As filed with the Securities and Exchange Commission on March 9, 2016.
===============================================================================
1933 Act File No. 333-141457
1940 Act File No. 811-22039
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
FIRST TRUST MLP AND ENERGY INCOME FUND
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
March 7, 2016
Dear Shareholder:
The accompanying materials relate to the Joint Annual Meetings of
Shareholders (collectively, the "Meeting") of each fund listed above (each a
"Fund" and collectively the "Funds"). The Meeting will be held at the offices of
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois
60187, on Friday, April 22, 2016, at 4:30 p.m. Central Time.
At the Meeting, you will be asked to vote on a proposal to elect two of
the Trustees of your Fund (the "Proposal") and to transact such other business
as may properly come before the Meeting and any adjournments or postponements
thereof. The Proposal is described in the accompanying Notice of Joint Annual
Meetings of Shareholders and Joint Proxy Statement.
YOUR PARTICIPATION AT THE MEETING IS VERY IMPORTANT. If you cannot attend
the Meeting, you may participate by proxy. As a Shareholder, you cast one vote
for each full share of a Fund that you own and a proportionate fractional vote
for any fraction of a share that you own. Please take a few moments to read the
enclosed materials and then cast your vote on the enclosed proxy card.
VOTING TAKES ONLY A FEW MINUTES. EACH SHAREHOLDER'S VOTE IS IMPORTANT.
YOUR PROMPT RESPONSE WILL BE MUCH APPRECIATED.
After you have voted on the Proposal, please be sure to sign your proxy
card and return it in the enclosed postage-paid envelope.
We appreciate your participation in this important Meeting.
Thank you.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Boards
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance
to you and will avoid the time and expense to your Fund involved in validating
your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration.
3. All Other Accounts: The capacity of the individual signing the proxy
should be indicated unless it is reflected in the form of registration. For
example:
REGISTRATION VALID SIGNATURE
CORPORATE ACCOUNTS
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr., UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
FIRST TRUST MLP AND ENERGY INCOME FUND
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
NOTICE OF JOINT ANNUAL MEETINGS OF SHAREHOLDERS
To be held On April 22, 2016
March 7, 2016
To the Shareholders of the above Funds:
Notice is hereby given that the Joint Annual Meetings of Shareholders
(collectively, the "Meeting") of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, First Trust Energy Income and
Growth Fund, First Trust Enhanced Equity Income Fund, First Trust/Aberdeen
Global Opportunity Income Fund, First Trust Mortgage Income Fund, First Trust
Strategic High Income Fund II, First Trust/Aberdeen Emerging Opportunity Fund,
First Trust Specialty Finance and Financial Opportunities Fund, First Trust High
Income Long/Short Fund, First Trust Energy Infrastructure Fund, First Trust MLP
and Energy Income Fund, First Trust Intermediate Duration Preferred & Income
Fund and First Trust New Opportunities MLP & Energy Fund (each a "Fund" and
collectively the "Funds"), each a Massachusetts business trust, will be held at
the offices of First Trust Advisors L.P., 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187, on Friday, April 22, 2016, at 4:30 p.m. Central Time,
for the following purposes:
1. To elect two Trustees (the Class III Trustees) of each Fund.
2. To transact such other business as may properly come before the
Meeting or any adjournments or postponements thereof.
The Board of Trustees of each Fund has fixed the close of business on
January 29, 2016 as the record date for the determination of shareholders of
such Fund entitled to notice of and to vote at the Meeting and any adjournments
or postponements thereof.
By Order of the Boards of Trustees,
/s/ W. Scott Jardine
W. Scott Jardine
Secretary
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SHAREHOLDERS ARE REQUESTED TO PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE PROXY
CARD IN THE ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF MAILED IN THE
CONTINENTAL UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE
SET FORTH ON THE INSIDE COVER OF THIS JOINT PROXY STATEMENT.
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FIRST TRUST ENERGY INCOME AND GROWTH FUND
FIRST TRUST ENHANCED EQUITY INCOME FUND
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
FIRST TRUST MORTGAGE INCOME FUND
FIRST TRUST STRATEGIC HIGH INCOME FUND II
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
FIRST TRUST HIGH INCOME LONG/SHORT FUND
FIRST TRUST ENERGY INFRASTRUCTURE FUND
FIRST TRUST MLP AND ENERGY INCOME FUND
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND
JOINT ANNUAL MEETINGS OF SHAREHOLDERS
April 22, 2016
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
JOINT PROXY STATEMENT
March 7, 2016
THIS JOINT PROXY STATEMENT AND THE ENCLOSED PROXY CARD WILL FIRST BE
MAILED TO SHAREHOLDERS ON OR ABOUT MARCH 14, 2016.
This Joint Proxy Statement is furnished in connection with the
solicitation of proxies by the Boards of Trustees of the funds listed above
(each a "Fund" and collectively the "Funds"), each a Massachusetts business
trust, for use at the Annual Meetings of Shareholders of the Funds to be held on
Friday, April 22, 2016, at 4:30 p.m. Central Time, at the offices of First Trust
Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, and
at any adjournments or postponements thereof (collectively, the "Meeting"). A
Notice of Joint Annual Meetings of Shareholders and a proxy card accompany this
Joint Proxy Statement. The Boards of Trustees of the Funds have determined that
the use of this Joint Proxy Statement is in the best interests of each Fund in
light of the same matter being considered and voted on by shareholders.
The principal offices of First Trust Energy Income and Growth Fund, First
Trust MLP and Energy Income Fund and First Trust New Opportunities MLP & Energy
Fund are located at 10 Westport Road, Suite C101A, Wilton, Connecticut 06897.
The principal offices of each of the other Funds are located at 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187.
Proxy solicitations will be made primarily by mail. However, proxy
solicitations may also be made by telephone or personal interviews conducted by
officers and service providers of the Funds, including any agents or affiliates
of such service providers.
The costs incurred in connection with the preparation of this Joint Proxy
Statement and its enclosures will be paid by the Funds. The Funds will also
reimburse brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of Fund shares.
The close of business on January 29, 2016 has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Meeting and any adjournments or postponements
thereof.
Each Fund has one class of shares of beneficial interest, par value $0.01
per share, known as common shares ("Shares").
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON APRIL 22, 2016. THIS JOINT PROXY STATEMENT IS
AVAILABLE ON THE INTERNET AT HTTP://WWW.FTPORTFOLIOS.COM/LOADCONTENT/
GR3UYPB3GR4Y. EACH FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE ALSO
AVAILABLE ON THE INTERNET AT HTTP://WWW.FTPORTFOLIOS.COM. TO FIND A REPORT,
SELECT YOUR FUND UNDER THE "CLOSED-END FUNDS" TAB, SELECT THE "NEWS &
LITERATURE" LINK, AND GO TO THE "QUARTERLY/SEMI-ANNUAL OR ANNUAL REPORTS"
HEADING. IN ADDITION, THE FUNDS WILL FURNISH, WITHOUT CHARGE, COPIES OF THEIR
MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS TO ANY SHAREHOLDER UPON REQUEST. TO
REQUEST A COPY, PLEASE WRITE TO FIRST TRUST ADVISORS L.P. ("FIRST TRUST
ADVISORS" OR THE "ADVISOR") AT 120 EAST LIBERTY DRIVE, SUITE 400, WHEATON,
ILLINOIS 60187, OR CALL (800) 988-5891.
YOU MAY CALL (800) 988-5891 FOR INFORMATION ON HOW TO OBTAIN DIRECTIONS TO
BE ABLE TO ATTEND THE MEETING AND VOTE IN PERSON.
In order that your Shares may be represented at the Meeting, you are
requested to:
o indicate your instructions on the proxy card;
o date and sign the proxy card;
o mail the proxy card promptly in the enclosed envelope which requires
no postage if mailed in the continental United States; and
o allow sufficient time for the proxy card to be received BY 4:30 P.M.
CENTRAL TIME, on FRIDAY, APRIL 22, 2016. (However, proxies received
after this date may still be voted in the event the Meeting is
adjourned or postponed to a later date.)
-2-
VOTING
As described further in the proposal, for each Fund, the affirmative vote
of a plurality of the Shares present and entitled to vote at the Meeting will be
required to elect the specified nominees as the Class III Trustees of that Fund
provided a quorum is present. Abstentions and broker non-votes (i.e., Shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or the persons entitled to vote and (ii) the broker
or nominee does not have discretionary voting power on a particular matter) will
have no effect on the approval of the proposal.
If the enclosed proxy card is properly executed and returned in time to be
voted at the Meeting, the Shares represented thereby will be voted in accordance
with the instructions marked thereon, or, if no instructions are marked thereon,
will be voted in the discretion of the persons named on the proxy card.
Accordingly, unless instructions to the contrary are marked thereon, a properly
executed and returned proxy will be voted FOR the election of the specified
nominees as the Class III Trustees and at the discretion of the named proxies on
any other matters that may properly come before the Meeting, as deemed
appropriate. Any shareholder who has given a proxy has the right to revoke it at
any time prior to its exercise either by attending the Meeting and voting his or
her Shares in person, or by timely submitting a letter of revocation or a
later-dated proxy to the applicable Fund at its address above. A list of
shareholders entitled to notice of and to be present and to vote at the Meeting
will be available at 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187
for inspection by any shareholder during regular business hours prior to the
Meeting. Shareholders will need to show valid identification and proof of Share
ownership to be admitted to the Meeting or to inspect the list of shareholders.
Under the By-Laws of each Fund, a quorum is constituted by the presence in
person or by proxy of the holders of thirty-three and one-third percent
(33-1/3%) of the voting power of the outstanding Shares entitled to vote on a
matter. For the purposes of establishing whether a quorum is present with
respect to a Fund, all Shares present and entitled to vote, including
abstentions and broker non-votes, shall be counted. Any meeting of shareholders
may be postponed prior to the meeting with notice to the shareholders entitled
to vote at that meeting. Any meeting of shareholders may, by action of the
chairman of the meeting, be adjourned to permit further solicitation of proxies
without further notice with respect to one or more matters to be considered at
such meeting to a designated time and place, whether or not a quorum is present
with respect to such matter. In addition, upon motion of the chairman of the
meeting, the question of adjournment may be submitted to a vote of the
shareholders, and in that case, any adjournment must be approved by the vote of
holders of a majority of the Shares present and entitled to vote with respect to
the matter or matters adjourned, and without further notice. Unless a proxy is
otherwise limited in this regard, any Shares present and entitled to vote at a
meeting, including broker non-votes, may, at the discretion of the proxies named
therein, be voted in favor of such an adjournment.
-3-
OUTSTANDING SHARES
On the Record Date, each Fund had the following number of Shares
outstanding:
------------------------------------------------------------------------------------------- -------------- ----------------
TICKER SHARES
FUND SYMBOL(1) OUTSTANDING
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND MFD 8,543,080
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND FEN 19,355,214
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FIRST TRUST ENHANCED EQUITY INCOME FUND FFA 19,973,164
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FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND FAM 17,267,115
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST MORTGAGE INCOME FUND FMY 4,213,115
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FIRST TRUST STRATEGIC HIGH INCOME FUND II FHY 8,298,394
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FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND FEO 5,270,077
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND FGB 14,321,269
------------------------------------------------------------------------------------------- -------------- ----------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND FSD 35,399,315
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FIRST TRUST ENERGY INFRASTRUCTURE FUND FIF 17,550,236
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FIRST TRUST MLP AND ENERGY INCOME FUND FEI 45,439,454
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FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND FPF 60,704,189
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FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND FPL 23,755,236
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1 The Shares of each of the Funds are listed on the New York Stock Exchange
("NYSE") except for the Shares of First Trust Energy Income and Growth Fund,
which are listed on the NYSE MKT LLC ("NYSE MKT").
Shareholders of record on the Record Date are entitled to one vote for
each full Share the shareholder owns and a proportionate fractional vote for any
fraction of a Share the shareholder owns.
To the knowledge of the Board of Trustees of each Fund, as of the Record
Date, no single shareholder or "group" (as that term is used in Section 13(d) of
the Securities Exchange Act of 1934 (the "1934 Act")) beneficially owned more
than 5% of the Fund's outstanding Shares, except as described in the following
table. A control person is one who owns, either directly or indirectly, more
than 25% of the voting securities of a Fund or acknowledges the existence of
control. A party that controls a Fund may be able to significantly affect the
outcome of any item presented to shareholders for approval. Information as to
beneficial ownership of Shares, including percentage of outstanding Shares
beneficially owned, is based on securities position listing reports as of the
Record Date and reports filed with the Securities and Exchange Commission
("SEC") by shareholders. The Funds do not have any knowledge of the identity of
the ultimate beneficiaries of the Shares listed below.
-4-
BENEFICIAL OWNERSHIP OF SHARES
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NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
========================================================================================================================
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND:
========================================================================================================================
Charles Schwab & Co., Inc. 643,248 Shares 7.53%
2423 E. Lincoln Drive
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
2801 Market Street 766,276 Shares 8.97%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
4804 Deer Lake Drive E. 824,373 Shares 9.65%
Jacksonville, FL 32246
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
499 Washington Blvd. 949,463 Shares 11.11%
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 618,178 Shares 7.24%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway 540,949 Shares 6.33%
St. Petersburg, FL 33716
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets LLC
60 S. 6th Street - P09 487,379 Shares 5.70%
Minneapolis, MN 55402
----------------------------------------------------- ------------------------------- ----------------------------------
TD Ameritrade Clearing, Inc.
1005 N. Ameritrade Place 887,141 Shares 10.38%
Bellevue, NE 68005
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FIRST TRUST ENERGY INCOME AND GROWTH FUND:
========================================================================================================================
The Bank of New York Mellon 1,792,132 Shares 9.26%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
Charles Schwab & Co., Inc.
2423 E. Lincoln Drive 1,297,170 Shares 6.70%
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
2801 Market Street 2,664,039 Shares 13.76%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
4804 Deer Lake Drive E. 968,012 Shares 5.00%
Jacksonville, FL 32246
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 2,022,151 Shares 10.45%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
499 Washington Blvd. 1,485,487 Shares 7.67%
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 1,262,993 Shares 6.53%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
Robert W. Baird & Co., Inc.
777 E. Wisconsin Avenue
19th Floor 1,095,553 Shares 5.66%
Milwaukee, WI 53202
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FIRST TRUST ENHANCED EQUITY INCOME FUND:
========================================================================================================================
The Bank of New York Mellon 1,557,584 Shares 7.80%
525 William Penn Place
Pittsburgh, PA 15259
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-5-
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NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
========================================================================================================================
First Clearing, LLC
2801 Market Street 4,933,048 Shares 24.70%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 2,027,728 Shares 10.15%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
499 Washington Blvd. 1,168,769 Shares 5.85%
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway 2,656,751 Shares 13.30%
St. Petersburg, FL 33716
----------------------------------------------------- ------------------------------- ----------------------------------
Advisors Asset Management, Inc.(1) 1,248,321 Shares 6.25%
18925 Base Camp Road
Monument, CO 80132
========================================================================================================================
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND:
========================================================================================================================
Charles Schwab & Co., Inc. 938,684 Shares 5.44%
2423 E. Lincoln Drive
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
2801 Market Street 1,315,841 Shares 7.62%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 1,355,328 Shares 7.85%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
499 Washington Blvd. 1,517,823 Shares 8.79%
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
U.S. Bank N.A.
1555 N. Rivercenter Drive
Suite 302 1,201,916 Shares 6.96%
Milwaukee, WI 53212
----------------------------------------------------- ------------------------------- ----------------------------------
Karpus Management, Inc., d/b/a Karpus Investment
Management(2)
183 Sully's Trail 2,018,317 Shares 11.69%
Pittsford, NY 14534
========================================================================================================================
FIRST TRUST MORTGAGE INCOME FUND:
========================================================================================================================
The Bank of New York Mellon/Mellon Trust of 229,087 Shares 5.44%
New England
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
499 Washington Blvd. 388,810 Shares 9.23%
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
The Northern Trust Company
801 S. Canal Street 682,376 Shares 16.20%
Chicago, IL 60607
----------------------------------------------------- ------------------------------- ----------------------------------
State Street Bank and Trust Co.
1776 Heritage Drive 574,713 Shares 13.64%
North Quincy, MA 02171
----------------------------------------------------- ------------------------------- ----------------------------------
1 Information is according to Amendment No. 1 to Schedule 13G filed with the
SEC on February 10, 2016. The entity listed indicated that it had (a) sole
voting power with respect to 1,243,987 Shares and (b) sole dispositive power
with respect to 1,248,321 Shares.
2 Information is according to Schedule 13G filed with the SEC on January 8,
2016.
-6-
========================================================================================================================
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
========================================================================================================================
Sit Investment Associates, Inc.
Sit Fixed Income Advisors II, LLC(1) 1,215,872 Shares 28.74%
3300 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
----------------------------------------------------- ------------------------------- ----------------------------------
1607 Capital Partners, LLC(2)
13 S. 13th Street, Suite 400 747,810 Shares 17.7%
Richmond, VA 23219
and
The Walt Disney Company Retirement Plan Master Trust 326,069 Shares 7.7%
500 South Buena Vista Street
Burbank, CA 91521-0500
========================================================================================================================
FIRST TRUST STRATEGIC HIGH INCOME FUND II:
========================================================================================================================
Charles Schwab & Co., Inc. 768,055 Shares 9.26%
2423 E. Lincoln Drive
Phoenix, AZ 85016
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC 676,633 Shares 8.15%
2801 Market Street
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 420,320 Shares 5.07%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
499 Washington Blvd. 1,113,356 Shares 13.42%
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 615,210 Shares 7.41%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
TD Ameritrade Clearing, Inc.
1005 N. Ameritrade Place 418,567 Shares 5.04%
Bellevue, NE 68005
----------------------------------------------------- ------------------------------- ----------------------------------
Advisors Asset Management, Inc.(3)
18925 Base Camp Road 303,084 Shares 7.424%
Monument CO 80132
========================================================================================================================
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND:
========================================================================================================================
The Bank of New York Mellon/Mellon Trust of 1,161,137 Shares 22.03%
New England
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
2801 Market Street 701,512 Shares 13.31%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 306,192 Shares 5.81%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
The Northern Trust Company
801 S. Canal Street 482,957 Shares 9.16%
Chicago, IL 60607
----------------------------------------------------- ------------------------------- ----------------------------------
1 Information is according to Schedule 13D filed with the SEC pursuant to a
joint filing agreement on March 19, 2015.
2 Information is according to Schedule 13G/A filed with the SEC pursuant to a
joint filing agreement on February 16, 2016. The Schedule 13G/A states that
(a) 1607 Capital Partners, LLC, an investment adviser, is the beneficial
owner of Shares based on having voting power which includes the power to
vote, or to direct the voting of, such securities and investment power which
includes the power to dispose, or to direct the disposition of, such
securities and (b) The Walt Disney Company Retirement Plan Master Trust is a
client of 1607 Capital Partners, LLC and is the beneficial owner of Shares
solely due to being able to terminate without condition the investment
management agreement with 1607 Capital Partners, LLC in less than sixty
days.
3 Information is according to Schedule 13G filed with the SEC on February 7,
2013.
-7-
========================================================================================================================
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
========================================================================================================================
State Street Bank and Trust Co. 299,644 Shares 5.69%
1776 Heritage Drive
North Quincy, MA 02171
----------------------------------------------------- ------------------------------- ----------------------------------
City of London Investment Group PLC(1) 955,932 Shares 18.1%
City of London Investment Management Company Limited
77 Gracechurch Street
London EC3V 0AS
England
----------------------------------------------------- ------------------------------- ----------------------------------
Lazard Asset Management LLC(2) 903,494 Shares 16.96%
30 Rockefeller Plaza
New York, NY 10112
----------------------------------------------------- ------------------------------- ----------------------------------
1607 Capital Partners, LLC(3) 340,394 Shares 6.4%
13 S. 13th Street, Suite 400
Richmond, VA 23219
========================================================================================================================
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND:
========================================================================================================================
First Clearing, LLC 5,881,012 Shares 41.06%
2801 Market Street
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC 1,317,858 Shares 9.20%
499 Washington Blvd.
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 732,915 Shares 5.12%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
Stifel, Nicolaus & Company, Incorporated
200 Regency Forest Drive 1,206,554 Shares 8.42%
Cary, NC 27518
========================================================================================================================
FIRST TRUST HIGH INCOME LONG/SHORT FUND:
========================================================================================================================
First Clearing, LLC 4,574,034 Shares 12.92%
2801 Market Street
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
4804 Deer Lake Drive E. 2,070,869 Shares 5.85%
Jacksonville, FL 32246
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 11,186,676 Shares 31.60%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
National Financial Services, LLC
499 Washington Blvd. 1,907,677 Shares 5.39%
Jersey City, NJ 07310
----------------------------------------------------- ------------------------------- ----------------------------------
Raymond James & Associates, Inc.
880 Carillon Parkway 1,906,553 Shares 5.39%
St. Petersburg, FL 33716
----------------------------------------------------- ------------------------------- ----------------------------------
State Street Bank and Trust Co.
1776 Heritage Drive 2,343,943 Shares 6.62%
North Quincy, MA 02171
----------------------------------------------------- ------------------------------- ----------------------------------
1 Information is according to Amendment No. 2 to Schedule 13G filed with the
SEC on February 12, 2016. The entities listed filed the Schedule 13G jointly
and indicated that, with respect to the Shares held, they had (a) shared
power to vote or to direct the vote and (b) shared power to dispose or to
direct the disposition.
2 Information is according to Schedule 13G/A filed with the SEC on February 8,
2016. The entity listed indicated that it had (a) sole voting power with
respect to 882,794 Shares and (b) sole dispositive power with respect to
903,494 Shares.
3 Information is according to Schedule 13G filed with the SEC on February 16,
2016.
-8-
========================================================================================================================
NAME AND ADDRESS SHARES BENEFICIALLY % OF OUTSTANDING SHARES
OF BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
========================================================================================================================
FIRST TRUST ENERGY INFRASTRUCTURE FUND:
========================================================================================================================
The Bank of New York Mellon 1,485,270 Shares 8.46%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
2801 Market Street 2,538,444 Shares 14.46%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
4804 Deer Lake Drive E. 1,318,592 Shares 7.51%
Jacksonville, FL 32246
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 4,495,446 Shares 25.61%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets LLC
60 S. 6th Street - P09 1,228,809 Shares 7.00%
Minneapolis, MN 55402
========================================================================================================================
FIRST TRUST MLP AND ENERGY INCOME FUND:
========================================================================================================================
The Bank of New York Mellon 2,787,741 Shares 6.14%
525 William Penn Place
Pittsburgh, PA 15259
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
2801 Market Street 2,475,223 Shares 5.45%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 19,240,607 Shares 42.34%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets LLC
60 S. 6th Street - P09 2,810,548 Shares 6.19%
Minneapolis, MN 55402
========================================================================================================================
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND:
========================================================================================================================
First Clearing, LLC 4,013,879 Shares 6.61%
2801 Market Street
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Merrill Lynch, Pierce Fenner & Smith Safekeeping
4804 Deer Lake Drive E. 4,723,438 Shares 7.78%
Jacksonville, FL 32246
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 22,694,899 Shares 37.39%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 4,419,940 Shares 7.28%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
RBC Capital Markets LLC
60 S. 6th Street - P09 4,668,068 Shares 7.69%
Minneapolis, MN 55402
========================================================================================================================
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND:
========================================================================================================================
American Enterprise Investment Services Inc. 2,986,815 Shares 12.57%
682 AMP Financial Center
Minneapolis, MN 55474
----------------------------------------------------- ------------------------------- ----------------------------------
First Clearing, LLC
2801 Market Street 1,739,163 Shares 7.32%
St. Louis, MO 63103
----------------------------------------------------- ------------------------------- ----------------------------------
Morgan Stanley Smith Barney LLC
1300 Thames Street 10,857,269 Shares 45.70%
Baltimore, MD 21231
----------------------------------------------------- ------------------------------- ----------------------------------
Pershing LLC
1 Pershing Plaza 1,237,746 Shares 5.21%
Jersey City, NJ 07399
----------------------------------------------------- ------------------------------- ----------------------------------
-9-
PROPOSAL: ELECTION OF TWO (2) CLASS III TRUSTEES OF EACH FUND
TWO (2) CLASS III TRUSTEES ARE TO BE ELECTED BY HOLDERS OF SHARES OF EACH FUND.
CURRENT TRUSTEES JAMES A. BOWEN AND NIEL B. NIELSON ARE THE NOMINEES FOR
ELECTION AS THE CLASS III TRUSTEES BY SHAREHOLDERS OF EACH FUND FOR A THREE-YEAR
TERM.
Each Fund has established a staggered Board of Trustees pursuant to its
By-Laws, and, accordingly, Trustees are divided into the following three (3)
classes: Class I, Class II and Class III. James A. Bowen and Niel B. Nielson are
currently the Class III Trustees of each Fund for a term expiring at the Meeting
or until their respective successors are elected and qualified. If elected, Mr.
Bowen and Mr. Nielson will hold office for a three-year term expiring at each
Fund's 2019 annual meeting of shareholders. Robert F. Keith, Richard E. Erickson
and Thomas R. Kadlec are current and continuing Trustees. Mr. Keith is the Class
I Trustee for a term expiring at each Fund's 2017 annual meeting of
shareholders. Dr. Erickson and Mr. Kadlec are Class II Trustees for a term
expiring at each Fund's 2018 annual meeting of shareholders. Each Trustee serves
until his successor is elected and qualified, or until he earlier resigns or is
otherwise removed.
REQUIRED VOTE: For each Fund, each nominee for election as a Class III
Trustee must be elected by the affirmative vote of the holders of a plurality of
the Shares of the Fund, cast in person or by proxy at the Meeting and entitled
to vote thereon, provided a quorum is present. Abstentions and broker non-votes
will have no effect on the approval of the proposal. Proxies cannot be voted for
a greater number of persons than the number of seats open for election.
Unless you give contrary instructions on your proxy card, your Shares will
be voted FOR the election of each nominee listed if your proxy card has been
properly executed and timely received by the applicable Fund. If either nominee
should withdraw or otherwise become unavailable for election prior to the
Meeting, the proxies named on your proxy card intend to vote FOR any substitute
nominee recommended by the Funds' Boards of Trustees in accordance with the
Funds' procedures.
THE BOARD OF TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE ELECTION OF EACH NOMINEE.
-10-
MANAGEMENT
MANAGEMENT OF THE FUNDS
The general supervision of the duties performed for each Fund under its
respective investment management agreement with the Advisor is the
responsibility of that Fund's Board of Trustees. The Trustees set broad policies
for the Funds and choose the Funds' officers. The following is a list of the
Trustees and executive officers of each Fund and a statement of their present
positions and principal occupations during the past five years, the number of
portfolios each Trustee oversees and the other directorships each Trustee holds,
if applicable. As noted above, each Fund has established a staggered Board of
Trustees consisting of five (5) Trustees divided into three (3) classes: Class
I, Class II and Class III. The length of the term of office of each Trustee is
generally three years, and when each Trustee's term begins and ends depends on
the Trustee's designated class. The officers of the Funds serve indefinite
terms. James A. Bowen is deemed an "interested person" (as that term is defined
in the Investment Company Act of 1940, as amended ("1940 Act")) ("Interested
Trustee") of the Funds due to his position as Chief Executive Officer of the
Advisor. Except for Mr. Bowen, each Trustee is not an "interested person" (as
that term is defined in the 1940 Act) and is therefore referred to as an
"Independent Trustee."
The remainder of this page is intentionally left blank.
-11-
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
TERM OF FIRST TRUST
POSITION(S) AND OFFICE(2) PRINCIPAL OCCUPATION(S) FUND COMPLEX OTHER
NAME, ADDRESS, AND HELD LENGTH OF TIME DURING PAST FIVE OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH WITH FUNDS SERVED(3) YEARS TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1) Chairman of Class III Chief Executive Officer, First 124 Portfolios None
120 East Liberty Drive the Board and Nominee Trust Advisors L.P. and First
Suite 400 Trustee Trust Portfolios L.P.; Chairman
Wheaton, IL 60187 Since 2004 of the Board of Directors,
DOB: 9/55 BondWave LLC (Software
Development Company/Investment
Advisor) and Stonebridge
Advisors LLC (Investment
Advisor)
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS IN
TERM OF FIRST TRUST
POSITION(S) AND OFFICE(2) PRINCIPAL OCCUPATION(S) FUND COMPLEX OTHER
NAME, ADDRESS, AND HELD LENGTH OF TIME DURING PAST FIVE OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH WITH FUNDS SERVED(3) YEARS TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson Trustee Class II Physician; President, Wheaton 124 Portfolios None
c/o First Trust Advisors Orthopedics; Limited Partner,
L.P. Since 2004 Gundersen Real Estate Limited
120 East Liberty Drive Partnership; Member, Sportsmed
Suite 400 LLC
Wheaton, IL 60187
DOB: 4/51
------------------------------------------------------------------------------------------------------------------------------------
Thomas R. Kadlec Trustee Class II President, ADM Investor 124 Portfolios Director of ADM
c/o First Trust Advisors Services, Inc. (Futures Investor Services,
L.P. Since 2004 Commission Merchant) Inc., ADM Investor
120 East Liberty Drive Services
Suite 400 International and
Wheaton, IL 60187 Futures Industry
DOB: 11/57 Association
------------------------------------------------------------------------------------------------------------------------------------
Robert F. Keith Trustee Class I President, Hibs Enterprises 124 Portfolios Director of Trust
c/o First Trust Advisors (Financial and Management Company of Illinois
L.P. Since 2006 Consulting)
120 East Liberty Drive
Suite 400
Wheaton, IL 60187
DOB: 11/56
------------------------------------------------------------------------------------------------------------------------------------
Niel B. Nielson Trustee Class III Managing Director and Chief 124 Portfolios Director of
c/o First Trust Advisors Nominee Operating Officer (January 2015 Covenant
L.P. to present), Pelita Harapan Transport Inc.
120 East Liberty Drive Since 2004 Education Foundation (2003 - 2014)
Suite 400 (Educational Products and
Wheaton, IL 60187 Services); President and Chief
DOB: 3/54 Executive Officer (June 2012 to
September 2014), Servant
Interactive LLC (Educational
Products and Services);
President and Chief Executive
Officer (June 2012 to
September 2014), Dew Learning
LLC (Educational Products and
Services); President (June 2002
to June 2012), Covenant College
------------------------------------------------------------------------------------------------------------------------------------
-12-
EXECUTIVE OFFICERS
------------------------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE(2)
AND LENGTH
NAME, ADDRESS, AND POSITION(S) OF TIME PRINCIPAL OCCUPATION(S)
DATE OF BIRTH HELD WITH FUNDS SERVED(3) DURING PAST FIVE YEARS
------------------------------------------------------------------------------------------------------------------------------------
James M. Dykas President and Chief Indefinite Managing Director and Chief Financial Officer
120 East Liberty Drive, Suite 400 Executive Officer (January 2016 to present), Controller (January 2012
Wheaton, IL 60187 Since January to January 2016), Senior Vice President (April 2007
DOB: 1/66 2012 to January 2016), First Trust Advisors L.P. and
First Trust Portfolios L.P.
------------------------------------------------------------------------------------------------------------------------------------
Donald Swade Treasurer, Chief Indefinite Vice President (April 2012 to present), First Trust
120 East Liberty Drive, Suite 400 Financial Officer Advisors L.P. and First Trust Portfolios L.P.; Vice
Wheaton, IL 60187 and Chief Since January President (September 2006 to April 2012), Guggenheim
DOB: 8/72 Accounting Officer 2016 Funds Investment Advisors, LLC/Claymore Securities,
Inc.
------------------------------------------------------------------------------------------------------------------------------------
W. Scott Jardine Secretary and Chief Indefinite General Counsel, First Trust Advisors L.P., First
120 East Liberty Drive, Suite 400 Legal Officer Trust Portfolios L.P. and BondWave LLC (August 2009
Wheaton, IL 60187 Since 2004 to Present) (Software Development Company/Investment
DOB: 5/60 Advisor); Secretary of Stonebridge Advisors LLC
(Investment Advisor)
------------------------------------------------------------------------------------------------------------------------------------
Daniel J. Lindquist Vice President Indefinite Managing Director (July 2012 to Present), Senior
120 East Liberty Drive, Suite 400 Vice President (September 2005 to July 2012), First
Wheaton, IL 60187 Since 2005 Trust Advisors L.P. and First Trust Portfolios L.P.
DOB: 2/70
------------------------------------------------------------------------------------------------------------------------------------
Kristi A. Maher Assistant Secretary Indefinite Deputy General Counsel, First Trust Advisors L.P.
120 East Liberty Drive, Suite 400 and Chief and First Trust Portfolios L.P.
Wheaton, IL 60187 Compliance Officer Assistant
DOB: 12/66 Secretary since
July 2004 and
Chief Compliance
Officer since
January 2011
------------------------------------------------------------------------------------------------------------------------------------
1 Mr. Bowen is deemed an "interested person" of the Funds due to his position
as Chief Executive Officer of First Trust Advisors L.P., investment advisor
of the Funds.
2 Currently, James A. Bowen and Niel B. Nielson, as Class III Trustees, are
each serving a term for each of the Funds until the Meeting or until their
successors are elected and qualified. Robert F. Keith, as the Class I
Trustee, is serving a term for each of the Funds until the Funds' 2017
annual meetings of shareholders or until his successor is elected and
qualified. Richard E. Erickson and Thomas R. Kadlec, as Class II Trustees,
are each serving a term for each of the Funds until the Funds' 2018 annual
meetings of shareholders or until their successors are elected and
qualified. Executive officers of the Funds have an indefinite term.
3 For executive officers, unless otherwise specified, length of time served
represents the year the person first became an executive officer of a Fund.
Except as otherwise provided below, all Trustees and executive officers were
elected or appointed (i) in 2004 for the then-existing Funds, (ii) in 2005
for First Trust Mortgage Income Fund, (iii) in 2006 for First Trust
Strategic High Income Fund II and First Trust/Aberdeen Emerging Opportunity
Fund, (iv) in 2007 for First Trust Specialty Finance and Financial
Opportunities Fund, (v) in 2010 for First Trust High Income Long/Short Fund,
(vi) in 2011 for First Trust Energy Infrastructure Fund, (vii) in 2012 for
First Trust MLP and Energy Income Fund and (viii) in 2013 for First Trust
Intermediate Duration Preferred & Income Fund and First Trust New
Opportunities MLP & Energy Fund. Robert F. Keith was appointed Trustee of
all then-existing funds in the First Trust Fund Complex, including the
then-existing Funds, in June 2006. James M. Dykas was elected (a) Treasurer,
Chief Financial Officer and Chief Accounting Officer of all then-existing
funds in the First Trust Fund Complex, including the then-existing Funds, in
January 2012, effective January 23, 2012 and (b) President and Chief
Executive Officer of all then-existing funds in the First Trust Fund
Complex, including the Funds, in December 2015, effective January 2016.
Donald Swade was elected Treasurer, Chief Financial Officer and Chief
Accounting Officer of all then-existing funds in the First Trust Fund
Complex, including the Funds, in December 2015, effective January 2016.
Daniel J. Lindquist was elected Vice President of all then-existing funds in
the First Trust Fund Complex, including the then-existing Funds, on December
12, 2005. Kristi A. Maher was elected Chief Compliance Officer of all
then-existing funds in the First Trust Fund Complex, including the
then-existing Funds, in December 2010, effective January 1, 2011; before
January 1, 2011, W. Scott Jardine served as Chief Compliance Officer.
UNITARY BOARD LEADERSHIP STRUCTURE
The same five persons serve as Trustees on each Fund's Board of Trustees
and on the boards of all other funds in the First Trust Fund Complex (the "First
Trust Funds"), which is known as a "unitary" board leadership structure. The
unitary board structure was adopted for the First Trust Funds because of the
efficiencies it achieves with respect to the governance and oversight of the
First Trust Funds. Each First Trust Fund is subject to the rules and regulations
of the 1940 Act (and other applicable securities laws), which means that many of
the First Trust Funds face similar issues with respect to certain of their
fundamental activities, including risk management, portfolio liquidity,
portfolio valuation and financial reporting. In addition, all of the First Trust
Funds that are closed-end funds (the "First Trust Closed-end Funds") are managed
by the Advisor and, except for First Trust Intermediate Duration Preferred &
Income Fund and one other First Trust Closed-end Fund, they employ common
-13-
service providers for custody, fund accounting, administration and transfer
agency that provide substantially similar services to the First Trust Closed-end
Funds pursuant to substantially similar contractual arrangements. Because of the
similar and often overlapping issues facing the First Trust Funds, including
among the First Trust Closed-end Funds, the Board of Trustees of each of the
First Trust Funds (such Boards of Trustees referred to herein collectively as
the "Board") believes that maintaining a unitary board structure promotes
efficiency and consistency in the governance and oversight of all First Trust
Funds and reduces the costs, administrative burdens and possible conflicts that
may result from having multiple boards. In adopting a unitary board structure,
the Trustees seek to provide effective governance through establishing a board
the overall composition of which will, as a body, possess the appropriate
skills, diversity, independence and experience to oversee the business of the
First Trust Funds.
Annually, the Board reviews its governance structure and the committee
structures, their performance and functions and reviews any processes that would
enhance Board governance over the Funds' business. The Board has determined that
its leadership structure, including the unitary board and committee structure,
is appropriate based on the characteristics of the funds it serves and the
characteristics of the First Trust Fund Complex as a whole. The Board is
composed of four Independent Trustees and one Interested Trustee. The Interested
Trustee serves as the Chairman of the Board of each Fund. An individual who is
not a Trustee serves as President and Chief Executive Officer of each Fund.
In order to streamline communication between the Advisor and the
Independent Trustees and create certain efficiencies, the Board has a Lead
Independent Trustee who is responsible for: (i) coordinating activities of the
Independent Trustees; (ii) working with the Advisor, Fund counsel and the
independent legal counsel to the Independent Trustees to determine the agenda
for Board meetings; (iii) serving as the principal contact for and facilitating
communication between the Independent Trustees and the Funds' service providers,
particularly the Advisor; and (iv) any other duties that the Independent
Trustees may delegate to the Lead Independent Trustee. The Lead Independent
Trustee is selected by the Independent Trustees and serves a three-year term or
until his successor is selected. Thomas R. Kadlec currently serves as the Lead
Independent Trustee.
The Board has established four standing committees (as described below)
and has delegated certain of its responsibilities to those committees. The Board
and its committees meet frequently throughout the year to oversee the Funds'
activities, review contractual arrangements with and performance of service
providers, oversee compliance with regulatory requirements, and review Fund
performance. The Independent Trustees are represented by independent legal
counsel at all Board and committee meetings other than meetings of the Executive
Committee. Generally, the Board acts by majority vote of all the Trustees,
except where a different vote is required by applicable law.
The three committee chairmen and the Lead Independent Trustee currently
rotate every three years in serving as Chairman of the Audit Committee, the
Nominating and Governance Committee or the Valuation Committee, or as Lead
Independent Trustee. The Lead Independent Trustee and the immediate past Lead
Independent Trustee also serve on the Executive Committee with the Interested
Trustee.
In addition to the Funds, the First Trust Fund Complex includes: three
closed-end funds advised by First Trust Advisors; First Trust Series Fund, an
open-end management investment company with four portfolios advised by First
Trust Advisors; First Trust Variable Insurance Trust, an open-end management
investment company with three portfolios advised by First Trust Advisors; and
-14-
First Trust Exchange-Traded Fund, First Trust Exchange-Traded Fund II, First
Trust Exchange-Traded Fund III, First Trust Exchange-Traded Fund IV, First Trust
Exchange-Traded Fund V, First Trust Exchange-Traded Fund VI, First Trust
Exchange-Traded Fund VII, First Trust Exchange-Traded AlphaDEX(R) Fund and First
Trust Exchange-Traded AlphaDEX(R) Fund II, each an exchange-traded fund with 19,
14, 8, 8, 1, 10, 1, 21, and 19 portfolios (each such portfolio, an "ETF" and
each such exchange-traded fund, an "ETF Trust"), respectively, advised by First
Trust Advisors.
The four standing committees of the Board are: the Executive Committee
(and Dividend and Pricing Committee), the Nominating and Governance Committee,
the Valuation Committee and the Audit Committee. The Executive Committee, which
meets between Board meetings, is authorized to exercise all powers of and to act
in the place of the Board of Trustees to the extent permitted by each Fund's
Declaration of Trust and By-Laws. The members of the Executive Committee of a
Fund also serve as a special committee of the Board known as the Dividend and
Pricing Committee which is authorized to exercise all of the powers and
authority of the Board in respect of the issuance and sale, through an
underwritten public offering, of the Shares of the Fund and all other such
matters relating to such financing, including determining the price at which
such Shares are to be sold, approval of the final terms of the underwriting
agreement, and approval of the members of the underwriting syndicate. Such
Committee is also responsible for the declaration and setting of dividends. Mr.
Kadlec, Mr. Keith and Mr. Bowen are members of the Executive Committee. The
number of meetings of the Executive Committee held for each Fund during its last
fiscal year is shown on Schedule 1 hereto.
The Nominating and Governance Committee of each Fund is responsible for
appointing and nominating persons to the Board of Trustees of that Fund. Messrs.
Erickson, Kadlec, Keith and Nielson are members of the Nominating and Governance
Committee, and each is an Independent Trustee who is also an "independent
director" within the meaning of the listing standards of the NYSE or NYSE MKT,
as applicable. The Nominating and Governance Committee operates under a written
charter adopted and approved by the Board, a copy of which is available on the
Funds' website at http://www.ftportfolios.com. If there is no vacancy on the
Board of Trustees of a Fund, the Board will not actively seek recommendations
from other parties, including shareholders. In 2014, the Board of Trustees
adopted a mandatory retirement age of 75 for Trustees, beyond which age Trustees
are ineligible to serve. The Nominating and Governance Committee Charter
provides that the Committee will not consider new trustee candidates who are 72
years of age or older or will turn 72 years old during the initial term. When a
vacancy on the Board of Trustees of a Fund occurs and nominations are sought to
fill such vacancy, the Nominating and Governance Committee may seek nominations
from those sources it deems appropriate in its discretion, including
shareholders of the applicable Fund. The Nominating and Governance Committee may
retain a search firm to identify candidates. To submit a recommendation for
nomination as a candidate for a position on the Board of Trustees of a Fund,
shareholders of the applicable Fund shall mail such recommendation to W. Scott
Jardine, Secretary, at 120 East Liberty Drive, Suite 400, Wheaton, Illinois
60187. Such recommendation shall include the following information: (i) evidence
of Fund ownership of the person or entity recommending the candidate (if a Fund
shareholder); (ii) a full description of the proposed candidate's background,
including their education, experience, current employment and date of birth;
(iii) names and addresses of at least three professional references for the
candidate; (iv) information as to whether the candidate is an "interested
person" in relation to the Fund, as such term is defined in the 1940 Act, and
such other information that may be considered to impair the candidate's
independence; and (v) any other information that may be helpful to the Committee
in evaluating the candidate (see also "ADDITIONAL INFORMATION - SHAREHOLDER
PROPOSALS" below). If a recommendation is received with satisfactorily completed
information regarding a candidate during a time when a vacancy exists on the
-15-
Board or during such other time as the Nominating and Governance Committee is
accepting recommendations, the recommendation will be forwarded to the Chairman
of the Nominating and Governance Committee and the counsel to the Independent
Trustees. Recommendations received at any other time will be kept on file until
such time as the Nominating and Governance Committee is accepting
recommendations, at which point they may be considered for nomination. In
connection with the evaluation of candidates, the review process may include,
without limitation, personal interviews, background checks, written submissions
by the candidates and third party references. Under no circumstances shall the
Nominating and Governance Committee evaluate nominees recommended by a
shareholder of a Fund on a basis substantially different than that used for
other nominees for the same election or appointment of Trustees. The number of
meetings of the Nominating and Governance Committee held for each Fund during
its last fiscal year is shown on Schedule 1 hereto.
The Valuation Committee of each Fund is responsible for the oversight of
the valuation procedures of that Fund (the "Valuation Procedures"), for
determining the fair value of that Fund's securities or other assets under
certain circumstances as described in the Valuation Procedures, and for
evaluating the performance of any pricing service for that Fund. Messrs.
Erickson, Kadlec, Keith and Nielson are members of the Valuation Committee. The
number of meetings of the Valuation Committee held for each Fund during its last
fiscal year is shown on Schedule 1 hereto.
The Audit Committee of each Fund is responsible for overseeing that Fund's
accounting and financial reporting process, the system of internal controls,
audit process and evaluating and appointing independent auditors (subject also
to Board approval). The Audit Committee operates under a written charter adopted
and approved by the Board, a copy of which is attached as Exhibit A hereto, and
is available on the Funds' website at http://www.ftportfolios.com. Messrs.
Erickson, Kadlec, Keith and Nielson, all of whom are "independent directors"
within the meaning of the listing standards of the NYSE or NYSE MKT, as
applicable, serve on the Audit Committee. Messrs. Kadlec and Keith have each
been determined to qualify as an "Audit Committee Financial Expert" as such term
is defined in Form N-CSR. The number of meetings of the Audit Committee held for
each Fund during its last fiscal year is shown in Schedule 1 hereto.
In carrying out its responsibilities, as described below under
"INDEPENDENT AUDITORS' FEES--Pre-Approval," the Audit Committee pre-approves all
audit services and permitted non-audit services for each Fund (including the
fees and terms thereof) and non-audit services to be performed for the Advisor
by Deloitte & Touche LLP ("Deloitte & Touche"), the Funds' independent
registered public accounting firm ("independent auditors"), if the engagement
relates directly to the operations and financial reporting of the Funds.
RISK OVERSIGHT
As part of the general oversight of each Fund, the Board is involved in
the risk oversight of the Funds. The Board has adopted and periodically reviews
policies and procedures designed to address the Funds' risks. Oversight of
investment and compliance risk, including oversight of sub-advisors, is
performed primarily at the Board level in conjunction with the Advisor's
investment oversight group and the Funds' Chief Compliance Officer ("CCO").
Oversight of other risks also occurs at the Committee level. The Advisor's
investment oversight group reports to the Board at quarterly meetings regarding,
among other things, Fund performance and the various drivers of such performance
as well as information related to sub-advisors and their operations and
processes. The Board reviews reports on the Funds' and the service providers'
compliance policies and procedures at each quarterly Board meeting and receives
-16-
an annual report from the CCO regarding the operations of the Funds' and the
service providers' compliance program. In addition, the Independent Trustees
meet privately each quarter with the CCO. The Audit Committee reviews with the
Advisor the Funds' major financial risk exposures and the steps the Advisor has
taken to monitor and control these exposures, including the Funds' risk
assessment and risk management policies and guidelines. The Audit Committee
also, as appropriate, reviews in a general manner the processes other Board
committees have in place with respect to risk assessment and risk management.
The Nominating and Governance Committee monitors all matters related to the
corporate governance of the Funds. The Valuation Committee monitors valuation
risk and compliance with the Funds' Valuation Procedures and oversees the
pricing services and actions by the Advisor's Pricing Committee with respect to
the valuation of portfolio securities.
Not all risks that may affect the Funds can be identified nor can controls
be developed to eliminate or mitigate their occurrence or effects. It may not be
practical or cost-effective to eliminate or mitigate certain risks, the
processes and controls employed to address certain risks may be limited in their
effectiveness, and some risks are simply beyond the reasonable control of the
Funds or the Advisor or other service providers. For instance, as the use of
Internet technology has become more prevalent, the Funds and their service
providers have become more susceptible to potential operational risks through
breaches in cyber security (generally, intentional and unintentional events that
may cause a Fund or a service provider to lose proprietary information, suffer
data corruption or lose operational capacity). There can be no guarantee that
any risk management systems established by the Funds, their service providers,
or issuers of the securities in which the Funds invest to reduce cyber security
risks will succeed, and the Funds cannot control such systems put in place by
service providers, issuers or other third parties whose operations may affect
the Funds and/or their shareholders. Moreover, it is necessary to bear certain
risks (such as investment related risks) to achieve a Fund's goals. As a result
of the foregoing and other factors, the Funds' ability to manage risk is subject
to substantial limitations.
BOARD DIVERSIFICATION AND TRUSTEE QUALIFICATIONS
As described above, the Nominating and Governance Committee of the Board
oversees matters related to the nomination of Trustees. The Nominating and
Governance Committee seeks to establish an effective Board with an appropriate
range of skills and diversity, including, as appropriate, differences in
background, professional experience, education, vocations, and other individual
characteristics and traits in the aggregate. Each Trustee must meet certain
basic requirements, including relevant skills and experience, time availability,
and if qualifying as an Independent Trustee, independence from the Advisor,
sub-advisors, underwriters or other service providers, including any affiliates
of these entities.
Listed below for each current Trustee and the nominees are the
experiences, qualifications and attributes that led to the conclusion, as of the
date of this Joint Proxy Statement, that each current Trustee and the nominees
should serve as a trustee.
Independent Trustees
Richard E. Erickson, M.D., is an orthopedic surgeon and President of
Wheaton Orthopedics. He also has been a co-owner and director of a fitness
center and a limited partner of two real estate companies. Dr. Erickson has
served as a Trustee of each Fund since its inception and of the First Trust
Funds since 1999. Dr. Erickson has also served as the Lead Independent Trustee
(2008 - 2009), Chairman of the Nominating and Governance Committee (2003 -
2007), Chairman of the Valuation Committee (June 2006 - 2007 and 2010 - 2011)
-17-
and Chairman of the Audit Committee (2012 - 2013) of the First Trust Funds. He
currently serves as Chairman of the Nominating and Governance Committee (since
January 1, 2014) of the First Trust Funds.
Thomas R. Kadlec is President of ADM Investor Services Inc. ("ADMIS"), a
futures commission merchant and wholly-owned subsidiary of the Archer Daniels
Midland Company ("ADM"). Mr. Kadlec has been employed by ADMIS and its
affiliates since 1990 in various accounting, financial, operations and risk
management capacities. Mr. Kadlec serves on the boards of several international
affiliates of ADMIS and is a member of ADM's Integrated Risk Committee, which is
tasked with the duty of implementing and communicating enterprise-wide risk
management. In 2014, Mr. Kadlec was elected to the board of the Futures Industry
Association. Mr. Kadlec has served as a Trustee of each Fund since its
inception. Mr. Kadlec also served on the Executive Committee from the
organization of the first First Trust Closed-end Fund in 2003 until he was
elected as the first Lead Independent Trustee in December 2005, serving as such
through 2007. He also served as Chairman of the Valuation Committee (2008 -
2009), Chairman of the Audit Committee (2010 - 2011) and Chairman of the
Nominating and Governance Committee (2012 - 2013) of the First Trust Funds. He
currently serves as Lead Independent Trustee and as a member of the Executive
Committee and the Dividend and Pricing Committee (since January 1, 2014) of the
First Trust Funds.
Robert F. Keith is President of Hibs Enterprises, a financial and
management consulting firm. Mr. Keith has been with Hibs Enterprises since 2003.
Prior thereto, Mr. Keith spent 18 years with ServiceMaster and Aramark,
including three years as President and COO of ServiceMaster Consumer Services,
where he led the initial expansion of certain products overseas, five years as
President and COO of ServiceMaster Management Services Company and two years as
President of Aramark ServiceMaster Management Services. Mr. Keith is a certified
public accountant and also has held the positions of Treasurer and Chief
Financial Officer of ServiceMaster, at which time he oversaw the financial
aspects of ServiceMaster's expansion of its Management Services division into
Europe, the Middle East and Asia. Mr. Keith has served as a Trustee of the First
Trust Funds since June 2006. Mr. Keith has also served as Chairman of the Audit
Committee (2008 - 2009), Chairman of the Nominating and Governance Committee
(2010 - 2011) and Lead Independent Trustee (2012 - 2013) of the First Trust
Funds. He currently serves as Chairman of the Valuation Committee (since January
1, 2014) and as a member of the Executive Committee and the Dividend and Pricing
Committee (since January 22, 2014) of the First Trust Funds.
Niel B. Nielson, Ph.D., has served as Managing Director and Chief
Operating Officer of Pelita Harapan Education Foundation (providing educational
products and services) since January 2015. Mr. Nielson formerly served as
President and Chief Executive Officer of Servant Interactive LLC (providing
education products and services) from June 2012 to September 2014, and he served
as President and Chief Executive Officer of Dew Learning LLC (a global provider
of digital and on-line educational products and services) from June 2012 to
September 2014. Mr. Nielson served as President of Covenant College (2002 -
2012), and as a partner and trader (of options and futures contracts for hedging
options) for Ritchie Capital Markets Group (1996 - 1997), where he held an
administrative management position at this proprietary derivatives trading
company. He also held prior positions in new business development for
ServiceMaster Management Services Company, and in personnel and human resources
for NationsBank of North Carolina, N.A. and Chicago Research and Trading Group,
Ltd. ("CRT"). His international experience includes serving as a director of CRT
Europe, Inc. for two years, directing out of London all aspects of business
conducted by the U.K. and European subsidiary of CRT. Prior to that, Mr. Nielson
was a trader and manager at CRT in Chicago. Mr. Nielson has served as a Trustee
of each Fund since its inception and of the First Trust Funds since 1999. Mr.
-18-
Nielson has also served as Chairman of the Audit Committee (2003 - 2007),
Chairman of the Nominating and Governance Committee (2008 - 2009), Lead
Independent Trustee (2010 - 2011) and Chairman of the Valuation Committee (2012
- 2013) of the First Trust Funds. He currently serves as Chairman of the Audit
Committee (since January 1, 2014) of the First Trust Funds.
Interested Trustee
James A. Bowen is the Chairman of the Board of the First Trust Funds and
Chief Executive Officer of First Trust Advisors and First Trust Portfolios L.P.
Until January 23, 2012, he served as President and Chief Executive Officer of
the First Trust Funds. Mr. Bowen also serves on the Executive Committee. He has
over 32 years of experience in the investment company business in sales, sales
management and executive management. Mr. Bowen has served as a Trustee of each
Fund since its inception and of the First Trust Funds since 1999.
OTHER INFORMATION
Independent Trustees
During the past five years, none of the Independent Trustees, nor any of
their immediate family members, has been a director, trustee, officer, general
partner or employee of, or consultant to, First Trust Advisors, First Trust
Portfolios L.P. (an affiliate of First Trust Advisors), any sub-advisor to any
fund in the First Trust Fund Complex, or any of their affiliates.
Executive Officers
The executive officers of each Fund hold the same positions with each fund
in the First Trust Fund Complex (representing 124 portfolios) as they hold with
the Funds.
-19-
BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUNDS BY TRUSTEES AND EXECUTIVE
OFFICERS
The following table sets forth the dollar range and number of equity
securities beneficially owned by the Trustees in each Fund and all funds in the
First Trust Fund Complex, including the Funds, as of December 31, 2015:
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS AND FIRST TRUST FUND COMPLEX (NUMBER OF SHARES HELD)
-------------------------------------------------------------------------------------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
-------------------------------------------------------------------------------------------------------------------------------
Richard E.
FUND James A. Bowen Erickson Thomas R. Kadlec Robert F. Keith Niel B. Nielson
-------------------------- ----------------- ----------------- ------------------- ------------------- --------------------
MACQUARIE/FIRST TRUST $0 $10,001-$50,000 $1-$10,000 $10,001-$50,000 $10,001-$50,000
GLOBAL INFRASTRUCTURE/ (0 Shares) (994 Shares) (800 Shares) (1,817 Shares) (1,162 Shares)
UTILITIES DIVIDEND &
INCOME FUND
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST ENERGY INCOME $0 $10,001-$50,000 $10,001-$50,000 $0 $10,001-$50,000
AND GROWTH FUND (0 Shares) (443 Shares) (700 Shares) (0 Shares) (539 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST ENHANCED $50,001-$100,000 $1-$10,000 $10,001-$50,000 $0 $1-$10,000
EQUITY INCOME FUND (4,003 Shares) (373 Shares) (850 Shares) (0 Shares) (465 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST/ABERDEEN $0 $10,001-$50,000 $10,001-$50,000 $0 $1-$10,000
GLOBAL OPPORTUNITY INCOME (0 Shares) (1,580 Shares) (850 Shares) (0 Shares) (936 Shares)
FUND
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST MORTGAGE $0 $0 $1-$10,000 $0 $1-$10,000
INCOME FUND (0 Shares) (0 Shares) (650 Shares) (0 Shares) (543 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST STRATEGIC $10,001-$50,000 $0 $0 $0 $1-$10,000
HIGH INCOME FUND II (1,498 Shares) (0 Shares) (0 Shares) (0 Shares) (335 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST/ABERDEEN $0 $0 $10,001-$50,000 $1-$10,000 $1-$10,000
EMERGING OPPORTUNITY FUND (0 Shares) (0 Shares) (1,000 Shares) (600 Shares) (454 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST SPECIALTY $0 $0 $0 $0 $0
FINANCE AND FINANCIAL (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
OPPORTUNITIES FUND
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST HIGH INCOME $50,001-$100,000 $0 $10,001-$50,000 $0 $0
LONG/SHORT FUND (7,025 Shares) (0 Shares) (1,000 Shares) (0 Shares) (0 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST ENERGY $0 $0 $0 $0 $0
INFRASTRUCTURE FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST MLP AND $0 $0 $0 $0 $0
ENERGY INCOME FUND (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST INTERMEDIATE $0 $0 $0 $10,001-$50,000 $0
DURATION PREFERRED & (0 Shares) (0 Shares) (0 Shares) (512 Shares) (0 Shares)
INCOME FUND
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
FIRST TRUST NEW $0 $0 $0 $0 $0
OPPORTUNITIES MLP & (0 Shares) (0 Shares) (0 Shares) (0 Shares) (0 Shares)
ENERGY FUND
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
AGGREGATE DOLLAR RANGE OF Over $100,000 Over $100,000 Over $100,000 Over $100,000 Over $100,000
EQUITY SECURITIES IN ALL (47,356 Shares) (10,339 Shares) (12,677 Shares) (12,838 Shares) (7,079 Shares)
REGISTERED INVESTMENT
COMPANIES IN THE FIRST
TRUST FUND COMPLEX
OVERSEEN BY TRUSTEE
-------------------------- ------------------ ------------------ -------------------- -------------------- ----------------
The Independent Trustees have adopted a policy that establishes the
expectation that each Independent Trustee will have invested an amount in the
-20-
First Trust Funds he oversees in the aggregate of at least one year's annual
retainer for Board service, with investments allocated among the First Trust
Funds depending on what is suitable for the Trustee's personal investment needs.
As of December 31, 2015, the Independent Trustees and their immediate
family members did not own, beneficially or of record, any class of securities
of First Trust Advisors or any sub-advisor or principal underwriter of any Fund
or any person, other than a registered investment company, directly or
indirectly controlling, controlled by, or under common control with First Trust
Advisors or any sub-advisor or principal underwriter of any Fund, nor, since the
beginning of the most recently completed fiscal year of any Fund, did any
Independent Trustee purchase or sell securities of First Trust Advisors, or any
sub-advisor to any fund in the First Trust Fund Complex, their parents or any
subsidiaries of any of the foregoing.
As of December 31, 2015, the Trustees and executive officers of the Funds
as a group beneficially owned approximately 120,794 shares of the funds in the
First Trust Fund Complex (less than 1% of the shares outstanding). As of
December 31, 2015, the Trustees and executive officers of each Fund as a group
beneficially owned the following number of Shares of each Fund, which is less
than 1% of each Fund's Shares outstanding:
--------------------------------------------------------------------------------------------------- -----------------------
FUND SHARES OWNED
--------------------------------------------------------------------------------------------------- -----------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND 4,773
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND 1,682
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND 5,691
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND 3,366
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST MORTGAGE INCOME FUND 1,193
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II 2,188
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND 2,054
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND 0
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND 12,725
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND 0
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST MLP AND ENERGY INCOME FUND 0
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND 512
--------------------------------------------------------------------------------------------------- -----------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND 0
--------------------------------------------------------------------------------------------------- -----------------------
COMPENSATION
During 2015, each Independent Trustee was paid a fixed annual retainer of
$125,000 per year and an annual per fund fee of $4,000 for each closed-end fund
or other actively managed fund and $1,000 for each index fund in the First Trust
Fund Complex. The fixed annual retainer was allocated pro rata among each fund
in the First Trust Fund Complex based on net assets. Additionally, the Lead
Independent Trustee was paid $15,000 annually, the Chairman of the Audit
Committee was paid $10,000 annually, the Chairman of the Valuation Committee was
paid $10,000 annually and the Chairman of the Nominating and Governance
Committee was paid $5,000 annually to serve in such capacities, with such
compensation allocated pro rata among each fund in the First Trust Fund Complex
based on net assets. Effective January 1, 2016, the fixed annual retainer paid
to the Independent Trustees is $230,000 per year and an annual per fund fee is
$2,500 for each closed-end fund and actively managed fund and $250 for each
-21-
index fund. The fixed annual retainer is allocated equally among each fund in
the First Trust Fund Complex rather than being allocated pro rata based on each
fund's net assets. Additionally, the Lead Independent Trustee is paid $30,000
annually, the Chairman of the Audit Committee is paid $20,000 annually and the
Chairman of the Nominating and Governance Committee is paid $10,000 annually to
serve in such capacities with compensation allocated pro rata among each fund in
the First Trust Complex based on its net assets. Trustees are also reimbursed by
the investment companies in the First Trust Fund Complex for travel and
out-of-pocket expenses incurred in connection with all meetings. Each Committee
Chairman and the Lead Independent Trustee rotate every three years.
The number of Board meetings held by each Fund during its last fiscal year
is shown in Schedule 1 hereto.
The aggregate fees and expenses paid to all Trustees by each Fund for its
last fiscal year (including reimbursement for travel and out-of-pocket expenses)
amounted to the following:
---------------------------------------------------------------------------------------------- ----------------------------
AGGREGATE FEES AND
FUND EXPENSES PAID
---------------------------------------------------------------------------------------------- ----------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND $17,711
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND $24,370
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND $19,607
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND $18,522
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST MORTGAGE INCOME FUND $16,858
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II $17,214
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND $17,445
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND $17,263
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND $24,190
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND $21,174
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST MLP AND ENERGY INCOME FUND $28,026
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND $33,933
---------------------------------------------------------------------------------------------- ----------------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND $21,451
---------------------------------------------------------------------------------------------- ----------------------------
The following table sets forth certain information regarding the
compensation of each Fund's Trustees (including reimbursement for travel and
out-of-pocket expenses) for each Fund's most recently completed fiscal year. The
Funds have no retirement or pension plans. The executive officers and the
Interested Trustee of each Fund receive no compensation from the Funds for
serving in such capacities.
-22-
AGGREGATE COMPENSATION FOR EACH FUND'S FISCAL YEAR
------------------------------------------------------- ------------- -----------------------------------------------------
INTERESTED INDEPENDENT
TRUSTEE TRUSTEES
------------------------------------------------------- ------------- -----------------------------------------------------
James A. Richard E. Thomas R. Robert F. Niel B.
FUND Bowen Erickson Kadlec Keith Nielson
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES $0 $4,413 $4,442 $4,429 $4,427
DIVIDEND & INCOME FUND(1)
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND(1) $0 $6,020 $6,165 $6,098 $6,087
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST ENHANCED EQUITY INCOME FUND(2) $0 $4,871 $4,932 $4,905 $4,899
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST/ABERDEEN GLOBAL $0 $4,609 $4,652 $4,632 $4,629
OPPORTUNITY INCOME FUND(2)
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST MORTGAGE INCOME FUND(3) $0 $4,209 $4,220 $4,216 $4,213
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II(3) $0 $4,298 $4,311 $4,305 $4,300
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND(2) $0 $4,349 $4,374 $4,362 $4,360
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL $0 $4,305 $4,326 $4,317 $4,315
OPPORTUNITIES FUND(1)
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND(3) $0 $5,999 $6,105 $6,057 $6,029
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND(1) $0 $5,249 $5,338 $5,297 $5,290
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST MLP AND ENERGY INCOME FUND(3) $0 $6,935 $7,091 $7,020 $6,980
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME $0 $8,376 $8,608 $8,505 $8,444
FUND(3)
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND(3) $0 $5,330 $5,401 $5,369 $5,351
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
TOTAL COMPENSATION FOR SERVING THE FIRST TRUST $0 $352,350 $361,500 $351,535 $356,500
FUND COMPLEX(4)
------------------------------------------------------- ------------- ------------ ------------ ------------- -------------
1 For fiscal year ended November 30, 2015.
2 For fiscal year ended December 31, 2015.
3 For fiscal year ended October 31, 2015.
4 For the calendar year ended December 31, 2015 for services to four
portfolios of First Trust Series Fund and three portfolios of First Trust
Variable Insurance Trust, open-end funds; 16 closed-end funds (including the
Funds); and 97 series of the ETF Trusts. Compensation includes, with respect
to certain ETFs, compensation paid by the Advisor rather than by the ETF
directly pursuant to the terms of the advisory agreement between the
applicable ETF Trust and the Advisor.
-23-
ATTENDANCE AT ANNUAL MEETINGS OF SHAREHOLDERS
The Board seeks to have as many Trustees as possible in attendance at
annual meetings of shareholders. The policy of the Nominating and Governance
Committee relating to attendance by Trustees at annual meetings of shareholders
is contained in the Funds' Nominating and Governance Committee Charter, which is
available on each Fund's website located at http://www.ftportfolios.com. In
addition, the Board's attendance at last year's annual shareholder meeting is
available on each Fund's website located at http://www.ftportfolios.com. To find
the Board's attendance, select your Fund under the "Closed-End Funds" tab,
select the "News & Literature" link, and go to the "Shareholder Updates and
Information" heading.
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Trustees in its
oversight of the Funds' accounting and financial reporting process. The Audit
Committee operates pursuant to a charter (the "Charter") that was most recently
reviewed by the Board of Trustees on December 7, 2015, a copy of which is
attached as Exhibit A hereto, and is available on the Funds' website located at
http://www.ftportfolios.com. As set forth in the Charter, management of the
Funds is responsible for maintaining appropriate systems for accounting and
internal controls and the audit process. The Funds' independent auditors are
responsible for planning and carrying out proper audits of each Fund's financial
statements and expressing an opinion as to their conformity with accounting
principles generally accepted in the United States of America.
In performing its oversight function, the Audit Committee reviewed and
discussed with management and the independent auditors, Deloitte & Touche LLP,
the audited financial statements of the First Trust Mortgage Income Fund, the
First Trust Strategic High Income Fund II, the First Trust High Income
Long/Short Fund, the First Trust MLP and Energy Income Fund, the First Trust
Intermediate Duration Preferred & Income Fund and the First Trust New
Opportunities MLP & Energy Fund for the fiscal year ended October 31, 2015 at a
meeting held on December 21, 2015; the Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, the First Trust Energy Income
and Growth Fund, the First Trust Specialty Finance and Financial Opportunities
Fund and the First Trust Energy Infrastructure Fund for the fiscal year ended
November 30, 2015 at a meeting held on January 21, 2016; and the First Trust
Enhanced Equity Income Fund, the First Trust/Aberdeen Global Opportunity Income
Fund and the First Trust/Aberdeen Emerging Opportunity Fund for the fiscal year
ended December 31, 2015 at a meeting held on February 22, 2016, and discussed
the audits of such financial statements with the independent auditors and
management.
In addition, the Audit Committee discussed with the independent auditors
the accounting principles applied by the Funds and such other matters brought to
the attention of the Audit Committee by the independent auditors as required by
the Public Company Accounting Oversight Board ("PCAOB") Auditing Standard No.
16, Communications with Audit Committees. The Audit Committee also received from
the independent auditors the written disclosures and letter required by PCAOB
Ethics and Independence Rule 3526, Communication with Audit Committees
Concerning Independence, delineating relationships between the independent
auditors and the Funds and discussed the impact that any such relationships may
have on the objectivity and independence of the independent auditors.
-24-
The members of the Funds' Audit Committee are not full-time employees of
the Funds and are not performing the functions of auditors or accountants. As
such, it is not the duty or responsibility of the Audit Committee or its members
to conduct "field work" or other types of auditing or accounting reviews or
procedures or to set auditor independence standards. Members of the Funds' Audit
Committee necessarily rely on the information provided to them by Fund
management and the independent auditors. Accordingly, the Audit Committee's
considerations and discussions referred to above do not assure that the audits
of the Funds' financial statements have been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the independent auditors are in fact "independent."
Based on its consideration of each Fund's audited financial statements and
the discussions referred to above with Fund management and Deloitte & Touche
LLP, and subject to the limitations on the responsibilities and role of the
Audit Committee as set forth in the Charter and discussed above, the Audit
Committee recommended to the Board the inclusion of each Fund's audited
financial statements in each Fund's Annual Report to Shareholders for the years
ended October 31, November 30 and December 31, 2015, respectively.
Submitted by the Audit Committee of each Fund:
Niel B. Nielson
Richard E. Erickson
Thomas R. Kadlec
Robert F. Keith
INDEPENDENT AUDITORS' FEES
Deloitte & Touche has been selected to serve as the independent auditors
for each Fund for its current fiscal year, and acted as the independent auditors
for each Fund for its most recently completed fiscal year. Deloitte & Touche has
advised the Funds that, to the best of its knowledge and belief, Deloitte &
Touche professionals did not have any direct or material indirect ownership
interest in the Funds inconsistent with independent professional standards
pertaining to independent registered public accounting firms. Representatives of
Deloitte & Touche are not expected to be present at the Meeting, but will have
the opportunity to make a statement if they desire to do so and will be
available should any matter arise requiring their presence. In reliance on Rule
32a-4 under the 1940 Act, each Fund is not seeking shareholder ratification of
the selection of Deloitte & Touche as independent auditors.
-25-
Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees
During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed each Fund and the Advisor for the fees set forth below. With respect
to First Trust Intermediate Duration Preferred & Income Fund, fees billed for
services to Stonebridge Advisors LLC ("Stonebridge"), such Fund's sub-advisor,
are also listed below; an affiliate of the Advisor owns a majority interest in
Stonebridge.
------------------------------- --------------------- ---------------------- ---------------------- -----------------
AUDIT-RELATED TAX ALL OTHER
AUDIT FEES(1,2) FEES(2) FEES(3) FEES(4)
------------------------------- --------------------- ---------------------- ---------------------- -----------------
FEES BILLED TO: 2014 2015 2014 2015 2014 2015 2014 2015
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
MACQUARIE/FIRST TRUST GLOBAL
INFRASTRUCTURE/ UTILITIES
DIVIDEND & INCOME FUND(5)
Fund $49,000 $49,000 $0 $0 $5,200 $5,950 $0 $3,000
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST ENERGY INCOME AND
GROWTH FUND(5)
Fund $57,000 $57,000 $0 $0 $70,000 $46,500 $0 $3,000
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST ENHANCED EQUITY
INCOME FUND(6)
Fund $38,000 $38,000 $0 $0 $5,200 $5,200 $0 $3,000
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST/ABERDEEN GLOBAL
OPPORTUNITY INCOME FUND(6)
Fund $53,000 $53,000 $0 $0 $5,200 $5,200 $0 $3,000
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST MORTGAGE INCOME
FUND(7)
Fund $45,000 $45,000 $0 $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST STRATEGIC HIGH
INCOME FUND II(7)
Fund $65,000 $65,000 $0 $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST/ABERDEEN EMERGING
OPPORTUNITY FUND(6)
Fund $53,000 $53,000 $0 $0 $8,670 $9,080 $0 $3,000
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST SPECIALTY FINANCE
AND FINANCIAL OPPORTUNITIES
FUND(5)
Fund $42,000 $65,500 $0 $0 $5,200 $5,200 $0 $3,000
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST HIGH INCOME
LONG/SHORT FUND(7)
Fund $52,000 $52,000 $0 $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST ENERGY
INFRASTRUCTURE FUND(5)
Fund $44,000 $44,000 $0 $0 $6,300 $6,300 $0 $3,000
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST MLP AND ENERGY
INCOME FUND(7)
Fund $57,000 $57,000 $0 $0 $52,000 $42,000 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST INTERMEDIATE
DURATION PREFERRED & INCOME
FUND(7)
Fund $28,000 $28,000 $0 $0 $5,200 $5,200 $0 $0
Advisor N/A N/A $0 $0 $0 $0 $0 $0
Sub-Advisor N/A N/A $0 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
-26-
------------------------------- --------------------- ---------------------- ---------------------- -----------------
AUDIT-RELATED TAX ALL OTHER
AUDIT FEES(1,2) FEES(2) FEES(3) FEES(4)
------------------------------- --------------------- ---------------------- ---------------------- -----------------
FEES BILLED TO: 2014 2015 2014 2015 2014 2015 2014 2015
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
FIRST TRUST NEW
OPPORTUNITIES MLP & ENERGY
FUND(7, 8)
Fund $78,000 $57,000 $0 $0 $0 $42,000 $0 $0
Advisor N/A N/A $7,000 $0 $0 $0 $0 $0
------------------------------- ----------- --------- ----------- ----------- ----------- --------- -------- --------
1 These fees were the aggregate fees billed for professional services for the
audit of the Fund's annual financial statements and services that are
normally provided in connection with statutory and regulatory filings or
engagements. For 2015, a portion of the amount shown for First Trust
Specialty Finance and Financial Opportunities Fund included fees
attributable to a shelf offering.
2 With respect to First Trust New Opportunities MLP & Energy Fund for 2014,
these fees were for audits and issuance of consents related to the initial
offering of such Fund.
3 These fees were for tax consultation or tax return preparation.
4 For 2015, these fees were for Fund accounting system conversion.
5 These fees were for the fiscal years ended November 30.
6 These fees were for the fiscal years ended December 31.
7 These fees were for the fiscal years ended October 31.
8 For 2014, these fees were for the period from inception on March 26, 2014
through October 31, 2014.
Non-Audit Fees
During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed each Fund and the Advisor for the non-audit fees listed below for
services provided to the entities indicated. With respect to First Trust
Intermediate Duration Preferred & Income Fund, non-audit fees billed for
services provided to Stonebridge, such Fund's sub-advisor, are also listed
below; an affiliate of the Advisor owns a majority interest in Stonebridge.
AGGREGATE NON-AUDIT FEES
------------------------------------------------------------------------------- -------------------- -------------------
FUND 2014 2015
------------------------------------------------------------------------------- -------------------- -------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND &
INCOME FUND(1)
Fund $5,200 $8,950
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST ENERGY INCOME AND GROWTH FUND(1)
Fund $70,000 $49,500
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST ENHANCED EQUITY INCOME FUND(2)
Fund $5,200 $8,200
Advisor $8,500(6) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND(2)
Fund $5,200 $8,200
Advisor $8,500(6) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST MORTGAGE INCOME FUND(3)
Fund $5,200 $5,200
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST STRATEGIC HIGH INCOME FUND II(3)
Fund $5,200 $5,200
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND(2)
Fund $8,670 $12,080
Advisor $8,500(6) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND(1)
Fund $5,200 $8,200
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST HIGH INCOME LONG/SHORT FUND(3)
Fund $5,200 $5,200
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
-27-
------------------------------------------------------------------------------- -------------------- -------------------
FUND 2014 2015
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST ENERGY INFRASTRUCTURE FUND(1)
Fund $6,300 $9,300
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST MLP AND ENERGY INCOME FUND(3)
Fund $52,000 $42,000
Advisor $43,500(5) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST INTERMEDIATE DURATION PREFERRED & INCOME FUND(3)
Fund $5,200 $5,200
Advisor $43,500(5) $12,500(7)
Sub-Advisor $3,000(6) $3,000(7)
------------------------------------------------------------------------------- -------------------- -------------------
FIRST TRUST NEW OPPORTUNITIES MLP & ENERGY FUND(3, 4)
Fund 0 $42,000
Advisor $6,700(6) $12,500(7)
------------------------------------------------------------------------------- -------------------- -------------------
1 These fees were for the fiscal years ended November 30.
2 These fees were for the fiscal years ended December 31.
3 These fees were for the fiscal years ended October 31.
4 For 2014, these fees were for the period from inception on March 26, 2014
through October 31, 2014.
5 These fees relate to 2013 federal and state tax matters, and Global
Investment Performance Standards (GIPS(R)) matters for the period July 2011
through June 2013.
6 These fees relate to 2013 federal and state tax matters.
7 These fees relate to 2014 federal and state tax returns.
Pre-Approval
Pursuant to its Charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Audit Committee of each Fund 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 each Fund by its independent auditors. The
Chairman of the Audit Committee is authorized to give such pre-approvals on
behalf of the Audit Committee up to $25,000 and report any such pre-approval to
the full Audit Committee.
The Audit Committee is also responsible for the pre-approval of the
independent auditors' engagements for non-audit services with the Advisor and
any entity controlling, controlled by or under common control with the Advisor
that provides ongoing services to the respective Fund, if the engagement relates
directly to the operations and financial reporting of the Funds, subject to the
de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditors have provided non-audit services to
the Advisor or any entity controlling, controlled by or under common control
with the Advisor that provides ongoing services to the respective Fund that were
not pre-approved pursuant to its policies, the Audit Committee will consider
whether the provision of such non-audit services is compatible with the
auditors' independence.
None of the Audit Fees, Audit-Related Fees, Tax Fees, or All Other Fees,
if any, or the Aggregate Non-Audit Fees disclosed above that were required to be
pre-approved by the Audit Committee pursuant to its Pre-Approval Policy were
pre-approved by the Audit Committee pursuant to the pre-approval exceptions
included in Regulation S-X.
Because the Audit Committee has not been informed of any such services,
the Audit Committee of each Fund has not considered whether the provision of
non-audit services that were rendered to the Advisor and any entity controlling,
controlled by, or under common control with the Advisor that provides ongoing
services to the respective Fund 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.
-28-
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
Shareholder Proposals for Inclusion in a Fund's Proxy Statement. To be
considered for presentation at the 2017 annual meeting of shareholders of a Fund
and included in the Fund's proxy statement relating to such meeting, a
shareholder proposal submitted pursuant to Rule 14a-8 under the 1934 Act must be
received at the principal executive offices of the applicable Fund not later
than November 15, 2016. Such a proposal will be included in the Fund's proxy
statement if it meets the requirements of Rule 14a-8. Timely submission of a
proposal does not mean that such proposal will be included in a Fund's proxy
statement.
Other Shareholder Proposals. In addition to any requirements of law,
including the proxy rules under the 1934 Act, under the Funds' By-Laws, any
proposal to elect any person nominated by shareholders for election as Trustee
and any other proposals by shareholders may only be brought before an annual
meeting of a Fund if timely written notice (the "Shareholder Notice") is
provided to the Secretary of the Fund and the other conditions summarized below
are met. In accordance with the advance notice provisions included in the Funds'
By-Laws, unless a greater or lesser period is required under applicable law, to
be timely, the Shareholder Notice must be delivered to or mailed and received at
the Fund's principal executive offices, Attn: W. Scott Jardine, Secretary, not
less than forty-five (45) days nor more than sixty (60) days prior to the first
anniversary date of the date of the proxy statement released to shareholders for
the preceding year's annual meeting. However, if and only if the annual meeting
is not scheduled to be held within a period that commences thirty (30) days
before the first anniversary date of the annual meeting for the preceding year
and ends thirty (30) days after such anniversary date (an annual meeting date
outside such period being referred to herein as an "Other Annual Meeting Date"),
such Shareholder Notice must be given as described above by the later of the
close of business on (i) the date forty-five (45) days prior to such Other
Annual Meeting Date or (ii) the tenth (10th) business day following the date
such Other Annual Meeting Date is first publicly announced or disclosed.
Any shareholder submitting a nomination of any person or persons (as the
case may be) for election as a Trustee or Trustees of a Fund is required to
deliver, as part of such Shareholder Notice: (i) a statement in writing setting
forth: (A) the name, age, date of birth, business address, residence address and
nationality of the person or persons to be nominated; (B) the class or series
and number of all Shares of the Fund owned of record or beneficially by each
such person or persons, as reported to such shareholder by such nominee(s); (C)
any other information regarding each such person required by paragraphs (a),
(d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the 1934 Act (or any successor provision
thereto); (D) any other information regarding the person or persons to be
nominated that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitation of proxies for
election of trustees or directors pursuant to Section 14 of the 1934 Act and the
rules and regulations promulgated thereunder; and (E) whether such shareholder
believes any nominee is or will be an "interested person" of the Fund (as
defined in the 1940 Act) and, if not an "interested person," information
regarding each nominee that will be sufficient for the Fund to make such
determination; and (ii) the written and signed consent of any person nominated
to be named as a nominee and to serve as a Trustee if elected. In addition, the
Trustees may require any proposed nominee to furnish such other information as
they may reasonably require or deem necessary to determine the eligibility of
such proposed nominee to serve as a Trustee.
-29-
Without limiting the foregoing, any shareholder who gives a Shareholder
Notice of any matter proposed to be brought before a shareholder meeting
(whether or not involving nominees for Trustees) is required to deliver, as part
of such Shareholder Notice: (i) the description of and text of the proposal to
be presented; (ii) a brief written statement of the reasons why such shareholder
favors the proposal; (iii) such shareholder's name and address as they appear on
the Fund's books; (iv) any other information relating to the shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with the solicitation of proxies with respect to the
matter(s) proposed pursuant to Section 14 of the 1934 Act and the rules and
regulations promulgated thereunder; (v) the class or series and number of all
Shares of the Fund owned beneficially and of record by such shareholder; (vi)
any material interest of such shareholder in the matter proposed (other than as
a shareholder); (vii) a representation that the shareholder intends to appear in
person or by proxy at the shareholder meeting to act on the matter(s) proposed;
(viii) if the proposal involves nominee(s) for Trustees, a description of all
arrangements or understandings between the shareholder and each proposed nominee
and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by the shareholder; and (ix) in the case of a
shareholder (a "Beneficial Owner") that holds Shares entitled to vote at the
meeting through a nominee or "street name" holder of record, evidence
establishing such Beneficial Owner's indirect ownership of, and entitlement to
vote, Shares at the meeting of shareholders. Shares "beneficially owned" means
all Shares which such person is deemed to beneficially own pursuant to Rules
13d-3 and 13d-5 under the 1934 Act.
In addition, the By-Laws provide that, unless required by federal law, no
matters shall be considered at or brought before any annual or special meeting
unless such matter has been deemed a proper matter for shareholder action by at
least sixty-six and two-thirds percent (66-2/3%) of the Trustees. Timely
submission of a proposal does not mean that such proposal will be brought before
the meeting.
SHAREHOLDER COMMUNICATIONS
Shareholders of a Fund who want to communicate with the Board of Trustees
or any individual Trustee should write the Fund to the attention of the Fund
Secretary, W. Scott Jardine. The letter should indicate that you are a Fund
shareholder. If the communication is intended for a specific Trustee and so
indicates, it will be sent only to that Trustee. If a communication does not
indicate a specific Trustee, it will be sent to the Chairman of the Nominating
and Governance Committee of the Board and the independent legal counsel to the
Independent Trustees for further distribution as deemed appropriate by such
persons.
INVESTMENT ADVISOR, SUB-ADVISORS, ADMINISTRATORS AND TRANSFER AGENTS
First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, serves as the Funds' investment advisor. First Trust Advisors is
also responsible for providing certain clerical, bookkeeping and other
administrative services to each Fund and also provides fund reporting services
to each Fund for a flat annual fee. Four Corners Capital Management, LLC, 2005
Market Street, Philadelphia, Pennsylvania 19103, and Macquarie Capital
Investment Management LLC, 125 West 55th Street, New York, New York 10019, serve
as the investment sub-advisors to Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund. Energy Income Partners, LLC, 49
Riverside Avenue, Westport, Connecticut 06880, serves as the investment
sub-advisor to First Trust Energy Income and Growth Fund, First Trust Energy
Infrastructure Fund, First Trust MLP and Energy Income Fund and First Trust New
Opportunities MLP & Energy Fund. An affiliate of the Advisor owns an interest in
Energy Income Partners, LLC. Chartwell Investment Partners, Inc., 1235 Westlakes
Drive, Berwyn, Pennsylvania 19312, serves as the investment sub-advisor to First
Trust Enhanced Equity Income Fund. Aberdeen Asset Management Inc., 1735 Market
-30-
Street, 32nd Floor, Philadelphia, Pennsylvania 19103, serves as the investment
sub-advisor to First Trust/Aberdeen Global Opportunity Income Fund and First
Trust/Aberdeen Emerging Opportunity Fund. Brookfield Investment Management Inc.,
250 Vesey Street, 15th Floor, New York, New York 10281, serves as the investment
sub-advisor to First Trust Strategic High Income Fund II and First Trust
Mortgage Income Fund. Confluence Investment Management LLC, 20 Allen Avenue,
Suite 300, St. Louis, Missouri 63119, serves as the investment sub-advisor to
First Trust Specialty Finance and Financial Opportunities Fund. MacKay Shields
LLC, 1345 Avenue of the Americas, 43rd Floor, New York, New York 10105, serves
as the investment sub-advisor to First Trust High Income Long/Short Fund.
Stonebridge Advisors LLC, 10 Westport Road, Suite C101, Wilton, Connecticut
06897, serves as the investment sub-advisor to First Trust Intermediate Duration
Preferred & Income Fund. An affiliate of the Advisor owns a majority interest in
Stonebridge Advisors LLC.
BNY Mellon Investment Servicing (US) Inc., 301 Bellevue Parkway,
Wilmington, Delaware 19809, acts as the administrator, accounting agent and
transfer agent to each Fund except for First Trust Intermediate Duration
Preferred & Income Fund. Brown Brothers Harriman & Co., 50 Milk Street, Boston,
Massachusetts 02109, acts as the administrator and accounting agent, and
Computershare Inc., P.O. Box 30170, College Station, Texas 77842-3170, acts as
the transfer agent, to First Trust Intermediate Duration Preferred & Income
Fund.
SECTION 30(h) AND SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require
the Funds' officers and Trustees, certain persons affiliated with First Trust
Advisors and any sub-advisor and persons who beneficially own more than 10% of a
Fund's Shares to file reports of ownership and changes of ownership with the SEC
and the NYSE or NYSE MKT, as applicable, and to furnish the Funds with copies of
all Section 16(a) forms they file. Based solely upon a review of copies of such
forms received by the Funds and certain written representations, the Funds
believe that during the fiscal years ended October 31, 2015, November 30, 2015
and December 31, 2015, all such filing requirements applicable to such persons
were met, except as follows:
----------------------------------- -----------------------------------------------------------------------------
Macquarie/First Trust Global On June 5, 2015, one late Form 3 was filed for John H. Kim, an officer of
Infrastructure/Utilities Dividend Macquarie Capital Investment Management LLC (investment sub-advisor).
& Income Fund
----------------------------------- -----------------------------------------------------------------------------
First Trust Enhanced Equity Income On May 1, 2015, one late Form 3 was filed for LuAnn Molino, an officer of
Fund Chartwell Investment Partners, Inc. (investment sub-advisor).
----------------------------------- -----------------------------------------------------------------------------
First Trust/Aberdeen Global With respect to each of these Funds:
Opportunity Income Fund On April 22, 2015, one late Form 3 was filed for Sofia Rosala.
and On April 28, 2015, one late Form 3 was filed for Paul Atkinson.
First Trust/Aberdeen Emerging On April 28, 2015, one late Form 3 was filed for Jeffrey Cotton.
Opportunity Fund On April 28, 2015, one late Form 3 was filed for Jennifer A. Nichols.
On April 29, 2015, one late Form 3 was filed for Charles Tan.
Each of the above is an officer of Aberdeen Asset Management Inc.
(investment sub-advisor).
----------------------------------- -----------------------------------------------------------------------------
First Trust Strategic High Income On June 16, 2015, one late Form 3 was filed for Mark Shipley, an officer of
Fund II Brookfield Investment Management Inc. (investment sub-advisor).
----------------------------------- -----------------------------------------------------------------------------
First Trust Intermediate Duration On February 18, 2016, one late Form 4 was filed for Robert F. Keith, a
Preferred & Income Fund Trustee of the Fund, with respect to a purchase of 512 of the Fund's Shares
on January 16, 2015.
----------------------------------- -----------------------------------------------------------------------------
FISCAL YEAR
The fiscal year end for First Trust Mortgage Income Fund, First Trust
Strategic High Income Fund II, First Trust High Income Long/Short Fund, First
Trust MLP and Energy Income Fund, First Trust Intermediate Duration Preferred &
-31-
Income Fund and First Trust New Opportunities MLP & Energy Fund was October 31,
2015. The fiscal year end for Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, First Trust Energy Income and
Growth Fund, First Trust Specialty Finance and Financial Opportunities Fund and
First Trust Energy Infrastructure Fund was November 30, 2015. The fiscal year
end for First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global
Opportunity Income Fund and First Trust/Aberdeen Emerging Opportunity Fund was
December 31, 2015.
DELIVERY OF CERTAIN DOCUMENTS
Annual reports will be sent to shareholders of record of each Fund
following the Fund's fiscal year end. Each Fund will furnish, without charge, a
copy of its annual report and/or semi-annual report as available upon request.
Such written or oral requests should be made by writing to the Advisor at 120
East Liberty Drive, Suite 400, Wheaton, Illinois 60187 or by calling (800)
988-5891.
Please note that only one annual or semi-annual report or proxy statement
may be delivered to two or more shareholders of a Fund who share an address,
unless the Fund has received instructions to the contrary. To request a separate
copy of an annual or semi-annual report or proxy statement, or for instructions
as to how to request a separate copy of such documents or as to how to request a
single copy if multiple copies of such documents are received, shareholders
should contact the Advisor at the address and phone number set forth above.
Pursuant to a request, a separate copy will be delivered promptly.
OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matter described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote thereon
according to their best judgment in the interests of the Funds.
March 7, 2016
--------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS ARE THEREFORE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS SOON AS POSSIBLE IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
--------------------------------------------------------------------------------
-32-
SCHEDULE 1
NUMBER OF BOARD AND COMMITTEE MEETINGS
HELD DURING EACH FUND'S LAST FISCAL YEAR
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
NOMINATING
AND
AUDIT EXECUTIVE GOVERNANCE VALUATION
BOARD COMMITTEE COMMITTEE COMMITTEE COMMITTEE
FUND MEETINGS MEETINGS MEETINGS MEETINGS MEETINGS
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
MACQUARIE/FIRST TRUST GLOBAL 5 7 4 4 4
INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND(1)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST ENERGY INCOME AND 6 7 4 4 4
GROWTH FUND(1)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST ENHANCED EQUITY 6 8 4 4 4
INCOME FUND(2)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST/ABERDEEN GLOBAL 6 8 12 4 4
OPPORTUNITY INCOME FUND(2)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST MORTGAGE INCOME 5 7 12 4 4
FUND(3)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST STRATEGIC HIGH 5 7 12 4 4
INCOME FUND II(3)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST/ABERDEEN EMERGING 7 8 4 4 4
OPPORTUNITY FUND(2)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST SPECIALTY FINANCE
AND FINANCIAL OPPORTUNITIES 6 7 4 4 4
FUND(1)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST HIGH INCOME 5 8 12 4 4
LONG/SHORT FUND(3)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST ENERGY 6 7 12 4 4
INFRASTRUCTURE FUND(1)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST MLP AND ENERGY 5 8 12 4 4
INCOME FUND(3)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST INTERMEDIATE
DURATION PREFERRED & INCOME 5 8 12 4 4
FUND(3)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
FIRST TRUST NEW OPPORTUNITIES 5 8 12 4 4
MLP & ENERGY FUND(3)
--------------------------------- ----------------- ----------------- ----------------- ----------------- -----------------
1 For fiscal year ended November 30, 2015.
2 For fiscal year ended December 31, 2015.
3 For fiscal year ended October 31, 2015.
EXHIBIT A
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee (the "Committee") is appointed by the Boards of
Trustees (the "Boards") of the investment companies (the "Funds") advised by
First Trust Advisors L.P. ("Fund Management") for the following purposes:
1. to oversee the accounting and financial reporting processes of
each Fund and its internal controls and, as the Audit Committee deems
appropriate, to inquire into the internal controls of certain third-party
service providers;
2. to oversee the quality and integrity of each Fund's financial
statements and the independent audit thereof;
3. to oversee, or, as appropriate, assist Board oversight of, each
Fund's compliance with legal and regulatory requirements that relate to
the Fund's accounting and financial reporting, internal controls and
independent audits; and
4. to approve, prior to the appointment, the engagement of each
Fund's independent auditor and, in connection therewith, to review and
evaluate the qualifications, independence and performance of the Fund's
independent auditor.
II. COMMITTEE ORGANIZATION AND COMPOSITION
A. Size and Membership Requirements.
1. The Committee shall be composed of at least three members, all
of whom shall be trustees of the Funds. Each member of the Committee, and
a Committee chairperson, shall be appointed by the Board on the
recommendation of the Nominating and Governance Committee.
2. Each member of the Committee shall be independent of the Funds
and must be free of any relationship that, in the opinion of the Board,
would interfere with the exercise of independent judgment as a Committee
member. With respect to the Funds which are closed-end funds or open-end
exchange-traded funds ("ETFs"), each member must meet the independence and
experience requirements of the New York Stock Exchange, NYSE Arca, NYSE
MKT LLC or the NASDAQ Stock Market (as applicable), and Section 10A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
10A-3 thereunder, and other applicable rules and regulations of the
Securities and Exchange Commission ("SEC"). Included in the foregoing is
the requirement that no member of the Committee be an "interested person"
of the Funds within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the "1940 Act"), nor shall any Committee
member accept, directly or indirectly, any consulting, advisory or other
compensatory fee from the Funds (except in the capacity as a Board or
committee member).
3. At least one member of the Committee shall have been determined
by the Board, exercising its business judgment, to qualify as an "audit
committee financial expert" as defined by the SEC.
4. With respect to Funds whose shares are listed on NYSE Arca or on
the New York Stock Exchange, each member of the Committee shall have been
determined by the Board, exercising its business judgment, to be
"financially literate" as required by the New York Stock Exchange or NYSE
Arca (as applicable). In addition, at least one member of the Committee
shall have been determined by the Board, exercising its business judgment,
to have "accounting or related financial management expertise," as
required by the New York Stock Exchange or NYSE Arca (as applicable). Such
member may, but need not be, the same person as the Funds' "audit
committee financial expert." With respect to Funds that are closed-end
funds or ETFs whose shares are listed on the NYSE MKT LLC or the NASDAQ
Stock Market, each member of the Committee shall be able to read and
understand fundamental financial statements, including a Fund's balance
sheet, income statement and cash flow statement. In addition, at least one
member of the Committee shall have been determined by the Board,
exercising its business judgment, to be "financially sophisticated," as
required by the NYSE MKT LLC or the NASDAQ Stock Market (as applicable).
Any member whom the Board determines to be an "audit committee financial
expert" shall be presumed to qualify as financially sophisticated.
5. With respect to Funds that are closed-end funds or ETFs,
Committee members shall not serve simultaneously on the audit committee of
more than two public companies, in addition to their service on the
Committee.
B. Frequency of Meetings.
The Committee will ordinarily meet once for every regular meeting of the
Board. The Committee may meet more or less frequently as appropriate, but no
less than four times per year.
C. Term of Office.
Committee members shall serve until they resign or are removed or replaced
by the Board.
III. RESPONSIBILITIES
A. With respect to Independent Auditors:
1. The Committee shall be responsible for the appointment or
replacement (subject, if applicable, to Board and/or shareholder
ratification), compensation, retention and oversight of the work of any
registered public accounting firm engaged (including resolution of
disagreements between management and the auditor regarding financial
reporting) for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Funds ("External
Auditors"). The External Auditors shall report directly to the Committee.
2. The Committee shall meet with the External Auditors and Fund
Management to review the scope, fees, audit plans and staffing of the
proposed audits for each fiscal year. At the conclusion of the audit, the
Committee shall review such audit results, including the External
Auditors' evaluation of each Fund's financial and internal controls, any
comments or recommendations of the External Auditors, any audit problems
A-2
or difficulties and Fund Management's response, including any restrictions
on the scope of the External Auditors' activities or on access to
requested information, any significant disagreements with Fund Management,
any accounting adjustments noted or proposed by the auditor but not made
by the Fund, any communications between the audit team and the audit
firm's national office regarding auditing or accounting issues presented
by the engagement, any significant changes required from the originally
planned audit programs and any adjustments to the financial statements
recommended by the External Auditors.
3. The Committee shall meet with the External Auditors in the
absence of Fund Management, as necessary.
4. The Committee shall pre-approve all audit services and permitted
non-audit services (including the fees and terms thereof) to be performed
for each Fund by its External Auditors in accordance with the Audit and
Non-Audit Services Pre-Approval Policy. The Chairman of the Committee is
authorized to give such pre-approvals on behalf of the Committee where the
fee for such engagement does not exceed the amount specified in the Audit
and Non-Audit Services Pre-Approval Policy, and shall report any such
pre-approval to the full Committee.
5. The Committee shall pre-approve the External Auditors'
engagements for non-audit services to Fund Management and any entity
controlling, controlled by or under common control with Fund Management
that provides ongoing services to the Funds, if the engagement relates
directly to the operations and financial reporting of the Funds, subject
to the de minimis exceptions for non-audit services described in Rule 2-01
of Regulation S-X. The Chairman of the Committee is authorized to give
such pre-approvals on behalf of the Committee, and shall report any such
pre-approval to the full Committee.
6. If the External Auditors have provided non-audit services to
Fund Management and any entity controlling, controlled by or under common
control with Fund Management that provides ongoing services to the Funds
that were not pre-approved pursuant to the de minimis exception, the
Committee shall consider whether the provision of such non-audit services
is compatible with the External Auditors' independence.
7. The Committee shall obtain and review a report from the External
Auditors at least annually (including a formal written statement
delineating all relationships between the auditors and the Funds
consistent with PCAOB Ethics and Independence Rule 3526) regarding (a) the
External Auditors' internal quality-control procedures; (b) any material
issues raised by the most recent internal quality-control review, or peer
review, of the firm, or by an inquiry or investigation by governmental or
professional authorities within the preceding five years, respecting one
or more independent audits carried out by the firm; (c) any steps taken to
deal with any such issues; and (d) the External Auditors' independence,
including all relationships between the External Auditors and the Funds
and their affiliates; and evaluating the qualifications, performance and
independence of the External Auditors, including their membership in the
SEC practice section of the AICPA and their compliance with all applicable
requirements for independence and peer review, and a review and evaluation
of the lead partner, taking into account the opinions of management and
discussing such reports with the External Auditors. The Committee shall
present its conclusions with respect to the External Auditors to the
Board.
A-3
8. The Committee shall review reports and other information
provided to it by the External Auditors regarding any illegal acts that
the External Auditors should discover (whether or not perceived to have a
material effect on a Fund's financial statements), in accordance with and
as required by Section 10A(b)(1) of the Exchange Act.
9. The Committee shall ensure the rotation of the lead (or
concurring) audit partner having primary responsibility for the audit and
the audit partner responsible for reviewing the audit as required by law,
and further consider the rotation of the independent auditor firm itself.
10. The Committee shall establish and recommend to the Board for
ratification a policy of the Funds with respect to the hiring of employees
or former employees of the External Auditors who participated in the
audits of the Funds' financial statements.
11. The Committee shall take (and, where appropriate, recommend that
the Board take) appropriate action to oversee the independence of the
External Auditors.
12. The Committee shall report regularly to the Board on the results
of the activities of the Committee, including any issues that arise with
respect to the quality or integrity of the Funds' financial statements,
the Funds' compliance with legal or regulatory requirements, the
performance and independence of the Funds' External Auditors, or the
performance of the internal audit function, if any.
B. With respect to Fund Financial Statements:
1. The Committee shall meet to review and discuss with Fund
Management and the External Auditors the annual audited financial
statements of the Funds, major issues regarding accounting and auditing
principles and practices, and the Funds' disclosures under "Management's
Discussion and Analysis," and shall meet to review and discuss with Fund
Management the semi-annual financial statements of the Funds and the
Funds' disclosures under "Management's Discussion and Analysis."
2. The Committee shall review and discuss reports, both written and
oral, from the External Auditors or Fund Management regarding (a) all
critical accounting policies and practices to be used; (b) all alternative
treatments of financial information within generally accepted accounting
principles ("GAAP") for policies and practices that have been discussed
with Fund Management, including the ramifications of the use of such
alternative treatments and disclosures and the treatment preferred by the
External Auditors; (c) other material written communications between the
External Auditors and Fund Management, such as any management letter or
schedule of unadjusted differences; and (d) all non-audit services
provided to any entity in the investment company complex (as defined in
Rule 2-01 of Regulation S-X) that were not pre-approved by the Committee.
3. The Committee shall review disclosures made to the Committee by
the Funds' principal executive officer and principal financial officer
during their certification process for the Funds' periodic reports about
any significant deficiencies in the design or operation of internal
controls or material weaknesses therein and any fraud involving management
or other employees who have a significant role in the Funds' internal
controls.
A-4
4. The Committee shall discuss with the External Auditors the
matters required to be discussed by the applicable PCAOB Auditing Standard
that arise during the External Auditor's review of the Funds' financial
statements.
5. The Committee shall review and discuss with Fund Management and
the External Auditors (a) significant financial reporting issues and
judgments made in connection with the preparation and presentation of the
Funds' financial statements, including any significant changes in the
Funds' selection or application of accounting principles and any major
issues as to the adequacy of the Funds' internal controls and any special
audit steps adopted in light of material control deficiencies, and (b)
analyses prepared by Fund Management or the External Auditors setting
forth significant financial reporting issues and judgments made in
connection with the preparation of the financial statements, including
analyses of the effects of alternative GAAP methods on the financial
statements.
6. The Committee shall review and discuss with Fund Management and
the External Auditors the effect of regulatory and accounting initiatives
on the Funds' financial statements.
7. The Committee shall discuss with Fund Management the Funds'
press releases regarding financial results and dividends, as well as
financial information and earnings guidance provided to analysts and
rating agencies. This discussion may be done generally, consisting of
discussing the types of information to be disclosed and the types of
presentations to be made. The Chairman of the Committee or any member of
the Committee also serving on the Dividend and Pricing Committee shall be
authorized to have these discussions with Fund Management on behalf of the
Committee, and shall report to the Committee regarding any such
discussions.
8. The Committee shall discuss with Fund Management the Funds'
major financial risk exposures and the steps Fund Management has taken to
monitor and control these exposures, including the Funds' risk assessment
and risk management policies and guidelines. In fulfilling its obligations
under this paragraph, the Committee may, as applicable, review in a
general manner the processes other Board committees have in place with
respect to risk assessment and risk management.
C. With respect to serving as a Qualified Legal Compliance Committee:
1. The Committee shall serve as the Funds' "qualified legal
compliance committee" ("QLCC") within the meaning of the rules of the SEC
and, in that regard, the following shall apply:
(i) The Committee shall receive and retain, in confidence,
reports of evidence of (a) a material violation of any federal or
state securities laws, (b) a material breach of a fiduciary duty
arising under any federal or state laws or (c) a similar material
violation of any federal or state law by a Fund or any of its
officers, trustees, employees or agents (a "Report of Material
Violation"). Reports of Material Violation may be addressed to the
Funds, attention W. Scott Jardine, by e-mail at
sjardine@ftportfolios.com or at the address of the principal office
of the Funds, which currently is 120 East Liberty Drive, Wheaton,
Illinois 60187, who shall forward the Report of Material Violation to
the Committee.
A-5
(ii) Upon receipt of a Report of Material Violation, the
Committee shall (a) inform the Fund's chief legal officer and chief
executive officer (or the equivalents thereof) of the report (unless
the Committee determines it would be futile to do so), and (b)
determine whether an investigation is necessary.
(iii) After considering the Report of Material Violation, the
Committee shall do the following if it deems an investigation
necessary:
(1) Notify the Board;
(2) Initiate an investigation, which may be conducted
either by the chief legal officer (or the equivalent thereof)
of the Fund or by outside attorneys; and
(3) Retain such additional expert personnel as the
Committee deems necessary.
(iv) At the conclusion of any such investigation, the Committee
shall:
(4) Recommend, by majority vote, that the Fund implement
an appropriate response to evidence of a material violation;
and
(5) Inform the chief legal officer and the chief
executive officer (or the equivalents thereof) and the Board of
the results of any such investigation and the appropriate
remedial measures to be adopted.
2. The Committee shall take all other action that it deems
appropriate in the event that the Fund fails in any material respect to
implement an appropriate response that the Committee, as the QLCC, has
recommended the Fund take.
D. Other Responsibilities:
1. The Committee shall receive, retain and handle complaints
received by the Funds regarding accounting, internal accounting controls,
or auditing matters from any person, whether or not an employee of the
Funds or Fund Management, and shall receive submissions of concerns
regarding questionable accounting or auditing matters by officers of the
Funds and employees of Fund Management, any administrator, fund
accountant, principal underwriter, or any other provider of
accounting-related services for the Funds. All such complaints and
concerns shall be handled in accordance with the Committee's procedures
for operating as a QLCC, outlined in III.C above.
2. The Committee shall review, with fund counsel and independent
legal counsel, any legal matters that could have significant impact on a
Fund's financial statements or compliance policies and the findings of any
examination by a regulatory agency as they relate to financial statement
matters.
A-6
3. The Committee shall review and reassess the adequacy of this
charter on an annual basis and provide a recommendation to the Board for
approval of any proposed changes deemed necessary or advisable by the
Committee.
4. The Committee shall evaluate on an annual basis the performance
of the Committee.
5. The Committee shall review with the External Auditors and with
Fund Management the adequacy and effectiveness of the Funds' internal
accounting and financial controls.
6. The Committee shall discuss with Fund Management and the
External Auditors any correspondence with regulators or governmental
agencies that raise material issues regarding the Funds' financial
statements or accounting policies.
7. The Committee shall obtain any reports from Fund Management with
respect to the Funds' policies and procedures regarding compliance with
applicable laws and regulations. The Committee shall perform other special
reviews, investigations or oversight functions as requested by the Board
and shall receive and review periodic or special reports issued on
exposure/controls, irregularities and control failures related to the
Funds.
8. The Committee shall prepare any report of the Committee required
to be included in a proxy statement for a Fund.
9. The Committee may request any officer or employee of a Fund or
Fund Management, independent legal counsel, fund counsel and the External
Auditors to attend a meeting of the Committee or to meet with any members
of, or consultants to, the Committee.
10. The Committee shall maintain minutes of its meetings.
11. The Committee shall perform such other functions and have such
powers as may be necessary or appropriate in the efficient and lawful
discharge of its responsibilities.
IV. AUTHORITY TO ENGAGE ADVISERS
The Committee may engage independent counsel and other advisers, as it
determines necessary to carry out its duties. The Funds' External Auditors shall
have unrestricted accessibility at any time to Committee members.
V. FUNDING PROVISIONS
A. The Committee shall determine the:
1. Compensation to any independent registered public accounting
firm engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for a Fund; and
2. Compensation to any advisers employed by the Committee.
A-7
B. The expenses enumerated in this Article V and all necessary and
appropriate administrative expenses of the Committee shall be paid by the
applicable Fund or Fund Management.
VI. MANAGEMENT AND EXTERNAL AUDITORS' RESPONSIBILITIES
A. Fund Management has the primary responsibility for establishing and
maintaining systems for accounting, reporting, disclosure and internal controls.
The External Auditors have the primary responsibility to plan and implement an
audit, with proper consideration given to the accounting, reporting and internal
controls. All External Auditors engaged for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for the
Funds shall report directly to the Committee. The External Auditors' ultimate
accountability is to the Board and the Committee, as representatives of
shareholders.
B. While the Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Funds' financial statements are complete and accurate and
are in accordance with GAAP, nor is it the duty of the Committee to assure
compliance with laws and regulations and/or the Funds' Code of Ethics.
C. In discharging its responsibilities, the Committee and its members are
entitled to rely on information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or presented by: (1)
one or more officers of a Fund; (2) legal counsel, public accountants, or other
persons as to matters the Committee member reasonably believes are within the
person's professional or expert competence; or (3) a Board committee of which
the Committee member is not a member.
Amended: December 8, 2014
A-8
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[BLANK BACK COVER]
FORM OF PROXY CARD
------------------
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
EASY VOTING OPTIONS:
VOTE BY MAIL
Vote, sign and date this Proxy
Card and return in the
postage-paid envelope
VOTE IN PERSON
Attend Shareholder Meeting
120 East Liberty Drive, Suite 400
Wheaton, Illinois 60187
on April 22, 2016
Please detach at perforation before mailing.
PROXY PROXY
[NAME OF FUND]
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 2016
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the [NAME OF FUND], a Massachusetts business
trust, hereby appoints W. Scott Jardine, Kristi A. Maher, James M. Dykas and
Erin E. Klassman as attorneys and proxies for the undersigned, with full powers
of substitution and revocation, to represent the undersigned and to vote on
behalf of the undersigned all shares of the Fund that the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Fund (the
"Meeting") to be held at the offices of First Trust Advisors L.P., 120 East
Liberty Drive, Suite 400, Wheaton, Illinois 60187, at 4:30 p.m. Central Time on
the date indicated above, and any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of Joint Annual
Meetings of Shareholders and Joint Proxy Statement dated March 7, 2016, and
hereby instructs said attorneys and proxies to vote said shares as indicated
hereon. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting and any adjournments or
postponements thereof (including, but not limited to, any questions as to
adjournments or postponements of the Meeting). A majority of the proxies present
and acting at the Meeting in person or by substitute (or, if only one shall be
so present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any proxy
previously given. This proxy, if properly executed, will be voted in the manner
directed by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES SET FORTH.
----------------------- -------------------
----------------------- -------------------
Please sign exactly as your name appears at left.
Joint owners each should sign. When signing as
attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name by
president or authorized officer. If a partnership,
please sign in partnership name by authorized person.
Please sign, date and return.
____________________________________________________
Signature
____________________________________________________
Signature (if held jointly)
____________________________________________________
Date XXXX_27468_020416
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 22, 2016
THE PROXY STATEMENT AND PROXY CARD FOR THIS MEETING ARE AVAILABLE AT:
https://www.proxy-direct.com/fir-27468
Please detach at perforation before mailing.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE ELECTION OF THE NOMINEES SET FORTH.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example: [solid box]
1. Election of Two Class III Trustees.
The Board of Trustees recommends that you vote FOR the election of
two Class III Nominees for a three-year term.
FOR WITHHOLD
01. James A. Bowen [ ] [ ]
02. Niel B. Nielson [ ] [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
27468_020416