee equals 1.35% of the public offer-

ing price per unit based on a $10 public offeringprice per unit. The percentage amount of thetransactional sales fee is based on the unit priceon your trust’s inception date. The transactionalsales fee equals the difference between the totalsales fee and the creation and development fee.As a result, the percentage and dollar amount ofthe transactional sales fee will vary as the publicoffering price per unit varies. The transactionalsales fee does not include the creation and devel-opment fee which is described under “Fees andExpenses” for your trust.

You pay the initial sales fee, if any, at thetime you buy units. The initial sales fee is thedifference between the total sales fee percentage(maximum of 1.85% of the public offering priceper unit) and the sum of the remaining fixeddollar deferred sales fee and the total fixed dollarcreation and development fee. The initial salesfee will be 0.00% of the public offering price perunit at a public offering price per unit of $10.If the public offering price per unit exceeds $10,you will be charged an initial sales fee equal tothe difference between the total sales fee percent-age (maximum of 1.85% of the public offeringprice per unit) and the sum of the remainingfixed dollar deferred sales fee and total fixed dol-lar creation and development fee. The deferredsales fee is fixed at $0.135 per unit. Your trustpays the deferred sales fee in equal monthlyinstallments as described under “Fees andExpenses” for your trust. If you redeem or sellyour units prior to collection of the totaldeferred sales fee, you will pay any remainingdeferred sales fee upon redemption or sale ofyour units.

Since the deferred sales fee and creation anddevelopment fee are fixed dollar amounts perunit, your trust must charge these amounts perunit regardless of any decrease in net asset value.



As a result, if the public offering price per unitfalls to less than $10 (resulting in the maximumsales fee percentage being a dollar amount that isless than the combined fixed dollar amounts ofthe deferred sales fee and creation and develop-ment fee) your initial sales fee will be a creditequal to the amount by which these fixed dollarfees exceed the sales fee at the time you buyunits. In such a situation, the value of securitiesper unit would exceed the public offering priceper unit by the amount of the initial sales feecredit and the value of those securities will fluc-tuate, which could result in a benefit or detri-ment to unitholders that purchase units at thatprice. The initial sales fee credit is paid by thesponsor and is not paid by the trust.

If you purchase units after the last deferredsales fee payment has been assessed, the second-ary market sales fee is equal to 1.85% of thepublic offering price and does not includedeferred payments (i.e. unitholders who buy inthe secondary market after collection of thedeferred sales fees are not charged deferred salesfees).

MMiinniimmuumm PPuurrcchhaassee.. The minimum amountyou can purchase of the trust appears on page 4under “Essential Information”, but such amountsmay vary depending on your selling firm.

RReedduucciinngg YYoouurr SSaalleess FFeeee. We offer a variety ofways for you to reduce the fee you pay. It is yourfinancial professional’s responsibility to alert usof any discount when you order units. Except asexpressly provided herein, you may not combinediscounts. Since the deferred sales fee and thecreation and development fee are fixed dollaramounts per unit, your trust must charge thesefees per unit regardless of any discounts.However, if you are eligible to receive a discountsuch that your total sales fee is less than the

fixed dollar amount of the sum of the deferredsales fee and the creation and development fee,we will credit you the difference between yourtotal sales fee and the fixed dollar fees at thetime you buy units.

Fee Accounts. Investors may purchase unitsthrough registered investment advisers, certifiedfinancial planners or registered broker-dealers whoin each case either charge investor accounts (“FeeAccounts”) periodic fees for brokerage services,financial planning, investment advisory or assetmanagement services, or provide such services inconnection with an investment account for whicha comprehensive “wrap fee” charge (“Wrap Fee”) isimposed. You should consult your financial advi-sor to determine whether you can benefit fromthese accounts. To purchase units in these FeeAccounts, your financial advisor must purchaseunits designated with one of the Fee AccountCUSIP numbers, if available. Please contact yourfinancial advisor for more information. If units ofthe trust are purchased for a Fee Account and theunits are subject to a Wrap Fee in such FeeAccount (i.e., the trust is “Wrap Fee Eligible”)then investors may be eligible to purchase units ofthe trust in these Fee Accounts that are not subjectto the transactional sales fee but will be subject tothe creation and development fee that is retainedby the sponsor. For example, this table illustratesthe sales fee you will pay as a percentage of the ini-tial $10 public offering price per unit (the percent-age will vary with the unit price).

Initial sales fee 0.00%Deferred sales fee 0.00%

Transactional sales fee 0.00%Creation and development fee 0.50%

Total sales fee 0.50%

This discount applies only during the initialoffering period. Certain Fee Account investors


may be assessed transaction or other fees on thepurchase and/or redemption of units by their bro-ker-dealer or other processing organizations forproviding certain transaction or account activities.We reserve the right to limit or deny purchases ofunits in Fee Accounts by investors or selling firmswhose frequent trading activity is determined tobe detrimental to the trust.

Employees. We waive the transactional salesfee for purchases made by officers, directors andemployees (and immediate family members) ofthe sponsor and its affiliates. These purchases arenot subject to the transactional sales fee but willbe subject to the creation and development fee.We also waive a portion of the sales fee for pur-chases made by officers, directors and employees(and immediate family members) of selling firms.These purchases are made at the public offeringprice per unit less the applicable regular dealerconcession. Immediate family members for thepurposes of this section include your spouse,children (including step-children) under the ageof 21 living in the same household, and parents(including step-parents). These discounts applyto initial offering period and secondary marketpurchases. All employee discounts are subject tothe policies of the related selling firm, includingbut not limited to, householding policies or limi-tations. Only officers, directors and employees(and their immediate family members) of sellingfirms that allow such persons to participate inthis employee discount program are eligible forthe discount.

RReettiirreemmeenntt AAccccoouunnttss.. The portfolio may besuitable for purchase in tax-advantaged retirementaccounts. You should contact your financial pro-fessional about the accounts offered and any addi-tional fees imposed.

HHOOWW TTOO SSEELLLL YYOOUURR UUNNIITTSS

You can sell or redeem your units on anybusiness day the New York Stock Exchange isopen by contacting your financial professional.Unit prices are available daily on the Internet atwwwwww..AAAAMMlliivvee..ccoomm or through your financial pro-fessional. The sale and redemption price of unitsis equal to the net asset value per unit, providedthat you will not pay any remaining creation anddevelopment fee or organization costs if you sellor redeem units during the initial offering period.The sale and redemption price is sometimesreferred to as the “liquidation price.” You payany remaining deferred sales fee when you sell orredeem your units. Certain broker-dealers maycharge a transaction or other fee for processingunit redemption or sale requests.

SSeelllliinngg UUnniittss. We may maintain a secondarymarket for units. This means that if you want tosell your units, we may buy them at the currentnet asset value, provided that you will not pay anyremaining creation and development fee or organ-ization costs if you sell units during the initialoffering period. We may then resell the units toother investors at the public offering price orredeem them for the redemption price. Our sec-ondary market repurchase price is the same as theredemption price. Certain broker-dealers mightalso maintain a secondary market in units. Youshould contact your financial professional for cur-rent repurchase prices to determine the best priceavailable. We may discontinue our secondarymarket at any time without notice. Even if we donot make a market, you will be able to redeemyour units with the trustee on any business dayfor the current redemption price.

RReeddeeeemmiinngg UUnniittss. You may also redeem yourunits directly with the trustee, The Bank of NewYork Mellon, on any day the New York Stock


Exchange is open. The redemption price that youwill receive for units is equal to the net asset valueper unit, provided that you will not pay anyremaining creation and development fee or organ-ization costs if you redeem units during the initialoffering period. You will pay any remainingdeferred sales fee at the time you redeem units.You will receive the net asset value for a particularday if the trustee receives your completedredemption request prior to the close of regulartrading on the New York Stock Exchange.Redemption requests received by authorizedfinancial professionals prior to the close of regulartrading on the New York Stock Exchange that areproperly transmitted to the trustee by the timedesignated by the trustee, are priced based on thedate of receipt. Redemption requests received bythe trustee after the close of regular trading on theNew York Stock Exchange, redemption requestsreceived by authorized financial professionals afterthat time or redemption requests received by suchpersons that are not transmitted to the trusteeuntil after the time designated by the trustee, arepriced based on the date of the next determinedredemption price provided they are received in atimely manner by the trustee on such date. It isthe responsibility of authorized financial profes-sionals to transmit redemption requests receivedby them to the trustee so they will be received ina timely manner. If your request is not receivedin a timely manner or is incomplete in any way,you will receive the next net asset value computedafter the trustee receives your completed request.

If you redeem your units, the trustee will gener-ally send you a payment for your units no later thanseven days after it receives all necessary documenta-tion (this will usually only take two business days).The only time the trustee can delay your paymentis if the New York Stock Exchange is closed (otherthan weekends or holidays), the Securities andExchange Commission determines that trading on

that exchange is restricted or an emergency existsmaking sale or evaluation of the securities not rea-sonably practicable, and for any other period thatthe Securities and Exchange Commission permits.

DDIISSTTRRIIBBUUTTIIOONNSS

DDiissttrriibbuuttiioonnss. Your trust generally pays distri-butions of its net investment income along withany excess capital on each distribution date tounitholders of record on the preceding recorddate. The record and distribution dates are shownunder “Essential Information” in the “InvestmentSummary” section of this prospectus. In somecases, your trust might pay a special distribution ifit holds an excessive amount of cash pending dis-tribution. For example, this could happen as aresult of a merger or similar transaction involvinga company whose stock is in your portfolio. Thetrust will also generally make required distribu-tions or distributions to avoid imposition of tax atthe end of each year because it is structured as a“regulated investment company” for federal taxpurposes. The amount of distributions will varyfrom time to time as companies change their divi-dends or trust expenses change.

Interest and dividends received by your trust,including that part of the proceeds of any disposi-tion of Treasury Obligations which representsaccrued interest, is credited by the trustee to yourtrust’s “income account”. Other receipts are cred-ited to the “capital account”. After deduction ofamounts sufficient to reimburse the trustee, with-out interest, for any amounts advanced and paidto the sponsor as the unitholder of record as of thefirst settlement date, interest, dividends and otherincome received will be distributed on each distri-bution date to unitholders of record as of the pre-ceding record date. All distributions will be net ofestimated expenses. Funds in the capital accountwill be distributed on each distribution date to

unitholders of record as of the preceding recorddate provided that the amount available for distri-bution therein shall equal at least $0.01 per unit.

Because investment income payments are notreceived by your trust at a constant rate through-out the year, income distributions may be moreor less than the amount credited to the incomeaccount as of the record date. Investors who pur-chase units between a record date and a distribu-tion date will receive their first distribution on thesecond distribution date after the purchase.

RReeppoorrttss. The trustee or your financial profes-sional will make available to you a statementshowing income and other receipts of your trustfor each distribution. Each year the trustee willalso provide an annual report on your trust’sactivity and certain tax information. You canrequest copies of security evaluations to enableyou to complete your tax forms and auditedfinancial statements for your trust, if available.

IINNVVEESSTTMMEENNTT RRIISSKKSS

All investments involve risk. This sectiondescribes the main risks that can impact the valueof the securities in your portfolio. You shouldunderstand these risks before you invest. If thevalue of the securities falls, the value of your unitswill also fall. We cannot guarantee that your trustwill achieve its objective or that your investmentreturn will be positive over any period.

MMaarrkkeett RRiisskk.. Market risk is the risk that thevalue of the securities in your trust will fluctuate.This could cause the value of your units to fallbelow your original purchase price. Market valuefluctuates in response to various factors. Thesecan include changes in interest rates, inflation, thefinancial condition of a security’s issuer, percep-tions of the issuer, or ratings on a security. Eventhough we supervise your portfolio, you should

remember that we do not manage your portfolio.Your trust will not sell a security solely because themarket value falls as is possible in a managed fund.

DDiivviiddeenndd PPaayymmeenntt RRiisskk.. Dividend paymentrisk is the risk that an issuer of a security in yourtrust is unwilling or unable to pay income on asecurity. Stocks represent ownership interests inthe issuers and are not obligations of the issuers.Common stockholders have a right to receive divi-dends only after the company has provided forpayment of its creditors, bondholders and preferredstockholders. Common stocks do not assure divi-dend payments. Dividends are paid only whendeclared by an issuer’s board of directors and theamount of any dividend may vary over time.

LLEEAAPPSS®®.. Although you may redeem yourunits at any time, if you redeem before theLEAPS® are exercised or expire, the value of yourunits may be adversely affected by the value of theLEAPS®. However, if the LEAPS® are not exer-cised and you hold your units until the trust’sscheduled termination date, the LEAPS® willexpire and the trust’s portfolio will consist of onlycash or securities or a combination of each.

If you sell or redeem your units before theLEAPS® are exercised, or if the trust terminatesprior to its scheduled termination date and theLEAPS® have not been exercised, you may notrealize any appreciation in the value of the Stocksbecause even if the Stocks appreciate in value, thatappreciation may be more than fully, fully or partlyoffset by an increase in value in the LEAPS®. Thevalue of the LEAPS® is deducted from the value ofthe trust’s assets when determining the value of aunit. If the Stocks decline in price, your loss maybe greater than it would be if there were noLEAPS® because the value of the LEAPS® is areduction to the value of the Stocks when calcu-lating the value of a unit. An increase in value ofthe LEAPS®, an obligation of the trust to sell or



deliver the Stocks at the strike price if the LEAPS®

are exercised by the option holder, will reduce thevalue of the Stocks in the trust, below the value ofthe Stocks that would otherwise be realizable if theStocks were not subject to the LEAPS®. Youshould note that even if the price of a Stock doesnot change, if the value of a LEAPS® increases (forexample, based on increased volatility of a Stock)your unit will lose value.

The value of the LEAPS® reduces the valueof your units. As the value of the LEAPS®

increases, it has a more negative impact on thevalue of your units. The value of the LEAPS®

will also be affected by changes in the value anddividend rates of the Stocks, an increase in inter-est rates, a change in the actual and perceivedvolatility of the stock market and the Stocks andthe remaining time to expiration. Additionally,the value of a LEAPS® does not increase ordecrease at the same rate as the underlying Stocks(although they generally move in the same direc-tion). However, as a LEAPS® approaches itsexpiration date, its value increasingly moves withthe price of the Stock subject to the LEAPS®.

The strike price for each LEAPS® held bythe trust may be adjusted downward before theLEAPS® expiration triggered by certain corporateevents affecting that Stock. The OCC generallydoes not adjust option strike prices to reflect ordi-nary dividends paid on the related Stock but mayadjust option strike prices to reflect certain corpo-rate events affecting the related Stock such asextraordinary dividends, stock splits, merger orother extraordinary distributions or events. Areduction in the strike price of an option couldreduce the trust’s capital appreciation potential onthe related Stock.

If the value of the underlying Stocks exceedsthe strike price of the LEAPS®, it is likely that the

option holder will exercise their right to purchasethe Stock subject to the LEAPS® from the trust.As the LEAPS® may be exercised on any businessday prior to their expiration, Stocks may be sold tothe option holders of the LEAPS® prior to the ter-mination of the trust. If this occurs, distributionsfrom the trust will be reduced by the amount ofthe dividends which would have been paid byStocks sold from the trust. As discussed under“Understanding Your Investment—Taxes”, the saleof Stocks from the trust will likely result in capitalgains to unit holders, which may be short-termdepending on the holding period of the Stocks. Inaddition, the sale of Stocks may, in certain circum-stances, result in the early termination of the trust.

UU..SS.. TTrreeaassuurryy OObblliiggaattiioonnss.. U.S. Treasury obli-gations are direct obligations of the United Stateswhich are backed by the full faith and credit ofthe United States. The value of the TreasuryObligations will be adversely affected by decreasesin bond prices and increases in interest rates.Certain Treasury Obligations may have been pur-chased at prices of less than their par value atmaturity, indicating a market discount. OtherTreasury Obligations may have been purchased atprices greater than their par value at maturity,indicating a market premium. The coupon inter-est rate of Treasury Obligations purchased at amarket discount was lower than current marketinterest rates of newly issued bonds of comparablerating and type and the coupon interest rate ofTreasury Obligations purchased at a market pre-mium was higher than current market interestrates of newly issued bonds of comparable ratingand type. Generally, the value of bonds pur-chased at a market discount will increase in valuefaster than bonds purchased at a market premiumif interest rates decrease. Conversely, if interestrates increase, the value of bonds purchased at amarket discount will decrease faster than bondspurchased at a market premium.


SSeeccttoorr CCoonncceennttrraattiioonn RRiisskk.. Sector concentra-tion risk is the risk that the value of your trust ismore susceptible to fluctuations based on factorsthat impact a particular sector because the portfolioconcentrates in companies within that sector. Aportfolio “concentrates” in a sector when securitiesissued by companies in a particular sector make up25% or more of the portfolio. Refer to the“Principal Risks” in the “Investment Summary”section in this prospectus for sector concentrations.

LLeeggiissllaattiioonn//LLiittiiggaattiioonn.. From time to time, vari-ous legislative initiatives are proposed in the UnitedStates and abroad which may have a negativeimpact on certain of the companies represented inthe trust. In addition, litigation regarding any ofthe issuers of the securities or of the industries rep-resented by these issuers may negatively impact theshare prices of these securities. No one can predictwhat impact any pending or threatened litigationwill have on the share prices of the securities.

LLiiqquuiiddiittyy RRiisskk.. Liquidity risk is the risk that thevalue of a security will fall if trading in the securityis limited or absent. No one can guarantee that aliquid trading market will exist for any security.

NNoo FFDDIICC GGuuaarraanntteeee.. An investment in thetrust is not a deposit of any bank and is not insuredor guaranteed by the Federal Deposit InsuranceCorporation or any other government agency.

HHOOWW TTHHEE TTRRUUSSTT WWOORRKKSS

YYoouurr TTrruusstt.. Your trust is a unit investmenttrust registered under the Investment Company Actof 1940. We created the trust under a trust agree-ment between Advisors Asset Management, Inc. (asdepositor/sponsor, evaluator and supervisor) andThe Bank of New York Mellon (as trustee). Tocreate your trust, we deposited securities with thetrustee (or contracts to purchase securities along

with an irrevocable letter of credit or other consid-eration to pay for the securities). In exchange, thetrustee delivered units of your trust to us. Eachunit represents an undivided interest in the assetsof your trust. These units remain outstandinguntil redeemed or until your trust terminates. Atthe close of the New York Stock Exchange on thetrust’s inception date, the number of units may beadjusted so that the public offering price per unitequals $10. The number of units and fractionalinterest of each unit in the trust will increase ordecrease to the extent of any adjustment.

CChhaannggiinngg YYoouurr PPoorrttffoolliioo. Your trust is not amanaged fund. Unlike a managed fund, wedesigned your portfolio to remain relatively fixed.Your trust will generally buy and sell securities:

• to pay expenses,

• to issue additional units or redeem units,

• in limited circumstances to protect thetrust,

• to make required distributions or avoidimposition of taxes on the trust, or

• as permitted by the trust agreement.

Stocks may also be called pursuant to theLEAPS® prior to the trust’s mandatory termina-tion date. When your trust sells securities, thecomposition and diversification of the securities inthe portfolio may be altered. If a public tenderoffer has been made for a security or a merger,acquisition or similar transaction has beenannounced affecting a security, the trustee mayeither sell the security or accept a tender offer ifthe supervisor determines that the action is in thebest interest of unitholders. The trustee will dis-tribute any cash proceeds to unitholders. If anoffer by the issuer of any of the portfolio securitiesor any other party is made to issue new securities,


or to exchange securities, for trust portfolio securi-ties, the trustee will at the direction of the sponsor,vote for or against, or accept or reject, any offerfor new or exchanged securities or property inexchange for a trust portfolio security. If any suchissuance, exchange or substitution occurs (regard-less of any action or rejection by a trust), any secu-rities and/or property received will be depositedinto the trust and will be promptly sold by thetrustee pursuant to the sponsor’s direction, unlessthe sponsor advises the trustee to keep such securi-ties or property. If any contract for the purchaseof securities fails, the sponsor will refund the cashand sales fee attributable to the failed contract tounitholders on or before the next distribution dateunless substantially all of the moneys held to coverthe purchase are reinvested in substitute securitiesin accordance with the trust agreement. Thesponsor may direct the reinvestment of securitysale proceeds if the sale is the direct result of seri-ous adverse credit factors which, in the opinion ofthe sponsor, would make retention of the securi-ties detrimental to the trust. In such a case, thesponsor may, but is not obligated to, direct thereinvestment of sale proceeds in any other securi-ties that meet the criteria for inclusion in the truston the trust’s inception date. The sponsor mayalso instruct the trustee to take action necessary toensure that the portfolio continues to satisfy thequalifications of a regulated investment company.

We will increase the size of your trust as wesell units. When we create additional units, wewill seek to replicate the existing portfolio. Anyadditional Stocks deposited will be subject to theLEAPS® with the same terms as the LEAPS®

initially deposited. When your trust buys securi-ties, it may pay brokerage or other acquisitionfees. You could experience a dilution of yourinvestment because of these fees and fluctuationsin security prices between the time we create unitsand the time your trust buys the securities.

When your trust buys or sells securities, we maydirect that it place orders with and pay brokeragecommissions to brokers that sell units or are affili-ated with us, your trust or the trustee.

Pursuant to an exemptive order, your trustmay be able to purchase securities from othertrusts that we sponsor when we create additionalunits. Your trust may also be able to sell securitiesto other trusts that we sponsor to satisfy unitredemption, pay deferred sales charges or expenses,in connection with periodic tax compliance or inconnection with the termination of your trust.The exemption may enable each trust to eliminatecommission costs on these transactions. The pricefor those securities will be the closing price on thesale date on the exchange where the securities areprincipally traded as certified by us to the trustee.

AAmmeennddiinngg tthhee TTrruusstt AAggrreeeemmeenntt.. The sponsorand the trustee can change the trust agreementwithout your consent to correct any provisionthat may be defective or to make other provisionsthat will not materially adversely affect your inter-est (as determined by the sponsor and thetrustee). We cannot change this agreement toreduce your interest in your trust without yourconsent. Investors owning two-thirds of the unitsin your trust may vote to change this agreement.

TTeerrmmiinnaattiioonn ooff YYoouurr TTrruusstt.. Your trust willterminate on the termination date set forth under“Essential Information” in the “InvestmentSummary” section of this prospectus. The trusteemay terminate your trust early if the value of thetrust is less than 40% of the original value of thesecurities in the trust at the time of deposit. Atthis size, the expenses of your trust may create anundue burden on your investment. Investorsowning two-thirds of the units in your trust mayalso vote to terminate the trust early. The trusteewill liquidate the trust in the event that a suffi-


cient number of units not yet sold to the publicare tendered for redemption so that the net worthof the trust would be reduced to less than 40% ofthe value of the securities at the time they weredeposited in the trust. If this happens, we willrefund any sales charge that you paid.

The scheduled mandatory termination dateset forth under “Essential Information” in the“Investment Summary” section will be subsequentto the expiration of the LEAPS®. If theLEAPS® are exercised prior to the expiration, thetrust will receive cash; if the LEAPS® are notexercised, the trust will continue to hold theStocks in the portfolio. If the trust is terminatedearly, the trustee will either sell the Stocks subjectto LEAPS® or enter into a closing purchasetransaction as a result of which the LEAPS® willbe cancelled and then sell the underlying Stocks.

You will receive your final distribution withina reasonable time following liquidation of all thesecurities after deducting final expenses. Your ter-mination distribution may be less than the priceyou originally paid for your units.

TThhee SSppoonnssoorr.. The sponsor of the trust isAdvisors Asset Management, Inc. We are a broker-dealer specializing in providing trading and supportservices to broker-dealers, registered representatives,investment advisers and other financial profession-als. Our headquarters are located at 18925 BaseCamp Road, Monument, Colorado 80132. Youcan contact our unit investment trust division at8100 East 22nd Street North, Building 800,Suite 102, Wichita, Kansas 67226 or by using thecontacts listed on the back cover of this prospectus.AAM is a registered broker-dealer and investmentadviser, a member of the Financial IndustryRegulatory Authority, Inc. (FINRA) and SecuritiesInvestor Protection Corporation (SIPC) and a reg-istrant of the Municipal Securities Rulemaking

Board (MSRB). If we fail to or cannot performour duties as sponsor or become bankrupt, thetrustee may replace us, continue to operate yourtrust without a sponsor, or terminate your trust.

We and your trust have adopted a code ofethics requiring our employees who have access toinformation on trust transactions to report per-sonal securities transactions. The purpose of thecode is to avoid potential conflicts of interest andto prevent fraud, deception or misconduct withrespect to your trust.

The sponsor or an affiliate may use the list ofsecurities in the trust in its independent capacity(which may include acting as an investmentadviser or broker-dealer) and distribute thisinformation to various individuals and entities.The sponsor or an affiliate may recommend oreffect transactions in the securities. This mayalso have an impact on the price your trust paysfor the securities and the price received upon unitredemption or trust termination. The sponsormay act as agent or principal in connection withthe purchase and sale of securities, includingthose held by the trust, and may act as a special-ist market maker in the securities. The sponsormay also issue reports and make recommenda-tions on the securities in the trust. The sponsoror an affiliate may have participated in a publicoffering of one or more of the securities in thetrust. The sponsor, an affiliate or their employ-ees may have a long or short position in thesesecurities or related securities. An officer, direc-tor or employee of the sponsor or an affiliatemay be an officer or director for the issuers ofthe securities.

TThhee TTrruusstteeee.. The Bank of New YorkMellon is the trustee of your trust. Its principalunit investment trust division office is located at2 Hanson Place, 12th Floor, Brooklyn, New


York 11217. You can contact the trustee bycalling the telephone number on the back coverof this prospectus or by writing to its unitinvestment trust office. We may remove andreplace the trustee in some cases without yourconsent. The trustee may also resign by notify-ing us and investors.

HHooww WWee DDiissttrriibbuuttee UUnniittss.. We sell units tothe public through broker-dealers and otherfirms. These distribution firms each receive partof the sales fee when they sell units. During theinitial offering period, the broker-dealer conces-sion or agency commission for broker-dealers andother firms is 1.25% of the public offering priceper unit at the time of the transaction. The bro-ker-dealer concession or agency commission is65% of the sales fee for secondary market sales.No broker-dealer concession or agency commis-sion is paid to broker-dealers, investment advisersor other selling firms in connection with unitsales in Fee Accounts subject to a Wrap Fee.

Broker-dealers and other firms that sell unitsof certain unit investment trusts for which AAMacts as sponsor are eligible to receive additionalcompensation for volume sales. The sponsoroffers two separate volume concession structuresfor certain trusts that are referred to as “VolumeConcession A” and “Volume Concession B.”The trust offered in this prospectus is a VolumeConcession A trust. Broker-dealers and otherfirms that sell units of any Volume Concession Atrust are eligible to receive the additional com-pensation described below. Such payments willbe in addition to the regular concessions paid tofirms as set forth in the applicable trust’sprospectus.

The additional concession for sales in a calen-dar month is based on total initial offering periodsales of all Volume Concession A trusts during the

12-month period through the end of the precedingcalendar month as set forth in the following table:

Initial Offering Period Sales VolumeIn Preceding 12 Months Concession

$25,000,000 but less than $100,000,000 0.035%$100,000,000 but less than $150,000,000 0.050$150,000,000 but less than $250,000,000 0.075$250,000,000 but less than $1,000,000,000 0.100$1,000,000,000 but less than $5,000,000,000 0.125$5,000,000,000 but less than $7,500,000,000 0.150$7,500,000,000 or more 0.175

We will pay these amounts out of our ownassets within a reasonable time following each cal-endar month.

The volume concessions will be paid on unitsof all Volume Concession A trusts sold in the ini-tial offering period, except as described below.For a trust to be eligible for this additionalVolume Concession A compensation, the trust’sprospectus must include disclosure related to theadditional Volume Concession A compensation; atrust is not eligible for additional VolumeConcession A compensation if the prospectus forsuch trust does not include disclosure related tothe additional Volume Concession A compensa-tion. In addition, dealer firms will not receivevolume concessions on the sale of units which arenot subject to a transactional sales charge.However, such sales will be included in determin-ing whether a firm has met the sales level break-points for volume concessions subject to the poli-cies of the related selling firm. Secondary marketsales of all unit trusts are excluded for purposes ofthese volume concessions.

Any sales fee discount is borne by the broker-dealer or selling firm out of the broker-dealerconcession or agency commission. We reserve theright to change the amount of compensation paid


to selling firms from time to time. Some broker-dealers and other selling firms may limit the com-pensation they or their representatives receive inconnection with unit sales. As a result, certainbroker-dealers and other selling firms may waiveor refuse payment of all or a portion of the regu-lar concession or agency commission and/or vol-ume concession described above and instruct thesponsor to retain such amounts rather than pay orallow the amounts to such firm.

We currently provide, at our own expenseand out of our own profits, additional compensa-tion and benefits to broker-dealers who sell unitsof this trust and our other products. This com-pensation is intended to result in additional salesof our products and/or compensate broker-deal-ers and financial advisors for past sales. A num-ber of factors are considered in determiningwhether to pay these additional amounts. Suchfactors may include, but are not limited to, thelevel or type of services provided by the interme-diary, the level or expected level of sales of ourproducts by the intermediary or its agents, theplacing of our products on a preferred or recom-mended product list and access to an intermedi-ary’s personnel. We may make these paymentsfor marketing, promotional or related expenses,including, but not limited to, expenses of enter-taining retail customers and financial advisors,advertising, sponsorship of events or seminars,obtaining information about the breakdown ofunit sales among an intermediary’s representativesor offices, obtaining shelf space in broker-dealerfirms and similar activities designed to promotethe sale of our products. We make such pay-ments to a substantial majority of intermediariesthat sell our products. We may also make certainpayments to, or on behalf of, intermediaries todefray a portion of their costs incurred for thepurpose of facilitating unit sales, such as the costsof developing or purchasing trading systems to

process unit trades. Payments of such additionalcompensation described in this paragraph andthe volume concessions described above, some ofwhich may be characterized as “revenue sharing,”may create an incentive for financial intermedi-aries and their agents to sell or recommend ourproducts, including this trust, over other prod-ucts. These arrangements will not change theprice you pay for your units.

We generally register units for sale in variousstates in the U.S. We do not register units forsale in any foreign country. This prospectus doesnot constitute an offer of units in any state orcountry where units cannot be offered or soldlawfully. We may reject any order for units inwhole or in part.

We may gain or lose money when we holdunits in the primary or secondary market due tofluctuations in unit prices. The gain or loss isequal to the difference between the price we payfor units and the price at which we sell or redeemthem. We may also gain or lose money when wedeposit securities to create units. The amount ofour profit or loss on the initial deposit of securitiesinto the trust is shown in the “Notes to Portfolio.”

TTAAXXEESS

This section summarizes some of the mainU.S. federal income tax consequences of owningunits of the trust. This section is current as of thedate of this prospectus. Tax laws and interpreta-tions change frequently, and these summaries donot describe all of the tax consequences to all tax-payers. For example, these summaries generallydo not describe your situation if you are a corpo-ration, a non-U.S. person, a broker/dealer, orother investor with special circumstances. Inaddition, this section does not describe your state,local or foreign tax consequences.


This federal income tax summary is based inpart on the advice of counsel to the sponsor. TheInternal Revenue Service could disagree with anyconclusions set forth in this section. In addition,our counsel was not asked to review, and has notreached a conclusion with respect to the federalincome tax treatment of the assets to be depositedin your trust. This may not be sufficient for youto use for the purpose of avoiding penalties underfederal tax law.

As with any investment, you should seekadvice based on your individual circumstancesfrom your own tax advisor.

TTrruusstt SSttaattuuss.. Your trust intends to qualify asa “regulated investment company” under the fed-eral tax laws. If your trust qualifies as a regulatedinvestment company and distributes its income asrequired by the tax law, your trust generally willnot pay federal income taxes. If your trust investsin a partnership, an adverse federal income taxaudit of that partnership could result in the trustbeing required to pay federal income tax or pay adeficiency dividend (without having receivedadditional cash).

DDiissttrriibbuuttiioonnss.. Trust distributions are general-ly taxable. After the end of each year, you willreceive a tax statement that separates your trust'sdistributions into three categories: ordinaryincome distributions, capital gain dividends andreturn of capital. Ordinary income distributionsare generally taxed at your ordinary tax rate, how-ever, as further discussed below, certain ordinaryincome distributions received from your trustmay be taxed at the capital gains tax rates.Generally, you will treat all capital gain dividendsas long-term capital gains regardless of how longyou have owned your units. To determine youractual tax liability for your capital gain dividends,you must calculate your total net capital gain or

loss for the tax year after considering all of yourother taxable transactions, as described below.Note that the presence of covered call options inthe portfolio may reduce the amount of dividendsthat would otherwise be treated as capital gaindividends. In addition, your trust may make dis-tributions that represent a return of capital for taxpurposes and thus will generally not be taxable toyou. A return of capital, although not initiallytaxable to you, will result in a reduction in thebasis in your units and subsequently result inhigher levels of taxable capital gains in the future.In addition, if the non-dividend distributionexceeds your basis in your units, you will havelong-term or short-term gain depending uponyour holding period. The tax status of your dis-tributions from your trust is not affected bywhether you reinvest your distributions in addi-tional units or receive them in cash. The incomefrom your trust that you must take into accountfor federal income tax purposes is not reduced byamounts used to pay a deferred sales fee, if any.The tax laws may require you to treat distribu-tions made to you in January as if you hadreceived them on December 31 of the previousyear. Income from your trust may also be subjectto a 3.8 percent “medicare tax.” This tax general-ly applies to your net investment income if youradjusted gross income exceeds certain thresholdamounts, which are $250,000 in the case of mar-ried couples filing joint returns and $200,000 inthe case of single individuals.

OOppttiioonnss.. As part of its portfolio, your trustmay write one or more call options on certainstock or stock indexes. Generally premiums forwriting options are not taxable when received, butinstead are taxed when the option expires, is exer-cised or is deemed to be sold. Thus, the amountsof the premiums will generally be taken intoaccount at that time in determining the amount ofdividends to be paid to the unitholder. These


amounts may be part of the dividends taxed asordinary income or those taxed as long-term capi-tal gain, depending on the circumstances. Further,the trust’s transaction in options will be subject tospecial provisions of the Internal Revenue Codethat, among other things, may affect the characterof gains and losses realized by your trust (i.e., mayaffect whether gains or losses are ordinary or capi-tal, or short-term or long-term), may affect theamount of dividends which may be taken intoaccount as a dividend which is eligible for the cap-ital gains tax rates, may accelerate recognition ofincome to the trust and may defer trust losses.These rules could, therefore, affect the character,amount and timing of distributions to unithold-ers. These provisions also (a) may require yourtrust to mark-to-market certain types of the posi-tions in its portfolio (i.e., treat them as if theywere closed out), and (b) may cause your trust torecognize income without receiving cash withwhich to make distributions in amounts necessaryto satisfy the distribution requirements for qualify-ing to be taxed as a regulated investment companyand for avoiding excise taxes.

DDiivviiddeennddss RReecceeiivveedd DDeedduuccttiioonn.. A corporationthat owns units generally will not be entitled tothe dividends received deduction with respect tomany dividends received from your trust becausethe dividends received deduction is generally notavailable for distributions from regulated invest-ment companies. However, certain ordinaryincome dividends on units that are attributable toqualifying dividends received by your trust fromcertain corporations may be reported by the trustas being eligible for the dividends received deduc-tion. The presence of covered call options in theportfolio may reduce the amount of dividendsthat are treated as qualifying dividends.

SSaallee oorr RReeddeemmppttiioonn ooff UUnniittss.. If you sell orredeem your units, you will generally recognize a

taxable gain or loss. To determine the amount ofthis gain or loss, you must subtract your tax basisin your units from the amount you receive in thetransaction. Your tax basis in your units is gener-ally equal to the cost of your units, generallyincluding sales charges. In some cases, however,you may have to adjust your tax basis after youpurchase your units.

CCaappiittaall GGaaiinnss aanndd LLoosssseess aanndd CCeerrttaaiinnOOrrddiinnaarryy IInnccoommee DDiivviiddeennddss.. If you are an indi-vidual, the maximum marginal stated federal taxrate for net capital gain is generally 20% (15%or 0% for taxpayers with taxable incomes belowcertain thresholds). Some portion of your capi-tal gain dividends may be subject to higher max-imum marginal stated federal income tax rates.Some portion of your capital gain dividends maybe attributable to the trust's interest in a masterlimited partnership which may be subject to amaximum marginal stated federal income taxrate of 28%, rather than the rates set forthabove. In addition, capital gain received fromassets held for more than one year that is consid-ered “unrecaptured section 1250 gain” (whichmay be the case, for example, with some capitalgains attributable to equity interests in real estateinvestment trusts that constitute interests inentities treated as real estate investment trustsfor federal income tax purposes) is taxed at amaximum stated tax rate of 25%. In the case ofcapital gain dividends, the determination ofwhich portion of the capital gain dividend, ifany, is subject to the 28% tax rate or the 25%tax rate, will be made based on rules prescribedby the United States Treasury. Capital gains mayalso be subject to the “medicare tax” describedabove.

Net capital gain equals net long-term capitalgain minus net short-term capital loss for the tax-able year. Capital gain or loss is long-term if the


holding period for the asset is more than one yearand is short-term if the holding period for theasset is one year or less. You must exclude thedate you purchase your units to determine yourholding period. However, if you receive a capitalgain dividend from your trust and sell your unitat a loss after holding it for six months or less, theloss will be recharacterized as long-term capitalloss to the extent of the capital gain dividendreceived. The tax rates for capital gains realizedfrom assets held for one year or less are generallythe same as for ordinary income. The InternalRevenue Code treats certain capital gains as ordi-nary income in special situations.

Ordinary income dividends received by anindividual unitholder from a regulated investmentcompany such as your trust are generally taxed atthe same rates that apply to net capital gain (asdiscussed above), provided certain holding periodrequirements are satisfied and provided the divi-dends are attributable to qualifying dividendsreceived by your trust itself. Distributions withrespect to shares in real estate investment trustsare qualifying dividends only in limited circum-stances. Further, the presence of covered calloptions in the portfolio may reduce the amountof dividends that are eligible for capital gains taxrates. Your trust will provide notice to itsunitholders of the amount of any distributionwhich may be taken into account as a dividendwhich is eligible for the capital gains tax rates.

IInn--KKiinndd DDiissttrriibbuuttiioonnss.. Under certain circum-stances, as described in this prospectus, you mayreceive an in-kind distribution of trust securitieswhen you redeem units or when your trust termi-nates. This distribution will be treated as a salefor federal income tax purposes and you will gen-erally recognize gain or loss, generally based onthe value at that time of the securities and theamount of cash received. The Internal Revenue

Service could however assert that a loss could notbe currently deducted.

RRoolllloovveerrss aanndd EExxcchhaannggeess.. If you elect to haveyour proceeds from your trust rolled over into afuture trust, the exchange would generally be con-sidered a sale for federal income tax purposes.

TTrreeaattmmeenntt ooff TTrruusstt EExxppeennsseess.. Expensesincurred and deducted by your trust will generallynot be treated as income taxable to you. In somecases, however, you may be required to treat yourportion of these trust expenses as income. Youmay not be able to deduct some or all of theseexpenses.

FFoorreeiiggnn TTaaxx CCrreeddiitt.. If your trust invests inany foreign securities, the tax statement that youreceive may include an item showing foreign taxesyour trust paid to other countries. In this case,dividends taxed to you will include your share ofthe taxes your trust paid to other countries. Youmay be able to deduct or receive a tax credit foryour share of these taxes.

Investments in Certain ForeignCorporations. If your trust holds an equityinterest in any “passive foreign investment com-panies” (“PFICs”), which are generally certainforeign corporations that receive at least 75% oftheir annual gross income from passive sources(such as interest, dividends, certain rents and roy-alties or capital gains) or that hold at least 50%of their assets in investments producing such pas-sive income, the trust could be subject to U.S.federal income tax and additional interest chargeson gains and certain distributions with respect tothose equity interests, even if all the income orgain is timely distributed to its unitholders. Yourtrust will not be able to pass through to itsunitholders any credit or deduction for suchtaxes. Your trust may be able to make an elec-


tion that could ameliorate these adverse tax con-sequences. In this case, your trust would recog-nize as ordinary income any increase in the valueof such PFIC shares, and as ordinary loss anydecrease in such value to the extent it did notexceed prior increases included in income.Under this election, your trust might be requiredto recognize in a year income in excess of its dis-tributions from PFICs and its proceeds from dis-positions of PFIC stock during that year, andsuch income would nevertheless be subject to thedistribution requirement and would be takeninto account for purposes of the 4% excise tax.Dividends paid by PFICs are not treated as quali-fied dividend income.

FFoorreeiiggnn IInnvveessttoorrss.. If you are a foreigninvestor (i.e., an investor other than a U.S. citi-zen or resident or a U.S. corporation, partner-ship, estate or trust), you should be aware that,generally, subject to applicable tax treaties, distri-butions from your trust will be characterized asdividends for federal income tax purposes (otherthan dividends which your trust properly reportsas capital gain dividends) and will be subject toU.S. income taxes, including withholding taxes,subject to certain exceptions described below.However, distributions received by a foreigninvestor from your trust that are properly report-ed by your trust as capital gain dividends maynot be subject to U.S. federal income taxes,including withholding taxes, provided that yourtrust makes certain elections and certain otherconditions are met. Distributions from yourtrust that are properly reported by the trust as aninterest-related dividend attributable to certaininterest income received by the trust or as ashort-term capital gain dividend attributable tocertain net short-term capital gain incomereceived by the trust may not be subject to U.S.federal income taxes, including withholdingtaxes when received by certain foreign investors,

provided that the trust makes certain electionsand certain other conditions are met. In addi-tion, distributions in respect of units may besubject to a U.S. withholding tax of 30% in thecase of distributions to (i) certain non-U.S.financial institutions that have not entered intoan agreement with the U.S. Treasury to collectand disclose certain information and are not res-ident in a jurisdiction that has entered into suchan agreement with the U.S. Treasury and (ii)certain other non-U.S. entities that do not pro-vide certain certifications and information aboutthe entity's U.S. owners. Dispositions of unitsby such persons may be subject to such with-holding after December 31, 2018. You shouldalso consult your tax advisor with respect toother U.S. tax withholding and reportingrequirements.

EEXXPPEENNSSEESS

Your trust will pay various expenses to con-duct its operations. The “Fees and Expenses”section of the “Investment Summary” in thisprospectus shows the estimated amount of theseexpenses.

The sponsor will receive a fee from yourtrust for creating and developing the trust,including determining the trust’s objectives,policies, composition and size, selecting serviceproviders and information services and for pro-viding other similar administrative and ministe-rial functions. This “creation and developmentfee” is a charge of $0.05 per unit. The trusteewill deduct this amount from your trust’s assetsas of the close of the initial offering period. Noportion of this fee is applied to the payment ofdistribution expenses or as compensation forsales efforts. This fee will not be deducted fromproceeds received upon a repurchase, redemp-tion or exchange of units before the close of theinitial public offering period.

Your trust will pay a fee to the trustee for itsservices. The trustee also benefits when it holdscash for your trust in non-interest bearingaccounts. Your trust will reimburse us as supervi-sor, evaluator and sponsor for providing portfoliosupervisory services, for evaluating your portfolioand for providing bookkeeping and administrativeservices. Our reimbursements may exceed thecosts of the services we provide to your trust butwill not exceed the costs of services provided to allof our unit investment trusts in any calendar year.All of these fees may adjust for inflation withoutyour approval.

Your trust will also pay its general operatingexpenses. Your trust may pay expenses such astrustee expenses (including legal and auditingexpenses), various governmental charges, fees forextraordinary trustee services, costs of takingaction to protect your trust, costs of indemnifyingthe trustee and the sponsor, legal fees and expens-es and expenses incurred in contacting you. Yourtrust may pay the costs of updating its registrationstatement each year. The trustee will generallypay trust expenses from distributions received onthe securities but in some cases may sell securitiesto pay trust expenses.

EEXXPPEERRTTSS

LLeeggaall MMaatttteerrss.. Chapman and Cutler LLP actsas counsel for the trust and has given an opinionthat the units are validly issued. Dorsey &Whitney LLP acts as counsel for the trustee.

IInnddeeppeennddeenntt RReeggiisstteerreedd PPuubblliicc AAccccoouunnttiinnggFFiirrmm.. Grant Thornton LLP, independent regis-tered public accounting firm, audited the state-ment of financial condition and the portfolioincluded in this prospectus.

AADDDDIITTIIOONNAALL IINNFFOORRMMAATTIIOONN

This prospectus does not contain all theinformation in the registration statement thatyour trust filed with the Securities and ExchangeCommission. The Information Supplement,which was filed with the Securities and ExchangeCommission, includes more detailed informationabout the securities in your portfolio, investmentrisks and general information about your trust.You can obtain the Information Supplement bycontacting us or the Securities and ExchangeCommission as indicated on the back cover ofthis prospectus. This prospectus incorporates theInformation Supplement by reference (it is legallyconsidered part of this prospectus).


RREEPPOORRTT OOFF IINNDDEEPPEENNDDEENNTT RREEGGIISSTTEERREEDD PPUUBBLLIICC AACCCCOOUUNNTTIINNGG FFIIRRMM

SSppoonnssoorr aanndd UUnniitthhoollddeerrssAAddvviissoorrss DDiisscciipplliinneedd TTrruusstt 11889966

Opinion on the financial statements

We have audited the accompanying statement of financial condition, including the trust portfolio on pages 5 through 8of Advisors Disciplined Trust 1896 (the “Trust”) as of October 10, 2018, the initial date of deposit, and the related notes(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the financial position of the Trust as of October 10, 2018, in conformity with accounting princi-ples generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of Advisors Asset Management, Inc., the Sponsor. Our responsibility isto express an opinion on the Trust’s financial statements based on our audit. We are a public accounting firm registeredwith the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independentwith respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of its internalcontrol over financial reporting. As part of our audit we are required to obtain an understanding of internal control overfinancial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal controlover financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whetherdue to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also included evaluatingthe accounting principles used and significant estimates made by management, as well as evaluating the overall presentationof the financial statements. Our procedures included confirmation of cash or irrevocable letter of credit deposited for thepurchase of securities as shown in the statement of financial condition as of October 10, 2018 by correspondencewith The Bank of New York Mellon, Trustee. We believe that our audit provides a reasonable basis for our opinion.

/S/ GRANT THORNTON LLP

We have served as the auditor of one or more of the unit investment trusts, sponsored by Advisors Asset Management, Inc.and its predecessor since 2003.

Chicago, IllinoisOctober 10, 2018


Advisors Disciplined Trust 1896

Statement of Financial Condition as of October 10, 2018

IInnvveessttmmeenntt iinn sseeccuurriittiieessContracts to purchase underlying securities (1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 599,270Accrued interest to first settlement date (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 599,352

LLiiaabbiilliittiieess aanndd iinntteerreesstt ooff iinnvveessttoorrssLiabilities:

Market value of call options (LEAPS®) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 32,539Accrued interest payable to sponsor (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Organization costs (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,777Deferred sales fee (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,651Creation and development fee (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,834

45,883Interest of investors:

Cost to investors (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566,731Less: initial sales fee (4)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -Less: deferred sales fee, creation and development fee and organization costs (3)(4)(5) . . . . . . . . . . . . . . 13,262Net interest of investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553,469

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 599,352

Number of units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,673

Net asset value per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9.766

(1) Aggregate cost of the securities is based on the closing sale price evaluations as determined by the evaluator. The trustee willadvance the amount of net interest accrued to the first settlement date to the trust for distribution to the sponsors as unitholdersof record as of such date. The liability for the LEAPS® are based on their aggregate underlying value.

(2) Cash or an irrevocable letter of credit has been deposited with the trustee covering the funds necessary for the purchase ofsecurities in the trust represented by purchase contracts.

(3) A portion of the public offering price represents an amount sufficient to pay for all or a portion of the costs incurred in establishingand offering the trust. These costs have been estimated at $0.049 per unit for the trust. A distribution will be made as of theearlier of the close of the initial offering period or six months following the trust’s inception date to an account maintained by thetrustee from which this obligation of the investors will be satisfied. To the extent the actual organization costs are greater thanthe estimated amount, only the estimated organization costs added to the public offering price will be reimbursed to the sponsorand deducted from the assets of the trust.

(4) The total sales fee consists of an initial sales fee, a deferred sales fee and a creation and development fee. The initial sales fee isequal to the difference between the maximum sales fee and the sum of the remaining deferred sales fee and the total creation anddevelopment fee. The maximum sales fee is 1.85% of the public offering price per unit. The deferred sales fee is equal to $0.135per unit and the creation and development fee is equal to $0.05 per unit.

(5) The aggregate cost to investors includes the applicable sales fee assuming no reduction of sales fees.


Contents

Investment Summary

A concise description 2 Investment Objectiveof essential information 2 Principal Investment Strategyabout the portfolio 2 Principal Risks

4 Who Should Invest4 Essential Information4 Fees and Expenses5 Portfolio

Understanding Your Investment

Detailed information to 9 The Covered Call Strategyhelp you understand 10 How to Buy Unitsyour investment 14 How to Sell Your Units

15 Distributions16 Investment Risks18 How the Trust Works22 Taxes26 Expenses27 Experts27 Additional Information28 Report of Independent Registered

Public Accounting Firm29 Statement of Financial Condition

Where to Learn More

You can contact us for Visit us on the Internetfree information about http://www.AAMlive.comthis and other investments, Call Advisors Assetincluding the Information Management, Inc.Supplement (877) 858-1773

Call The Bank of New York Mellon(800) 848-6468

Additional Information

This prospectus does not contain all information filed with theSecurities and Exchange Commission. To obtain or copy this infor-mation including the Information Supplement (a duplication fee maybe required):

E-mail: [email protected]: Public Reference Section

Washington, D.C. 20549Visit: http://www.sec.gov

(EDGAR Database)Call: 1-202-551-8090

(only for information on the operation of thePublic Reference Section)

Refer to:Advisors Disciplined Trust 1896Securities Act file number: 333-226760Investment Company Act file number: 811-21056

INCOME QUALITY

COVERED CALL

PORTFOLIO - 15 MONTH,SERIES 2018-4Q

PROSPECTUS

OCTOBER 10, 2018

Documents

Income Quality Covered Call Portfolio - docs.aamlive.com · A portfolio pursuing a covered call option writing strategy consisting of common stocks of domestic companies and U.S