UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21496
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)
Registrant's telephone number, including area code: 630-765-8000
Date of fiscal year end: November 30
Date of reporting period: May 31, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
(a) | The Report to Shareholders is attached herewith. |
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Performance | |||||
Average Annual Total Returns | |||||
6
Months Ended 5/31/23 |
1
Year Ended 5/31/23 |
5
Years Ended 5/31/23 |
10
Years Ended 5/31/23 |
Inception (3/25/04) to 5/31/23 | |
Fund Performance(3) | |||||
NAV(4) | -0.17% | -8.30% | 4.13% | 3.38% | 6.10% |
Market Value | -8.63% | -18.48% | 0.59% | 2.06% | 4.95% |
Index Performance | |||||
S&P 500® Utilities Total Return Index | -7.71% | -9.96% | 8.47% | 9.32% | 9.27% |
(1) | Most recent distribution paid through May 31, 2023. Subject to change in the future. |
(2) | Distribution rates are calculated by annualizing the most recent distribution paid through the report date and then dividing by Common Share Price or NAV, as applicable, as of May 31, 2023. Subject to change in the future. |
(3) | Total return is based on the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results. |
(4) | On January 3, 2023, the fair value methodology used to value the senior loan investments held by the Fund was changed. Prior to that date, the senior loans were valued using the bid side price provided by a pricing service. After such date, the senior loans were valued using the midpoint between the bid and ask price provided by a pricing service. The change in the Fund’s fair value methodology on January 3, 2023, resulted in a one-time increase in the Fund’s NAV of approximately $0.010 per share on that date, which represented a positive impact on the Fund’s performance of 0.11%. Without the change to the pricing methodology, the performance of the Fund on a NAV basis would have been -0.28%, -8.40%, 4.11%, 3.37%, and 6.10%, in the 6 months, one-year, five-year, ten-year and since inception periods ended May 31, 2023, respectively. |
Performance | |||||
Average Annual Total Returns | |||||
6
Months Ended 5/31/23 |
1
Year Ended 5/31/23 |
5
Years Ended 5/31/23 |
10
Years Ended 5/31/23 |
Inception (3/25/04) to 5/31/23 | |
Fund Performance(1) | |||||
NAV(2) | -0.17% | -8.30% | 4.13% | 3.38% | 6.10% |
Market Value | -8.63% | -18.48% | 0.59% | 2.06% | 4.95% |
Index Performance | |||||
S&P 500® Utilities Total Return Index | -7.71% | -9.96% | 8.47% | 9.32% | 9.27% |
(1) | Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share price for market value returns. Total returns do not reflect sales load and are not annualized for periods less than one year. |
(2) | On January 3, 2023, the fair value methodology used to value the senior loan investments held by the Fund was changed. Prior to that date, the senior loans were valued using the bid side price provided by a pricing service. After such date, the senior loans were valued using the midpoint between the bid and ask price provided by a pricing service. The change in the Fund’s fair value methodology on January 3, 2023, resulted in a one-time increase in the Fund’s NAV of approximately $0.010 per share on that date, which represented a positive impact on the Fund’s performance of 0.11%. Without the change to the pricing methodology, the performance of the Fund on a NAV basis would have been -0.28%, -8.40%, 4.11%, 3.37%, and 6.10%, in the 6 months, one-year, five-year, ten-year and since inception periods ended May 31, 2023, respectively. |
Shares | Description | Value | ||
COMMON STOCKS (a) – 85.5% | ||||
Australia – 2.0% | ||||
156,912 |
Transurban Group (b) |
$1,514,621 | ||
Canada – 20.2% | ||||
112,315 |
Enbridge, Inc. (b) |
3,953,984 | ||
199,939 |
Gibson Energy, Inc. (b) |
3,227,008 | ||
110,886 |
Hydro One Ltd. (b) (c) (d) |
3,160,353 | ||
46,450 |
Pembina Pipeline Corp. (b) |
1,406,332 | ||
94,560 |
TC Energy Corp. (b) |
3,680,700 | ||
15,428,377 | ||||
Hong Kong – 6.2% | ||||
653,500 |
CLP Holdings, Ltd. (b) |
4,761,179 | ||
Italy – 13.2% | ||||
220,601 |
Enav S.p.A. (b) (c) (d) |
931,412 | ||
353,208 |
Enel S.p.A. (b) |
2,211,653 | ||
809,284 |
Snam S.p.A. (b) |
4,230,063 | ||
324,186 |
Terna-Rete Elettrica Nazionale S.p.A. (b) |
2,713,964 | ||
10,087,092 | ||||
Japan – 2.0% | ||||
37,000 |
West Japan Railway Co. (b) |
1,551,172 | ||
United Kingdom – 28.0% | ||||
472,954 |
National Grid PLC (b) |
6,506,942 | ||
398,650 |
Pennon Group PLC (b) |
3,835,792 | ||
136,302 |
Severn Trent PLC (b) |
4,701,701 | ||
96,727 |
SSE PLC (b) |
2,263,888 | ||
328,214 |
United Utilities Group PLC (b) |
4,133,853 | ||
21,442,176 | ||||
United States – 13.9% | ||||
57,313 |
Eversource Energy (b) |
3,967,779 | ||
145,974 |
Kinder Morgan, Inc. (b) |
2,351,641 | ||
30,053 |
Sempra Energy (b) |
4,313,507 | ||
10,632,927 | ||||
Total Common Stocks |
65,417,544 | |||
(Cost $67,587,084) | ||||
Units | Description | Value | ||
MASTER LIMITED PARTNERSHIPS (a) – 2.1% | ||||
United States – 2.1% | ||||
63,048 |
Enterprise Products Partners, L.P. (b) |
1,597,006 | ||
(Cost $1,013,121) |
Principal Value |
Description | Rate (e) | Stated Maturity (f) |
Value | ||||
SENIOR FLOATING-RATE LOAN INTERESTS – 35.5% | ||||||||
Canada – 0.3% | ||||||||
$248,125 |
Air Canada, Term Loan B, 3 Mo. LIBOR + 3.50%, 0.75% Floor |
8.84% | 08/11/28 | 247,763 | ||||
Cayman Islands – 1.2% | ||||||||
500,000 |
AAdvantage Loyalty IP Ltd., Initial Term Loan, 3 Mo. LIBOR + 4.75%, 0.75% Floor |
10.00% | 04/20/28 | 503,008 |
Principal Value |
Description | Rate (e) | Stated Maturity (f) |
Value | ||||
SENIOR FLOATING-RATE LOAN INTERESTS (Continued) | ||||||||
Cayman Islands (Continued) | ||||||||
$450,000 |
SkyMiles IP Ltd., Initial Term Loan, 3 Mo. SOFR + 3.75%, 1.00% Floor |
8.80% | 10/20/27 | $466,625 | ||||
969,633 | ||||||||
Ireland – 1.1% | ||||||||
569,221 |
Castlelake Aviation One DAC, Initial Term Loans, 3 Mo. LIBOR + 2.75%, 0.50% Floor |
7.62% | 10/22/26 | 559,894 | ||||
300,000 |
Setanta Aircraft Leasing DAC, Term Loan, 3 Mo. LIBOR + 2.00%, 0.00% Floor |
7.16% | 11/05/28 | 298,098 | ||||
857,992 | ||||||||
Luxembourg – 2.6% | ||||||||
1,977,308 |
Connect Finco SARL, Term Loan B, 1 Mo. LIBOR + 3.50%, 1.00% Floor |
8.66% | 12/11/26 | 1,966,195 | ||||
United States – 30.3% | ||||||||
453,957 |
Calpine Construction Finance Co., L.P., Term Loan B, 1 Mo. LIBOR + 2.00%, 0.00% Floor |
7.15% | 01/15/25 | 453,707 | ||||
599,528 |
Calpine Corp., Term Loan B5, 1 Mo. LIBOR + 2.50%, 0.00% Floor |
7.66% | 12/16/27 | 595,457 | ||||
671,806 |
Calpine Corp., Term Loan B9, 1 Mo. LIBOR + 2.00%, 0.00% Floor |
7.16% | 04/05/26 | 666,928 | ||||
2,098,842 |
Charter Communications Operating LLC, Term Loan B2, 3 Mo. SOFR + 1.75%, 0.00% Floor |
6.80%-6.90% | 02/01/27 | 2,060,150 | ||||
703,204 |
Core & Main L.P., Term Loan B-1 Loan, 1 Mo. SOFR + 2.50%, 0.00% Floor |
7.69%-7.74% | 07/27/28 | 698,004 | ||||
199,485 |
CSC Holdings LLC, Term Loan B5, 1 Mo. LIBOR + 2.50%, 0.00% Floor |
7.61% | 04/15/27 | 168,922 | ||||
790,574 |
CSC Holdings LLC, Term Loan B6, 1 Mo. SOFR + 4.50%, 0.00% Floor |
9.56% | 01/18/28 | 700,646 | ||||
639,937 |
Cumulus Media New Holdings, Inc., Initial Term Loan, 1 Mo. LIBOR + 3.75%, 1.00% Floor |
8.78% | 03/31/26 | 505,016 | ||||
1,081,250 |
Directv Financing LLC, Initial Term Loan, 1 Mo. LIBOR + 5.00%, 0.75% Floor |
10.15% | 08/02/27 | 1,029,047 | ||||
1,445,500 |
Frontier Communications Holdings LLC, Term Loan B-Exit, 3 Mo. LIBOR + 3.75%, 0.75% Floor |
8.94% | 10/08/27 | 1,346,397 | ||||
1,670,952 |
Hamilton Projects Acquiror LLC, Term Loan B, 3 Mo. LIBOR + 4.50%, 0.75% Floor |
9.66% | 06/17/27 | 1,649,021 | ||||
1,062,500 |
Mileage Plus Holdings LLC, Term Loan B, 3 Mo. LIBOR + 5.25%, 1.00% Floor |
10.21% | 06/21/27 | 1,101,844 | ||||
750,000 |
Northwest Fiber LLC, Term Loan B, 1 Mo. SOFR + 3.75%, 0.00% Floor |
8.95% | 04/30/27 | 717,656 | ||||
987,500 |
Olympus Water US Holding Corp., Term Loan B, 3 Mo. LIBOR + 3.75%, 0.50% Floor |
8.94% | 11/09/28 | 924,428 | ||||
1,881,352 |
Parkway Generation LLC, Term Loan B, 1 Mo. SOFR + 4.75%, 0.75% Floor |
10.28% | 02/18/29 | 1,829,032 | ||||
247,402 |
Parkway Generation LLC, Term Loan C, 1 Mo. SOFR + 4.75%, 0.75% Floor |
10.28% | 02/18/29 | 240,405 | ||||
2,222,716 |
PG&E Corp., Term Loan B, 1 Mo. LIBOR + 3.00%, 0.50% Floor |
8.19% | 06/23/25 | 2,209,279 | ||||
1,433,785 |
Standard Industries Inc./NJ, Initial Term Loan, 1 Mo. SOFR + 2.25%, 0.50% Floor |
7.71% | 09/22/28 | 1,426,272 | ||||
1,488,750 |
Terraform Power Operating, Term Loan B, 1 Mo. SOFR + 2.50%, 0.50% Floor |
7.50% | 05/21/29 | 1,470,141 | ||||
498,728 |
United Airlines, Inc., Class B Term Loan, 3 Mo. LIBOR + 3.75%, 0.75% Floor |
8.89% | 04/21/28 | 496,995 |
Principal Value |
Description | Rate (e) | Stated Maturity (f) |
Value | ||||
SENIOR FLOATING-RATE LOAN INTERESTS (Continued) | ||||||||
United States (Continued) | ||||||||
$2,484,981 |
Viasat, Inc., Term Loan B, 1 Mo. SOFR + 4.50%, 0.50% Floor |
9.60% | 03/04/29 | $2,399,560 | ||||
494,383 |
Vistra Operations Co., LLC, 2018 Incremental Term Loans, 1 Mo. LIBOR + 1.75%, 0.00% Floor |
6.86%-6.90% | 12/31/25 | 491,294 | ||||
23,180,201 | ||||||||
Total Senior Floating-Rate Loan Interests |
27,221,784 | |||||||
(Cost $27,590,057) |
Total Investments – 123.1% |
94,236,334 | ||
(Cost $96,190,262) | |||
Outstanding Loan – (36.0)% |
(27,550,000) | ||
Net Other Assets and Liabilities – 12.9% |
9,837,459 | ||
Net Assets – 100.0% |
$76,523,793 |
(a) | Portfolio securities are categorized based upon their country of incorporation. |
(b) | All or a portion of this security serves as collateral on the outstanding loan. At May 31, 2023, the segregated value of these securities amounts to $67,014,550. |
(c) | This security may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933, as amended (the “1933 Act”). |
(d) | This security is exempt from registration upon resale under Rule 144A of the 1933 Act and may be resold in transactions exempt from registration, normally to qualified institutional buyers. This security is not restricted on the foreign exchange where it trades freely without any additional registration. As such, it does not require the additional disclosure required of restricted securities. |
(e) | Senior Floating-Rate Loan Interests (“Senior Loans”) in which the Fund invests pay interest at rates which are periodically predetermined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as the LIBOR, (ii) the SOFR obtained from the U.S. Department of the Treasury’s Office of Financial Research, (iii) the prime rate offered by one or more United States banks or (iv) the certificate of deposit rate. Certain Senior Loans are subject to a LIBOR or SOFR floor that establishes a minimum LIBOR or SOFR rate. When a range of rates is disclosed, the Fund holds more than one contract within the same tranche with identical LIBOR or SOFR period, spread and floor, but different LIBOR or SOFR reset dates. |
(f) | Senior Loans generally are subject to mandatory and/or optional prepayment. As a result, the actual remaining maturity of Senior Loans may be substantially less than the stated maturities shown. |
LIBOR | London Interbank Offered Rate |
SOFR | Secured Overnight Financing Rate |
Currency
Exposure Diversification |
%
of Total Investments |
United States Dollar | 41.9% |
British Pound Sterling | 22.8 |
Canadian Dollar | 16.4 |
Euro | 10.7 |
Hong Kong Dollar | 5.0 |
Japanese Yen | 1.6 |
Australian Dollar | 1.6 |
Total | 100.0% |
Total Value at 5/31/2023 |
Level
1 Quoted Prices |
Level
2 Significant Observable Inputs |
Level
3 Significant Unobservable Inputs | |
Common Stocks* |
$ 65,417,544 | $ 65,417,544 | $ — | $ — |
Master Limited Partnerships* |
1,597,006 | 1,597,006 | — | — |
Senior Floating-Rate Loan Interests* |
27,221,784 | — | 27,221,784 | — |
Total Investments |
$ 94,236,334 | $ 67,014,550 | $ 27,221,784 | $— |
* | See Portfolio of Investments for country breakout. |
ASSETS: | |
Investments, at value (Cost $96,190,262) |
$ 94,236,334 |
Cash |
10,028,579 |
Receivables: | |
Investment securities sold |
545,875 |
Dividend reclaims |
250,447 |
Dividends |
177,681 |
Interest |
137,642 |
Prepaid expenses |
14,319 |
Total Assets |
105,390,877 |
LIABILITIES: | |
Outstanding loan |
27,550,000 |
Due to custodian foreign currency (Proceeds $59) |
59 |
Payables: | |
Investment securities purchased |
725,625 |
Investment advisory fees (includes Sub-Advisory fees of $162,372) |
270,620 |
Interest and fees on loan |
145,020 |
Withholding tax |
102,929 |
Audit and tax fees |
42,365 |
Administrative fees |
8,060 |
Trustees’ fees and expenses |
7,620 |
Shareholder reporting fees |
6,563 |
Custodian fees |
2,435 |
Transfer agent fees |
1,569 |
Legal fees |
1,211 |
Financial reporting fees |
758 |
Other liabilities |
2,250 |
Total Liabilities |
28,867,084 |
NET ASSETS |
$76,523,793 |
NET ASSETS consist of: | |
Paid-in capital |
$ 131,835,768 |
Par value |
85,474 |
Accumulated distributable earnings (loss) |
(55,397,449) |
NET ASSETS |
$76,523,793 |
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) |
$8.95 |
Number of |
INVESTMENT INCOME: | ||
Dividends (net of foreign withholding tax of $321,378) |
$ 2,057,865 | |
Interest |
1,209,027 | |
Other |
27,718 | |
Total investment income |
3,294,610 | |
EXPENSES: | ||
Interest and fees on loan |
827,084 | |
Investment advisory fees (includes Sub-Advisory fees of $322,101) |
536,835 | |
Audit and tax fees |
42,572 | |
Administrative fees |
30,267 | |
Shareholder reporting fees |
24,894 | |
Listing expense |
10,554 | |
Transfer agent fees |
9,217 | |
Trustees’ fees and expenses |
9,138 | |
Legal fees |
8,717 | |
Custodian fees |
6,417 | |
Financial reporting fees |
4,612 | |
Other |
7,481 | |
Total expenses |
1,517,788 | |
NET INVESTMENT INCOME (LOSS) |
1,776,822 | |
NET REALIZED AND UNREALIZED GAIN (LOSS): | ||
Net realized gain (loss) on: | ||
Investments |
1,752,002 | |
Foreign currency transactions |
(89,783) | |
Net realized gain (loss) |
1,662,219 | |
Net change in unrealized appreciation (depreciation) on: | ||
Investments |
(3,971,624) | |
Foreign currency translation |
(5,674) | |
Net change in unrealized appreciation (depreciation) |
(3,977,298) | |
NET REALIZED AND UNREALIZED GAIN (LOSS) |
(2,315,079) | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$(538,257) |
Six
Months Ended 5/31/2023 (Unaudited) |
Year Ended 11/30/2022 | ||
OPERATIONS: | |||
Net investment income (loss) |
$ 1,776,822 | $ 4,202,170 | |
Net realized gain (loss) |
1,662,219 | 559,510 | |
Net change in unrealized appreciation (depreciation) |
(3,977,298) | (4,101,468) | |
Net increase (decrease) in net assets resulting from operations |
(538,257) | 660,212 | |
DISTRIBUTIONS TO SHAREHOLDERS FROM: | |||
Investment operations |
(3,418,977) | (4,464,666) | |
Return of capital |
— | (2,373,288) | |
Total distributions to shareholders |
(3,418,977) | (6,837,954) | |
Total increase (decrease) in net assets |
(3,957,234) | (6,177,742) | |
NET ASSETS: | |||
Beginning of period |
80,481,027 | 86,658,769 | |
End of period |
$ 76,523,793 | $ 80,481,027 | |
COMMON SHARES: | |||
Common Shares at end of period |
8,547,442 | 8,547,442 |
Cash flows from operating activities: | ||
Net increase (decrease) in net assets resulting from operations |
$(538,257) | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities: | ||
Purchases of investments |
(38,414,225) | |
Sales, maturities and paydown of investments |
40,770,188 | |
Return of capital received from investment in MLPs |
224,796 | |
Net amortization/accretion of premiums/discounts on investments |
(29,242) | |
Net realized gain/loss on investments |
(1,752,002) | |
Net change in unrealized appreciation/depreciation on investments |
3,971,624 | |
Changes in assets and liabilities: | ||
Decrease in interest receivable |
2,705 | |
Increase in dividend reclaims receivable |
(83,339) | |
Decrease in dividends receivable |
729,942 | |
Increase in prepaid expenses |
(12,916) | |
Increase in due to custodian foreign currency |
59 | |
Increase in interest and fees payable on loan |
46,153 | |
Increase in investment advisory fees payable |
4,766 | |
Decrease in audit and tax fees payable |
(34,867) | |
Increase in legal fees payable |
37 | |
Decrease in shareholder reporting fees payable |
(8,243) | |
Increase in administrative fees payable |
824 | |
Increase in custodian fees payable |
549 | |
Increase in transfer agent fees payable |
38 | |
Increase in trustees’ fees and expenses payable |
4,558 | |
Decrease in financial reporting fees payable |
(13) | |
Increase in other liabilities payable |
1,608 | |
Decrease in withholding tax payable |
(24,993) | |
Cash provided by operating activities |
$4,859,750 | |
Cash flows from financing activities: | ||
Distributions to Common Shareholders from investment operations |
(5,128,465) | |
Cash used in financing activities |
(5,128,465) | |
Decrease in cash and foreign currency (a) |
(268,715) | |
Cash and foreign currency at beginning of period |
10,297,294 | |
Cash and foreign currency at end of period |
$10,028,579 | |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest and fees |
$780,931 |
(a) | Includes net change in unrealized appreciation (depreciation) on foreign currency of ($5,674). |
Six
Months Ended 5/31/2023 (Unaudited) |
Year Ended November 30, | |||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | ||||||||
Net asset value, beginning of period |
$ 9.42 | $ 10.14 | $ 9.49 | $ 11.08 | $ 10.77 | $ 13.34 | ||||||
Income from investment operations: | ||||||||||||
Net investment income (loss) |
0.21 | 0.49 | 0.70 | 0.77 | 0.85 | 1.10 | ||||||
Net realized and unrealized gain (loss) |
(0.28) | (0.41) | 0.75 | (1.51) | 0.51 | (2.47) | ||||||
Total from investment operations |
(0.07) | 0.08 | 1.45 | (0.74) | 1.36 | (1.37) | ||||||
Distributions paid to shareholders from: | ||||||||||||
Net investment income |
(0.40) | (0.52) | (0.66) | (0.85) | (0.45) | (0.94) | ||||||
Return of capital |
— | (0.28) | (0.14) | — | (0.60) | (0.26) | ||||||
Total distributions paid to Common Shareholders |
(0.40) | (0.80) | (0.80) | (0.85) | (1.05) | (1.20) | ||||||
Net asset value, end of period |
$ | $9.42 | $10.14 | $9.49 | $11.08 | $10.77 | ||||||
Market value, end of period |
$ | $8.74 | $9.65 | $8.20 | $10.21 | $10.41 | ||||||
Total return based on net asset value (a) |
(0.17)% | 1.03% | 15.96% | (5.54)% | 13.75% | (10.29)% | ||||||
Total return based on market value (a) |
(8.63)% | (1.51)% | 27.71% | (11.42)% | 8.44% | (9.91)% | ||||||
Ratios to average net assets/supplemental data: | ||||||||||||
Net assets, end of period (in 000’s) |
$ 76,524 | $ 80,481 | $ 86,659 | $ 81,102 | $ 94,686 | $ 92,096 | ||||||
Ratio of total expenses to average net assets |
3.80% (b) | 2.66% | 2.13% | 2.50% | 3.15% | 3.04% | ||||||
Ratio of total expenses to average net assets excluding interest expense |
1.73% (b) | 1.75% | 1.70% | 1.85% | 1.80% | 1.79% | ||||||
Ratio of net investment income (loss) to average net assets |
4.45% (b) | 4.85% | 6.84% | 7.85% | 7.57% | 9.16% | ||||||
Portfolio turnover rate |
38% | 66% | 92% | 209% | 153% | 216% | ||||||
Indebtedness: | ||||||||||||
Total loan outstanding (in 000’s) |
$ 27,550 | $ 27,550 | $ 33,250 | $ 27,050 | $ 38,100 | $ 39,200 | ||||||
Asset coverage per $1,000 of indebtedness (c) |
$ 3,778 | $ 3,921 | $ 3,606 | $ 3,998 | $ 3,485 | $ 3,349 |
(a) | Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan, and changes in net asset value per share for net asset value returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results. |
(b) | Annualized. |
(c) | Calculated by subtracting the Fund’s total liabilities (not including the loan outstanding) from the Fund’s total assets, and dividing by the outstanding loan balance in 000’s. |
1) | the last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price; |
2) | the type of security; |
3) | the size of the holding; |
4) | the initial cost of the security; |
5) | transactions in comparable securities; |
6) | price quotes from dealers and/or third-party pricing services; |
7) | relationships among various securities; |
8) | information obtained by contacting the issuer, analysts, or the appropriate stock exchange; |
9) | an analysis of the issuer’s financial statements; |
10) | the existence of merger proposals or tender offers that might affect the value of the security; and |
11) | other relevant factors. |
1) | the value of similar foreign securities traded on other foreign markets; |
2) | ADR trading of similar securities; |
3) | closed-end fund or exchange-traded fund trading of similar securities; |
4) | foreign currency exchange activity; |
5) | the trading prices of financial products that are tied to baskets of foreign securities; |
6) | factors relating to the event that precipitated the pricing problem; |
7) | whether the event is likely to recur; |
8) | whether the effects of the event are isolated or whether they affect entire markets, countries or regions; and |
9) | other relevant factors. |
1) | the most recent price provided by a pricing service; |
2) | the fundamental business data relating to the borrower; |
3) | an evaluation of the forces which influence the market in which these securities are purchased and sold; |
4) | the type, size and cost of the security; |
(1) | The terms “security” and “securities” used throughout the Notes to Financial Statements include Senior Loans. |
5) | the financial statements of the borrower; |
6) | the credit quality and cash flow of the borrower; |
7) | the information as to any transactions in or offers for the security; |
8) | the price and extent of public trading in similar securities (or equity securities) of the borrower, or comparable companies; |
9) | the coupon payments; |
10) | the quality, value and salability of collateral, if any, securing the security; |
11) | the business prospects of the borrower, including any ability to obtain money or resources from a parent or affiliate and an assessment of the borrower’s management; |
12) | the prospects for the borrower’s industry, and multiples (of earnings and/or cash flows) being paid for similar businesses in that industry; |
13) | the borrower’s competitive position within the industry; |
14) | the borrower’s ability to access additional liquidity through public and/or private markets; and |
15) | other relevant factors. |
• | Level 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
• | Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following: |
o | Quoted prices for similar investments in active markets. |
o | Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly. |
o | Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates). |
o | Inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the investment. |
Distributions paid from: | |
Ordinary income |
$4,464,666 |
Capital gains |
— |
Return of capital |
2,373,288 |
Undistributed ordinary income |
$— |
Undistributed capital gains |
— |
Total undistributed earnings |
— |
Accumulated capital and other losses |
(52,306,452) |
Net unrealized appreciation (depreciation) |
2,575,725 |
Total accumulated earnings (losses) |
(49,730,727) |
Other |
(1,709,488) |
Paid-in capital |
131,921,242 |
Total net assets |
$80,481,027 |
Tax Cost | Gross Unrealized Appreciation |
Gross Unrealized (Depreciation) |
Net
Unrealized Appreciation (Depreciation) | |||
$96,190,262 | $4,519,941 | $(6,473,869) | $(1,953,928) |
(1) | If Common Shares are trading at or above net asset value (“NAV”) at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date. |
(2) | If Common Shares are trading below NAV at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants’ accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market within 30 days of the valuation date except where temporary curtailment or suspension of purchases is necessary to comply with federal securities laws. Interest will not be paid on any uninvested cash payments. |
(b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a) | Not applicable. |
(b) | There have been no changes, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recent annual report on Form N-CSR. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
(a) | Not applicable. |
(b) | Not applicable. |
Item 13. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(3) | Not applicable. |
(a)(4) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) | Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund |
By (Signature and Title)* | /s/ James M. Dykas | |
James M. Dykas, President and Chief Executive Officer (principal executive officer) |
Date: | August 7, 2023 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ James M. Dykas | |
James M. Dykas, President and Chief Executive Officer (principal executive officer) |
Date: | August 7, 2023 |
By (Signature and Title)* | /s/ Donald P. Swade | |
Donald P. Swade, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer) |
Date: | August 7, 2023 |
* Print the name and title of each signing officer under his or her signature.