SCHEDULE: First Trust Entities Disclose 6.43% Stake in NYLI MacKay Fund

First Trust Portfolios L.P., First Trust Advisors L.P., and The Charger Corporation jointly reported a 6.43% beneficial ownership stake in NYLI MacKay DefinedTerm Muni Opportunities Fund.

Summary

• First Trust Portfolios L.P., First Trust Advisors L.P., and The Charger Corporation have jointly filed a Schedule 13G, reporting beneficial ownership in NYLI MacKay DefinedTerm Muni Opportunities Fund.
• The reporting persons collectively hold 1,207,941 shares of Common stock, representing 6.43% of the class of securities.
• The Charger Corporation is the General Partner of both First Trust Portfolios L.P. and First Trust Advisors L.P., facilitating the joint filing.
• First Trust Portfolios L.P. acts as sponsor for unit investment trusts that hold shares of the issuer, while First Trust Advisors L.P. serves as portfolio supervisor for these trusts and investment advisor/sub-advisor for other investment vehicles holding shares.
• The reporting persons disclaim beneficial ownership of the shares, indicating a passive investment approach.
• Shares held by unit investment trusts are generally voted by the trustee, not by the reporting persons, to align with the voting patterns of other shareholders.

Sentiment

Score: 6

Explanation: Neutral to slightly positive. The filing is a routine disclosure of a significant passive stake by a reputable institutional investor, indicating confidence in the fund without implying active control or strategic changes.

Positives

• Increased transparency regarding significant institutional holdings in the fund.
• The presence of a substantial stake by a reputable institutional investor like First Trust, even if passive, can be viewed as a vote of confidence in the fund's underlying strategy and management.

Negatives

• NA

Risks

• The reporting entities disclaim beneficial ownership, indicating a passive investment approach and no intent to influence control of the issuer, which might disappoint investors seeking activist engagement.

Future Outlook

The filing is a disclosure of current ownership and does not contain forward-looking statements or guidance regarding the issuer's future performance or strategy.

Management Comments

• The reporting persons, through James M. Dykas, certified that the securities were acquired and are held in the ordinary course of business and not for the purpose or with the effect of changing or influencing the control of the issuer.

Industry Context

This filing indicates a significant institutional holding by First Trust entities in a municipal opportunities fund. Such disclosures are common for large asset managers and reflect their investment strategies across various fund types, including those focused on municipal bonds, which are often sought for tax-exempt income. The passive nature of the stake is typical for institutional investments in publicly traded funds.

Comparison to Industry Standards

• NA

Related Party Transactions

• The filing details the relationship between First Trust Portfolios L.P., First Trust Advisors L.P., and The Charger Corporation, where The Charger Corporation is the General Partner of the other two. This structure facilitates the joint filing and clarifies the beneficial ownership reporting for the group.

Stakeholder Impact

• **Shareholders**: Provides transparency regarding a significant institutional investor's stake, which could be viewed as a vote of confidence in the fund's strategy and management, albeit a passive one.
• **Fund Management**: Awareness of a large, passive institutional holder, which typically does not seek to influence day-to-day operations or control.

Next Steps

• The reporting persons will continue to monitor their holdings and file amendments to Schedule 13G as required by SEC regulations if their ownership percentage changes significantly.

Key Dates

Recommendation

This Schedule 13G filing is a routine disclosure of a passive, institutional ownership stake by First Trust entities. It does not indicate any intent to influence control or suggest any fundamental changes to the issuer's operations or prospects. While the significant stake by a reputable firm might offer some comfort, the disclaimer of beneficial ownership and the passive nature of the investment mean it provides no new information to warrant a change in investment thesis. Therefore, a 'hold' recommendation is appropriate, maintaining existing positions based on the fund's underlying merits rather than this ownership disclosure.

Keywords

NYLI MacKay DefinedTerm Muni Opportunities Fund, First Trust Portfolios, First Trust Advisors, The Charger Corporation, Schedule 13G, beneficial ownership, municipal bonds, investment fund, common stock, institutional ownership