SCHEDULE: Sit Entities Trim Stake in First Trust Mortgage Income Fund

Sit Investment Associates and Sit Fixed Income Advisors II have reduced their beneficial ownership in First Trust Mortgage Income Fund to 52.0% after recent transactions.

Summary

• Sit Investment Associates, Inc. and Sit Fixed Income Advisors II, LLC (Sit Entities) filed Amendment No. 31 to their Schedule 13D regarding First Trust Mortgage Income Fund.
• The Sit Entities beneficially own 2,192,343 shares of Common Stock, representing 52.0% of the Issuer's outstanding shares.
• This percentage is based on 4,213,115 shares outstanding as of April 30, 2025, as reported in the Issuer's Form N-CSRS.
• In the last 60 days, the Sit Entities purchased a total of 27,749 shares across multiple transactions, with prices ranging from $11.92 to $12.08 per share.
• A significant sell transaction of 101,000 shares occurred on December 18, 2025, at a price of $11.85 per share.
• The net effect of these transactions over the last 60 days was a reduction of 73,251 shares in their beneficial ownership.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the net reduction in shares by a significant institutional investor, despite maintaining a majority stake. A large sell-off, even with smaller buys, can signal a shift in strategy or outlook by a major holder.

Positives

• The Sit Entities maintain a significant majority stake of 52.0% in the First Trust Mortgage Income Fund, indicating continued substantial conviction in the fund.

Negatives

• The Sit Entities executed a substantial sell of 101,000 shares on December 18, 2025, at $11.85 per share.
• The net effect of transactions over the last 60 days was a reduction of 73,251 shares, indicating a decrease in their overall position.

Future Outlook

NA

Industry Context

This filing reflects a change in a significant institutional investor's position in a mortgage income fund. Such adjustments can be influenced by broader interest rate expectations, housing market forecasts, or specific performance assessments of the fund's underlying assets. While the filing itself doesn't provide these details, the reduction in stake by a major holder could signal a recalibration of exposure to the mortgage-backed securities market or the specific fund.

Stakeholder Impact

• Shareholders: The reduction in stake by a major institutional investor could lead to concerns about the fund's future performance or management, potentially impacting investor confidence and share price.

Key Dates

Recommendation

While a major institutional investor has reduced its stake, it still maintains a significant majority ownership of 52.0%. This suggests continued, albeit slightly reduced, conviction. The net selling activity could introduce short-term volatility, but the overall large position indicates a 'hold' rather than a 'sell' for investors who believe in the fund's long-term strategy. A 'sell' would be more appropriate if the stake was significantly reduced below majority or if the reporting person indicated a complete exit strategy.

Keywords

First Trust Mortgage Income Fund, Sit Investment Associates, Sit Fixed Income Advisors II, Schedule 13D, Beneficial Ownership, Common Stock, Mortgage Income Fund, Institutional Ownership, Share Transactions