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 on April 21, 2025, to elect three Class III Trustees.

Summary

• 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, at 11:30 a.m. Central Time 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, each for a three-year term expiring at the 2028 annual meeting.
• Shareholders of record as of February 19, 2025, are entitled to vote.
• The Board of Trustees unanimously recommends that shareholders vote FOR the election of each nominee.
• The proxy statement provides details on the nominees, continuing trustees, board structure, committee responsibilities, and other relevant information for shareholders.
• The document also includes information on share ownership, compensation of trustees, audit committee report, and fees paid to the independent auditors, Deloitte & Touche LLP.
• Shareholders are encouraged to promptly complete, sign, date, and return the proxy card in the enclosed postage-paid envelope.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The recommendation to vote for the nominees suggests a positive outlook from the board.

Positives

• The Board of Trustees unanimously recommends voting FOR the election of the nominees, indicating confidence in their abilities.
• The proxy statement provides detailed information about the nominees, continuing trustees, and board structure, promoting transparency for shareholders.
• The document includes information on the various committees of the Board and their responsibilities, demonstrating a commitment to corporate governance.
• The Audit Committee has reviewed the financial statements and recommended their inclusion in the annual report, providing assurance to shareholders.
• The Funds will furnish, without charge, copies of their most recent annual and semi-annual reports to any shareholder upon request.

Negatives

• The document notes some late filings of Section 16(a) reports by officers of the sub-advisors and the Funds, indicating potential weaknesses in compliance procedures.
• The document mentions that the Funds and their service providers have become more susceptible to potential operational risks through breaches in cyber security.

Risks

• The document acknowledges the risk of cyber security breaches affecting the Funds and their service providers.
• The document states that not all risks that may affect the Funds can be identified nor can controls be developed to eliminate or mitigate their occurrence or effects.
• The document mentions that 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.

Future Outlook

The document outlines the election of trustees for a three-year term expiring at the 2028 annual meeting, indicating a focus on long-term governance and oversight of the funds.

Management Comments

• James A. Bowen, Chairman of the Boards, emphasizes the importance of shareholder participation and encourages shareholders to vote on the enclosed proxy card.
• The Board of Trustees of each Fund unanimously recommends that Shareholders Vote FOR the Election of Each Nominee.

Industry Context

This announcement is typical for publicly traded investment funds, ensuring compliance with regulatory requirements and providing shareholders with the opportunity to participate in the governance of the funds.

Comparison to Industry Standards

• The structure of the Board of Trustees, with a mix of interested and independent trustees, is a common practice in the investment management industry.
• The use of a unitary board structure for the First Trust Funds is aimed at promoting efficiency and consistency in governance, which aligns with industry efforts to streamline operations and reduce costs.
• The compensation structure for independent trustees, including retainers and per-fund fees, is consistent with industry benchmarks for board compensation at similar-sized fund complexes.
• The detailed disclosures regarding potential conflicts of interest and related-party transactions are in line with regulatory requirements and best practices for transparency in the investment management industry.

Stakeholder Impact

• Shareholders have the opportunity to vote on the election of trustees, influencing the governance and oversight of the funds.
• The election of qualified trustees aims to ensure the effective management and performance of the funds, benefiting shareholders.
• The disclosure of fees and expenses provides transparency to shareholders regarding the costs associated with managing the funds.

Next Steps

• Shareholders are requested to complete, sign, date, and return the proxy card promptly.
• The Joint Annual Meetings of Shareholders will be held on April 21, 2025.
• The Board of Trustees will continue to oversee the Funds activities and performance.

Key Dates