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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Macquarie First Trust Global Infrastructure Util Div Inc Fund | NYSE:MFD | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.05 | -0.66% | 7.48 | 7.60 | 7.4707 | 7.48 | 5,900 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21496
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(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: November 30
Date of reporting period:
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, 100 F Street, NE, Washington, DC 20549. 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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42 |
Performance | ||||
Average Annual Total Returns | ||||
1
Year Ended 11/30/23 |
5
Years Ended 11/30/23 |
10
Years Ended 11/30/23 |
Inception
(3/25/04) to 11/30/23 | |
Fund Performance(3) | ||||
NAV(4) | 2.85% | 5.30% | 3.00% | 6.10% |
Market Value | -2.19% | 3.40% | 2.12% | 5.19% |
Index Performance | ||||
S&P 500® Utilities Total Return Index | -9.31% | 5.84% | 8.80% | 8.92% |
(1) | Most recent distribution paid through November 30, 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 November 30, 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. |
(4) | On January 3, 2023, the fair value methodology used to value the senior loan investments held by the Fund was changed. Prior to that date, the senior loans were valued using the bid side price provided by a pricing service. After such date, the senior loans were valued using the midpoint between the bid and ask price provided by a pricing service. The change in the Fund’s fair value methodology on January 3, 2023, resulted in a one-time increase in the Fund’s NAV of approximately $0.010 per share on that date, which represented a positive impact on the Fund’s performance of 0.11%. Without the change to the pricing methodology, the performance of the Fund on a NAV basis would have been 2.73%, 5.27%, 2.99%, and 6.10%, in the one-year, five-year, ten-year and since fund inception periods ended November 30, 2023, respectively. |
Performance | ||||
Average Annual Total Returns | ||||
1
Year Ended 11/30/23 |
5
Years Ended 11/30/23 |
10
Years Ended 11/30/23 |
Inception
(3/25/04) to 11/30/23 | |
Fund Performance(1) | ||||
NAV(2) | 2.85% | 5.30% | 3.00% | 6.10% |
Market Value | -2.19% | 3.40% | 2.12% | 5.19% |
Index Performance | ||||
S&P 500® Utilities Total Return Index | -9.31% | 5.84% | 8.80% | 8.92% |
(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 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 less than one year. |
(2) | On January 3, 2023, the fair value methodology used to value the senior loan investments held by the Fund was changed. Prior to that date, the senior loans were valued using the bid side price provided by a pricing service. After such date, the senior loans were valued using the midpoint between the bid and ask price provided by a pricing service. The change in the Fund’s fair value methodology on January 3, 2023, resulted in a one-time increase in the Fund’s NAV of approximately $0.010 per share on that date, which represented a positive impact on the Fund’s performance of 0.11%. Without the change to the pricing methodology, the performance of the Fund on a NAV basis would have been 2.73%, 5.27%, 2.99%, and 6.10%, in the one-year, five-year, ten-year and since inception periods ended November 30, 2023, respectively. |
Shares | Description | Value | ||
COMMON STOCKS (a) – 97.5% | ||||
Australia – 1.8% | ||||
156,912 |
Transurban Group (AUD) (b) |
$1,343,688 | ||
Canada – 20.2% | ||||
112,315 |
Enbridge, Inc. (CAD) (b) |
3,921,651 | ||
199,939 |
Gibson Energy, Inc. (CAD) (b) |
3,017,614 | ||
110,886 |
Hydro One Ltd. (CAD) (b) (c) (d) |
3,082,368 | ||
46,450 |
Pembina Pipeline Corp. (CAD) (b) |
1,553,753 | ||
94,560 |
TC Energy Corp. (CAD) (b) |
3,546,305 | ||
15,121,691 | ||||
Hong Kong – 5.4% | ||||
519,000 |
CLP Holdings, Ltd. (HKD) (b) |
4,036,364 | ||
Italy – 13.3% | ||||
220,601 |
Enav S.p.A. (EUR) (b) (c) (d) |
786,647 | ||
352,111 |
Enel S.p.A. (EUR) (b) |
2,485,907 | ||
809,284 |
Snam S.p.A. (EUR) (b) |
4,072,427 | ||
324,186 |
Terna-Rete Elettrica Nazionale S.p.A. (EUR) (b) |
2,609,874 | ||
9,954,855 | ||||
Japan – 1.9% | ||||
37,000 |
West Japan Railway Co. (JPY) (b) |
1,459,187 | ||
United Kingdom – 29.2% | ||||
472,954 |
National Grid PLC (GBP) (b) |
6,135,005 | ||
508,656 |
Pennon Group PLC (GBP) (b) |
4,540,020 | ||
136,302 |
Severn Trent PLC (GBP) (b) |
4,475,657 | ||
96,727 |
SSE PLC (GBP) (b) |
2,237,721 | ||
328,214 |
United Utilities Group PLC (GBP) (b) |
4,520,599 | ||
21,909,002 | ||||
United States – 25.7% | ||||
52,061 |
Crown Castle, Inc. (b) |
6,105,714 | ||
68,043 |
Eversource Energy (b) |
4,042,435 | ||
62,328 |
Exelon Corp. (b) |
2,400,251 | ||
145,974 |
Kinder Morgan, Inc. (b) |
2,564,763 | ||
56,569 |
Sempra (b) |
4,122,183 | ||
19,235,346 | ||||
Total Common Stocks |
73,060,133 | |||
(Cost $75,440,987) | ||||
Units | Description | Value | ||
MASTER LIMITED PARTNERSHIPS (a) – 1.9% | ||||
United States – 1.9% | ||||
52,821 |
Enterprise Products Partners, L.P. (b) |
1,414,546 | ||
(Cost $828,560) |
Principal Value |
Description | Rate (e) | Stated Maturity (f) |
Value | ||||
SENIOR FLOATING-RATE LOAN INTERESTS – 36.8% | ||||||||
Canada – 0.3% | ||||||||
$246,875 |
Air Canada, Term Loan B, 3 Mo. CME Term SOFR + CSA + 3.50%, 0.75% Floor |
9.14% | 08/11/28 | 247,096 |
Principal Value |
Description | Rate (e) | Stated Maturity (f) |
Value | ||||
SENIOR FLOATING-RATE LOAN INTERESTS (Continued) | ||||||||
Cayman Islands – 1.2% | ||||||||
$450,000 |
AAdvantage Loyalty IP Ltd., Initial Term Loan, 3 Mo. CME Term SOFR + CSA + 4.75%, 0.75% Floor |
10.43% | 04/20/28 | $457,531 | ||||
400,000 |
SkyMiles IP Ltd., Initial Term Loan, 1 Mo. CME Term SOFR + 3.75%, 1.00% Floor |
9.17% | 10/20/27 | 409,402 | ||||
866,933 | ||||||||
Ireland – 1.2% | ||||||||
566,332 |
Castlelake Aviation One DAC, Initial Term Loans, 3 Mo. CME Term SOFR + CSA + 2.75%, 0.50% Floor |
8.42% | 10/22/26 | 567,394 | ||||
300,000 |
Setanta Aircraft Leasing DAC, Term Loan, 3 Mo. LIBOR + CSA + 2.00%, 0.00% Floor |
7.65% | 11/05/28 | 300,516 | ||||
867,910 | ||||||||
Luxembourg – 2.6% | ||||||||
1,967,115 |
Connect Finco SARL, Term Loan B, 1 Mo. CME Term SOFR + 3.50%, 1.00% Floor |
8.85% | 12/11/26 | 1,965,266 | ||||
United States – 31.5% | ||||||||
452,759 |
Calpine Construction Finance Co., L.P. Term Loan B, 1 Mo. CME Term SOFR + 2.25%, 0.00% Floor |
7.60% | 07/19/30 | 451,697 | ||||
429,330 |
Calpine Corp., Term Loan B5, 1 Mo. CME Term SOFR + 2.50%, 0.00% Floor |
7.96% | 12/16/27 | 430,107 | ||||
668,316 |
Calpine Corp., Term Loan B9, 1 Mo. CME Term SOFR + 2.00%, 0.00% Floor |
7.46% | 04/05/26 | 669,569 | ||||
2,087,967 |
Charter Communications Operating LLC, Term Loan B2, 1 Mo. CME Term SOFR + 1.75%, 0.00% Floor |
7.10%-7.13% | 02/01/27 | 2,086,193 | ||||
372,093 |
Covanta Holding Corp, Term Loan B, 1 Mo. CME Term SOFR + 3.00%, 0.50% Floor |
8.32% | 11/30/28 | 372,233 | ||||
27,907 |
Covanta Holding Corp, Term Loan C, 1 Mo. CME Term SOFR + 3.00%, 0.50% Floor |
8.32% | 11/30/28 | 27,917 | ||||
198,454 |
CSC Holdings LLC, Term Loan B5, 1 Mo. LIBOR + CSA + 2.50%, 0.00% Floor |
7.94% | 04/15/27 | 186,282 | ||||
786,611 |
CSC Holdings LLC, Term Loan B6, 1 Mo. CME Term SOFR + 4.50%, 0.00% Floor |
9.82% | 01/18/28 | 760,067 | ||||
639,937 |
Cumulus Media New Holdings, Inc., Term Loan B, 1 Mo. CME Term SOFR + CSA + 3.75%, 1.00% Floor |
9.40% | 03/31/26 | 492,217 | ||||
1,025,000 |
Directv Financing LLC, Term Loan, 1 Mo. CME Term SOFR + 5.00%, 0.75% Floor |
10.46% | 08/02/27 | 1,010,066 | ||||
1,438,125 |
Frontier Communications Holdings LLC, Term Loan B-Exit, 1 Mo. CME Term SOFR + CSA + 3.75%, 0.75% Floor |
9.21% | 10/08/27 | 1,414,087 | ||||
498,180 |
Generation Bridge Northeast LLC, Term Loan B, 1 Mo. CME Term SOFR + 4.25%, 0.00% Floor |
9.60% | 08/07/29 | 500,566 | ||||
325,000 |
GIP Pilot Acquisition Partners, L.P. Term Loan B, 1 Mo. CME Term SOFR + 3.00%, 0.00% Floor |
8.39% | 10/04/30 | 325,000 | ||||
1,528,405 |
Hamilton Projects Acquiror LLC, Term Loan B, 3 Mo. CME Term SOFR + CSA + 4.50%, 0.75% Floor |
9.96% | 06/17/27 | 1,534,030 | ||||
328,182 |
Lackawanna Energy Center LLC, Term Loan B2, 1 Mo. CME Term SOFR + 5.00%, 0.50% Floor |
10.35% | 08/04/29 | 322,644 | ||||
70,996 |
Lackawanna Energy Center LLC, Term Loan C, 1 Mo. CME Term SOFR + 5.00%, 0.50% Floor |
10.35% | 08/04/29 | 69,798 | ||||
937,500 |
Mileage Plus Holdings LLC, Term Loan B, 3 Mo. CME Term SOFR + CSA + 5.25%, 1.00% Floor |
10.80% | 06/21/27 | 967,969 | ||||
746,173 |
Northwest Fiber LLC, Term Loan B, 1 Mo. CME Term SOFR + CSA + 3.75%, 0.00% Floor |
9.24% | 04/30/27 | 740,991 |
Principal Value |
Description | Rate (e) | Stated Maturity (f) |
Value | ||||
SENIOR FLOATING-RATE LOAN INTERESTS (Continued) | ||||||||
United States (Continued) | ||||||||
$982,500 |
Olympus Water US Holding Corp., Term Loan B, 3 Mo. CME Term SOFR + CSA + 3.75%, 0.50% Floor |
9.40% | 11/09/28 | $977,450 | ||||
1,871,851 |
Parkway Generation LLC, Term Loan B, 3 Mo. CME Term SOFR + CSA + 4.75%, 0.75% Floor |
10.39% | 02/18/29 | 1,802,489 | ||||
247,402 |
Parkway Generation LLC, Term Loan C, 3 Mo. CME Term SOFR + CSA + 4.75%, 0.75% Floor |
10.39% | 02/18/29 | 238,234 | ||||
2,211,288 |
PG&E Corp., Term Loan B, 1 Mo. CME Term SOFR + CSA + 3.00%, 0.50% Floor |
8.46% | 06/23/25 | 2,215,954 | ||||
1,347,665 |
Standard Industries Inc./NJ, Initial Term Loan, 1 Mo. CME Term SOFR + CSA + 2.50%, 0.50% Floor |
7.70% | 09/22/28 | 1,350,192 | ||||
1,361,250 |
Terraform Power Operating, Term Loan B, 1 Mo. CME Term SOFR + CSA + 2.50%, 0.50% Floor |
7.99% | 05/21/29 | 1,353,593 | ||||
394,921 |
United Airlines, Inc., Class B Term Loan, 1 Mo. CME Term SOFR + CSA + 3.75%, 0.75% Floor |
9.21% | 04/21/28 | 395,683 | ||||
2,472,462 |
Viasat, Inc., Term Loan B, 1 Mo. CME Term SOFR + 4.50%, 0.50% Floor |
9.85% | 03/04/29 | 2,390,908 | ||||
491,575 |
Vistra Operations Co., LLC, 2018 Incremental Term Loan, 1 Mo. CME Term SOFR + CSA + 1.75%, 0.00% Floor |
7.19% | 12/31/25 | 492,246 | ||||
23,578,182 | ||||||||
Total Senior Floating-Rate Loan Interests |
27,525,387 | |||||||
(Cost $27,576,974) |
Total Investments – 136.2% |
102,000,066 | ||
(Cost $103,846,521) | |||
Outstanding Loan – (36.8)% |
(27,550,000) | ||
Net Other Assets and Liabilities – 0.6% |
438,040 | ||
Net Assets – 100.0% |
$74,888,106 |
(a) | Portfolio securities are categorized based upon their country of incorporation. |
(b) | All or a portion of this security serves as collateral for the outstanding loan. At November 30, 2023, the segregated value of these securities amounts to $74,474,679. |
(c) | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933, as amended (the “1933 Act”). |
(d) | This security is exempt from registration upon resale under Rule 144A of the 1933 Act and may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security is not restricted on the foreign exchange where it trades freely without any additional registration. As such, it does not require the additional disclosure required of restricted securities. |
(e) | Senior Floating-Rate Loan Interests (“Senior Loans”) in which the Fund invests pay interest at rates which are periodically predetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as the LIBOR, (ii) the SOFR obtained from the U.S. Department of the Treasury’s Office of Financial Research or another major financial institution, (iii) the prime rate offered by one or more United States banks or (iv) the certificate of deposit rate. Certain Senior Loans are subject to a LIBOR or SOFR floor that establishes a minimum LIBOR or SOFR rate. When a range of rates is disclosed, the Fund holds more than one contract within the same tranche with identical LIBOR or SOFR period, spread and floor, but different LIBOR or SOFR reset dates. |
(f) | Senior Loans generally are subject to mandatory and/or optional prepayment. As a result, the actual remaining maturity of Senior Loans may be substantially less than the stated maturities shown. |
Abbreviations throughout the Portfolio of Investments: | |
AUD | – Australian Dollar |
CAD | – Canadian Dollar |
CME | – Chicago Mercantile Exchange |
CSA | – Credit Spread Adjustment |
EUR | – Euro |
GBP | – British Pound Sterling |
HKD | – Hong Kong Dollar |
JPY | – Japanese Yen |
LIBOR | – London Interbank Offered Rate |
SOFR | – Secured Overnight Financing Rate |
USD | – United States Dollar |
Currency
Exposure Diversification |
%
of Total Investments |
USD | 47.2% |
GBP | 21.5 |
CAD | 14.8 |
EUR | 9.8 |
HKD | 4.0 |
JPY | 1.4 |
AUD | 1.3 |
Total | 100.0% |
Total Value at 11/30/2023 |
Level
1 Quoted Prices |
Level
2 Significant Observable Inputs |
Level
3 Significant Unobservable Inputs | |
Common Stocks* |
$ 73,060,133 | $ 73,060,133 | $ — | $ — |
Master Limited Partnerships* |
1,414,546 | 1,414,546 | — | — |
Senior Floating-Rate Loan Interests* |
27,525,387 | — | 27,525,387 | — |
Total Investments |
$ 102,000,066 | $ 74,474,679 | $ 27,525,387 | $— |
* | See Portfolio of Investments for country breakout. |
ASSETS: | |
Investments, at value |
$ 102,000,066 |
Cash |
2,177,459 |
Foreign currency |
127 |
Receivables: | |
Dividends |
293,048 |
Interest |
138,410 |
Reclaims |
136,674 |
Prepaid expenses |
1,349 |
Total Assets |
104,747,133 |
LIABILITIES: | |
Outstanding loan |
27,550,000 |
Payables: | |
Distributions |
1,709,488 |
Investment advisory fees (includes Sub-Advisory fees of $148,605) |
247,675 |
Interest and fees on loan |
151,939 |
Audit and tax fees |
77,470 |
Withholding tax |
69,921 |
Shareholder reporting fees |
17,129 |
Legal fees |
9,148 |
Administrative fees |
9,032 |
Custodian fees |
6,942 |
Trustees’ fees and expenses |
3,623 |
Transfer agent fees |
3,089 |
Financial reporting fees |
771 |
Other liabilities |
2,800 |
Total Liabilities |
29,859,027 |
NET ASSETS |
$74,888,106 |
NET ASSETS consist of: | |
Paid-in capital |
$ 131,964,564 |
Par value |
85,474 |
Accumulated distributable earnings (loss) |
(57,161,932) |
NET ASSETS |
$74,888,106 |
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) |
$8.76 |
Number of |
|
Investments, at cost |
$103,846,521 |
Foreign currency, at cost (proceeds) |
$126 |
INVESTMENT INCOME: | ||
Dividends |
$ 5,047,487 | |
Interest |
2,591,502 | |
Foreign withholding tax |
(529,355) | |
Other |
30,193 | |
Total investment income |
7,139,827 | |
EXPENSES: | ||
Interest and fees on loan |
1,746,460 | |
Investment advisory fees (includes Sub-Advisory fees of $628,630) |
1,047,716 | |
Audit and tax fees |
77,677 | |
Administrative fees |
57,183 | |
Shareholder reporting fees |
54,894 | |
Listing expense |
23,750 | |
Legal fees |
20,661 | |
Trustees’ fees and expenses |
19,883 | |
Transfer agent fees |
18,637 | |
Custodian fees |
12,083 | |
Financial reporting fees |
9,250 | |
Other |
10,474 | |
Total expenses |
3,098,668 | |
NET INVESTMENT INCOME (LOSS) |
4,041,159 | |
NET REALIZED AND UNREALIZED GAIN (LOSS): | ||
Net realized gain (loss) on: | ||
Investments |
1,139,056 | |
Foreign currency transactions |
(87,694) | |
Net realized gain (loss) |
1,051,362 | |
Net change in unrealized appreciation (depreciation) on: | ||
Investments |
(3,864,151) | |
Foreign currency translation |
16,663 | |
Net change in unrealized appreciation (depreciation) |
(3,847,488) | |
NET REALIZED AND UNREALIZED GAIN (LOSS) |
(2,796,126) | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ 1,245,033 |
Year Ended 11/30/2023 |
Year Ended 11/30/2022 | ||
OPERATIONS: | |||
Net investment income (loss) |
$ 4,041,159 | $ 4,202,170 | |
Net realized gain (loss) |
1,051,362 | 559,510 | |
Net change in unrealized appreciation (depreciation) |
(3,847,488) | (4,101,468) | |
Net increase (decrease) in net assets resulting from operations |
1,245,033 | 660,212 | |
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||
Investment operations |
(6,837,954) | (4,464,666) | |
Return of capital |
— | (2,373,288) | |
Total distributions to shareholders |
(6,837,954) | (6,837,954) | |
Total increase (decrease) in net assets |
(5,592,921) | (6,177,742) | |
NET ASSETS: | |||
Beginning of period |
80,481,027 | 86,658,769 | |
End of period |
$ 74,888,106 | $ 80,481,027 | |
COMMON SHARES: | |||
Common Shares at end of period |
8,547,442 | 8,547,442 |
Cash flows from operating activities: | ||
Net increase (decrease) in net assets resulting from operations |
$1,245,033 | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities: | ||
Purchases of investments |
(64,014,304) | |
Sales, maturities and paydown of investments |
57,717,380 | |
Return of capital received from investment in MLPs |
461,156 | |
Net amortization/accretion of premiums/discounts on investments |
(61,670) | |
Net realized gain/loss on investments |
(1,139,056) | |
Net change in unrealized appreciation/depreciation on investments |
3,864,151 | |
Changes in assets and liabilities: | ||
Decrease in interest receivable |
1,937 | |
Decrease in reclaims receivable |
30,434 | |
Decrease in dividends receivable |
614,575 | |
Decrease in prepaid expenses |
54 | |
Increase in interest and fees payable on loan |
53,072 | |
Decrease in investment advisory fees payable |
(18,179) | |
Increase in audit and tax fees payable |
238 | |
Increase in legal fees payable |
7,974 | |
Increase in shareholder reporting fees payable |
2,323 | |
Increase in administrative fees payable |
1,796 | |
Increase in custodian fees payable |
5,056 | |
Increase in transfer agent fees payable |
1,558 | |
Increase in trustees’ fees and expenses payable |
561 | |
Increase in other liabilities payable |
2,158 | |
Decrease in withholding tax payable |
(58,001) | |
Cash used in operating activities |
$(1,281,754) | |
Cash flows from financing activities: | ||
Distributions to Common Shareholders from investment operations |
(6,837,954) | |
Cash used in financing activities |
(6,837,954) | |
Decrease in cash and foreign currency (a) |
(8,119,708) | |
Cash and foreign currency at beginning of period |
10,297,294 | |
Cash and foreign currency at end of period |
$2,177,586 | |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest and fees |
$1,693,388 |
(a) | Includes net change in unrealized appreciation (depreciation) on foreign currency of $16,663. |
Year Ended November 30, | |||||||||
2023 | 2022 | 2021 | 2020 | 2019 | |||||
Net asset value, beginning of period |
$ 9.42 | $ 10.14 | $ 9.49 | $ 11.08 | $ 10.77 | ||||
Income from investment operations: | |||||||||
Net investment income (loss) |
0.47 (a) | 0.49 | 0.70 | 0.77 | 0.85 | ||||
Net realized and unrealized gain (loss) |
(0.33) | (0.41) | 0.75 | (1.51) | 0.51 | ||||
Total from investment operations |
0.14 | 0.08 | 1.45 | (0.74) | 1.36 | ||||
Distributions paid to shareholders from: | |||||||||
Net investment income |
(0.80) | (0.52) | (0.66) | (0.85) | (0.45) | ||||
Return of capital |
— | (0.28) | (0.14) | — | (0.60) | ||||
Total distributions paid to Common Shareholders |
(0.80) | (0.80) | (0.80) | (0.85) | (1.05) | ||||
Net asset value, end of period |
$ | $9.42 | $10.14 | $9.49 | $11.08 | ||||
Market value, end of period |
$ | $8.74 | $9.65 | $8.20 | $10.21 | ||||
Total return based on net asset value (b) |
2.85% | 1.03% | 15.96% | (5.54)% | 13.75% | ||||
Total return based on market value (b) |
(2.19)% | (1.51)% | 27.71% | (11.42)% | 8.44% | ||||
Ratios to average net assets/supplemental data: | |||||||||
Net assets, end of period (in 000’s) |
$ 74,888 | $ 80,481 | $ 86,659 | $ 81,102 | $ 94,686 | ||||
Ratio of total expenses to average net assets |
4.01% | 2.66% | 2.13% | 2.50% | 3.15% | ||||
Ratio of total expenses to average net assets excluding interest expense |
1.75% | 1.75% | 1.70% | 1.85% | 1.80% | ||||
Ratio of net investment income (loss) to average net assets |
5.23% | 4.85% | 6.84% | 7.85% | 7.57% | ||||
Portfolio turnover rate |
59% | 66% | 92% | 209% | 153% | ||||
Indebtedness: | |||||||||
Total loan outstanding (in 000’s) |
$ 27,550 | $ 27,550 | $ 33,250 | $ 27,050 | $ 38,100 | ||||
Asset coverage per $1,000 of indebtedness (c) |
$ 3,718 | $ 3,921 | $ 3,606 | $ 3,998 | $ 3,485 |
(a) | Based on average shares outstanding. |
(b) | 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. |
(c) | 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. |
1) | the most recent price provided by a pricing service; |
2) | available market prices for the fixed-income security; |
3) | the fundamental business data relating to the borrower; |
(1) | The terms “security” and “securities” used throughout the Notes to Financial Statements include Senior Loans. |
4) | an evaluation of the forces which influence the market in which these securities are purchased and sold; |
5) | the type, size and cost of the security; |
6) | the financial statements of the borrower; |
7) | the credit quality and cash flow of the borrower; |
8) | the information as to any transactions in or offers for the security; |
9) | the price and extent of public trading in similar securities (or equity securities) of the borrower, or comparable companies; |
10) | the coupon payments; |
11) | the quality, value and salability of collateral, if any, securing the security; |
12) | the business prospects of the borrower, including any ability to obtain money or resources from a parent or affiliate and an assessment of the borrower’s management; |
13) | the prospects for the borrower’s industry, and multiples (of earnings and/or cash flows) being paid for similar businesses in that industry; |
14) | the borrower’s competitive position within the industry; |
15) | the borrower’s ability to access additional liquidity through public and/or private markets; and |
16) | 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. |
Distributions paid from: | 2023 | 2022 |
Ordinary income |
$6,837,954 | $4,464,666 |
Capital gains |
— | — |
Return of capital |
— | 2,373,288 |
Undistributed ordinary income |
$37,825 |
Undistributed capital gains |
— |
Total undistributed earnings |
37,825 |
Accumulated capital and other losses |
(52,255,058) |
Net unrealized appreciation (depreciation) |
(3,235,211) |
Total accumulated earnings (losses) |
(55,452,444) |
Other |
(1,709,488) |
Paid-in capital |
132,050,038 |
Total net assets |
$74,888,106 |
Tax Cost | Gross Unrealized Appreciation |
Gross Unrealized (Depreciation) |
Net
Unrealized Appreciation (Depreciation) | |||
$105,243,303 | $5,729,672 | $(8,972,909) | $(3,243,237) |
(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 seeks to invest more than 40% of its Total Assets in securities and instruments of non-U.S. Infrastructure Issuers located in Australia, New Zealand, Canada, the United Kingdom, certain European Union member countries, Switzerland, Japan, Hong Kong and Singapore. |
• | No more than 60% of the Fund’s Total Assets may be invested in securities and instruments of U.S. Infrastructure Issuers at any time. |
• | No more than 7% of the Fund’s Total Assets may be invested in the securities and instruments of any single Infrastructure Issuer at any time. |
• | At least 80% of the Fund’s Total Assets are intended to be invested in securities and instruments of Infrastructure Issuers that are expected to provide dividends, interest and other similar income. This investment policy cannot be changed unless the shareholders of the Fund receive at least 60 days’ prior notice of any such change. |
• | No more than 30% of the Fund’s Total Assets may be invested in the securities and instruments of non-U.S. Infrastructure Issuers located in any one country at any time. |
• | Up to 100% of the Fund’s Total Assets may be comprised of securities and instruments of Infrastructure Issuers that manage, own and/or operate Infrastructure Assets. |
• | The Fund may invest up to 15% of its Total Assets in infrastructure securities in countries which are not members of the Organization for Economic Corporation and Development (OECD). |
• | As to the Core Component: |
• | As to the Senior Loan Component: |
• | The Fund through the issuance of preferred shares, commercial paper or notes and/or borrowings utilizes leverage up to a maximum of 30% of the Fund’s total assets, immediately after such issuance and/or borrowing. |
• | The Fund is authorized to enter into forward currency contracts or currency futures contracts to selectively hedge certain currencies for defensive purposes. |
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) | 256 | 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) | 256 | 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) | 256 | 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 June 2006 | President, Hibs Enterprises (Financial and Management Consulting) | 256 | 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) | 256 | None |
(1) | Currently, Denise M. Keefe and Robert F. Keith, as Class I Trustees, are serving as trustees until the Fund’s 2026 annual meeting of shareholders. Richard E. Erickson, Thomas R. Kadlec, and Bronwyn Wright 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. |
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 | ||||
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) | 232 | 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) | 256 | 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 December 2005 |
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 • Chief Compliance Officer Since January 2011• Assistant Secretary Since Fund Inception |
Deputy General Counsel, First Trust Advisors L.P. and First Trust Portfolios L.P. |
(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). |
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 each of the last two fiscal years 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 those fiscal years were $51,000 for the fiscal year ended November 30, 2022 and $51,000 for the fiscal year ended November 30, 2023.
(b) Audit-Related Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years 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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
Audit-Related Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years 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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
(c) Tax Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant were $41,250 for the fiscal year ended November 30, 2022 and $32,769 for the fiscal year ended November 30, 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 each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant’s advisor were $0 for the fiscal year ended November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
(d) All Other Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years 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 November 30, 2022 and $0 for the fiscal year ended November 30, 2023.
All Other Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant to the registrant’s investment advisor, other than the services reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year ended November 30, 2022 and $0 for the fiscal year ended November 30, 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: |
(b) 0%
(c) 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 fiscal year ended November 30, 2022 were $41,250 for the registrant and $0 for the registrant’s investment advisor, and for the fiscal year ended November 30, 2023 were $32,769 for the registrant and $44,000 for the registrant’s investment advisor.
(h) The registrant’s audit committee of its Board of Trustees has determined that 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.
The Proxy Voting Policies are attached herewith.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1) Identification of Portfolio Manager(s) or Management Team Members and Description of Role of Portfolio Manager(s) or Management Team Members
Information provided as of November 30, 2023
Delaware Investments Fund Advisers (“DIFA”) serves as the registrant’s sub-advisor, a series of Macquarie Investment Management Business Trust.
Anthony Felton, CFA, Fund Co-Portfolio Manager
Anthony Felton is a founding member of Macquarie’s Global Listed Infrastructure Securities business, joining the firm in 2004. He has more than 16 years of experience as a global listed infrastructure investor and 10 years of experience as a portfolio manager for Macquarie’s Global Listed Infrastructure strategies. Felton has significant experience in the analysis of regulated infrastructure companies, such as water, electricity, and gas distribution assets, as well as user demand infrastructure assets such as airports, toll roads, and rail as well as energy and communications infrastructure. He has a Bachelor of Commerce from the University of New South Wales.
Adam H. Brown, CFA, Senior Portfolio Manager
Adam H. Brown is a Senior Portfolio Manager for the firm’s high yield strategies within Macquarie Asset Management Fixed Income (MFI). He manages MFI’s bank loan portfolios and is a co-portfolio manager for the high yield, fixed rate multisector, and core plus strategies. Brown joined Macquarie Asset Management (MAM) in April 2011 as part of the firm’s integration of Macquarie Four Corners Capital Management, where he had worked since 2002. At Four Corners, he was a co-portfolio manager on the firm’s collateralized loan obligations (CLOs) and a senior research analyst supporting noninvestment grade portfolios. Before that, Brown was with the predecessor of Wells Fargo Securities, where he worked in the leveraged finance group arranging senior secured bank loans and high yield bond financings for financial sponsors and corporate issuers. He earned an MBA from the A.B. Freeman School of Business at Tulane University and a bachelor’s degree in Accounting from the University of Florida.
Name | Title | Length of Service | Business Experience Past 5 Years |
Anthony Felton | Fund Co-Portfolio Manager | 24 years | Anthony Felton joined Macquarie Group in February 2004 and the MAM Infrastructure Securities team in June 2004. He is a portfolio manager of several funds in the MAM Global Infrastructure Securities Strategy, including MFD for the past 5 years. |
Adam H. Brown | Portfolio Manager | 25 years | Adam H. Brown is a senior portfolio manager and co-head of the firm high yield strategies. He manages the bank loan portfolios and is a co-portfolio manager for the high yield, fixed rate multisector, and core plus strategies. |
(a)(2) | Other Accounts Managed by Portfolio Manager(s) or Management Team Member and Potential Conflicts of Interest |
Information provided as of November 30, 2023
Other Accounts Managed by Portfolio Manager(s) or Management Team Member
Name of Portfolio Manager or Team Member
|
Type of Accounts
|
Total No. of Accounts Managed
|
Total Assets
|
No. of Accounts where Advisory Fee is Based on Performance
|
Total Assets in Accounts where Advisory Fee is Based on Performance
|
Anthony Felton | Registered Investment Companies: | 3 | $695,441,897 | 0 | $0 |
Other Pooled Investment Vehicles: | 9 | $894,586,396 | 0 | $0 | |
Other Accounts: | 7 | $860,564,231 | 0 | $0 | |
Adam H. Brown | Registered Investment Companies | 8 | $4,439,821,626 | 0 | 0 |
Other Pooled Investment Vehicles | 3 | $411,549,803 | 0 | 0 | |
Other Accounts | 4 | $180,786,222 | 0 | 0 |
Potential Conflicts of Interests
MAM has policies and procedures in place that govern the manner in which allocations of trades will be handled should MAM effect purchases or sales of the same security for different clients. These procedures address circumstances in which separate purchase or sale orders for the same security are placed for two or more clients, and additionally when purchase or sale orders for the same security are aggregated. MAM policies detail specific conditions that must be met when aggregating purchase or sale orders for the same security for two or more clients. The Portfolio Manager is responsible for allocating investment opportunities and aggregating orders consistently with the procedures and a periodic, but at least quarterly, review by the Chief Compliance Officer of MAM (or designee) is required.
A portfolio manager's management of personal accounts also may present certain conflicts of interest. While the Manager's code of ethics is designed to address these potential conflicts, there is no guarantee that it will do so.
(a)(3) | Compensation Structure of Portfolio Manager(s) or Management Team Members |
Information provided as of November 30, 2023
For Mr. Felton and Mr. Brown:
The portfolio’s manager’s compensation consists of the following: (1) fixed remuneration in the form of a base salary; (2) variable (at risk) performance pay in the form of an annual profit share allocation; and (3) long term equity based incentives. Fixed remuneration takes into consideration the role of the individuals and market conditions. Remuneration is reviewed on a yearly basis in March/May and takes effect from July of that year. Aggregate staff profit share is linked to Macquarie Group’s profitability and return on ordinary equity, with the allocation of individual profit share being based on factors including contribution to profit, use of capital, funding and risk. Macquarie Group operates profit share retention arrangements for employees meeting certain pay thresholds, to ensure an appropriate balance between short and long-term incentives. Retained profit share is invested in the Macquarie Employee Retained Equity Plan (MEREP) to further align employee and shareholder interests as well as enhance Macquarie Group’s ability to attract and retain high caliber talent.
Compensation is not directly based on the pre or post tax performance of the Fund over a certain period. However, performance of the Fund could be part of a number of factors that are taken into account when determining compensation. If the Portfolio Manager’s or the Management Team’s bonus is over a certain amount, a portion of that bonus may be deferred and may be paid out in the future in up to four equal installments.
(a)(4) | Disclosure of Securities Ownership |
The information below is as of November 30, 2023
Name | Dollar
($) Range of Fund Shares Beneficially Owned |
Anthony Felton | None |
Adam H. Brown | None |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
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) | Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund |
By (Signature and Title)* | /s/ James M. Dykas | |
James M. Dykas, President and Chief Executive Officer (principal executive officer) |
Date: | February 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: | February 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: | February 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 Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income 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: | February 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 Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income 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: | February 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 Macquarie/First Trust Global Infrastructure/Utilities Dividend & 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: | February 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 Macquarie/First Trust Global Infrastructure/Utilities Dividend & 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: | February 8, 2024 | /s/ Derek D. Maltbie | |||
Derek D. Maltbie, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) |
FIRST TRUST ADVISORS L.P.
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PROXY VOTING GUIDELINES
First Trust Advisors L.P. (“FTA”) serves as investment adviser providing discretionary investment advisory services for Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund (the “Fund”). Delaware Investments Fund Advisers (“DIFA”) acts as a sub-adviser to the Fund. FTA has full responsibility for proxy voting and related duties with respect to the Fund. In fulfilling these duties, FTA and the Fund have adopted the following policies and procedures:
1. It is FTA’s policy to seek to ensure that proxies for securities held by the Fund are voted consistently and solely in the best economic interests of the Fund.
2. FTA shall be responsible for the oversight of the Fund’s proxy voting process and shall assign a senior member of its staff to be responsible for this oversight.
3. FTA has engaged the services of Institutional Shareholder Services (“ISS”) to provide research and voting services. ISS provides a password protected website which is accessible to authorized FTA personnel to download upcoming proxy meeting data, including research reports of companies held in the Fund. FTA has adopted the ISS Proxy Voting Guidelines (the “Guidelines”).
4. FTA shall review proxies received for the Fund and the Guidelines and forward them to DIFA for review. FTA will generally follow the Guidelines to vote Fund proxies so long as such Guidelines are considered to be in the best interests of the Proxy Client, and there are no noted or perceived conflicts of interest. FTA’s use of the Guidelines is not intended to constrain FTA’s consideration of any proxy proposal, and there are times when FTA deviates from the Guidelines. Generally, FTA will not rely on ISS Proxy Voting Guidelines to withhold votes or vote against directors solely based on (i) quota criteria or (ii) the exclusion of certain climate- related disclosures, which may or may not relate to the company’s core business or may not materially impact shareholder value. In such cases, FTA will consider such proxy voting decisions in light of merit-based considerations which it believes may impact shareholder value. In addition, FTA will vote against shareholder proposals that are not related to a company’s core business and/or do not appear to be an appropriate use of a company’s resources to maximize shareholder value. FTA retains final authority and fiduciary responsibility for proxy voting.
5. If FTA manages the assets or pension fund of a company and any First Trust client holds any securities in that company, FTA will vote proxies relating to such company’s securities in accordance with the Guidelines to avoid any conflict of interest. In addition, if FTA has actual knowledge of any other type of material conflict of interest between itself and the Fund with respect to the voting of a proxy, FTA shall vote the applicable proxy in accordance with the Guidelines to avoid such conflict of interest.
6. If the Fund requests FTA to follow specific voting guidelines or additional guidelines, FTA shall review the request and generally will follow such guidelines, unless FTA determines that it is unable to follow such guidelines. In such case, FTA shall inform the Fund that it is not able to honor the Fund’s request.
7. FTA clients, in addition to the Fund, have delegated discretionary proxy voting authority to FTA. FTA votes proxies for such clients in accordance with the First Trust Advisors L.P. Proxy Voting Guidelines.
Adopted: October 3, 2004
Amended: September 9, 2019
Amended: October 12, 2022
Amended: June 5, 2023
N-2 |
12 Months Ended | ||||||||||||||||||||||
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Nov. 30, 2023
$ / shares
shares
| |||||||||||||||||||||||
Cover [Abstract] | |||||||||||||||||||||||
Entity Central Index Key | 0001276469 | ||||||||||||||||||||||
Amendment Flag | false | ||||||||||||||||||||||
Entity Inv Company Type | N-2 | ||||||||||||||||||||||
Document Type | N-CSR | ||||||||||||||||||||||
Entity Registrant Name | Macquarie/First Trust Global Infrastr/Util Div & Inc Fund | ||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Investment Objectives and Practices [Text Block] | Investment
Objective
The
Fund seeks to provide a high level of current return consisting of dividends, interest, and other similar income while attempting to preserve
capital.
Principal
Investment Policies
In
pursuit of the Fund’s objective, the Fund seeks to manage its investments and expenses so that a significant portion of its distributions
to the Fund’s common shareholders qualify as tax-advantaged dividends, subject to the continued availability of favorable tax treatment
for such qualifying dividends. The Fund seeks to achieve its investment objective by investing in a portfolio of equity, debt, preferred
or convertible securities and other instruments issued by U.S. and non-U.S. issuers (“Infrastructure Issuers”) that have as
their primary focus (in terms of income and/or assets) the management, ownership and/or operation of infrastructure and utilities assets
(“Infrastructure Assets”) in a select group of countries (as detailed below).
The
Fund consists of two components: (1) the “Core Component” and (2) the “Senior Loan Component.” The Core Component
consists primarily of equity securities and securities and instruments with equity characteristics, and other securities and instruments
issued by Infrastructure Issuers (collectively, “Core Infrastructure Securities”). The Senior Loan Component consists of senior
secured floating-rate U.S. dollar-denominated loans of Infrastructure Issuers (“Infrastructure Senior Loans”) from the funds
raised through the Fund’s use of leverage.
As
used herein, “Total Assets” generally means the average daily gross asset value of the Fund (including assets attributable
to the proceeds of the Fund’s preferred shares of beneficial interest (“Preferred Shares”), if any, and the principal
amount of any borrowings) 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 incurred, commercial paper or notes issued by the Fund and the liquidation
preference of any outstanding Preferred Shares). For the purposes of determining Total Assets, the liquidation preference of the Preferred
Shares is not treated as a liability.
In
pursuit of its investment objective, under normal market conditions:
○
The Fund primarily invests in listed securities and instruments of Infrastructure Issuers, however the Fund may invest up to 25% of the
Core Component in unlisted securities and instruments of Infrastructure Issuers.
○
The Fund invests more than 50% of the Core Component (and may invest up to 100%) in securities and instruments of non-U.S. Infrastructure
Issuers. ○
Within the Core Component, no more than 45% of the Core Infrastructure Securities may, at any time, consist of securities and instruments
of U.S. Infrastructure Issuers.
○
At least 80%, and up to 100%, of the Senior Loan Component consists of Infrastructure Senior Loans that are rated non-investment grade.
To
the extent the Fund enters into derivatives transactions, it will do so pursuant to Rule 18f-4 under 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.
The
Fund utilizes leverage through the issuance of instruments (each a “Leverage Instrument” and collectively, the “Leverage
Instruments”) in an aggregate amount up to 30% of the Fund’s Total Assets immediately after such issuance and/or borrowing.
The Fund expects to invest the proceeds derived from any Leverage Instrument offering in Infrastructure Senior Loans or other debt securities
consistent with the Fund’s investment objective and policies. Such Infrastructure Senior Loans or other debt securities are anticipated
to largely match the interest rate of the Fund’s then outstanding leverage. The Fund may also borrow money as a temporary measure
for extraordinary or emergency purposes, including the payment of dividends and the settlement of securities transactions which otherwise
might require untimely dispositions of Fund securities.
The
Fund may lend its portfolio securities to broker-dealers and banks. Any such loan must be continuously secured by collateral in cash or
cash equivalents maintained on a current basis in an amount at least equal to the market value of the securities loaned by the Fund. The
Fund would continue to receive the equivalent of the interest or dividends paid by the issuer on the securities loaned, and would also
receive an additional return that may be in the form of a fixed fee or a percentage of the collateral. The Fund may pay reasonable fees
to persons unaffiliated with the Fund for services in arranging these loans.
The
Fund may deviate from its investment guidelines from time to time as deemed appropriate under prevailing economic and market conditions
to achieve its investment objective over the long-term. If any allocation of assets exceeds the applicable investment guideline, the Fund
will seek to reduce the allocation as soon as practicable based on the liquidity of its assets and other market factors. The Fund may
invest its assets temporarily in other investments and securities of various types pending investment or reinvestment in securities and
instruments of Infrastructure Issuers. Pending investment or reinvestment, such temporary investments and securities will not be taken
into account for purposes of the Fund’s allocation guidelines. For temporary defensive purposes, the Fund may depart from its principal
investment strategies and invest part or all of its assets in securities with remaining maturities of less than one year or cash equivalents,
or it may hold cash. During such periods, the Fund may not be able to achieve its investment objective.
Fundamental
Investment Policies
The
Fund, as a fundamental policy, may not:
1.
Issue senior securities, as defined in the 19040 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;
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.
Invest 25% or more of its Total Assets in securities and instruments of issuers in any single industry except to the extent the Fund invests
in the infrastructure and utilities industry, provided there shall be no limitation on the purchase of obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities.
The
foregoing fundamental investment policies, together with the investment objective of the Fund, cannot be changed without approval by holders
of a majority of the outstanding voting securities of the Fund, as defined in the 1940 Act, which includes the Fund’s common shares
of beneficial interest (“Common Shares”) and preferred shares of beneficial interest (“Preferred Shares”), if
any, voting together as a single class, and of the holders of the outstanding Preferred Shares voting as a single class. Under the 1940
Act a “majority of the outstanding voting securities” means the vote of: (i) 67% or more of the Fund’s shares present
at a meeting, if the holders of more than 50% of the Fund’s shares are present or represented by proxy; or (ii) more than 50% of
the Fund’s shares, whichever is less.
|
||||||||||||||||||||||
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.
Canada
Risk. The Fund invests in securities of Canadian issuers and is therefore subject to certain risks specifically
associated with investments in the securities of Canadian issuers. The Canadian economy is heavily dependent on the demand for natural
resources and agricultural products. Canada is a major producer of commodities such as forest products, metals, agricultural products,
and energy related products like oil, gas, and hydroelectricity. Accordingly, a change in the supply and demand of these resources, both
domestically and internationally, can have a significant effect on Canadian market performance. Canada is a top producer of zinc and uranium
and a global source of many other natural resources, such as gold, nickel, aluminum, and lead. Conditions that weaken demand for such
products worldwide could have a negative impact on the Canadian economy as a whole. Changes to the U.S. economy may significantly
affect the Canadian economy because the U.S. is Canada’s largest trading partner and foreign investor. These and other factors could
have a negative impact on the Fund and its investments in Canada.
Credit
Agency Risk. Credit ratings are determined by credit rating agencies and are only the opinions of such
entities. Ratings assigned by a rating agency are not absolute standards of credit quality and do not evaluate market risk or the liquidity
of securities. Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings may adversely
affect the credit ratings of securities held by the Fund or such credit agency’s ability to evaluate creditworthiness and, as a
result, may adversely affect those securities’ perceived or actual credit risk.
Credit
and Below-Investment Grade Securities Risk. Credit risk is the risk that the issuer or other obligated
party of a debt security in the Fund’s portfolio will fail to pay, or it is perceived that it will fail to pay, dividends and/or
interest or repay principal, when due. Below-investment grade instruments are commonly referred to as high-yield securities or “junk”
bonds and are considered speculative with respect to the issuer’s capacity to pay dividends or interest and repay principal and
are more susceptible to default or decline in market value than investment grade securities due to adverse economic and business developments.
High-yield securities are often unsecured and subordinated to other creditors of the issuer. The market values for high-yield securities
tend to be very volatile, and these securities are generally less liquid than investment grade securities. For these reasons, an investment
in the Fund is subject to the following specific risks: (i) increased price sensitivity to changing interest rates and to a deteriorating
economic environment; (ii) greater risk of loss due to default or declining credit quality; (iii) adverse company specific events more
likely to render the issuer unable to make dividend, interest and/or principal payments; (iv) negative perception of the high-yield market
which may depress the price and liquidity of high-yield securities; (v) volatility; and (vi) liquidity.
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.
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, sub-advisor,
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.
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. 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.
Illiquid
Securities Risk. The Fund may invest in securities that are considered to be illiquid securities. Illiquid
securities may be difficult to dispose of at a fair price at the times when the Fund believes it is desirable to do so. The market
price of illiquid securities generally is more volatile than that of more liquid securities, which may adversely affect the price that
the Fund pays for or recovers upon the sale of such securities. Illiquid securities are also more difficult to value, especially in challenging
markets.
Although
the resale or secondary market for senior loans is growing, it is currently limited. There is no organized exchange or board of trade
on which senior loans are traded. Instead, the secondary market for senior loans is an unregulated inter-dealer or inter-bank resale market.
In addition, the senior loans in which the Fund invests may require the consent of the borrower and/or agent prior to the settlement of
the sale or assignment. These consent requirements can delay or impede the Fund’s ability to settle the sale of senior loans. Depending
on market conditions, the Fund may have difficulty disposing its senior loans, which may adversely impact its ability to obtain cash to
repay debt, to pay dividends, to pay expenses or to take advantage of new investment opportunities.
Inflation
Risk. Certain of the Fund’s investments are subject to inflation risk. Inflation risk is the risk
that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. As inflation
increases, the present value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect
to debt securities. Inflation creates uncertainty
over the future real value (after inflation) of an investment. Inflation rates may change frequently and drastically as a result of various
factors, including unexpected shifts in the domestic or global economy, and the Fund’s investments may not keep pace with inflation,
which may result in losses to Fund investors.
Infrastructure
and Industry Concentration Risk. Given the Fund’s concentration in the infrastructure industry,
the Fund is more susceptible to adverse economic or regulatory occurrences affecting that industry than an investment company that is
not concentrated in a single industry. Infrastructure issuers, including utilities and companies involved in infrastructure projects,
may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection
with capital construction programs, high leverage costs associated with environmental and other regulations, the effects of economic slowdown,
surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable
prices, the effects of energy conservation policies, increased regulation and other factors.
In
addition, infrastructure assets can have a substantial environmental impact. Ordinary operation or an accident with respect to such assets
could cause major environmental damage which could cause the owner of such assets significant financial distress. Community and environmental
groups may protest about the development or operation of infrastructure assets, and these protests may induce government action to the
detriment of the owner of the infrastructure asset.
Interest
Rate Risk. Interest rate risk is the risk that securities will decline in value because of changes in
market interest rates. The yield on the Fund’s common shares will tend to rise or fall as market interest rates rise and fall, as
senior loans pay interest at rates which float in response to changes in market rates. Changes in prevailing interest rates can be expected
to cause some fluctuation in the Fund’s net asset value. Similarly, a sudden and significant increase in market interest rates may
cause a decline in the Fund’s net asset value.
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 was 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.
LIBOR
Risk. Many financial instruments use or may use a floating rate based upon the LIBOR. The United Kingdom’s
Financial Conduct Authority (the “FCA”), which regulates LIBOR, has ceased making LIBOR available as a reference rate over
a phase-out period that began December 31, 2022. There is no assurance that any alternative reference rate, including the Secured Overnight
Financing Rate (“SOFR”) will be similar to or produce the same value or economic equivalence as LIBOR or that instruments
using an alternative rate will have the same volume or liquidity. The unavailability or replacement of LIBOR may affect the value, liquidity
or return on certain Fund investments and may result in costs incurred in connection with closing out positions and entering into new
trades. Any potential effects of the transition away from LIBOR on the Fund or on certain instruments in which the Fund invests can be
difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to the Fund.
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
Risk. As a result of the Fund’s exposure to MLPs, 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 invest in the group of industries that
are part of the energy sector. Certain risks inherent in investing in MLPs 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.
Certain
MLP securities may trade in relatively low volumes due to their smaller market capitalizations or other factors, which may cause them
to have a high degree of price volatility and illiquidity. The structures of MLPs create certain risks, including, for example, risks
related to the limited ability of investors to control an MLP and to vote on matters affecting the MLP, risks related to potential conflicts
of interest between an MLP and the MLP’s general partner, the risk that an MLP will generate insufficient cash flow to meet its
current operating requirements, the risk that an MLP will issue additional securities or engage in other transactions that will have the
effect of diluting the interests of existing investors, and risks related to the general partner’s right to require unit-holders
to sell their common units at an undesirable time or price.
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 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-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.
There
may be very limited regulatory oversight of certain non-U.S. banks or securities depositories that hold non-U.S. securities and non-U.S.
currency and the laws of certain countries may limit the ability to recover such assets if a non-U.S. bank or depository or their agents
go bankrupt. There may also be an increased risk of loss of portfolio securities.
Investing
in non-U.S. securities may also involve a greater risk for excessive trading due to “time-zone arbitrage.” If an event occurring
after the close of a non-U.S. market, but before the time the Fund computes its current net asset value, causes a change in the price
of the non-U.S. securities and such price is not reflected in the Fund’s current net asset value, investors may attempt to take
advantage of anticipated price movements in securities held by the Fund based on such pricing discrepancies.
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 the Advisor seek to reduce these operational risks through controls and procedures,
there is no way to completely protect against such risks.
Portfolio
Turnover Risk. The Fund may engage in portfolio trading to accomplish its investment objective. The
investment policies of the Fund may lead to frequent changes in investments, particularly in periods of rapidly fluctuating interest or
currency exchange rates. There are no limits on the rate of portfolio turnover and investments may be sold without regard to length of
time held when the Fund’s investment strategy so dictates. A higher portfolio turnover rate results in correspondingly greater brokerage
commissions and other transactional expenses that are borne by the Fund. High portfolio turnover may result in the realization of net
short-term capital gains by the Fund which, when distributed to shareholders, will be taxable as ordinary income.
Potential
Conflicts of Interest Risk. First Trust, DIFA and the portfolio managers have interests which may conflict
with the interests of the Fund. In particular, First Trust and DIFA 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 DIFA) 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 DIFA have a financial incentive to leverage the Fund.
Prepayment
Risk. Loans are subject to prepayment risk. Prepayment risk is the risk that a borrower repays principal
prior to the scheduled maturity date. The degree to which borrowers prepay loans, whether as a contractual requirement or at their election,
may be affected by general business conditions, interest rates, the financial condition of the borrower and competitive conditions among
loan investors, among others. As such, prepayments cannot be predicted with accuracy. Upon a prepayment, either in part or in full, the
actual outstanding debt on which the Fund derives interest income will be reduced. The Fund may not be able to reinvest the proceeds received
on terms as favorable as the prepaid loan.
Qualified
Dividend Income Tax Risk. There can be no assurance as to what portion of the distributions paid to
the Fund’s common shareholders will consist of tax-advantaged qualified dividend income. Certain distributions designated by the
Fund as derived from qualified dividend income will be taxed in the hands of non-corporate common shareholders at the rates applicable
to long-term capital gains, provided certain holding period and other requirements are satisfied by both the Fund and the common shareholders.
Additional requirements apply in determining whether distributions by foreign issuers should be regarded as qualified dividend income.
Certain investment strategies of the Fund will limit the Fund’s ability to meet these requirements and consequently will limit the
amount of qualified dividend income received and distributed by the Fund. A change in the favorable provisions of the federal tax laws
with respect to qualified dividends may result in a widespread reduction in announced dividends and may adversely impact the valuation
of the shares of dividend-paying companies.
Reinvestment
Risk. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the
Fund invests the proceeds from matured, traded or called instruments at market interest rates that are below the Fund’s portfolio’s
current earnings rate. A decline in income could affect the common shares’ market price, level of distributions or the overall return
of the Fund.
Reorganization
Risk. The Board of Trustees of the Fund has approved the reorganization of the Fund into ASGI.
If approved by shareholders, the transaction is anticipated to be consummated during 2024, subject to the 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 receive shares of ASGI, 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 ASGI, is contained in registration statement/proxy materials. Shareholders should refer to such registration statement/proxy
materials, which are available at https://www.ftportfolios.com/LoadContent/gohdcqj3gy3o.
Restricted
Securities Risk. The Fund may invest in restricted securities. The term “restricted securities”
refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual
restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing
of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it
has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the
decision is made to sell the security and the time the security is registered so that the Fund could sell it. Contractual restrictions
on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of
the securities. The Fund would, in either case, bear market risks during that period.
Risks
Associated with an Investment in Initial Public Offerings. Securities purchased in initial public offerings
(“IPOs”) are often subject to the general risks associated with investments in companies with small market capitalizations,
and typically to a heightened degree. Securities issued in IPOs have no trading history, and information about the companies may be available
for very limited periods. In addition, the prices of securities sold in an IPO may be highly volatile. At any particular time or from
time to time, the Fund may not be able to invest in IPOs, or to invest to the extent desired, because, for example, only a small portion
(if any) of the securities being offered in an IPO may be available to the Fund. In addition, under certain market conditions, a relatively
small number of companies may issue securities in IPOs. The Fund’s investment performance during periods when it is unable
to invest significantly or at all in IPOs may be lower than during periods when it is able to do so. IPO securities may be volatile, and
the Fund cannot predict whether investments in IPOs will be successful.
Senior
Loan Risk. The Fund invests in senior loans and therefore is subject to the risks associated therewith.
Investments in senior loans are subject to the same risks as investments in other types of debt securities, including credit risk, interest
rate risk, liquidity risk and valuation risk (which may be heightened because of the limited public information available regarding senior
loans and because loan
borrowers may be leveraged and tend to be more adversely affected by changes in market or economic conditions). Further, no active trading
market may exist for certain senior loans, which may impair the ability of the Fund to realize full value in the event of the need to
sell a senior loan and which may make it difficult to value senior loans. Senior loans may not be considered “securities”
and the Fund may not be entitled to rely on the anti-fraud protections of the federal securities laws.
In
the event a borrower fails to pay scheduled interest or principal payments on a senior loan held by the Fund, the Fund will experience
a reduction in its income and a decline in the value of the senior loan, which will likely reduce dividends and lead to a decline in the
net asset value of the Fund’s common shares. If the Fund acquires a senior loan from another lender, for example, by acquiring a
participation, the Fund may also be subject to credit risks with respect to that lender. Although senior loans may be secured by specific
collateral, the value of the collateral may not equal the Fund’s investment when the senior loan is acquired or may decline below
the principal amount of the senior loan subsequent to the Fund’s investment. Also, to the extent that collateral consists of stock
of the borrower or its subsidiaries or affiliates, the Fund bears the risk that the stock may decline in value, be relatively illiquid,
and/or may lose all or substantially all of its value, causing the senior loan to be under collateralized. Therefore, the liquidation
of the collateral underlying a senior loan may not satisfy the issuer’s obligation to the Fund in the event of non-payment of scheduled
interest or principal, and the collateral may not be readily liquidated.
The
senior loan market has seen a significant increase in loans with weaker lender protections including, but not limited to, limited financial
maintenance covenants or, in some cases, no financial maintenance covenants (i.e., “covenant-lite loans”) that would typically
be included in a traditional loan agreement and general weakening of other restrictive covenants applicable to the borrower such as limitations
on incurrence of additional debt, restrictions on payments of junior debt or restrictions on dividends and distributions. Weaker lender
protections such as the absence of financial maintenance covenants in a loan agreement and the inclusion of “borrower-favorable”
terms may impact recovery values and/or trading levels of senior loans in the future. The absence of financial maintenance covenants in
a loan agreement generally means that the lender may not be able to declare a default if financial performance deteriorates. This may
hinder the Fund’s ability to reprice credit risk associated with a particular borrower and reduce the Fund’s ability to restructure
a problematic loan and mitigate potential loss. As a result, the Fund’s exposure to losses on investments in senior loans may be
increased, especially during a downturn in the credit cycle or changes in market or economic conditions.
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. Recent 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.
United
Kingdom Risk. The Fund is subject to certain risks specifically associated with investments in the securities
of United Kingdom issuers. Investments in issuers located in the United Kingdom may subject the Fund to regulatory, political, currency,
security, and economic risk specific to the United Kingdom. The United Kingdom has one of the largest economies in Europe, and the United
States, China and other European countries are substantial trading partners of the United Kingdom. As a result, the British economy may
be impacted by changes to the economic health of the United States, China and other European countries. The United Kingdom’s official
departure from the European Union (commonly referred to as “Brexit”) led to volatility in global financial markets, in particular
those of the United Kingdom and across Europe, and the weakening in political, regulatory, consumer, corporate and financial confidence
in the United Kingdom and Europe. Given the size and importance of the United Kingdom’s economy, uncertainty or unpredictability
about its legal, political and/or economic relationships with Europe has been, and may continue to be, a source of instability and could
lead to significant currency fluctuations and other adverse effects on international markets and international trade even under the post-Brexit
trade guidelines. The negative impact of Brexit on not only the United Kingdom and European economies, but the broader global economy,
could be significant, potentially resulting in increased volatility and illiquidity and lower economic growth for companies that rely
significantly on Europe for their business activities and revenues. It is not currently possible to determine the extent of the impact
that Brexit may have on the Fund’s investments and this uncertainty could negatively
impact current and future economic conditions in the United Kingdom and other countries, which could negatively impact the value of the
Fund’s investments.
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. The valuation of senior loans may carry more risk than that of common stock. Because the secondary
market for senior loans is limited, it may be difficult to value the loans held by the Fund. Market quotations may not be readily available
for some senior loans and valuation may require more research than for liquid securities. In addition, elements of judgment may play a
greater role in the valuation of senior loans than for securities with a secondary market, because there is less reliable objective data
available. These difficulties may lead to inaccurate asset pricing.
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Effects of Leverage [Text Block] | Effects
of Leverage
The
aggregate principal amount of borrowings under the BNP Paribas Facility represented 26.89% of the Total Assets as of November 30, 2023.
Asset coverage with respect to the borrowings under the BNP Paribas Facility was 371.83% as of November 30, 2023, and the Fund had $17,450,000
of unutilized funds available for borrowing under the BNP Paribas Facility as of that date. The total amount of borrowings that may be
outstanding at any one time under the BNP Paribas Facility is $45,000,000. The interest rate under the BNP Paribas Facility is equal to
SOFR plus 95 basis points. As of November 30, 2023, the rate was 6.26%. As of November 30, 2023, the Fund had $27,550,000 outstanding
under the BNP Paribas Facility. The Fund only pays a commitment fee of 0.55% on the undrawn amount when the outstanding debt is less than
80% of the maximum commitment amount. The total annual interest and fee rate as of November 30, 2023 was 6.61%.
Assuming
that the Leverage Instruments will represent approximately 26.89% of the Fund’s Total Assets and pay dividends or interest at an
annual combined average rate of 6.61%, the income generated by the Fund’s portfolio (net of estimated expenses) must exceed 1.78%
in order to cover the dividend or interest payments specifically related to the Leverage Instruments. Of course, these numbers are
merely estimates used for illustration. Actual dividend or interest rates on the Leverage Instruments will vary frequently and may
be significantly higher or lower than the rate estimated above.
The
following table is furnished in response to requirements of the Securities and Exchange Commission. 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 Instruments representing 26.89% of the Fund’s capital, net of expenses, and the Fund’s currently
projected annual Leverage Instrument expense of 6.61%.
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 Instruments) and gains or losses on the value
of the securities the Fund owns. As required by Securities and Exchange Commission 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 portfolio securities is entirely offset by losses in the value of those portfolio securities.
|
||||||||||||||||||||||
Annual Interest Rate [Percent] | 6.26% | ||||||||||||||||||||||
Effects of Leverage [Table Text Block] |
|
||||||||||||||||||||||
Return at Minus Ten [Percent] | (16.11%) | ||||||||||||||||||||||
Return at Minus Five [Percent] | (9.27%) | ||||||||||||||||||||||
Return at Zero [Percent] | (2.43%) | ||||||||||||||||||||||
Return at Plus Five [Percent] | 4.41% | ||||||||||||||||||||||
Return at Plus Ten [Percent] | 11.25% | ||||||||||||||||||||||
Effects of Leverage, Purpose [Text Block] | The
following table is furnished in response to requirements of the Securities and Exchange Commission. 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 Instruments representing 26.89% of the Fund’s capital, net of expenses, and the Fund’s currently
projected annual Leverage Instrument expense of 6.61%.
|
||||||||||||||||||||||
Share Price | $ 7.73 | ||||||||||||||||||||||
NAV Per Share | $ 8.76 | ||||||||||||||||||||||
Latest Premium (Discount) to NAV [Percent] | (11.76%) | ||||||||||||||||||||||
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 | 8,547,442 | ||||||||||||||||||||||
Document Period End Date | Nov. 30, 2023 | ||||||||||||||||||||||
Canada Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Canada
Risk. The Fund invests in securities of Canadian issuers and is therefore subject to certain risks specifically
associated with investments in the securities of Canadian issuers. The Canadian economy is heavily dependent on the demand for natural
resources and agricultural products. Canada is a major producer of commodities such as forest products, metals, agricultural products,
and energy related products like oil, gas, and hydroelectricity. Accordingly, a change in the supply and demand of these resources, both
domestically and internationally, can have a significant effect on Canadian market performance. Canada is a top producer of zinc and uranium
and a global source of many other natural resources, such as gold, nickel, aluminum, and lead. Conditions that weaken demand for such
products worldwide could have a negative impact on the Canadian economy as a whole. Changes to the U.S. economy may significantly
affect the Canadian economy because the U.S. is Canada’s largest trading partner and foreign investor. These and other factors could
have a negative impact on the Fund and its investments in Canada.
|
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Credit Agency Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Credit
Agency Risk. Credit ratings are determined by credit rating agencies and are only the opinions of such
entities. Ratings assigned by a rating agency are not absolute standards of credit quality and do not evaluate market risk or the liquidity
of securities. Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings may adversely
affect the credit ratings of securities held by the Fund or such credit agency’s ability to evaluate creditworthiness and, as a
result, may adversely affect those securities’ perceived or actual credit risk.
|
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Credit And Below Investment Grade Securities [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Credit
and Below-Investment Grade Securities Risk. Credit risk is the risk that the issuer or other obligated
party of a debt security in the Fund’s portfolio will fail to pay, or it is perceived that it will fail to pay, dividends and/or
interest or repay principal, when due. Below-investment grade instruments are commonly referred to as high-yield securities or “junk”
bonds and are considered speculative with respect to the issuer’s capacity to pay dividends or interest and repay principal and
are more susceptible to default or decline in market value than investment grade securities due to adverse economic and business developments.
High-yield securities are often unsecured and subordinated to other creditors of the issuer. The market values for high-yield securities
tend to be very volatile, and these securities are generally less liquid than investment grade securities. For these reasons, an investment
in the Fund is subject to the following specific risks: (i) increased price sensitivity to changing interest rates and to a deteriorating
economic environment; (ii) greater risk of loss due to default or declining credit quality; (iii) adverse company specific events more
likely to render the issuer unable to make dividend, interest and/or principal payments; (iv) negative perception of the high-yield market
which may depress the price and liquidity of high-yield securities; (v) volatility; and (vi) liquidity.
|
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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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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, sub-advisor,
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.
|
||||||||||||||||||||||
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. 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.
|
||||||||||||||||||||||
Illiquid Securities Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Illiquid
Securities Risk. The Fund may invest in securities that are considered to be illiquid securities. Illiquid
securities may be difficult to dispose of at a fair price at the times when the Fund believes it is desirable to do so. The market
price of illiquid securities generally is more volatile than that of more liquid securities, which may adversely affect the price that
the Fund pays for or recovers upon the sale of such securities. Illiquid securities are also more difficult to value, especially in challenging
markets.
Although
the resale or secondary market for senior loans is growing, it is currently limited. There is no organized exchange or board of trade
on which senior loans are traded. Instead, the secondary market for senior loans is an unregulated inter-dealer or inter-bank resale market.
In addition, the senior loans in which the Fund invests may require the consent of the borrower and/or agent prior to the settlement of
the sale or assignment. These consent requirements can delay or impede the Fund’s ability to settle the sale of senior loans. Depending
on market conditions, the Fund may have difficulty disposing its senior loans, which may adversely impact its ability to obtain cash to
repay debt, to pay dividends, to pay expenses or to take advantage of new investment opportunities.
|
||||||||||||||||||||||
Inflation Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Inflation
Risk. Certain of the Fund’s investments are subject to inflation risk. Inflation risk is the risk
that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. As inflation
increases, the present value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect
to debt securities. Inflation creates uncertainty
over the future real value (after inflation) of an investment. Inflation rates may change frequently and drastically as a result of various
factors, including unexpected shifts in the domestic or global economy, and the Fund’s investments may not keep pace with inflation,
which may result in losses to Fund investors.
|
||||||||||||||||||||||
Infrastructure And Industry Concentration Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Infrastructure
and Industry Concentration Risk. Given the Fund’s concentration in the infrastructure industry,
the Fund is more susceptible to adverse economic or regulatory occurrences affecting that industry than an investment company that is
not concentrated in a single industry. Infrastructure issuers, including utilities and companies involved in infrastructure projects,
may be subject to a variety of factors that may adversely affect their business or operations, including high interest costs in connection
with capital construction programs, high leverage costs associated with environmental and other regulations, the effects of economic slowdown,
surplus capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable
prices, the effects of energy conservation policies, increased regulation and other factors.
In
addition, infrastructure assets can have a substantial environmental impact. Ordinary operation or an accident with respect to such assets
could cause major environmental damage which could cause the owner of such assets significant financial distress. Community and environmental
groups may protest about the development or operation of infrastructure assets, and these protests may induce government action to the
detriment of the owner of the infrastructure asset.
|
||||||||||||||||||||||
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 was 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.
|
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L I B O R Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | LIBOR
Risk. Many financial instruments use or may use a floating rate based upon the LIBOR. The United Kingdom’s
Financial Conduct Authority (the “FCA”), which regulates LIBOR, has ceased making LIBOR available as a reference rate over
a phase-out period that began December 31, 2022. There is no assurance that any alternative reference rate, including the Secured Overnight
Financing Rate (“SOFR”) will be similar to or produce the same value or economic equivalence as LIBOR or that instruments
using an alternative rate will have the same volume or liquidity. The unavailability or replacement of LIBOR may affect the value, liquidity
or return on certain Fund investments and may result in costs incurred in connection with closing out positions and entering into new
trades. Any potential effects of the transition away from LIBOR on the Fund or on certain instruments in which the Fund invests can be
difficult to ascertain, and they may vary depending on a variety of factors, and they could result in losses to the Fund.
|
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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 Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | MLP
Risk. As a result of the Fund’s exposure to MLPs, 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 invest in the group of industries that
are part of the energy sector. Certain risks inherent in investing in MLPs 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.
Certain
MLP securities may trade in relatively low volumes due to their smaller market capitalizations or other factors, which may cause them
to have a high degree of price volatility and illiquidity. The structures of MLPs create certain risks, including, for example, risks
related to the limited ability of investors to control an MLP and to vote on matters affecting the MLP, risks related to potential conflicts
of interest between an MLP and the MLP’s general partner, the risk that an MLP will generate insufficient cash flow to meet its
current operating requirements, the risk that an MLP will issue additional securities or engage in other transactions that will have the
effect of diluting the interests of existing investors, and risks related to the general partner’s right to require unit-holders
to sell their common units at an undesirable time or price.
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 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 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.
There
may be very limited regulatory oversight of certain non-U.S. banks or securities depositories that hold non-U.S. securities and non-U.S.
currency and the laws of certain countries may limit the ability to recover such assets if a non-U.S. bank or depository or their agents
go bankrupt. There may also be an increased risk of loss of portfolio securities.
Investing
in non-U.S. securities may also involve a greater risk for excessive trading due to “time-zone arbitrage.” If an event occurring
after the close of a non-U.S. market, but before the time the Fund computes its current net asset value, causes a change in the price
of the non-U.S. securities and such price is not reflected in the Fund’s current net asset value, investors may attempt to take
advantage of anticipated price movements in securities held by the Fund based on such pricing discrepancies.
|
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Operatonal 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 the 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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Portfolio Turnover Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Portfolio
Turnover Risk. The Fund may engage in portfolio trading to accomplish its investment objective. The
investment policies of the Fund may lead to frequent changes in investments, particularly in periods of rapidly fluctuating interest or
currency exchange rates. There are no limits on the rate of portfolio turnover and investments may be sold without regard to length of
time held when the Fund’s investment strategy so dictates. A higher portfolio turnover rate results in correspondingly greater brokerage
commissions and other transactional expenses that are borne by the Fund. High portfolio turnover may result in the realization of net
short-term capital gains by the Fund which, when distributed to shareholders, will be taxable as ordinary income.
|
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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, DIFA and the portfolio managers have interests which may conflict
with the interests of the Fund. In particular, First Trust and DIFA 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 DIFA) 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 DIFA have a financial incentive to leverage the Fund.
|
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Prepayments Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Prepayment
Risk. Loans are subject to prepayment risk. Prepayment risk is the risk that a borrower repays principal
prior to the scheduled maturity date. The degree to which borrowers prepay loans, whether as a contractual requirement or at their election,
may be affected by general business conditions, interest rates, the financial condition of the borrower and competitive conditions among
loan investors, among others. As such, prepayments cannot be predicted with accuracy. Upon a prepayment, either in part or in full, the
actual outstanding debt on which the Fund derives interest income will be reduced. The Fund may not be able to reinvest the proceeds received
on terms as favorable as the prepaid loan.
|
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Qualified Dividend Income Tax Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Qualified
Dividend Income Tax Risk. There can be no assurance as to what portion of the distributions paid to
the Fund’s common shareholders will consist of tax-advantaged qualified dividend income. Certain distributions designated by the
Fund as derived from qualified dividend income will be taxed in the hands of non-corporate common shareholders at the rates applicable
to long-term capital gains, provided certain holding period and other requirements are satisfied by both the Fund and the common shareholders.
Additional requirements apply in determining whether distributions by foreign issuers should be regarded as qualified dividend income.
Certain investment strategies of the Fund will limit the Fund’s ability to meet these requirements and consequently will limit the
amount of qualified dividend income received and distributed by the Fund. A change in the favorable provisions of the federal tax laws
with respect to qualified dividends may result in a widespread reduction in announced dividends and may adversely impact the valuation
of the shares of dividend-paying companies.
|
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Reinvestment Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Reinvestment
Risk. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the
Fund invests the proceeds from matured, traded or called instruments at market interest rates that are below the Fund’s portfolio’s
current earnings rate. A decline in income could affect the common shares’ market price, level of distributions or the overall return
of the Fund.
|
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Reorganization Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Reorganization
Risk. The Board of Trustees of the Fund has approved the reorganization of the Fund into ASGI.
If approved by shareholders, the transaction is anticipated to be consummated during 2024, subject to the 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 receive shares of ASGI, 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 ASGI, is contained in registration statement/proxy materials. Shareholders should refer to such registration statement/proxy
materials, which are available at https://www.ftportfolios.com/LoadContent/gohdcqj3gy3o.
|
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Restricted Securities Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Restricted
Securities Risk. The Fund may invest in restricted securities. The term “restricted securities”
refers to securities that are unregistered or are held by control persons of the issuer and securities that are subject to contractual
restrictions on their resale. As a result, restricted securities may be more difficult to value and the Fund may have difficulty disposing
of such assets either in a timely manner or for a reasonable price. In order to dispose of an unregistered security, the Fund, where it
has contractual rights to do so, may have to cause such security to be registered. A considerable period may elapse between the time the
decision is made to sell the security and the time the security is registered so that the Fund could sell it. Contractual restrictions
on the resale of securities vary in length and scope and are generally the result of a negotiation between the issuer and acquirer of
the securities. The Fund would, in either case, bear market risks during that period.
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Risks Associated With An Investment In Initial Public Offerings [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Risks
Associated with an Investment in Initial Public Offerings. Securities purchased in initial public offerings
(“IPOs”) are often subject to the general risks associated with investments in companies with small market capitalizations,
and typically to a heightened degree. Securities issued in IPOs have no trading history, and information about the companies may be available
for very limited periods. In addition, the prices of securities sold in an IPO may be highly volatile. At any particular time or from
time to time, the Fund may not be able to invest in IPOs, or to invest to the extent desired, because, for example, only a small portion
(if any) of the securities being offered in an IPO may be available to the Fund. In addition, under certain market conditions, a relatively
small number of companies may issue securities in IPOs. The Fund’s investment performance during periods when it is unable
to invest significantly or at all in IPOs may be lower than during periods when it is able to do so. IPO securities may be volatile, and
the Fund cannot predict whether investments in IPOs will be successful.
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Senior Loan Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Senior
Loan Risk. The Fund invests in senior loans and therefore is subject to the risks associated therewith.
Investments in senior loans are subject to the same risks as investments in other types of debt securities, including credit risk, interest
rate risk, liquidity risk and valuation risk (which may be heightened because of the limited public information available regarding senior
loans and because loan
borrowers may be leveraged and tend to be more adversely affected by changes in market or economic conditions). Further, no active trading
market may exist for certain senior loans, which may impair the ability of the Fund to realize full value in the event of the need to
sell a senior loan and which may make it difficult to value senior loans. Senior loans may not be considered “securities”
and the Fund may not be entitled to rely on the anti-fraud protections of the federal securities laws.
In
the event a borrower fails to pay scheduled interest or principal payments on a senior loan held by the Fund, the Fund will experience
a reduction in its income and a decline in the value of the senior loan, which will likely reduce dividends and lead to a decline in the
net asset value of the Fund’s common shares. If the Fund acquires a senior loan from another lender, for example, by acquiring a
participation, the Fund may also be subject to credit risks with respect to that lender. Although senior loans may be secured by specific
collateral, the value of the collateral may not equal the Fund’s investment when the senior loan is acquired or may decline below
the principal amount of the senior loan subsequent to the Fund’s investment. Also, to the extent that collateral consists of stock
of the borrower or its subsidiaries or affiliates, the Fund bears the risk that the stock may decline in value, be relatively illiquid,
and/or may lose all or substantially all of its value, causing the senior loan to be under collateralized. Therefore, the liquidation
of the collateral underlying a senior loan may not satisfy the issuer’s obligation to the Fund in the event of non-payment of scheduled
interest or principal, and the collateral may not be readily liquidated.
The
senior loan market has seen a significant increase in loans with weaker lender protections including, but not limited to, limited financial
maintenance covenants or, in some cases, no financial maintenance covenants (i.e., “covenant-lite loans”) that would typically
be included in a traditional loan agreement and general weakening of other restrictive covenants applicable to the borrower such as limitations
on incurrence of additional debt, restrictions on payments of junior debt or restrictions on dividends and distributions. Weaker lender
protections such as the absence of financial maintenance covenants in a loan agreement and the inclusion of “borrower-favorable”
terms may impact recovery values and/or trading levels of senior loans in the future. The absence of financial maintenance covenants in
a loan agreement generally means that the lender may not be able to declare a default if financial performance deteriorates. This may
hinder the Fund’s ability to reprice credit risk associated with a particular borrower and reduce the Fund’s ability to restructure
a problematic loan and mitigate potential loss. As a result, the Fund’s exposure to losses on investments in senior loans may be
increased, especially during a downturn in the credit cycle or changes in market or economic conditions.
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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. Recent 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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United Kingdom Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | United
Kingdom Risk. The Fund is subject to certain risks specifically associated with investments in the securities
of United Kingdom issuers. Investments in issuers located in the United Kingdom may subject the Fund to regulatory, political, currency,
security, and economic risk specific to the United Kingdom. The United Kingdom has one of the largest economies in Europe, and the United
States, China and other European countries are substantial trading partners of the United Kingdom. As a result, the British economy may
be impacted by changes to the economic health of the United States, China and other European countries. The United Kingdom’s official
departure from the European Union (commonly referred to as “Brexit”) led to volatility in global financial markets, in particular
those of the United Kingdom and across Europe, and the weakening in political, regulatory, consumer, corporate and financial confidence
in the United Kingdom and Europe. Given the size and importance of the United Kingdom’s economy, uncertainty or unpredictability
about its legal, political and/or economic relationships with Europe has been, and may continue to be, a source of instability and could
lead to significant currency fluctuations and other adverse effects on international markets and international trade even under the post-Brexit
trade guidelines. The negative impact of Brexit on not only the United Kingdom and European economies, but the broader global economy,
could be significant, potentially resulting in increased volatility and illiquidity and lower economic growth for companies that rely
significantly on Europe for their business activities and revenues. It is not currently possible to determine the extent of the impact
that Brexit may have on the Fund’s investments and this uncertainty could negatively
impact current and future economic conditions in the United Kingdom and other countries, which could negatively impact the value of the
Fund’s investments.
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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. The valuation of senior loans may carry more risk than that of common stock. Because the secondary
market for senior loans is limited, it may be difficult to value the loans held by the Fund. Market quotations may not be readily available
for some senior loans and valuation may require more research than for liquid securities. In addition, elements of judgment may play a
greater role in the valuation of senior loans than for securities with a secondary market, because there is less reliable objective data
available. These difficulties may lead to inaccurate asset pricing.
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Interest Rate Risk [Member] | |||||||||||||||||||||||
General Description of Registrant [Abstract] | |||||||||||||||||||||||
Risk [Text Block] | Interest
Rate Risk. Interest rate risk is the risk that securities will decline in value because of changes in
market interest rates. The yield on the Fund’s common shares will tend to rise or fall as market interest rates rise and fall, as
senior loans pay interest at rates which float in response to changes in market rates. Changes in prevailing interest rates can be expected
to cause some fluctuation in the Fund’s net asset value. Similarly, a sudden and significant increase in market interest rates may
cause a decline in the Fund’s net asset value.
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