DEF: First Trust Funds Announce Joint Annual Meetings of Shareholders to Elect Trustees

First Trust Enhanced Equity Income Fund, First Trust Mortgage Income Fund, and First Trust Intermediate Duration Preferred & Income Fund are holding a Joint Annual Meeting of Shareholders on April 21, 2025, to elect three Class III Trustees.

Summary

• The document is a joint proxy statement for the Joint Annual Meetings of Shareholders of First Trust Enhanced Equity Income Fund, First Trust Mortgage Income Fund, and First Trust Intermediate Duration Preferred & Income Fund.
• The meeting is scheduled for April 21, 2025, at the offices of First Trust Advisors L.P. in Wheaton, Illinois.
• The primary purpose of the meeting is to elect three Class III Trustees for each fund: James A. Bowen, Niel B. Nielson, and Bronwyn Wright.
• Shareholders of record as of February 19, 2025, are entitled to vote at the meeting.
• The Board of Trustees recommends that shareholders vote FOR the election of each nominee.
• The document also provides information about the Funds' management, board structure, committee responsibilities, and compensation.
• It includes details on share ownership, including shareholders owning more than 5% of the outstanding shares.
• The proxy statement also covers topics such as the audit committee report, independent auditor fees, and procedures for shareholder proposals and communications.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The information is presented in a factual and objective manner, with no explicit positive or negative sentiment expressed. The recommendation to vote for the nominees is a standard practice.

Positives

• The document provides clear instructions for shareholders on how to vote by proxy.
• The Board of Trustees is actively involved in risk oversight and has established several committees to manage different aspects of the Funds' operations.
• The Funds have a unitary board leadership structure, which promotes efficiency and consistency in governance.
• The Audit Committee is comprised of independent directors and oversees the Funds' accounting and financial reporting process.
• The document includes detailed information about the qualifications and experience of the Trustee nominees and continuing Trustees.

Negatives

• The document notes that the Funds and their service providers are susceptible to potential operational risks through breaches in cyber security.
• There were some late filings of Section 16(a) reports by officers of the Funds and their sub-advisors.

Risks

• Cyber security breaches pose a potential operational risk to the Funds and their service providers.
• The Funds' ability to manage risk is subject to substantial limitations, and there is no guarantee that risk management systems will succeed.
• The document mentions that not all risks can be identified, nor can controls be developed to eliminate or mitigate their occurrence or effects.

Future Outlook

The document outlines the upcoming Joint Annual Meetings of Shareholders and the election of Trustees, but does not provide specific forward-looking statements or guidance regarding the Funds' future performance or strategies.

Management Comments

• James A. Bowen, Chairman of the Boards, emphasizes the importance of shareholder participation in the Meeting and encourages shareholders to vote on the enclosed proxy card.
• The Board of Trustees of each Fund has determined that the use of this Joint Proxy Statement is in the best interests of the Fund in light of the same matter being considered and voted on by shareholders.

Industry Context

This announcement is typical for registered investment companies and is required to ensure transparency and shareholder participation in the governance of the Funds. The election of trustees is a standard procedure to maintain the oversight and management of the Funds.

Comparison to Industry Standards

• The structure of the First Trust Funds, with a unitary board and various committees, is a common practice among closed-end funds to ensure efficient governance and oversight.
• The compensation structure for independent trustees is generally in line with industry standards for similar funds.
• The disclosure of share ownership by major stakeholders is a standard regulatory requirement for investment companies.
• Comparable companies include other closed-end funds managed by firms such as BlackRock, Eaton Vance, and Nuveen, which also hold annual meetings to elect trustees and address other corporate governance matters.

Stakeholder Impact

• The election of Trustees impacts shareholders by ensuring proper governance and oversight of the Funds.
• The Board of Trustees' decisions and actions affect the Funds' performance and investment strategies, which ultimately impact shareholder returns.

Next Steps

• Shareholders should review the proxy statement and vote on the proposal to elect the Class III Trustees.
• Shareholders can attend the Joint Annual Meetings of Shareholders on April 21, 2025, or vote by proxy.
• The elected Trustees will serve a three-year term expiring at each Funds 2028 annual meeting of shareholders.

Key Dates