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Share Name | Share Symbol | Market | Type |
---|---|---|---|
First Trust New Opportunities MLP and Energy Fund | NYSE:FPL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 7.76 | 0 | 00:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22902
(Exact name of registrant as specified in charter)
10 Westport Road, Suite C101a
Wilton,
CT 06897
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios
L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name
and address of agent for service)
Registrant’s telephone number, including area code: 630-765-8000
Date of fiscal year end: October 31
Date of reporting period: October 31, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
(a) The Report to Shareholders is attached herewith.
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12 |
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38 |
Performance | |||
Average
Annual Total Returns | |||
1
Year Ended 10/31/23 |
5
Years Ended 10/31/23 |
Inception
(3/26/14) to 10/31/23 | |
Fund Performance(3) | |||
NAV | 9.57% | 3.89% | -0.98% |
Market Value | 18.22% | 4.01% | -2.28% |
Index Performance | |||
S&P 500® Index | 10.14% | 11.00% | 10.94% |
Alerian MLP Total Return Index | 16.60% | 8.69% | 1.50% |
(1) | Most recent distribution paid through October 31, 2023. Subject to change in the future. |
(2) | Distribution rates are calculated by annualizing the most recent distribution paid through the report date and then dividing by Common Share Price or NAV, as applicable, as of October 31, 2023. Subject to change in the future. |
(3) | Total return is based on the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results. |
Average
Annual Total Returns | |||
1
Year Ended 10/31/23 |
5
Years Ended 10/31/23 |
Inception
(3/26/14) to 10/31/23 | |
Fund Performance(1) | |||
NAV | 9.57% | 3.89% | -0.98% |
Market Value | 18.22% | 4.01% | -2.28% |
Index Performance | |||
S&P 500® Index | 10.14% | 11.00% | 10.94% |
Alerian MLP Total Return Index | 16.60% | 8.69% | 1.50% |
(1) | Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per Common Share for NAV returns and changes in Common Share price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. |
(2) | Wolfe Research Power Supply Outlook: Implications for Power, Rails, Natural Gas, Turbines September 15, 2023 |
(3) | Bloomberg |
(4) | Energy Institute Statistical Review of World Energy, 2023 |
(5) | World Bank, Energy Institute Statistical Review of World Energy – 2023, EIP Estimates. This information is based on assumptions made by EIP, changes to the assumptions will affect the information provided. |
Shares | Description | Value | ||
COMMON STOCKS (a) – 60.3% | ||||
Electric Utilities – 11.4% | ||||
52,400 |
Alliant Energy Corp. |
$2,556,596 | ||
35,270 |
American Electric Power Co., Inc. (b) |
2,664,296 | ||
33 |
Constellation Energy Corp. |
3,726 | ||
4,800 |
Duke Energy Corp. |
426,672 | ||
7,300 |
Emera, Inc. (CAD) (c) |
239,096 | ||
247,250 |
Enel S.p.A., ADR (c) |
1,552,730 | ||
5,000 |
Entergy Corp. |
477,950 | ||
23,700 |
Eversource Energy (b) |
1,274,823 | ||
65,800 |
Exelon Corp. |
2,562,252 | ||
4,400 |
Fortis, Inc. (CAD) (c) |
174,699 | ||
6,200 |
Iberdrola S.A., ADR |
275,342 | ||
10,200 |
IDACORP, Inc. (c) |
966,042 | ||
13,480 |
NextEra Energy, Inc. (b) |
785,884 | ||
6,490 |
Orsted A/S, ADR |
104,359 | ||
83,520 |
PPL Corp. |
2,052,087 | ||
35,780 |
Southern (The) Co. |
2,407,994 | ||
14,800 |
Xcel Energy, Inc. |
877,196 | ||
19,401,744 | ||||
Energy Equipment & Services – 1.0% | ||||
133,800 |
Archrock, Inc. (c) |
1,695,246 | ||
Gas Utilities – 7.5% | ||||
54,620 |
AltaGas Ltd. (CAD) (c) |
1,014,610 | ||
33,200 |
Atmos Energy Corp. (c) |
3,574,312 | ||
101,900 |
National Fuel Gas Co. (c) |
5,191,805 | ||
35,670 |
New Jersey Resources Corp. (c) |
1,447,489 | ||
19,200 |
ONE Gas, Inc. (c) |
1,159,680 | ||
12,840 |
UGI Corp. (c) |
267,072 | ||
12,654,968 | ||||
Independent Power & Renewable Electricity Producers – 1.1% | ||||
37,300 |
AES (The) Corp. (c) |
555,770 | ||
53,390 |
Clearway Energy, Inc., Class A (c) |
1,087,554 | ||
8,000 |
EDP Renovaveis S.A. (EUR) (d) |
128,696 | ||
1,772,020 | ||||
Multi-Utilities – 9.2% | ||||
60,000 |
Atco Ltd., Class I (CAD) (c) |
1,538,129 | ||
7,170 |
CenterPoint Energy, Inc. (c) |
192,730 | ||
16,450 |
CMS Energy Corp. (c) |
893,893 | ||
17,380 |
DTE Energy Co. (c) |
1,675,084 | ||
54,370 |
Public Service Enterprise Group, Inc. |
3,351,910 | ||
80,800 |
Sempra (b) |
5,658,424 | ||
28,130 |
WEC Energy Group, Inc. |
2,289,501 | ||
15,599,671 | ||||
Oil, Gas & Consumable Fuels – 29.2% | ||||
50,000 |
BP PLC, ADR (c) |
1,829,000 | ||
9,410 |
Cheniere Energy, Inc. (b) |
1,566,012 | ||
117,040 |
DT Midstream, Inc. (c) |
6,316,649 | ||
103,085 |
Enbridge, Inc. (c) |
3,302,843 | ||
9,000 |
Exxon Mobil Corp. |
952,650 | ||
130,664 |
Keyera Corp. (CAD) (c) |
3,038,698 | ||
398,998 |
Kinder Morgan, Inc. (c) |
6,463,768 | ||
20,602 |
ONEOK, Inc. |
1,343,250 |
Shares | Description | Value | ||
COMMON STOCKS (a) (Continued) | ||||
Oil, Gas & Consumable Fuels (Continued) | ||||
53,000 |
Shell PLC, ADR (b) |
$3,452,420 | ||
45,500 |
Targa Resources Corp. |
3,804,255 | ||
75,109 |
TC Energy Corp. |
2,587,505 | ||
58,800 |
TotalEnergies SE, ADR (b) |
3,916,080 | ||
320,178 |
Williams (The) Cos., Inc. |
11,014,123 | ||
49,587,253 | ||||
Professional Services – 0.7% | ||||
8,500 |
Jacobs Solutions, Inc. (b) |
1,133,050 | ||
Water Utilities – 0.2% | ||||
3,200 |
American Water Works Co., Inc. (c) |
376,480 | ||
Total Common Stocks |
102,220,432 | |||
(Cost $108,855,490) | ||||
Units | Description | Value | ||
MASTER LIMITED PARTNERSHIPS – 48.8% | ||||
Chemicals – 2.7% | ||||
210,988 |
Westlake Chemical Partners, L.P. (c) |
4,523,583 | ||
Energy Equipment & Services – 0.4% | ||||
31,000 |
USA Compression Partners, L.P. (c) |
778,100 | ||
Gas Utilities – 0.9% | ||||
88,500 |
Suburban Propane Partners, L.P. (c) |
1,556,715 | ||
Independent Power & Renewable Electricity Producers – 1.4% | ||||
88,919 |
NextEra Energy Partners, L.P. (e) |
2,407,037 | ||
Oil, Gas & Consumable Fuels – 43.4% | ||||
220,269 |
Cheniere Energy Partners, L.P. (c) |
12,282,199 | ||
1,232,960 |
Energy Transfer, L.P. (c) |
16,213,424 | ||
16,000 |
EnLink Midstream, LLC (c) (e) |
196,640 | ||
692,564 |
Enterprise Products Partners, L.P. (c) |
18,034,367 | ||
208,716 |
Hess Midstream, L.P., Class A (c) (e) |
6,261,480 | ||
300,000 |
MPLX, L.P. (c) |
10,812,000 | ||
531,720 |
Plains All American Pipeline, L.P. (c) |
8,055,558 | ||
41,070 |
TXO Partners, L.P. (c) |
802,097 | ||
35,000 |
Western Midstream Partners, L.P. |
939,050 | ||
73,596,815 | ||||
Total Master Limited Partnerships |
82,862,250 | |||
(Cost $54,755,184) | ||||
Shares | Description | Value | ||
MONEY MARKET FUNDS – 16.5% | ||||
27,934,754 |
Morgan Stanley Institutional Liquidity Funds - Treasury Portfolio - Institutional Class - 5.22% (f) |
27,934,754 | ||
(Cost $27,934,754) | ||||
Total Investments – 125.6% |
213,017,436 | |||
(Cost $191,545,428) |
Number of Contracts | Description | Notional Amount | Exercise Price | Expiration Date | Value | |||||
WRITTEN OPTIONS – (0.2)% | ||||||||||
Call Options Written – (0.2)% | ||||||||||
(352) |
American Electric Power Co., Inc. |
$(2,659,008) | $80.00 | 11/17/23 | (7,392) |
Number of Contracts | Description | Notional Amount | Exercise Price | Expiration Date | Value | |||||
WRITTEN OPTIONS (Continued) | ||||||||||
Call Options Written (Continued) | ||||||||||
(94) |
Cheniere Energy, Inc. |
$(1,564,348) | $180.00 | 12/15/23 | $(19,270) | |||||
(237) |
Eversource Energy |
(1,274,823) | 55.00 | 11/17/23 | (26,070) | |||||
(85) |
Jacobs Solutions, Inc. |
(1,133,050) | 140.00 | 12/15/23 | (19,763) | |||||
(134) |
NextEra Energy, Inc. |
(781,220) | 56.00 | 11/17/23 | (41,272) | |||||
(808) |
Sempra |
(5,658,424) | 70.00 | 11/17/23 | (129,280) | |||||
(530) |
Shell PLC, ADR |
(3,452,420) | 70.00 | 11/17/23 | (7,950) | |||||
(588) |
TotalEnergies SE, ADR |
(3,916,080) | 70.00 | 11/17/23 | (17,640) | |||||
Total Written Options |
(268,637) | |||||||||
(Premiums received $278,625) |
Outstanding Loan – (26.5)% |
(44,900,000) | ||
Net Other Assets and Liabilities – 1.1% |
1,796,534 | ||
Net Assets – 100.0% |
$169,645,333 |
(a) | Securities are issued in U.S. dollars unless otherwise indicated in the security description. |
(b) | All or a portion of this security’s position represents cover for outstanding options written. |
(c) | All or a portion of this security serves as collateral on the outstanding loan. At October 31, 2023, the segregated value of these securities amounts to $96,845,568. |
(d) | This security is fair valued by the Advisor’s Pricing Committee in accordance with procedures approved by the Fund’s Board of Trustees and in accordance with provisions of the Investment Company Act of 1940 and rules thereunder, as amended. At October 31, 2023, securities noted as such are valued at $128,696 or 0.1% of net assets. Certain of these securities are fair valued using a factor provided by a third-party pricing service due to the change in value between the foreign markets’ close and the New York Stock Exchange close exceeding a certain threshold. On days when this threshold is not exceeded, these securities are typically valued at the last sale price on the exchange on which they are principally traded. |
(e) | This security is taxed as a “C” corporation for federal income tax purposes. |
(f) | Rate shown reflects yield as of October 31, 2023. |
Abbreviations throughout the Portfolio of Investments: | |
ADR | – American Depositary Receipt |
CAD | – Canadian Dollar |
EUR | – Euro |
ASSETS TABLE | ||||
Total Value at 10/31/2023 |
Level
1 Quoted Prices |
Level
2 Significant Observable Inputs |
Level
3 Significant Unobservable Inputs | |
Common Stocks: | ||||
Independent Power & Renewable Electricity Producers |
$ 1,772,020 | $ 1,643,324 | $ 128,696 | $ — |
Other Industry Categories* |
100,448,412 | 100,448,412 | — | — |
Master Limited Partnerships* |
82,862,250 | 82,862,250 | — | — |
Money Market Funds |
27,934,754 | 27,934,754 | — | — |
Total Investments |
$ 213,017,436 | $ 212,888,740 | $ 128,696 | $— |
LIABILITIES TABLE | ||||
Total Value at 10/31/2023 |
Level
1 Quoted Prices |
Level
2 Significant Observable Inputs |
Level
3 Significant Unobservable Inputs | |
Written Options |
$ (268,637) | $ (248,874) | $ (19,763) | $ — |
* | See Portfolio of Investments for industry breakout. |
ASSETS: | |
Investments, at value |
$ 213,017,436 |
Receivables: | |
Dividends |
1,111,145 |
Investment securities sold |
1,061,933 |
Income taxes |
83,828 |
Interest |
80,147 |
Dividend reclaims |
19,307 |
Prepaid expenses |
6,983 |
Total Assets |
215,380,779 |
LIABILITIES: | |
Outstanding loan |
44,900,000 |
Options written, at value |
268,637 |
Due to custodian |
9 |
Payables: | |
Interest and fees on loan |
184,859 |
Investment advisory fees |
181,914 |
Audit and tax fees |
138,866 |
Shareholder reporting fees |
20,365 |
Legal fees |
18,154 |
Administrative fees |
9,985 |
Custodian fees |
6,312 |
Transfer agent fees |
3,149 |
Trustees’ fees and expenses |
925 |
Financial reporting fees |
771 |
Other liabilities |
1,500 |
Total Liabilities |
45,735,446 |
NET ASSETS |
$169,645,333 |
NET ASSETS consist of: | |
Paid-in capital |
$ 303,542,008 |
Par value |
234,477 |
Accumulated distributable earnings (loss) |
(134,131,152) |
NET ASSETS |
$169,645,333 |
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) |
$7.24 |
Number of |
|
Investments, at cost |
$191,545,428 |
Premiums received on options written |
$278,625 |
INVESTMENT INCOME: | ||
Dividends |
$ 4,538,786 | |
Interest |
274,310 | |
Foreign withholding tax |
(209,714) | |
Other |
5,366 | |
Total investment income |
4,608,748 | |
EXPENSES: | ||
Investment advisory fees |
2,112,202 | |
Interest and fees on loan |
1,995,088 | |
Audit and tax fees |
102,255 | |
Administrative fees |
97,768 | |
Shareholder reporting fees |
68,928 | |
Legal fees |
33,539 | |
Listing expense |
23,792 | |
Trustees’ fees and expenses |
18,784 | |
Transfer agent fees |
18,608 | |
Custodian fees |
13,534 | |
Financial reporting fees |
9,250 | |
Other |
21,718 | |
Total expenses |
4,515,466 | |
NET INVESTMENT INCOME (LOSS) BEFORE TAXES |
93,282 | |
Current federal income tax benefit (expense) |
3,410,202 | |
Current state income tax benefit (expense) |
220,531 | |
Deferred federal income tax benefit (expense) |
(612,667) | |
Deferred state income tax benefit (expense) |
(42,075) | |
Total income tax benefit (expense) |
2,975,991 | |
NET INVESTMENT INCOME (LOSS) |
3,069,273 | |
NET REALIZED AND UNREALIZED GAIN (LOSS): | ||
Net realized gain (loss) before taxes on: | ||
Investments |
14,105,374 | |
Written options contracts |
2,145,719 | |
Foreign currency transactions |
(12,036) | |
Net realized gain (loss) before taxes |
16,239,057 | |
Current federal income tax benefit (expense) |
(3,410,202) | |
Current state income tax benefit (expense) |
(234,196) | |
Total income tax benefit (expense) |
(3,644,398) | |
Net realized gain (loss) on investments, written options contracts and foreign currency transactions |
12,594,659 | |
Net change in unrealized appreciation (depreciation) before taxes on: | ||
Investments |
(2,802,830) | |
Written options contracts |
(121,460) | |
Foreign currency translation |
(54) | |
Net change in unrealized appreciation (depreciation) before taxes |
(2,924,344) | |
Deferred federal income tax benefit (expense) |
612,667 | |
Deferred state income tax benefit (expense) |
42,075 | |
Total income tax benefit (expense) |
654,742 | |
Net change in unrealized appreciation (depreciation) on investments, written options contracts and foreign currency
translation |
(2,269,602) | |
NET REALIZED AND UNREALIZED GAIN (LOSS) |
10,325,057 | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ 13,394,330 |
Year Ended 10/31/2023 |
Year Ended 10/31/2022 | ||
OPERATIONS: | |||
Net investment income (loss) |
$ 3,069,273 | $ 6,444,372 | |
Net realized gain (loss) |
12,594,659 | 10,172,548 | |
Net change in unrealized appreciation (depreciation) |
(2,269,602) | 9,665,186 | |
Net increase (decrease) in net assets resulting from operations |
13,394,330 | 26,282,106 | |
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||
Investment operations |
(10,564,660) | (10,940,992) | |
CAPITAL TRANSACTIONS: | |||
Repurchase of Common Shares * |
(1,310,482) | (6,372,428) | |
Net increase (decrease) in net assets resulting from capital transactions |
(1,310,482) | (6,372,428) | |
Total increase (decrease) in net assets |
1,519,188 | 8,968,686 | |
NET ASSETS: | |||
Beginning of period |
168,126,145 | 159,157,459 | |
End of period |
$ 169,645,333 | $ 168,126,145 | |
CAPITAL TRANSACTIONS were as follows: | |||
Common Shares at beginning of period |
23,662,968 | 24,720,592 | |
Common Shares repurchased * |
(215,308) | (1,057,624) | |
Common Shares at end of period |
23,447,660 | 23,662,968 |
* | On September 15, 2020, the Fund commenced a share repurchase program. For the fiscal years ended October 31, 2023 and October 31, 2022, the Fund repurchased 215,308 and 1,057,624 Common Shares, respectively, at a weighted-average discount of 14.01% and 12.95%, respectively, from net asset value per share. The Fund’s share repurchase program ended on March 15, 2023. |
Cash flows from operating activities: | ||
Net increase (decrease) in net assets resulting from operations |
$13,394,330 | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities: | ||
Purchases of investments |
(158,120,369) | |
Sales of investments |
153,239,395 | |
Proceeds from written options |
2,707,844 | |
Return of capital received from investment in MLPs |
8,588,627 | |
Net realized gain/loss on investments and written options |
(16,251,093) | |
Net change in unrealized appreciation/depreciation on investments and written options |
2,924,290 | |
Changes in assets and liabilities: | ||
Decrease in income taxes receivable |
1,703 | |
Increase in interest receivable |
(80,147) | |
Increase in dividend reclaims receivable |
(17,419) | |
Increase in dividends receivable |
(300,328) | |
Decrease in prepaid expenses |
741 | |
Increase in due to custodian |
9 | |
Increase in interest and fees payable on loan |
50,681 | |
Increase in investment advisory fees payable |
11,954 | |
Increase in audit and tax fees payable |
9 | |
Increase in legal fees payable |
17,568 | |
Increase in shareholder reporting fees payable |
1,272 | |
Increase in administrative fees payable |
375 | |
Increase in custodian fees payable |
3,115 | |
Increase in transfer agent fees payable |
141 | |
Decrease in trustees’ fees and expenses payable |
(610) | |
Increase in other liabilities payable |
1,099 | |
Cash provided by operating activities |
$6,173,187 | |
Cash flows from financing activities: | ||
Repurchase of Common Shares |
(1,310,482) | |
Distributions to Common Shareholders from investment operations |
(10,564,660) | |
Proceeds from borrowing |
2,000,000 | |
Cash used in financing activities |
(9,875,142) | |
Decrease in cash and foreign currency (a) |
(3,701,955) | |
Cash at beginning of period |
3,701,955 | |
Cash at end of period |
$— | |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest and fees |
$2,024,554 | |
Cash paid during the period for taxes |
$11,961 |
(a) | Includes net change in unrealized appreciation (depreciation) on foreign currency of $(54). |
Year Ended October 31, | |||||||||
2023 | 2022 | 2021 | 2020 | 2019 | |||||
Net asset value, beginning of period |
$ 7.11 | $ 6.44 | $ 4.73 | $ 9.41 | $ 9.43 | ||||
Income from investment operations: | |||||||||
Net investment income (loss) |
0.13 (a) | 0.26 | 0.48 | (1.07) | 0.12 | ||||
Net realized and unrealized gain (loss) |
0.44 | 0.82 | 1.65 | (2.93) | 0.76 (b) | ||||
Total from investment operations |
0.57 | 1.08 | 2.13 | (4.00) | 0.88 | ||||
Distributions paid to shareholders from: | |||||||||
Net investment income |
— | (0.03) | (0.03) | — | — | ||||
Net realized gain |
(0.45) | (0.42) | (0.42) | — | (0.25) | ||||
Return of capital |
— | — | — | (0.68) | (0.65) | ||||
Total distributions paid to Common Shareholders |
(0.45) | (0.45) | (0.45) | (0.68) | (0.90) | ||||
Common Share repurchases |
0.01 | 0.04 | 0.03 | 0.00 (c) | — | ||||
Net asset value, end of period |
$ | $7.11 | $6.44 | $4.73 | $9.41 | ||||
Market value, end of period |
$ | $6.08 | $5.80 | $3.66 | $8.66 | ||||
Total return based on net asset value (d) |
9.57% | 19.00% | 48.22% | (43.24)% | 10.34% (b) | ||||
Total return based on market value (d) |
18.22% | 12.99% | 72.51% | (52.28)% | 10.70% | ||||
Net assets, end of period (in 000’s) |
$ 169,645 | $ 168,126 | $ 159,157 | $ 121,183 | $ 241,815 | ||||
Portfolio turnover rate |
33% | 57% | 126% | 113% | 74% | ||||
Ratios of expenses to average net assets: | |||||||||
Including current and deferred income taxes (e) |
2.70% | 2.15% | 2.34% | 5.51% (f) | 2.89% | ||||
Excluding current and deferred income taxes |
2.69% | 2.22% | 2.14% | 5.34% (f) | 2.86% | ||||
Excluding current and deferred income taxes and interest expense |
1.50% | 1.49% | 1.50% | 1.58% | 1.58% | ||||
Ratios of net investment income (loss) to average net assets: | |||||||||
Net investment income (loss) ratio before tax expenses |
0.06% | 0.17% | (0.13)% | (3.40)% (f) | (0.90)% | ||||
Net investment income (loss) ratio including tax expenses (e) |
0.05% | 0.24% | (0.32)% | (3.57)% (f) | (0.93)% | ||||
Indebtedness: | |||||||||
Total loan outstanding (in 000’s) |
$ 44,900 | $ 42,900 | $ 40,400 | $ 33,400 | $ 89,000 | ||||
Asset coverage per $1,000 of indebtedness (g) |
$ 4,778 | $ 4,919 | $ 4,940 | $ 4,628 | $ 3,717 |
(a) | Based on average shares outstanding. |
(b) | During the fiscal year ended October 31, 2019, the Fund received a reimbursement from the sub-advisor in the amount of $228 in connection with a trade error, which represents less than $0.01 per share. Since the sub-advisor reimbursed the Fund, there was no effect on the Fund’s total return. |
(c) | Amount represents less than $0.01 per share. |
(d) | Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan, and changes in net asset value per share for net asset value returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results. |
(e) | Includes current and deferred income taxes associated with each component of the Statement of Operations. |
(f) | This ratio includes breakage fees. If breakage fees had not been included, these expense ratios would have been 2.81% lower and the net investment income ratios would have been 2.81% higher. |
(g) | Calculated by subtracting the Fund’s total liabilities (not including the loan outstanding) from the Fund’s total assets, and dividing by the outstanding loan balance in 000’s. |
1) | the last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price; |
2) | the type of security; |
3) | the size of the holding; |
4) | the initial cost of the security; |
5) | transactions in comparable securities; |
6) | price quotes from dealers and/or third-party pricing services; |
7) | relationships among various securities; |
8) | information obtained by contacting the issuer, analysts, or the appropriate stock exchange; |
9) | an analysis of the issuer’s financial statements; |
10) | the existence of merger proposals or tender offers that might affect the value of the security; and |
11) | other relevant factors. |
1) | the last sale price on the exchange on which they are principally traded; |
2) | the value of similar foreign securities traded on other foreign markets; |
3) | ADR trading of similar securities; |
4) | closed-end fund or exchange-traded fund trading of similar securities; |
5) | foreign currency exchange activity; |
6) | the trading prices of financial products that are tied to baskets of foreign securities; |
7) | factors relating to the event that precipitated the pricing problem; |
8) | whether the event is likely to recur; |
9) | whether the effects of the event are isolated or whether they affect entire markets, countries or regions; and |
10) | other relevant factors. |
• | Level 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
• | Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following: |
o | Quoted prices for similar investments in active markets. |
o | Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly. |
o | Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates). |
o | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the investment. |
Current federal income tax benefit (expense) |
$ — |
Current state income tax benefit (expense) |
(13,665) |
Current foreign income tax benefit (expense) |
— |
Deferred federal income tax benefit (expense) |
— |
Deferred state income tax benefit (expense) |
— |
Total income tax benefit (expense) |
$(13,665) |
Federal net operating loss |
$1,172,107 |
State net operating loss |
2,159,029 |
State income taxes |
— |
Federal and state capital loss carryforward |
15,163,402 |
Other |
— |
Total deferred tax assets |
18,494,538 |
Less: federal valuation allowance |
(7,048,043) |
Less: state valuation allowance |
(2,817,352) |
Net deferred tax assets |
$8,629,143 |
Deferred tax liabilities: | |
Unrealized gains on investment securities |
$(8,629,143) |
Total deferred tax liabilities |
(8,629,143) |
Total net deferred tax liabilities |
$— |
Application of statutory income tax rate |
$ 2,815,679 |
State income taxes, net |
67,525 |
Change in valuation allowance |
(2,609,379) |
Current year change in tax rate |
— |
Other |
(260,160) |
Total |
$ 13,665 |
Fiscal Year | Amount Generated | Prior
Year Amount Utilized |
Current
Year Amount Utilized |
Amount Expired | Remaining | Expiration | ||||||
2018 | $ 7,227,948 | $ (2,435,437) | $ (4,792,511) | $ — | $ — | 10/31/2023 | ||||||
2020 | 76,657,602 | — | (10,226,391) | — | 66,431,211 | 10/31/2025 | ||||||
$ 83,885,550 | $ (2,435,437) | $ (15,018,902) | $ — | $ 66,431,211 |
Tax Cost | Gross Unrealized Appreciation |
Gross Unrealized (Depreciation) |
Net
Unrealized Appreciation (Depreciation) | |||
$174,623,153 | $50,391,496 | $(12,265,850) | $38,125,646 |
Asset Derivatives | Liability Derivatives | |||||||||
Derivative Instrument |
Risk Exposure |
Statement
of Assets and Liabilities Location |
Value | Statement
of Assets and Liabilities Location |
Value | |||||
Written Options | Equity Risk | — | $ — | Options written, at value | $ 268,637 |
Statement of Operations Location | |
Equity Risk Exposure | |
Net realized gain (loss) before taxes on written options contracts | $2,145,719 |
Net change in unrealized appreciation (depreciation) before taxes on written options contracts | (121,460) |
(1) | If Common Shares are trading at or above net asset value (“NAV”) at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date. |
(2) | If Common Shares are trading below NAV at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants’ accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market within 30 days of the valuation date except where temporary curtailment or suspension of purchases is necessary to comply with federal securities laws. Interest will not be paid on any uninvested cash payments. |
• | The Fund invests at least 85% of its Managed Assets in equity and debt securities of MLPs, MLP related entities and other energy sector and energy utility companies that the Fund’s Sub-Advisor believes offer opportunities for growth and income. |
• | The Fund may invest up to 20% of its Managed Assets in unregistered or otherwise restricted securities, including MLP common units, MLP subordinated units and securities of public and private energy sector and energy utilities companies. |
• | The Fund may invest up to 20% of its Managed Assets in debt securities of MLPs, MLP-related entities and other energy sector and energy utilities companies, including certain below investment grade securities. |
• | The Fund will not invest more than 15% of its Managed Assets in any single issuer. |
• | The Fund will not engage in short sales, except in connection with the execution of its covered call options strategy and except to the extent the Fund engages in derivative investments to seek to hedge against interest rate risk in connection with the Fund’s use of leverage or market risks associated with the Fund’s portfolio. |
• | The Fund may invest up to 30% of its Managed Assets in non-U.S. securities and may hedge the currency risk of such non-U.S. securities. |
• | The Fund may write (or sell) covered call options on up to 35% of its Managed Assets. |
NOT FDIC INSURED | NOT BANK GUARANTEED | MAY LOSE VALUE |
Assumed Portfolio Total Return (Net of Expenses) |
-10% | -5% | 0% | 5% | 10% |
Common Share Total Return |
- |
- |
- |
Name, Year of Birth and Position with the Fund | Term of Office and Year First Elected or Appointed(1) | Principal
Occupations During Past 5 Years |
Number of Portfolios in the First Trust Fund Complex Overseen by Trustee | Other Trusteeships or Directorships Held by Trustee During Past 5 Years |
INDEPENDENT TRUSTEES | ||||
Richard
E. Erickson, Trustee (1951) |
• Three Year Term• Since Fund Inception | Retired; Physician, Edward-Elmhurst Medical Group (2021 to September 2023); Physician and Officer, Wheaton Orthopedics (1990 to 2021) | 254 | None |
Thomas
R. Kadlec, Trustee (1957) |
• Three Year Term• Since Fund Inception | Retired; President, ADM Investor Services, Inc. (Futures Commission Merchant) (2010 to July 2022) | 254 | Director, National Futures Association and ADMIS Singapore Ltd.; Formerly, Director of ADM Investor Services, Inc., ADM Investor Services International, ADMIS Hong Kong Ltd., and Futures Industry Association |
Denise
M. Keefe, Trustee (1964) |
• Three Year Term• Since 2021 | Executive Vice President, Advocate Aurora Health and President, Advocate Aurora Continuing Health Division (Integrated Healthcare System) | 254 | Director and Board Chair of Advocate Home Health Services, Advocate Home Care Products and Advocate Hospice; Director and Board Chair of Aurora At Home (since 2018); Director of Advocate Physician Partners Accountable Care Organization; Director of RML Long Term Acute Care Hospitals; Director of Senior Helpers (since 2021); and Director of MobileHelp (since 2022) |
Robert
F. Keith, Trustee (1956) |
• Three Year Term• Since Fund Inception | President, Hibs Enterprises (Financial and Management Consulting) | 254 | Formerly, Director of Trust Company of Illinois |
Niel
B. Nielson, Trustee (1954) |
• Three Year Term• Since Fund Inception | Senior Advisor (2018 to Present), Managing Director and Chief Operating Officer (2015 to 2018), Pelita Harapan Educational Foundation (Educational Products and Services) | 254 | None |
(1) | Currently, Richard E. Erickson and Thomas R. Kadlec, as Class II Trustees, are serving as trustees until the Fund’s 2024 annual meeting of shareholders. James A. Bowen, Niel B. Nielson and Bronwyn Wright, as Class III Trustees, are serving as trustees until the Fund’s 2025 annual meeting of shareholders. Denise M. Keefe and Robert F. Keith, as Class I Trustees, are serving as trustees until the Fund’s 2026 annual meeting of shareholders. |
Name, Year of Birth and Position with the Fund | Term of Office and Year First Elected or Appointed(1) | Principal
Occupations During Past 5 Years |
Number of Portfolios in the First Trust Fund Complex Overseen by Trustee | Other Trusteeships or Directorships Held by Trustee During Past 5 Years |
Bronwyn
Wright, Trustee (1971) |
• Three Year Term• Since 2023 | Independent Director to a number of Irish collective investment funds (2009 to Present); Various roles at international affiliates of Citibank (1994 to 2009), including Managing Director, Citibank Europe plc and Head of Securities and Fund Services, Citi Ireland (2007 to 2009) | 229 | None |
INTERESTED TRUSTEE | ||||
James
A. Bowen(2), Trustee and Chairman of the Board (1955) |
• Three Year Term• Since Fund Inception | Chief Executive Officer, First Trust Advisors L.P. and First Trust Portfolios L.P.; Chairman of the Board of Directors, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) | 254 | None |
Name and Year of Birth | Position and Offices with Fund | Term of Office and Length of Service | Principal
Occupations During Past 5 Years |
OFFICERS(3) | |||
James
M. Dykas (1966) |
President and Chief Executive Officer | • Indefinite
Term • Since 2016 |
Managing Director and Chief Financial Officer, First Trust Advisors L.P. and First Trust Portfolios L.P.; Chief Financial Officer, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) |
Derek
D. Maltbie (1972) |
Treasurer, Chief Financial Officer and Chief Accounting Officer | • Indefinite
Term • Since 2023 |
Senior Vice President, First Trust Advisors L.P. and First Trust Portfolios L.P., July 2021 to Present. Previously, Vice President, First Trust Advisors L.P. and First Trust Portfolios L.P., 2014 to 2021. |
W.
Scott Jardine (1960) |
Secretary and Chief Legal Officer | • Indefinite
Term • Since Fund Inception |
General Counsel, First Trust Advisors L.P. and First Trust Portfolios L.P.; Secretary and General Counsel, BondWave LLC; Secretary, Stonebridge Advisors LLC |
Daniel
J. Lindquist (1970) |
Vice President | • Indefinite
Term • Since Fund Inception |
Managing Director, First Trust Advisors L.P. and First Trust Portfolios L.P. |
Kristi
A. Maher (1966) |
Chief Compliance Officer and Assistant Secretary | • Indefinite
Term • Since Fund Inception |
Deputy General Counsel, First Trust Advisors L.P. and First Trust Portfolios L.P. |
(1) | Currently, Richard E. Erickson and Thomas R. Kadlec, as Class II Trustees, are serving as trustees until the Fund’s 2024 annual meeting of shareholders. James A. Bowen, Niel B. Nielson and Bronwyn Wright, as Class III Trustees, are serving as trustees until the Fund’s 2025 annual meeting of shareholders. Denise M. Keefe and Robert F. Keith, as Class I Trustees, are serving as trustees until the Fund’s 2026 annual meeting of shareholders. |
(2) | Mr. Bowen is deemed an “interested person” of the Fund due to his position as CEO of First Trust Advisors L.P., investment advisor of the Fund. |
(3) | The term “officer” means the president, vice president, secretary, treasurer, controller or any other officer who performs a policy making function. |
• | Information we receive from you and your broker-dealer, investment professional or financial representative through interviews, applications, agreements or other forms; |
• | Information about your transactions with us, our affiliates or others; |
• | Information we receive from your inquiries by mail, e-mail or telephone; and |
• | Information we collect on our website through the use of “cookies.” For example, we may identify the pages on our website that your browser requests or visits. |
• | In order to provide you with products and services and to effect transactions that you request or authorize, we may disclose your personal information as described above to unaffiliated financial service providers and other companies that perform administrative or other services on our behalf, such as transfer agents, custodians and trustees, or that assist us in the distribution of investor materials such as trustees, banks, financial representatives, proxy services, solicitors and printers. |
• | We may release information we have about you if you direct us to do so, if we are compelled by law to do so, or in other legally limited circumstances (for example to protect your account from fraud). |
(b) Not applicable.
Item 2. Code of Ethics.
(a) | The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. |
(c) | There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. |
(d) | The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions. |
(e) Not applicable.
(f) A copy of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller is filed as an exhibit pursuant to Item 13(a)(1).
Item 3. Audit Committee Financial Expert.
As of the end of the period covered by the report, the registrant’s board of trustees has determined that Thomas R. Kadlec, Robert F. Keith and Bronwyn Wright are qualified to serve as audit committee financial experts serving on its audit committee and that each of them is “independent,” as defined by Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees (Registrant) -- The aggregate fees billed for the last fiscal year for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal year was $59,000 for the fiscal year ended October 31, 2022 and $59,000 for the fiscal year ended October 31, 2023. |
(b) | Audit-Related Fees (Registrant) -- The aggregate fees billed in the last fiscal year for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 for the fiscal year ended October 31, 2022 and $0 for the fiscal year ended October 31, 2023. |
Audit-Related Fees (Investment Advisor) -- The aggregate fees billed in the last fiscal year for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 for the fiscal year ended October 31, 2022 and $0 for the fiscal year ended October 31, 2023.
(c) | Tax Fees (Registrant) -- The aggregate fees billed in the last fiscal year for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were $47,000 for the fiscal year ended October 31, 2022 and $42,187 for the fiscal year ended October 31, 2023. These fees were for tax consultation and/or tax return preparation and professional services rendered for PFIC (Passive Foreign Investment Company) Identification Services. |
Tax Fees (Investment Advisor) -- The aggregate fees billed in the last fiscal year for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were $0 for the fiscal year ended October 31, 2022 and $0 for the fiscal year ended October 31, 2023.
(d) | All Other Fees (Registrant) -- The aggregate fees billed in the last fiscal year for products and services provided by the principal accountant to the registrant, other than the services reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year ended October 31, 2022 and $0 for the fiscal year ended October 31, 2023. |
All Other Fees (Investment Advisor) The aggregate fees billed in the last fiscal year for products and services provided by the principal accountant to the registrant, other than the services reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year ended October 31, 2022 and $0 for the fiscal year ended October 31, 2023.
(e)(1) | Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. |
Pursuant to its charter and its Audit and Non-Audit Services Pre-Approval Policy, the Audit Committee (the “Committee”) is responsible for the pre-approval of all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the registrant by its independent auditors. The Chairman of the Committee is authorized to give such pre-approvals on behalf of the Committee up to $25,000 and report any such pre-approval to the full Committee.
The Committee is also responsible for the pre-approval of the independent auditor’s engagements for non-audit services with the registrant’s advisor (not including a sub-advisor whose role is primarily portfolio management and is sub-contracted or overseen by another investment advisor) and any entity controlling, controlled by or under common control with the investment advisor that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant, subject to the de minimis exceptions for non-audit services described in Rule 2-01 of Regulation S-X. If the independent auditor has provided non-audit services to the registrant’s advisor (other than any sub-advisor whose role is primarily portfolio management and is sub-contracted with or overseen by another investment advisor) and any entity controlling, controlled by or under common control with the investment advisor that provides ongoing services to the registrant that were not pre-approved pursuant to its policies, the Committee will consider whether the provision of such non-audit services is compatible with the auditor’s independence.
(e)(2) | The percentage of services described in each of paragraphs (b) through (d) for the registrant and the registrant’s investment advisor of this Item that were approved by the audit committee pursuant to the pre-approval exceptions included in paragraph (c)(7)(i)(c) or paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows: |
Registrant: | Advisor and Distributor: |
(b) 0% | (b) 0% |
(c) 0% | (c) 0% |
(d) 0% | (d) 0% |
(f) | The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than fifty percent. |
(g) | The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor), and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant for the registrant’s fiscal year ended October 31, 2022 were $47,000 for the registrant and $0 for the registrant’s investment advisor and for the fiscal year ended October 31, 2023 were $44,000 for the registrant and $31,000 for the registrant’s investment advisor. |
(h) | The registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor), and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
(i) | Not applicable. |
(j) | Not applicable. |
Item 5. Audit Committee of Listed Registrants.
(a) | The registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 consisting of all the independent directors of the registrant. The audit committee of the registrant is comprised of: Richard E. Erickson, Thomas R. Kadlec, Denise M. Keefe, Robert F. Keith, Niel B. Nielson and Bronwyn Wright. |
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
A description of the policies and procedures used to vote proxies on behalf of the Fund is attached as an exhibit.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1) Identification of Portfolio Managers or Management Team Members and Description of Role of Portfolio Managers or Management Team Members
Information provided as of November 14, 2023.
Energy Income Partners, LLC
Energy Income Partners, LLC (“EIP”), located in Westport, CT, was founded in 2003 to provide professional asset management services in publicly traded energy-related infrastructure companies with above average dividend payout ratios operating pipelines and related storage and handling facilities, electric power transmission and distribution as well as long contracted or regulated power generation from renewables and other sources. The corporate structure of the portfolio companies includes C-corporations, partnerships and energy infrastructure real estate investment trusts. EIP mainly focuses on investments in assets that receive steady fee-based or regulated income from their corporate and individual customers. EIP manages or supervises approximately $5.2 billion of assets as of October 31, 2023. EIP advises two privately offered partnerships for U.S. high net worth individuals and an open-end mutual fund. EIP also manages separately managed accounts and provides its model portfolio to unified managed accounts. Finally, EIP serves as a sub-advisor to three closed-end management investment companies in addition to the Fund, two actively managed exchange-traded funds, a sleeve of an actively managed exchange-traded fund and a sleeve of a series of variable insurance trust. EIP is a registered investment advisor with the Securities and Exchange Commission.
James J. Murchie, Co-Portfolio Manager
James J. Murchie is the Founder, Chief Executive Officer, co-portfolio manager and a Principal of Energy Income Partners. After founding Energy Income Partners in October 2003, Mr. Murchie and the Energy Income Partners investment team joined Pequot Capital Management Inc. (“Pequot Capital”) in December 2004. In August 2006, Mr. Murchie and the Energy Income Partners investment team left Pequot Capital and re-established Energy Income Partners. Prior to founding Energy Income Partners, Mr. Murchie was a Portfolio Manager at Lawhill Capital Partners, LLC (“Lawhill Capital”), a long/short equity hedge fund investing in commodities and equities in the energy and basic industry sectors. Before Lawhill Capital, Mr. Murchie was a Managing Director at Tiger Management, LLC, where his primary responsibility was managing a portfolio of investments in commodities and related equities. Mr. Murchie was also a Principal at Sanford C. Bernstein. He began his career at British Petroleum, PLC. Mr. Murchie holds a BA from Rice University and an MA from Harvard University.
Eva Pao, Co-Portfolio Manager
Eva Pao is a Principal of Energy Income Partners and is co-portfolio manager. She has been with EIP since inception in 2003. From 2005 to mid-2006, Ms. Pao joined Pequot Capital Management during EIP’s affiliation with Pequot. Prior to Harvard Business School, Ms. Pao was a Manager at Enron Corp where she managed a portfolio in Canadian oil and gas equities for Enron’s internal hedge fund that specialized in energy-related equities and managed a natural gas trading book. Ms. Pao holds degrees from Rice University and Harvard Business School.
John K. Tysseland, Co-Portfolio Manager
John Tysseland is a Principal and co-portfolio manager. From 2005 to 2014, he worked at Citi Research most currently serving as a Managing Director where he covered midstream energy companies and MLPs. From 1998 to 2005, he worked at Raymond James & Associates as a Vice President who covered the oilfield service industry and established the firm’s initial coverage of MLPs in 2001. Prior to that, he was an Equity Trader at Momentum Securities from 1997 to 1998 and an Assistant Executive Director at Sumar Enterprises from 1996 to 1997. He graduated from The University of Texas at Austin in 1996 with a BA in economics.
(a)(2) | Other Accounts Managed by Portfolio Managers or Management Team Member and Potential Conflicts of Interest |
Information provided as of November 14, 2023.
Name of Portfolio Manager or Team Member | Type of Accounts* | Total # of Accounts Managed |
Total Assets | # of Accounts Managed for which Advisory Fee is Based on Performance | Total Assets for which Advisory Fee is Based on Performance |
1. James Murchie | Registered Investment Companies: | 8 | 3,820,000,000 | 0 | $0 |
Other Pooled Investment Vehicles: | 2 | 151,000,000 | 2 | 151,000,000 | |
Other Accounts: | 138 | 756,000,000 | 0 | $0 | |
2. Eva Pao | Registered Investment Companies: | 8 | 3,820,000,000 | 0 | $0 |
Other Pooled Investment Vehicles: | 2 | 151,000,000 | 2 | 151,000,000 | |
Other Accounts: | 138 | 756,000,000 | 0 | $0 | |
3. John Tysseland | Registered Investment Companies: | 8 | 3,820,000,000 | 0 | $0 |
Other Pooled Investment Vehicles: | 2 | 151,000,000 | 2 | 151,000,000 | |
Other Accounts: | 138 | 756,000,000 | 0 | $0 |
*Information excludes the registrant
Portfolio Manager Potential Conflicts of Interests
Potential conflicts of interest may arise when a fund’s portfolio manager has day-to-day management responsibilities with respect to one or more other funds or other accounts, as is the case for the portfolio managers of the Fund. These potential conflicts may include:
Besides the Fund, Energy Income Partners, LLC (“EIP”) portfolio managers serves as portfolio managers to separately managed accounts and provides its model portfolio to unified managed accounts and serve as portfolio managers to three closed-end management investment companies other than the Fund, three actively managed exchange-traded funds (ETFs), a sleeve of an ETF, and a sleeve of a series of a variable insurance trust. The portfolio managers also serve as portfolio managers two private investment funds (the “Private Funds”), both of which have a performance fee and an open end registered mutual fund.
EIP has written policies and procedures regarding order aggregation and allocation that seek to ensure that all accounts are treated fairly and equitably and that no account is at a disadvantage. EIP will generally execute client transactions on an aggregated basis when EIP believes that to do so will allow it to obtain best execution and to negotiate more favorable commission rates or avoid certain transaction costs that might have otherwise been paid had such orders been placed independently. EIP’s ability to implement this may be limited by an account’s custodian, directed brokerage arrangements or other constraints limiting EIP’s use of a common executing broker.
An aggregated order may be allocated on a basis different from that specified herein provided that all clients receive fair and equitable treatment and there is a legitimate reason for the different allocation. Reasons for deviation may include (but are not limited to): a client’s investment guidelines and restrictions, available cash, liquidity or legal reasons, and to avoid odd-lots or in cases when an allocation would result in a de minimis allocation to one or more clients.
Notwithstanding the above, due to differing tax ramifications and compliance ratios, as well as dissimilar risk constraints and tolerances, accounts with similar investment mandates may trade the same securities at differing points in time. Additionally, for the reasons noted above, certain accounts, including funds in which EIP, its affiliates and/or employees (“EIP Funds”) have a financial interest including proprietary accounts, may trade separately from other accounts and participate in transactions which are deemed to be inappropriate for other accounts with similar investment mandates. Further, during periods in which EIP intends to trade the same securities across multiple accounts, transactions for those accounts that must be traded through specific brokers and/or platforms will often be executed after those for accounts over which EIP exercises full brokerage discretion, including the EIP Funds.
(a)(3) Compensation Structure of Portfolio Managers or Management Team Members
Portfolio Manager Compensation
Information provided as of November 14, 2023.
The Fund’s portfolio managers are compensated by a competitive minimum base salary and share in the profits of EIP in relation to their ownership of EIP. The profits of EIP are influenced by the assets under management and the performance of the Funds (i.e. all Funds managed or sub-advised by EIP) as described above. Therefore, their success is based on the growth and success for all the funds, not just the funds that charge an incentive fee. The Fund’s portfolio managers understand that you cannot have asset growth without the trust and confidence of investors, therefore, they do not engage in taking undue risk to generate performance.
The compensation of the EIP team members is determined according to prevailing rates within the industry for similar positions. EIP wishes to attract, retain and reward high quality personnel through a competitive compensation package.
(a)(4) Disclosure of Securities Ownership
Information provided as of November 14, 2023.
Name | Dollar Range of Fund Shares Beneficially Owned |
James J. Murchie | $100,001-$500,000 |
John Tysseland | $10,001-$50,000 |
(b) Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
REGISTRANT PURCHASES OF EQUITY SECURITIES
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
Month #1 (11/01/2022– 11/30/2022) |
78,261 | 6.04 | 2,130,674 |
181,828
|
Month #2 (12/01/2022– 12/31/2022) |
137,047 | 6.11 | 2,267,721 | 44,781 |
Month #3 (01/01/2023– 01/31/2023) |
0 | 0 | 0 | 0 |
Month #4 (02/01/2023– 02/28/2023) |
0 | 0 | 0 | 0 |
Month #5 (03/01/2023– 03/31/2023) |
0 | 0 | 0 | 0 |
Month #6 (04/01/2023– 04/30/2023) |
0 | 0 | 0 | 0 |
Month #7 (05/01/2023– 05/31/2023) |
0 | 0 | 0 | 0 |
Month #8 (06/01/2023– 06/30/2023) |
0 | 0 | 0 | 0 |
Month #9 (07/01/2023– 07/31/2023) |
0 | 0 | 0 | 0 |
Month #10 (08/01/2023– 08/31/2023) |
0 | 0 | 0 | 0 |
Month #11 (09/01/2023– 09/30/2023) |
0 | 0 | 0 | 0 |
Month #12 (10/01/2023– 10/31/2023) |
0 | 0 | 0 | 0 |
Total | 215,308 | $6.09 | 2,267,721 | 44,781 |
Item 10. Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a) | Not applicable. |
(b) | Not applicable. |
Item 13. Exhibits.
(a)(1) | Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(c) | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies as required by Item 7 is attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) | First Trust New Opportunities MLP & Energy Fund |
By (Signature and Title)* | /s/ James M. Dykas | |
James M. Dykas, President and Chief Executive Officer (principal executive officer) |
Date: | January 8, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ James M. Dykas | |
James M. Dykas, President and Chief Executive Officer (principal executive officer) |
Date: | January 8, 2024 |
By (Signature and Title)* | /s/ Derek D. Maltbie | |
Derek D. Maltbie, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) |
Date: | January 8, 2024 |
* Print the name and title of each signing officer under his or her signature.
SENIOR FINANCIAL OFFICER
CODE OF CONDUCT
I. Introduction
This code of conduct is being adopted by the investment companies advised by First Trust Advisors L.P., from time to time, (the "FUNDS"). The reputation and integrity of the Funds are valuable assets that are vital to the Funds' success. Each officer of the Funds, and officers and employees of the investment adviser to the Funds who work on Fund matters, including each of the Funds' senior financial officers ("SFOS"), is responsible for conducting each Fund's business in a manner that demonstrates a commitment to the highest standards of integrity. SFOs include the Principal Executive Officer (who is the President), the Controller (who is the principal accounting officer), and the Treasurer (who is the principal financial officer), and any person who performs a similar function.
The Funds, First Trust Advisors L.P. and First Trust Portfolios have adopted Codes of Ethics under Rule 17j-1 under the Investment Company Act of 1940 (the "RULE 17J-1 CODE"). These Codes of Ethics are designed to prevent certain conflicts of interest that may arise when officers, employees, or directors of the Funds and the foregoing entities know about present or future Fund transactions and/or have the power to influence those transactions, and engage in transactions with respect to those same securities in their personal account(s) or otherwise take advantage of their position and knowledge with respect to those securities. In an effort to prevent these conflicts and in accordance with Rule 17j-1, the Funds adopted their Rule 17j-1 Code to prohibit transactions and conduct that create conflicts of interest, and to establish compliance procedures.
The Sarbanes-Oxley Act of 2002 was designed to address corporate malfeasance and to help assure investors that the companies in which they invest are accurately and completely disclosing financial information. Under Section 406 of the Act, all public companies (including the Funds) must either have a code of ethics for their SFOs, or disclose why they do not. The Act was intended to prevent future situations (such as occurred in well-reported situations involving such companies as Enron and WorldCom) where a company creates an environment in which employees are afraid to express their opinions or to question unethical and potentially illegal business practices.
The Funds have chosen to adopt a senior financial officer Code of Conduct to encourage their SFOs, and other Fund officers and employees of First Trust Advisors or First Trust Portfolios to act ethically and to question potentially unethical or illegal practices, and to strive to ensure that the Funds' financial disclosures are complete, accurate, and understandable.
II. Purposes of This Code of Conduct
The purposes of this Code are:
A. To promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
B. To promote full, fair, accurate, timely, and understandable disclosure in reports and documents that the Funds file with, or submits to, the SEC and in other public communications the Funds make;
C. To promote compliance with applicable governmental laws, rules and regulations;
D. To encourage the prompt internal reporting to an appropriate person of violations of the Code; and
E. To establish accountability for adherence to the Code.
III. Questions About This Code
The Funds' Boards of Trustees have designated W. Scott Jardine or other appropriate officer designated by the President of the respective Funds to be the Compliance Coordinator for the implementation and administration of the Code.
IV. Handling of Financial Information
The Funds have adopted guidelines under which its SFOs perform their duties. However, the Funds expect that all officers or employees of the adviser or distributor who participate in the preparation of any part of any Fund's financial statements follow these guidelines with respect to each Fund:
A. Act with honesty and integrity and avoid violations of this Code, including actual or apparent conflicts of interest with the Fund in personal and professional relationships.
B. Disclose to the Fund's Compliance Coordinator any material transaction or relationship that reasonably could be expected to give rise to any violations of the Code, including actual or apparent conflicts of interest with the Fund. You should disclose these transactions or relationships whether you are involved or have only observed the transaction or relationship. If it is not possible to disclose the matter to the Compliance Coordinator, it should be disclosed to the Fund's Principal Financial Officer or Principal Executive Officer.
C. Provide information to the Fund's other officers and appropriate employees of service providers (adviser, administrator, outside auditor, outside counsel, custodian, etc.) that is accurate, complete, objective, relevant, timely, and understandable.
D. Endeavor to ensure full, fair, timely, accurate, and understandable disclosure in the Fund's periodic reports.
E. Comply with the federal securities laws and other applicable laws and rules, such as the Internal Revenue Code.
F. Act in good faith, responsibly, and with due care, competence and diligence, without misrepresenting material facts or allowing your independent judgment to be subordinated.
G. Respect the confidentiality of information acquired in the course of your work except when you have Fund approval to disclose it or where disclosure is otherwise legally mandated. You may not use confidential information acquired in the course of your work for personal advantage.
H. Share and maintain skills important and relevant to the Fund's needs.
I. Proactively promote ethical behavior among peers in your work environment.
J. Responsibly use and control all assets and resources employed or entrusted to you.
K. Record or participate in the recording of entries in the Fund's books and records that are accurate to the best of your knowledge.
V. Waivers of This Code
SFOs and other parties subject to this Code may request a waiver of a provision of this Code (or certain provisions of the Fund's Rule 17j-1 Code) by submitting their request in writing to the Compliance Coordinator for appropriate review. An executive officer of the Fund or the Audit Committee will decide whether to grant a waiver. All waivers of this Code must be disclosed to the Fund's shareholders to the extent required by SEC rules. A good faith interpretation of the provisions of this Code, however, shall not constitute a waiver.
VI. Annual Certification
Each SFO will be asked to certify on an annual basis that he/she is in full compliance with the Code and any related policy statements.
VII. Reporting Suspected Violations
A. SFOs or other officers of the Funds or employees of the First Trust group who work on Fund matters who observe, learn of, or, in good faith, suspect a violation of the Code MUST immediately report the violation to the Compliance Coordinator, another member of the Funds' or First Trust's senior management, or to the Audit Committee of the Fund Board. An example of a possible Code violation is the preparation and filing of financial disclosure that omits material facts, or that is accurate but is written in a way that obscures its meaning.
B. Because service providers such as an administrator, outside accounting firm, and custodian provide much of the work relating to the Funds' financial statements, you should be alert for actions by service providers that may be illegal, or that could be viewed as dishonest or unethical conduct. You should report these actions to the Compliance Coordinator even if you know, or think, that the service provider has its own code of ethics for its SFOs or employees.
C. SFOs or other officers or employees who report violations or suspected violations in good faith will not be subject to retaliation of any kind. Reported violations will be investigated and addressed promptly and will be treated confidentially to the extent possible.
VIII. Violations of The Code
A. Dishonest, unethical or illegal conduct will constitute a violation of this Code, regardless of whether this Code specifically refers to that particular conduct. A violation of this Code may result in disciplinary action, up to and including termination of employment. A variety of laws apply to the Funds and their operations, including the Securities Act of 1933, the Investment Company Act of 1940, state laws relating to duties owed by Fund directors and officers, and criminal laws. The federal securities laws generally prohibit the Funds from making material misstatements in its prospectus and other documents filed with the SEC, or from omitting to state a material fact. These material misstatements and omissions include financial statements that are misleading or omit materials facts.
B. Examples of criminal violations of the law include stealing, embezzling, misapplying corporate or bank funds, making a payment for an expressed purpose on a Fund's behalf to an individual who intends to use it for a different purpose; or making payments, whether corporate or personal, of cash or other items of value that are intended to influence the judgment or actions of political candidates, government officials or businesses in connection with any of the Funds' activities. The Funds must and will report all suspected criminal violations to the appropriate authorities for possible prosecution, and will investigate, address and report, as appropriate, non-criminal violations.
Amended: June 1, 2009
Certification Pursuant to Rule 30a-2(a) under
the 1940 Act and Section 302
of the Sarbanes-Oxley Act
I, James M. Dykas, certify that:
1. | I have reviewed this report on Form N-CSR of First Trust New Opportunities MLP & Energy Fund; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | January 8, 2024 | /s/ James M. Dykas | |||
James M. Dykas, President and Chief Executive Officer (principal executive officer) |
Certification Pursuant to Rule 30a-2(a) under
the 1940 Act and Section 302
of the Sarbanes-Oxley Act
I, Derek D. Maltbie, certify that:
1. | I have reviewed this report on Form N-CSR of First Trust New Opportunities MLP & Energy Fund; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | January 8, 2024 | /s/ Derek D. Maltbie | |||
Derek D. Maltbie, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) |
Certification Pursuant to Rule 30a-2(b) under the
1940 Act and Section 906
of the Sarbanes-Oxley Act
I, James M. Dykas, President and Chief Executive Officer of First Trust New Opportunities MLP & Energy Income Fund (the “Registrant”), certify that:
1. | The Form N-CSR of the Registrant (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: | January 8, 2024 | /s/ James M. Dykas | |||
James M. Dykas, President and Chief Executive Officer (principal executive officer) |
I, Derek D. Maltbie, Treasurer, Chief Financial Officer and Chief Accounting Officer of First Trust New Opportunities MLP & Energy Fund (the “Registrant”), certify that:
1. | The Form N-CSR of the Registrant (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Date: | January 8, 2024 | /s/ Derek D. Maltbie | |||
Derek D. Maltbie, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) |
ENERGY INCOME PARTNERS, LLC
Proxy Voting Policies and Procedures
If an adviser exercises voting authority with respect to client securities, Advisers Act Rule 206(4)-6 requires the adviser to adopt and implement written policies and procedures reasonably designed to ensure that client securities are voted in the best interest of the client. This is consistent with legal interpretations which hold that an adviser’s fiduciary duty includes handling the voting of proxies on securities held in client accounts over which the adviser exercises voting discretion in a manner consistent with the best interest of the client.
Absent unusual circumstances, EIP exercises voting authority with respect to securities held in client accounts pursuant to provisions in its advisory agreements. Accordingly, EIP has adopted these policies and procedures with the aim of meeting the following requirements of Rule 206(4)-6:
• | ensuring that proxies are voted in the best interest of clients; |
• | addressing material conflicts that may arise between EIP’s interests and those of its clients in the voting of proxies; |
• | disclosing to clients how they may obtain information on how EIP voted proxies with respect to the client’s securities; |
• | describing to clients EIP’s proxy voting policies and procedures and, upon request, furnishing a copy of the policies and procedures to the requesting client. |
Engagement of Institutional Shareholder Services Inc.
With the aim of ensuring that proxies are voted in the best interests of EIP clients, EIP has engaged Institutional Shareholder Services Inc. (“ISS”) as its independent proxy voting service to provide EIP with proxy voting recommendations, as well as to handle the administrative mechanics of proxy voting. EIP, after reviewing ISS’s own Proxy Voting Guidelines, has concluded that ISS’s Proxy Voting Guidelines are reasonably designed to vote proxies in the best interests of EIP’s clients, and has therefore directed ISS to utilize its Proxy Voting Guidelines in making recommendations to vote, as those guidelines may be amended from time to time.
EIP notes that it shall not override the votes that are prepopulated by ISS in accordance with its policies unless as provided below.
Notwithstanding anything herein to the contrary, from time to time, EIP may determine that voting in contravention to a recommendation made by ISS may be in the best interest of EIP’s clients. When EIP chooses to override an ISS voting recommendation, EIP will document the occurrence, including the reason(s) that it chose to do so. Documentation of any override of an ISS voting recommendation shall be reviewed at the next scheduled Brokerage Committee meeting.
In certain circumstances, voting situations may arise in which the optimal voting decision may not be easily captured by a rigid set of voting guidelines. This is particularly the case for significant corporate events, including, but not necessarily limited to, mergers and acquisitions, dissolutions, conversions and consolidations. While each such transaction is unique in its terms, conditions and potential economic
outcome, EIP will conduct such additional analysis as it deems necessary to form the voting decision that it believes is in the best interests of its clients. All records relating to such analyses will be maintained and reviewed periodically by the Chief Compliance Officer (“CCO”) or her designee.
On an annual basis, EIP’s Brokerage Committee shall be responsible for approving the ongoing use of ISS as a proxy voting service provider. Such approval shall be based upon, among other things, reviews of (1) ISS’s Proxy Voting Guidelines, including any changes thereto; (2) the results of internal testing regarding ISS’s adherence to its proxy voting guidelines; (3) periodic due diligence over ISS as described further below; and (4) any potential factual errors, potential incompleteness, or potential methodological weaknesses in ISS’s analysis that were identified and documented throughout the preceding twelve month period.
Conflicts of Interest in Proxy Voting
There may be instances where EIP’s interests conflict, or appear to conflict, with client interests in the voting of proxies. For example, EIP may provide services to, or have an investor who is a senior member of a company whose management is soliciting proxies. There may be a concern that EIP would vote in favor of management because of its relationship with the company or a senior officer. Or, for example, EIP (or its senior executive officers) may have business or personal relationships with corporate directors or candidates for directorship.
EIP addresses these conflicts or appearances of conflicts by ensuring that proxies are voted in accordance with the recommendations made by ISS which is an independent third-party proxy voting service. As previously noted, in most cases, proxies will be voted in accordance with ISS’s own pre-existing proxy voting guidelines, subject to EIP’s right to override an ISS voting recommendation. Under no circumstances will EIP override an ISS recommendation in any instance in which EIP identifies a potential conflict of interest.
Disclosure on How Proxies Were Voted
EIP will disclose to clients in Part 2A of its Form ADV how clients can obtain information on how their proxies were voted, by contacting EIP at its office in Westport, CT. EIP will also disclose in the ADV a summary of these proxy voting policies and procedures and that upon request, clients will be furnished a full copy of these policies and procedures. Finally, EIP will disclose in its ADV Part 2A, (1)the extent to which automated voting is used and (2) how these policies and procedures address the use of automated voting in the cases where it becomes aware before the submission deadline for proxies to be voted at the shareholder meeting that an issuer intends to file or has filed additional soliciting materials with the SEC regarding the matter to be voted on.
It is the responsibility of the CCO to ensure that any requests made by clients for proxy voting information are responded to in a timely fashion and that a record of requests and responses are maintained in EIP’s books and records.
Proxy Materials
EIP personnel will instruct custodians to forward to ISS all proxy materials received on securities held in EIP client accounts.
Limitations
In certain circumstances, where EIP has determined that it is consistent with the client’s best interest, EIP will not take steps to ensure that proxies are voted on securities in the client’s account. The following are circumstances where this may occur:
• | Limited Value: Proxies will not be required to be voted on securities in a client’s account if the value of the client’s economic interest in the securities is indeterminable or insignificant (less than $1,000). Proxies will also not be required to be voted for any securities that are no longer held by the client’s account. |
• | Securities Lending Program: When securities are out on loan, they are transferred into the borrower’s name and are voted by the borrower, in its discretion. In most cases, EIP will not take steps to see that loaned securities are voted. However, where EIP determines that a proxy vote, or other shareholder action is materially important to the client’s account, EIP will make a good faith effort to recall the security for purposes of voting, understanding that in certain cases, the attempt to recall the security may not be effective in time for voting deadlines to be met. |
• | Unjustifiable Costs: In certain circumstances, after doing a cost-benefit analysis, EIP may choose not to vote where the cost of voting a client’s proxy would exceed any anticipated benefits to the client of the proxy proposal. |
Oversight of Policy
The CCO will follow the following procedures with respect to the oversight of ISS in making recommendations with respect to voting client proxies:
• | Periodically, but no less frequently than semi-annually, sample proxy votes to review whether they complied with EIP’s proxy voting policies and procedures, including a review of those items that relate to certain proposals that may require more analysis (e.g., non-routine matters). |
• | Collect information, no less frequently than annually, reasonably sufficient to support the conclusion that ISS has the capacity and competency to adequately analyze proxy issues. In this regard, the CCO shall consider, among other things: |
• | the adequacy and quality of ISS’s staffing and personnel; |
• | the robustness of its policies and procedures regarding its ability to (i) ensure that its proxy voting recommendations are based on current and accurate information and (ii) identify, disclose and address any conflicts of interest; |
• | ISS’s engagement with issuers, including ISS’s process for ensuring that it has complete and accurate information about each issuer and each particular matter, and ISS’s process, if any, for EIP to access the issuer’s views about ISS’s voting recommendations in a timely and efficient manner; |
• | ISS’s efforts to correct any identified material deficiencies in its analysis; |
• | ISS’s disclosure to EIP regarding the sources of information and methodologies used in formulating voting recommendations or executing voting instructions; |
• | ISS’s consideration of factors unique to a specific issuer or proposal when evaluating a matter subject to a shareholder vote; and |
• | any other considerations that the CCO believes would be appropriate in considering the nature and quality of the services provided by ISS. |
For purposes of these procedures, the CCO may rely upon information posted by ISS on its website, provided that ISS represents that the information is complete and current.
If a circumstance occurs in which EIP becomes aware of potential factual errors, potential incompleteness, or potential methodological weaknesses in ISS’s analysis that may materially affect the voting recommendation provided by ISS, EIP shall investigate the issue in a timely manner and shall request additional information from ISS as is necessary to identify and resolve the identified discrepancy. EIP shall document the results of each such investigation and present the results to the Brokerage Committee at its next scheduled meeting.
Recordkeeping on Proxies
It is the responsibility of EIP’s CCO to ensure that the following proxy voting records are maintained:
• | a copy of EIP’s proxy voting policies and procedures; |
• | a copy of all proxy statements received on securities in client accounts (EIP may rely on ISS or the SEC’s EDGAR system to satisfy this requirement); |
• | a record of each vote cast on behalf of a client (EIP relies on ISS to satisfy this requirement); |
• | a copy of any document prepared by EIP that was material to making a voting decision or that memorializes the basis for that decision; |
• | a copy of each written client request for information on how proxies were voted on the client’s behalf or for a copy of EIP’s proxy voting policies and procedures, and |
• | a copy of any written response to any client request for information on how proxies were voted on their behalf or furnishing a copy of EIP’s proxy voting policies and procedures. |
The CCO will see that these books and records are made and maintained in accordance with the requirements and time periods provided in Rule 204-2 of the Advisers Act.
For any registered investment companies advised by EIP, votes made on its behalf will be stored electronically or otherwise recorded so that they are available for preparation of the Form N-PX, Annual Report of Proxy Voting Record of Registered Management Investment Company.
N-2 |
12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2023
$ / shares
shares
| |||||||||||||||
Cover [Abstract] | |||||||||||||||
Entity Central Index Key | 0001589420 | ||||||||||||||
Amendment Flag | false | ||||||||||||||
Entity Inv Company Type | N-2 | ||||||||||||||
Document Type | N-CSR | ||||||||||||||
Entity Registrant Name | First Trust New Opportunities MLP & Energy Fund | ||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Investment Objectives and Practices [Text Block] | Investment
Objective
The
Fund’s investment objective is to seek a high level of total return with an emphasis on current distributions paid to common shareholders.
Principal
Investment Policies
The
Fund focuses on investing in publicly traded MLPs, MLP-related entities and other companies in the energy sector and energy utility industries
that are weighted towards non-cyclical, fee-for-service revenues.
The
Fund considers investments in “MLP-related entities” to include investments that offer economic exposure to publicly traded
MLPs and private investments that have MLP characteristics, but are not publicly traded. The Fund considers investments in the “energy
sector” to include companies that derive a majority of their revenues or operating income from transporting, processing, storing,
distributing, marketing, exploring, developing, managing or producing natural gas, natural gas liquids (including propane), crude oil,
refined petroleum products, coal or electricity, or from supplying energy-related products and services, or any such other companies within
the energy sector as classified under the Global Industry Classification Standards developed by MSCI, Inc. and Standard & Poor’s
(“GICS”). The Fund considers investments in “energy utility” to include companies that derive a majority
of their revenues or operating income from providing products, services or equipment for the generation, transmission, distribution or
sale of electricity or gas and such other companies within the electric, gas, independent power and renewable electricity producers and
multi-utilities industries as classified under GICS.
In
the pursuit of its investment objective, under normal market conditions:
To
the extent the Fund enters into derivatives transactions, it will do so pursuant to Rule 18f-4 under the Investment Company Act of 1940
(the “1940 Act”). Rule 18f-4 requires the Fund to implement certain policies and procedures designed to manage its derivatives
risks, dependent upon the Fund’s level of exposure to derivative instruments.
Unless
otherwise stated, all investment restrictions above apply at the time of purchase and the Fund will not be required to reduce a position
due solely to market value fluctuations.
“Managed
Assets” means the average daily gross asset value of the Fund (which includes assets attributable to the Fund’s preferred
shares of beneficial interest, if any, and the principal amount of any borrowings and issuance of notes), minus the sum of the Fund’s
accrued and unpaid dividends on any outstanding preferred shares and accrued liabilities (other than the principal amount of any borrowings).
For purposes of determining Managed Assets, the liquidation preference of the preferred shares, if any, is not treated as a liability.
The
Fund’s investment policies may be changed by the Board of Trustees of the Fund without a shareholder vote, provided that shareholders
receive at least 60 days’ prior notice of any change. Fundamental
Investment Policies
The
Fund, as a fundamental policy, may not:
1)
Issue senior securities, as defined in the 1940 Act, other than (i) preferred shares which immediately after issuance will have asset
coverage of at least 200%, (ii) indebtedness which immediately after issuance will have asset coverage of at least 300%, or (iii) the
borrowings permitted by investment restriction (2) set forth below;
2)
Borrow money, except as permitted by the 1940 Act, as amended, the rules thereunder and interpretations thereof or pursuant to a Securities
and Exchange Commission exemptive order;
3)
Act as underwriter of another issuer’s securities, except to the extent that the Fund may be deemed to be an underwriter within
the meaning of the Securities Act of 1933 in connection with the purchase and sale of portfolio securities;
4)
Purchase or sell real estate, but this shall not prevent the Fund from investing in securities of companies that deal in real estate or
are engaged in the real estate business, including real estate investment trusts, and securities secured by real estate or interests therein
and the Fund may hold and sell real estate or mortgages on real estate acquired through default, liquidation, or other distributions of
an interest in real estate as a result of the Fund’s ownership of such securities;
5)
Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not
prevent the Fund from purchasing or selling options, futures contracts, derivative instruments or from investing in securities or other
instruments backed by physical commodities);
6)
Make loans of funds or other assets, other than by entering into repurchase agreements, lending portfolio securities and through the purchase
of securities in accordance with its investment objective, policies and limitations; or
7)
Concentrate (invest 25% or more of total assets) the Fund’s investments in any particular industry, except that the Fund will concentrate
its assets in the following group of industries that are part of the energy sector: transporting, processing, storing, distributing, marketing,
exploring, developing, managing and producing natural gas, natural gas liquids (including propane), crude oil, refined petroleum products,
coal and electricity, and supplying products and services in support of pipelines, power transmission, petroleum and natural gas production,
transportation and storage.
The
Fund may incur borrowings and/or issue series of notes or other senior securities in an amount up to 33-1/3% (or such other percentage
to the extent permitted by the 1940 Act) of its total assets (including the amount borrowed) less all liabilities other than borrowings.
|
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Risk Factors [Table Text Block] | Principal
Risks
The
Fund is a closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund
is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance
that the Fund will achieve its investment objective.
The
following discussion summarizes the principal risks associated with investing in the Fund, which includes the risk that you could lose
some or all of your investment in the Fund. The Fund is subject to the informational requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940 and, in accordance therewith, files reports, proxy statements and other information that
is available for review. The order of the below risk factors does not indicate the significance of any particular risk factor.
Conversion
Risk. The Board of Trustees of the Fund has approved the merger of the Fund into a wholly-owned subsidiary
of a newly created exchange-traded fund (“ETF”). It is currently expected that the transaction will be consummated during
2024, subject to requisite shareholder approval and satisfaction of applicable regulatory requirements and approvals and customary closing
conditions. There is no assurance when or whether such approvals, or any other approvals required for the transaction, will be obtained.
Under the terms of the proposed transaction, shareholders of the Fund would become shareholders of the ETF, which will have its own investment
strategies, and thereafter cease to be a shareholder of the Fund. More information on the proposed transaction, including the risks
and considerations associated with the transaction as well as the risks of investing in the new ETF, will be contained in registration
statement/proxy materials that will shortly be finalized. Shareholders should refer to such registration statement/proxy materials
when they become available.
Current
Market Conditions Risk. Current market conditions risk is the risk that a particular investment, or
shares of the Fund in general, may fall in value due to current market conditions. As a means to fight inflation, which remains at elevated
levels, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal
Reserve has announced that it intends to reverse previously implemented quantitative easing. U.S. regulators have proposed several changes
to market
and issuer regulations which would directly impact the Fund, and any regulatory changes could adversely impact the Fund’s ability
to achieve its investment strategies or make certain investments. Recent and potential future bank failures could result in disruption
to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which
may also heighten market volatility and reduce liquidity. The ongoing adversarial political climate in the United States, as well as political
and diplomatic events both domestic and abroad, have and may continue to have an adverse impact the U.S. regulatory landscape, markets
and investor behavior, which could have a negative impact on the Fund’s investments and operations. Other unexpected political,
regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial
markets and the broader economy. For example, in February 2022, Russia invaded Ukraine which has caused and could continue to cause significant
market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting
from those hostilities have and could continue to have a significant impact on certain Fund investments as well as Fund performance and
liquidity. The economies of the United States and its trading partners, as well as the financial markets generally, may be adversely impacted
by trade disputes and other matters. For example, the United States has imposed trade barriers and restrictions on China. In addition,
the Chinese government is engaged in a longstanding dispute with Taiwan, continually threatening an invasion. If the political climate
between the United States and China does not improve or continues to deteriorate, if China were to attempt invading Taiwan, or if other
geopolitical conflicts develop or worsen, economies, markets and individual securities may be adversely affected, and the value of the
Fund’s assets may go down. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by
governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets,
negatively impacting global growth prospects. While vaccines have been developed, there is no guarantee that vaccines will be effective
against emerging future variants of the disease. As this global pandemic illustrated, such events may affect certain geographic regions,
countries, sectors and industries more significantly than others. Advancements in technology may also adversely impact markets and the
overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced development and increased regulation
of artificial intelligence. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s
portfolio investments and could result in disruptions in the trading markets.
Covered
Call Options Risk. As the writer (seller) of a call option, the Fund forgoes, during the life of the
option, the opportunity to profit from increases in the market value of the portfolio security covering the option above the sum of the
premium and the strike price of the call option but retains the risk of loss should the price of the underlying security decline. The
value of call options written by the Fund, which are priced daily, are determined by trading activity in the broad options market and
will be affected by, among other factors, changes in the value of the underlying security in relation to the strike price, changes in
dividend rates of the underlying security, changes in interest rates, changes in actual or perceived volatility of the stock market and
the underlying security, and the time remaining until the expiration date. The value of call options written by the Fund may be adversely
affected if the market for the option is reduced or becomes illiquid. There can be no assurance that a liquid market will exist when the
Fund seeks to close out an option position.
Cyber
Security Risk. The Fund is susceptible to potential operational risks through breaches in cyber security.
A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information,
suffer data corruption or lose operational capacity. Such events could cause the Fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized
access to the Fund’s digital information systems through “hacking” or malicious software coding, but may also result
from outside attacks such as denial-of-service attacks through efforts to make network services unavailable to intended users. In addition,
cyber security breaches of the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the Fund invests, can also subject the Fund to many of the same risks associated with direct cyber
security breaches. The Fund has established risk management systems designed to reduce the risks associated with cyber security. However,
there is no guarantee that such efforts will succeed, especially because the Fund does not directly control the cyber security systems
of issuers or third party service providers. Substantial costs may be incurred by the Fund in order to resolve or prevent cyber incidents
in the future.
Energy
Infrastructure Companies Risk. Energy infrastructure companies, such as those structured as MLPs or
utility companies, may be directly affected by energy commodity prices, especially those companies which own the underlying energy commodity.
A decrease in the production or availability of natural gas, natural gas liquids, crude oil, coal or other energy commodities or a decrease
in the volume of such commodities available for transportation, processing, storage or distribution may adversely impact the financial
performance of energy infrastructure companies. Energy infrastructure companies are subject to significant federal, state and local government
regulation in virtually every aspect of their operations, including how facilities are constructed, maintained and operated, environmental
and safety controls, and the prices they may charge for products and services. Various governmental authorities have the power to enforce
compliance with these regulations and the permits issued under them and violators are subject to administrative, civil and criminal penalties,
including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could be enacted in the
future which would likely increase compliance costs and may adversely affect the financial performance of energy infrastructure companies.
Natural disasters, such as hurricanes in the Gulf of Mexico, also may impact energy infrastructure companies.
Certain
energy infrastructure companies are subject to the imposition of rate caps, increased competition due to deregulation, counterparties
to contracts defaulting or going bankrupt, the difficulty in obtaining an adequate return on invested capital or in financing large construction
projects, the limitations on operations and increased costs and delays attributable to environmental considerations, and the capital market’s
ability to absorb utility debt. In addition, taxes, government regulation, international politics, price and supply fluctuations, volatile
interest rates and energy conservation may cause difficulties for these companies.
Equity
Securities Risk. The value of the Fund’s shares will fluctuate with changes in the value of the
equity securities in which the Fund invests. Prices of equity securities fluctuate for several reasons, including changes in investors’
perceptions of the financial condition of an issuer or the general condition of the relevant stock market, such as market volatility,
or when political or economic events affecting the issuers occur. In addition, common stock prices may be particularly sensitive to rising
interest rates, as the cost of capital rises and borrowing costs increase. Equity securities may decline significantly in price over short
or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country,
company, industry or sector of the market.
Interest
Rate Swaps Risk. If short-term interest rates are lower than the Fund’s fixed rate of payment
on an interest rate swap, the swap will reduce common share net earnings. In addition, a default by the counterparty to a swap transaction
could also negatively impact the performance of the common shares.
Leverage
Risk. The use of leverage by the Fund can magnify the effect of any losses. If the income and gains
from the securities and investments purchased with leverage proceeds do not cover the cost of leverage, the return to the common shares
will be less than if leverage had not been used. Leverage involves risks and special considerations for common shareholders including:
(i) the likelihood of greater volatility of net asset value and market price of the common shares than a comparable portfolio without
leverage; (ii) the risk that fluctuations in interest rates on borrowings will reduce the return to the common shareholders or will result
in fluctuations in the dividends paid on the common shares; (iii) in a declining market, the use of leverage is likely to cause a greater
decline in the net asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the
market price of the common shares; and (iv) when the Fund uses certain types of leverage, the investment advisory fee payable to the Advisor
and by the Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.
Liquidity
Risk. Certain securities in which the Fund may invest may trade less frequently, particularly those
of issuers with smaller capitalizations. Securities with limited trading volumes may display volatile or erratic price movements. The
Fund may have difficulty selling these investments in a timely manner, be forced to sell them for less than it otherwise would have been
able to realize, or both.
Management
Risk and Reliance on Key Personnel. The implementation of the Fund’s investment strategy depends
upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and experience
and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team could have
a negative impact on the Fund.
Market
Discount from Net Asset Value. Shares of closed-end investment companies such as the Fund frequently
trade at a discount from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset
value.
Market
Risk. Investments held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations
caused by real or perceived adverse economic conditions, political events, regulatory factors or market developments, changes
in interest rates and perceived trends in securities prices. Shares of the Fund could decline in value or underperform other investments
as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war,
acts of terrorism, market manipulation, government defaults, government shutdowns, regulatory actions, political changes, diplomatic developments,
the imposition of sanctions and other similar measures, spread of infectious diseases or other public health issues, recessions,
or other events could have a significant negative impact on the Fund and its investments. Any of such circumstances could have a
materially negative impact on the value of the Fund’s shares, the liquidity of an investment, and result in increased market
volatility. During any such events, the Fund’s shares may trade at increased premiums or discounts to their net asset value, the
bid/ask spread on the Fund’s shares may widen and the returns on investment may fluctuate.
MLP
and Investment Concentration Risks. The Fund’s investments are concentrated in the group of industries
that are part of the energy sector, with a particular focus on MLPs, MLP-related entities and other companies in the energy sector and
energy utility industries. The Fund’s concentration in the group of industries that are part of the energy sector may present more
risk than if the Fund were broadly diversified over multiple sectors of the economy. A downturn in one or more industries within the energy
sector, material declines in energy-related commodity prices, adverse political, legislative or regulatory developments or other events
could have a larger impact on the Fund than on an investment company that does not concentrate in the group of industries that are part
of the energy
sector. Certain risks inherent in investing in the business of the types of securities that the Fund may invest include: commodity pricing
risk, commodity supply and demand risk, lack of diversification of and reliance on MLP customers and suppliers risk, commodity depletion
and exploration risk, energy sector and energy utility industry regulatory risk including risks associated with the prices and methodology
of determining prices that energy companies may charge for their products and services, interest rate risk, risk of lack of acquisition
or reinvestment opportunities for MLPs, risk of lacking of funding for MLPs, dependency on MLP affiliate risk, weather risk, catastrophe
risk, terrorism and MLP market disruption risk, and technology risk.
Companies
that own interstate pipelines are subject to regulation by the Federal Energy Regulatory Commission (FERC) with respect to the tariff
rates that they may charge customers and may change policies to no longer permit such companies to include certain costs in their costs
of services. This may lower the tariff rates charged to customers which will in turn negatively affect performance.
Other
factors which may reduce the amount of cash an MLP, MLP-related entity and other energy sector and energy utility company has available
to pay its debt and equity holders include increased operating costs, maintenance capital expenditures, acquisition costs, expansion or
construction costs and borrowing costs (including increased borrowing costs as a result of additional collateral requirements as a result
of ratings downgrades by credit agencies).
Non-Diversification.
The Fund is a non-diversified investment company under the 1940 Act and will not be treated as a regulated investment company under the
Internal Revenue Code of 1986. Accordingly, the diversification-specific regulatory requirements under the 1940 Act and the Internal
Revenue Code of 1986 regarding the minimum number or size of portfolio securities do not apply to the Fund, and the Fund’s investments
may be more heavily concentrated in, and thus more sensitive to changes in the prices of, securities of particular issuers.
Non-U.S.
Securities and Currency Risk. Investing in non-U.S. securities involves certain risks not involved in
domestic investments, including, but not limited to: fluctuations in currency exchange rates; future foreign economic, financial, political
and social developments; different legal systems; the possible imposition of exchange controls or other foreign governmental laws or restrictions;
lower trading volume; withholding taxes; greater price volatility and illiquidity; different trading and settlement practices; less governmental
supervision; high and volatile rates of inflation; fluctuating interest rates; less publicly available information; and different accounting,
auditing and financial recordkeeping standards and requirements. Because the Fund may invest in securities denominated or quoted in non-U.S.
currencies, changes in the non-U.S. currency/United States dollar exchange rate may affect the value of the Fund’s securities and
the unrealized appreciation or depreciation of investments.
Operational
Risk. The Fund is subject to risks arising from various operational factors, including, but not limited
to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties,
failed or inadequate processes and technology or systems failures. The Fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its
investment objective. Although the Fund and Advisor seek to reduce these operational risks through controls and procedures, there is no
way to completely protect against such risks.
Renewable
Energy Company Risk. Renewable energy companies are a subset of Energy Infrastructure Companies and,
as such, are subject to many of the same risks as Energy Infrastructure Companies. In addition, the future growth of renewable energy
companies may be dependent upon government policies that support renewable power generation and enhance the economic viability of owning
renewable electric generation assets. Such policies can include renewable portfolio standard programs, which mandate that a specified
percentage of electricity sales come from eligible sources of renewable energy, accelerated cost-recovery systems of depreciation and
tax credits.
A
portion of revenues from investments in renewable energy companies will be tied, either directly or indirectly, to the wholesale market
price for electricity in the markets served. Wholesale market electricity prices are impacted by a number of factors including: the price
of fuel (for example, natural gas) that is used to generate electric power; the cost of and management of generation and the amount of
excess generating capacity relative to load in a particular market; and conditions (such as extremely hot or cold weather) that impact
electrical system demand. Owners of renewable energy companies may attempt to secure fixed prices for their power production through the
use of financial hedges; but may not be able to deliver power to collect such fixed price, rendering those hedges ineffective or creating
economic losses for renewable energy companies. In addition, there is uncertainty surrounding the trend in electricity demand growth,
which is influenced by macroeconomic conditions; absolute and relative energy prices; and energy conservation and demand management. This
volatility and uncertainty in power markets could have a material adverse effect on the assets, liabilities, financial condition, results
of operations and cash flow of the companies in which the Fund may invest.
Potential
Conflicts of Interest Risk. First Trust, EIP and the portfolio managers have interests which may conflict
with the interests of the Fund. In particular, First Trust and EIP currently manage and may in the future manage and/or advise other investment
funds or accounts with the same or substantially similar investment objective and strategies as the Fund. In addition, while the Fund
is using leverage,
the amount of the fees paid to First Trust (and by First Trust to EIP) for investment advisory and management services are higher than
if the Fund did not use leverage because the fees paid are calculated based on Managed Assets. Therefore, First Trust and EIP have a financial
incentive to leverage the Fund.
Recent
Market and Economic Developments. In recent years, prices of oil and other energy commodities have experienced
significant volatility. During such periods, such volatility has adversely impacted many of the MLPs, MLP-related entities and other companies
in the energy sector and energy utility industries in which the Fund has invested or may invest. For example, many MLPs, MLP-related entities
and other companies in the energy sector and energy utility industries have in recent years experienced eroding growth prospects, reduced
distribution levels or, in some cases, bankruptcy. These conditions have impacted, and may in the future impact, the NAV of the Fund and
its ability to pay distributions to shareholders at current or historic levels.
Tax
Risk. Changes in tax laws or regulations, or interpretations thereof in the future, could adversely
affect the Fund or the MLPs, MLP-related entities and other energy sector and energy utility companies in which the Fund invests. A change
in current tax law, a change in the business of a given MLP, or a change in the types of income earned by a given MLP could result in
an MLP being treated as a corporation for United States federal income tax purposes, which would result in such MLP being required to
pay United States federal income tax on its taxable income. In the past, certain events have caused some MLPs to be reclassified or restructured
as corporations. The classification of an MLP as a corporation for United States federal income tax purposes has the effect of reducing
the amount of cash available for distribution by the MLP and causing any such distributions received by the Fund to be taxed as dividend
income to the extent of the MLP’s current or accumulated earnings and profits.
A
reduction in the percentage of the income offset by tax deductions or an increase in sales of the Fund’s MLP holdings that result
in capital gains will reduce that portion of the Fund’s distribution from an MLP treated as a return of capital and increase that
portion treated as income, and may result in lower after-tax distributions to the Fund’s common shareholders. On the other hand,
to the extent a distribution received by the Fund from an MLP is treated as a return of capital, the Fund’s adjusted tax basis in
the interests of the MLP may be reduced, which will result in an increase in the amount of income or gain or decrease in the amount of
loss that will be recognized by the Fund for tax purposes upon the sale of any such interests.
Utilities
Risk. Utility companies include companies producing or providing gas, electricity or water. These companies
are subject to the risk of the imposition of rate caps, increased competition due to deregulation, the difficulty in obtaining an adequate
return on invested capital or in financing large construction projects, the limitations on operations and increased costs and delays attributable
to environmental considerations and the capital market’s ability to absorb utility debt. In addition, in many regions, including
the United States, the utility industry is experiencing increasing competitive pressures, primarily in wholesale markets, as a result
of consumer demand, technological advances, greater availability of natural gas with respect to electric utility companies and other factors.
Taxes, government regulation, international politics, price and supply fluctuations, volatile interest rates and energy conservation also
may negatively affect utility companies.
Valuation
Risk. Market prices generally will not be available for subordinated units, direct ownership of general
partner interests, restricted securities or unregistered securities of certain MLPs or MLP-related entities, and the value of such investments
will ordinarily be determined based on fair valuations determined pursuant to procedures adopted by the Board of Trustees. The value of
these securities typically requires more reliance on the judgment of the Sub-Advisor than that required for securities for which there
is an active trading market. In addition, the Fund relies on information provided by certain MLPs, which may not be received by the Fund
in a timely manner, to calculate taxable income allocable to the MLP units held in the Fund’s portfolio and to determine the tax
character of distributions to common shareholders. From time to time the Fund will modify its estimates and/or assumptions as new information
becomes available. To the extent the Fund modifies its estimates and/or assumptions, the net asset value of the Fund would likely fluctuate.
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Effects of Leverage [Text Block] | Effects
of Leverage
The
aggregate principal amount of borrowings under the committed facility agreement (the “Committed Facility”) with BNP Paribas
Prime Brokerage International, Ltd. represented approximately 20.93% of Managed Assets as of October 31, 2023. Asset coverage with respect
to the borrowings under the Committed Facility was 477.83% as of October 31, 2023, and the Fund had $6,100,000 of unutilized funds available
for borrowing under the Committed Facility as of that date. Outstanding balances under the Committed Facility accrue interest at fixed
and variable rates. As of October 31, 2023, the maximum commitment amount of the Committed Facility was $51,000,000, which comprises a
floating rate financing amount for $27,350,000 of the facility and a fixed rate financing amount for $23,650,000 of the facility. The
borrowing rate on the floating rate financing amount is equal to the SOFR plus 95 basis points and the borrowing rate on the fixed rate
financing amount is 3.46%. The fixed rate financing amount is for a ten-year period ending in 2024. As of October 31, 2023, the Fund had
$44,900,000 outstanding under the Committed Facility. The Committed Facility also
has an annual unused fee of 0.55% on the unutilized funds available for borrowing, subject to a waiver on any day on which the drawn amount
is 80% or more of the maximum commitment amount. As of October 31, 2023, the approximate average annual interest and fee rate was 4.79%.
Assuming
that the Fund’s leverage costs remain as described above (at an assumed average annual cost of 4.79%), the annual return that the
Fund’s portfolio must experience (net of expenses) in order to cover its leverage costs would be 1.00%.
The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on Common Share
total return, assuming investment portfolio total returns (comprised of income and changes in the value of securities held in the Fund’s
portfolio) of (10%), (5%), 0%, 5% and 10%. These assumed investment portfolio returns are hypothetical figures and are not necessarily
indicative of the investment portfolio returns experienced or expected to be experienced by the Fund.
The
table further assumes leverage representing 20.93% of the Fund’s Managed Assets, net of expenses, and an annual leverage interest
and fee rate of 4.79%.
Common
Share total return is composed of two elements: the Common Share dividends paid by the Fund (the amount of which is largely determined
by the net investment income of the Fund after paying dividends or interest on its leverage) and gains or losses on the value of the securities
the Fund owns. As required by SEC rules, the table above assumes that the Fund is more likely to suffer capital losses than to enjoy capital
appreciation. For example, to assume a total return of 0% the Fund must assume that the distributions it receives on its investments are
entirely offset by losses in the value of those securities.
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Annual Interest Rate [Percent] | 4.79% | ||||||||||||||
Annual Coverage Return Rate [Percent] | 1.00% | ||||||||||||||
Effects of Leverage [Table Text Block] |
|
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Return at Minus Ten [Percent] | (13.91%) | ||||||||||||||
Return at Minus Five [Percent] | (7.59%) | ||||||||||||||
Return at Zero [Percent] | (1.27%) | ||||||||||||||
Return at Plus Five [Percent] | 5.06% | ||||||||||||||
Return at Plus Ten [Percent] | 11.38% | ||||||||||||||
Effects of Leverage, Purpose [Text Block] | The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on Common Share
total return, assuming investment portfolio total returns (comprised of income and changes in the value of securities held in the Fund’s
portfolio) of (10%), (5%), 0%, 5% and 10%. These assumed investment portfolio returns are hypothetical figures and are not necessarily
indicative of the investment portfolio returns experienced or expected to be experienced by the Fund.
The
table further assumes leverage representing 20.93% of the Fund’s Managed Assets, net of expenses, and an annual leverage interest
and fee rate of 4.79%.
|
||||||||||||||
Share Price | $ 6.68 | ||||||||||||||
NAV Per Share | $ 7.24 | ||||||||||||||
Capital Stock, Long-Term Debt, and Other Securities [Abstract] | |||||||||||||||
Outstanding Security, Title [Text Block] | Common Shares outstanding (unlimited number of Common Shares has been authorized) | ||||||||||||||
Outstanding Security, Held [Shares] | shares | 23,447,660 | ||||||||||||||
Conversion Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Conversion
Risk. The Board of Trustees of the Fund has approved the merger of the Fund into a wholly-owned subsidiary
of a newly created exchange-traded fund (“ETF”). It is currently expected that the transaction will be consummated during
2024, subject to requisite shareholder approval and satisfaction of applicable regulatory requirements and approvals and customary closing
conditions. There is no assurance when or whether such approvals, or any other approvals required for the transaction, will be obtained.
Under the terms of the proposed transaction, shareholders of the Fund would become shareholders of the ETF, which will have its own investment
strategies, and thereafter cease to be a shareholder of the Fund. More information on the proposed transaction, including the risks
and considerations associated with the transaction as well as the risks of investing in the new ETF, will be contained in registration
statement/proxy materials that will shortly be finalized. Shareholders should refer to such registration statement/proxy materials
when they become available.
|
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Current Market Conditions Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Current
Market Conditions Risk. Current market conditions risk is the risk that a particular investment, or
shares of the Fund in general, may fall in value due to current market conditions. As a means to fight inflation, which remains at elevated
levels, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal
Reserve has announced that it intends to reverse previously implemented quantitative easing. U.S. regulators have proposed several changes
to market
and issuer regulations which would directly impact the Fund, and any regulatory changes could adversely impact the Fund’s ability
to achieve its investment strategies or make certain investments. Recent and potential future bank failures could result in disruption
to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which
may also heighten market volatility and reduce liquidity. The ongoing adversarial political climate in the United States, as well as political
and diplomatic events both domestic and abroad, have and may continue to have an adverse impact the U.S. regulatory landscape, markets
and investor behavior, which could have a negative impact on the Fund’s investments and operations. Other unexpected political,
regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial
markets and the broader economy. For example, in February 2022, Russia invaded Ukraine which has caused and could continue to cause significant
market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting
from those hostilities have and could continue to have a significant impact on certain Fund investments as well as Fund performance and
liquidity. The economies of the United States and its trading partners, as well as the financial markets generally, may be adversely impacted
by trade disputes and other matters. For example, the United States has imposed trade barriers and restrictions on China. In addition,
the Chinese government is engaged in a longstanding dispute with Taiwan, continually threatening an invasion. If the political climate
between the United States and China does not improve or continues to deteriorate, if China were to attempt invading Taiwan, or if other
geopolitical conflicts develop or worsen, economies, markets and individual securities may be adversely affected, and the value of the
Fund’s assets may go down. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by
governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets,
negatively impacting global growth prospects. While vaccines have been developed, there is no guarantee that vaccines will be effective
against emerging future variants of the disease. As this global pandemic illustrated, such events may affect certain geographic regions,
countries, sectors and industries more significantly than others. Advancements in technology may also adversely impact markets and the
overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced development and increased regulation
of artificial intelligence. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s
portfolio investments and could result in disruptions in the trading markets.
|
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Covered Call Options Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Covered
Call Options Risk. As the writer (seller) of a call option, the Fund forgoes, during the life of the
option, the opportunity to profit from increases in the market value of the portfolio security covering the option above the sum of the
premium and the strike price of the call option but retains the risk of loss should the price of the underlying security decline. The
value of call options written by the Fund, which are priced daily, are determined by trading activity in the broad options market and
will be affected by, among other factors, changes in the value of the underlying security in relation to the strike price, changes in
dividend rates of the underlying security, changes in interest rates, changes in actual or perceived volatility of the stock market and
the underlying security, and the time remaining until the expiration date. The value of call options written by the Fund may be adversely
affected if the market for the option is reduced or becomes illiquid. There can be no assurance that a liquid market will exist when the
Fund seeks to close out an option position.
|
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Cyber Security Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Cyber
Security Risk. The Fund is susceptible to potential operational risks through breaches in cyber security.
A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information,
suffer data corruption or lose operational capacity. Such events could cause the Fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized
access to the Fund’s digital information systems through “hacking” or malicious software coding, but may also result
from outside attacks such as denial-of-service attacks through efforts to make network services unavailable to intended users. In addition,
cyber security breaches of the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or sub-advisor,
as applicable, or issuers in which the Fund invests, can also subject the Fund to many of the same risks associated with direct cyber
security breaches. The Fund has established risk management systems designed to reduce the risks associated with cyber security. However,
there is no guarantee that such efforts will succeed, especially because the Fund does not directly control the cyber security systems
of issuers or third party service providers. Substantial costs may be incurred by the Fund in order to resolve or prevent cyber incidents
in the future.
|
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Energy Infrastructure Companies Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Energy
Infrastructure Companies Risk. Energy infrastructure companies, such as those structured as MLPs or
utility companies, may be directly affected by energy commodity prices, especially those companies which own the underlying energy commodity.
A decrease in the production or availability of natural gas, natural gas liquids, crude oil, coal or other energy commodities or a decrease
in the volume of such commodities available for transportation, processing, storage or distribution may adversely impact the financial
performance of energy infrastructure companies. Energy infrastructure companies are subject to significant federal, state and local government
regulation in virtually every aspect of their operations, including how facilities are constructed, maintained and operated, environmental
and safety controls, and the prices they may charge for products and services. Various governmental authorities have the power to enforce
compliance with these regulations and the permits issued under them and violators are subject to administrative, civil and criminal penalties,
including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could be enacted in the
future which would likely increase compliance costs and may adversely affect the financial performance of energy infrastructure companies.
Natural disasters, such as hurricanes in the Gulf of Mexico, also may impact energy infrastructure companies.
Certain
energy infrastructure companies are subject to the imposition of rate caps, increased competition due to deregulation, counterparties
to contracts defaulting or going bankrupt, the difficulty in obtaining an adequate return on invested capital or in financing large construction
projects, the limitations on operations and increased costs and delays attributable to environmental considerations, and the capital market’s
ability to absorb utility debt. In addition, taxes, government regulation, international politics, price and supply fluctuations, volatile
interest rates and energy conservation may cause difficulties for these companies.
|
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Equity Securities Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Equity
Securities Risk. The value of the Fund’s shares will fluctuate with changes in the value of the
equity securities in which the Fund invests. Prices of equity securities fluctuate for several reasons, including changes in investors’
perceptions of the financial condition of an issuer or the general condition of the relevant stock market, such as market volatility,
or when political or economic events affecting the issuers occur. In addition, common stock prices may be particularly sensitive to rising
interest rates, as the cost of capital rises and borrowing costs increase. Equity securities may decline significantly in price over short
or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country,
company, industry or sector of the market.
|
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Interest Rate Swaps Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Interest
Rate Swaps Risk. If short-term interest rates are lower than the Fund’s fixed rate of payment
on an interest rate swap, the swap will reduce common share net earnings. In addition, a default by the counterparty to a swap transaction
could also negatively impact the performance of the common shares.
|
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Leverage Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Leverage
Risk. The use of leverage by the Fund can magnify the effect of any losses. If the income and gains
from the securities and investments purchased with leverage proceeds do not cover the cost of leverage, the return to the common shares
will be less than if leverage had not been used. Leverage involves risks and special considerations for common shareholders including:
(i) the likelihood of greater volatility of net asset value and market price of the common shares than a comparable portfolio without
leverage; (ii) the risk that fluctuations in interest rates on borrowings will reduce the return to the common shareholders or will result
in fluctuations in the dividends paid on the common shares; (iii) in a declining market, the use of leverage is likely to cause a greater
decline in the net asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the
market price of the common shares; and (iv) when the Fund uses certain types of leverage, the investment advisory fee payable to the Advisor
and by the Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.
|
||||||||||||||
Liquidity Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Liquidity
Risk. Certain securities in which the Fund may invest may trade less frequently, particularly those
of issuers with smaller capitalizations. Securities with limited trading volumes may display volatile or erratic price movements. The
Fund may have difficulty selling these investments in a timely manner, be forced to sell them for less than it otherwise would have been
able to realize, or both.
|
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Management Risk And Reliance On Key Personnel [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Management
Risk and Reliance on Key Personnel. The implementation of the Fund’s investment strategy depends
upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and experience
and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team could have
a negative impact on the Fund.
|
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Market Discount From Net Asset Value [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Market
Discount from Net Asset Value. Shares of closed-end investment companies such as the Fund frequently
trade at a discount from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset
value.
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Market Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Market
Risk. Investments held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations
caused by real or perceived adverse economic conditions, political events, regulatory factors or market developments, changes
in interest rates and perceived trends in securities prices. Shares of the Fund could decline in value or underperform other investments
as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war,
acts of terrorism, market manipulation, government defaults, government shutdowns, regulatory actions, political changes, diplomatic developments,
the imposition of sanctions and other similar measures, spread of infectious diseases or other public health issues, recessions,
or other events could have a significant negative impact on the Fund and its investments. Any of such circumstances could have a
materially negative impact on the value of the Fund’s shares, the liquidity of an investment, and result in increased market
volatility. During any such events, the Fund’s shares may trade at increased premiums or discounts to their net asset value, the
bid/ask spread on the Fund’s shares may widen and the returns on investment may fluctuate.
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M L P And Investment Concentration Risks [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | MLP
and Investment Concentration Risks. The Fund’s investments are concentrated in the group of industries
that are part of the energy sector, with a particular focus on MLPs, MLP-related entities and other companies in the energy sector and
energy utility industries. The Fund’s concentration in the group of industries that are part of the energy sector may present more
risk than if the Fund were broadly diversified over multiple sectors of the economy. A downturn in one or more industries within the energy
sector, material declines in energy-related commodity prices, adverse political, legislative or regulatory developments or other events
could have a larger impact on the Fund than on an investment company that does not concentrate in the group of industries that are part
of the energy
sector. Certain risks inherent in investing in the business of the types of securities that the Fund may invest include: commodity pricing
risk, commodity supply and demand risk, lack of diversification of and reliance on MLP customers and suppliers risk, commodity depletion
and exploration risk, energy sector and energy utility industry regulatory risk including risks associated with the prices and methodology
of determining prices that energy companies may charge for their products and services, interest rate risk, risk of lack of acquisition
or reinvestment opportunities for MLPs, risk of lacking of funding for MLPs, dependency on MLP affiliate risk, weather risk, catastrophe
risk, terrorism and MLP market disruption risk, and technology risk.
Companies
that own interstate pipelines are subject to regulation by the Federal Energy Regulatory Commission (FERC) with respect to the tariff
rates that they may charge customers and may change policies to no longer permit such companies to include certain costs in their costs
of services. This may lower the tariff rates charged to customers which will in turn negatively affect performance.
Other
factors which may reduce the amount of cash an MLP, MLP-related entity and other energy sector and energy utility company has available
to pay its debt and equity holders include increased operating costs, maintenance capital expenditures, acquisition costs, expansion or
construction costs and borrowing costs (including increased borrowing costs as a result of additional collateral requirements as a result
of ratings downgrades by credit agencies).
|
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Non Diversification [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Non-Diversification.
The Fund is a non-diversified investment company under the 1940 Act and will not be treated as a regulated investment company under the
Internal Revenue Code of 1986. Accordingly, the diversification-specific regulatory requirements under the 1940 Act and the Internal
Revenue Code of 1986 regarding the minimum number or size of portfolio securities do not apply to the Fund, and the Fund’s investments
may be more heavily concentrated in, and thus more sensitive to changes in the prices of, securities of particular issuers.
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Non U S Securities And Currency Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Non-U.S.
Securities and Currency Risk. Investing in non-U.S. securities involves certain risks not involved in
domestic investments, including, but not limited to: fluctuations in currency exchange rates; future foreign economic, financial, political
and social developments; different legal systems; the possible imposition of exchange controls or other foreign governmental laws or restrictions;
lower trading volume; withholding taxes; greater price volatility and illiquidity; different trading and settlement practices; less governmental
supervision; high and volatile rates of inflation; fluctuating interest rates; less publicly available information; and different accounting,
auditing and financial recordkeeping standards and requirements. Because the Fund may invest in securities denominated or quoted in non-U.S.
currencies, changes in the non-U.S. currency/United States dollar exchange rate may affect the value of the Fund’s securities and
the unrealized appreciation or depreciation of investments.
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Operational Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Operational
Risk. The Fund is subject to risks arising from various operational factors, including, but not limited
to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties,
failed or inadequate processes and technology or systems failures. The Fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its
investment objective. Although the Fund and Advisor seek to reduce these operational risks through controls and procedures, there is no
way to completely protect against such risks.
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Renewable Energy Company Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Renewable
Energy Company Risk. Renewable energy companies are a subset of Energy Infrastructure Companies and,
as such, are subject to many of the same risks as Energy Infrastructure Companies. In addition, the future growth of renewable energy
companies may be dependent upon government policies that support renewable power generation and enhance the economic viability of owning
renewable electric generation assets. Such policies can include renewable portfolio standard programs, which mandate that a specified
percentage of electricity sales come from eligible sources of renewable energy, accelerated cost-recovery systems of depreciation and
tax credits.
A
portion of revenues from investments in renewable energy companies will be tied, either directly or indirectly, to the wholesale market
price for electricity in the markets served. Wholesale market electricity prices are impacted by a number of factors including: the price
of fuel (for example, natural gas) that is used to generate electric power; the cost of and management of generation and the amount of
excess generating capacity relative to load in a particular market; and conditions (such as extremely hot or cold weather) that impact
electrical system demand. Owners of renewable energy companies may attempt to secure fixed prices for their power production through the
use of financial hedges; but may not be able to deliver power to collect such fixed price, rendering those hedges ineffective or creating
economic losses for renewable energy companies. In addition, there is uncertainty surrounding the trend in electricity demand growth,
which is influenced by macroeconomic conditions; absolute and relative energy prices; and energy conservation and demand management. This
volatility and uncertainty in power markets could have a material adverse effect on the assets, liabilities, financial condition, results
of operations and cash flow of the companies in which the Fund may invest.
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Potential Conflicts Of Interest Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Potential
Conflicts of Interest Risk. First Trust, EIP and the portfolio managers have interests which may conflict
with the interests of the Fund. In particular, First Trust and EIP currently manage and may in the future manage and/or advise other investment
funds or accounts with the same or substantially similar investment objective and strategies as the Fund. In addition, while the Fund
is using leverage,
the amount of the fees paid to First Trust (and by First Trust to EIP) for investment advisory and management services are higher than
if the Fund did not use leverage because the fees paid are calculated based on Managed Assets. Therefore, First Trust and EIP have a financial
incentive to leverage the Fund.
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Tax Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Tax
Risk. Changes in tax laws or regulations, or interpretations thereof in the future, could adversely
affect the Fund or the MLPs, MLP-related entities and other energy sector and energy utility companies in which the Fund invests. A change
in current tax law, a change in the business of a given MLP, or a change in the types of income earned by a given MLP could result in
an MLP being treated as a corporation for United States federal income tax purposes, which would result in such MLP being required to
pay United States federal income tax on its taxable income. In the past, certain events have caused some MLPs to be reclassified or restructured
as corporations. The classification of an MLP as a corporation for United States federal income tax purposes has the effect of reducing
the amount of cash available for distribution by the MLP and causing any such distributions received by the Fund to be taxed as dividend
income to the extent of the MLP’s current or accumulated earnings and profits.
A
reduction in the percentage of the income offset by tax deductions or an increase in sales of the Fund’s MLP holdings that result
in capital gains will reduce that portion of the Fund’s distribution from an MLP treated as a return of capital and increase that
portion treated as income, and may result in lower after-tax distributions to the Fund’s common shareholders. On the other hand,
to the extent a distribution received by the Fund from an MLP is treated as a return of capital, the Fund’s adjusted tax basis in
the interests of the MLP may be reduced, which will result in an increase in the amount of income or gain or decrease in the amount of
loss that will be recognized by the Fund for tax purposes upon the sale of any such interests.
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Utilities Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Utilities
Risk. Utility companies include companies producing or providing gas, electricity or water. These companies
are subject to the risk of the imposition of rate caps, increased competition due to deregulation, the difficulty in obtaining an adequate
return on invested capital or in financing large construction projects, the limitations on operations and increased costs and delays attributable
to environmental considerations and the capital market’s ability to absorb utility debt. In addition, in many regions, including
the United States, the utility industry is experiencing increasing competitive pressures, primarily in wholesale markets, as a result
of consumer demand, technological advances, greater availability of natural gas with respect to electric utility companies and other factors.
Taxes, government regulation, international politics, price and supply fluctuations, volatile interest rates and energy conservation also
may negatively affect utility companies.
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Valuation Risk [Member] | |||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||
Risk [Text Block] | Valuation
Risk. Market prices generally will not be available for subordinated units, direct ownership of general
partner interests, restricted securities or unregistered securities of certain MLPs or MLP-related entities, and the value of such investments
will ordinarily be determined based on fair valuations determined pursuant to procedures adopted by the Board of Trustees. The value of
these securities typically requires more reliance on the judgment of the Sub-Advisor than that required for securities for which there
is an active trading market. In addition, the Fund relies on information provided by certain MLPs, which may not be received by the Fund
in a timely manner, to calculate taxable income allocable to the MLP units held in the Fund’s portfolio and to determine the tax
character of distributions to common shareholders. From time to time the Fund will modify its estimates and/or assumptions as new information
becomes available. To the extent the Fund modifies its estimates and/or assumptions, the net asset value of the Fund would likely fluctuate.
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1 Year First Trust New Opportun... Chart |
1 Month First Trust New Opportun... Chart |
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