First Trust Energy Infrastructure Fund (the "Fund") (NYSE: FIF)
has declared its final common share distribution rate in the amount
of $0.15 per share, which as previously announced on April 19,
2024, will be payable on May 2, 2024, to shareholders of record as
of April 29, 2024. The ex-dividend date is expected to be April 26,
2024. The final distribution information for the Fund appears
below.
First Trust Energy Infrastructure
Fund (FIF):
Distribution per share:
$0.15
Distribution Rate based on the April 23,
2024 NAV of $18.47:
9.75%
Distribution Rate based on the April 23,
2024 closing market price of $18.31:
9.83%
This distribution is to pay the Fund’s estimated accumulated net
investment income prior to the previously approved merger.
The distribution will be paid entirely in cash, with no option
for dividend reinvestment.
The Fund's Board of Trustees has approved a managed distribution
policy for the Fund (the "Plan") in reliance on exemptive relief
received from the Securities and Exchange Commission which permits
the Fund to make periodic distributions of long-term capital gains
as frequently as monthly each tax year. A portion of this monthly
distribution may include long-term capital gains. This may result
in a reduction of the long-term capital gain distribution necessary
at year end by distributing long-term capital gains throughout the
year. The annual distribution rate is independent of the Fund's
performance during any particular period. Accordingly, you should
not draw any conclusions about the Fund's investment performance
from the amount of any distribution or from the terms of the
Plan.
This distribution will consist of net investment income earned
by the Fund and return of capital and may also consist of net
short-term realized capital gains. The final determination of the
source and tax status of all distributions paid in 2024 will be
made after the end of 2024 and will be provided on Form
1099-DIV.
The Fund is a non-diversified, closed-end management investment
company that seeks to provide a high level of total return with an
emphasis on current distributions paid to shareholders. The Fund
seeks to achieve its investment objectives by investing primarily
in securities of companies engaged in the energy infrastructure
sector. These companies principally include publicly-traded master
limited partnerships (“MLPs”) and limited liability companies taxed
as partnerships, MLP affiliates, YieldCos, pipeline companies,
utilities, and other companies that derive at least 50% of their
revenues from operating or providing services in support of
infrastructure assets such as pipelines, power transmission and
petroleum and natural gas storage in the petroleum, natural gas and
power generation industries (collectively, "Energy Infrastructure
Companies"). To generate additional income, the Fund expects to
write (or sell) covered call options on up to 35% of the managed
assets held in the Fund's portfolio.
First Trust Advisors L.P. ("FTA") is a federally registered
investment advisor and serves as the Fund's investment advisor. FTA
and its affiliate First Trust Portfolios L.P. ("FTP"), a FINRA
registered broker-dealer, are privately-held companies that provide
a variety of investment services. FTA has collective assets under
management or supervision of approximately $226 billion as of March
28, 2024 through unit investment trusts, exchange-traded funds,
closed-end funds, mutual funds and separate managed accounts. FTA
is the supervisor of the First Trust unit investment trusts, while
FTP is the sponsor. FTP is also a distributor of mutual fund shares
and exchange-traded fund creation units. FTA and FTP are based in
Wheaton, Illinois.
Energy Income Partners, LLC ("EIP") serves as the Fund's
investment sub-advisor and provides advisory services to a number
of investment companies and partnerships for the purpose of
investing in energy, utility, and other energy infrastructure
securities. EIP is one of the early investment advisors
specializing in this area. As of March 31, 2024, EIP managed or
supervised approximately $5.4 billion in client assets.
Principal Risk Factors: Risks are inherent in all investing.
Certain risks applicable to the Fund are identified below, which
includes the risk that you could lose some or all of your
investment in the Fund. The principal risks of investing in the
Fund are spelled out in the Fund's annual shareholder reports. The
order of the below risk factors does not indicate the significance
of any particular risk factor. The Fund also files reports, proxy
statements and other information that is available for
review.
Past performance is no assurance of future results. Investment
return and market value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their
original cost. There can be no assurance that the Fund's investment
objectives will be achieved. The Fund may not be appropriate for
all investors.
The Fund is subject to risks, including the fact that it is a
non-diversified closed-end management investment company.
Market risk is the risk that a particular investment, or shares
of a fund in general may fall in value. Investments held by the
Fund are subject to market fluctuations caused by real or perceived
adverse economic conditions, political events, regulatory factors
or market developments, changes in interest rates and perceived
trends in securities prices. Shares of a fund could decline in
value or underperform other investments as a result. In addition,
local, regional or global events such as war, acts of terrorism,
market manipulation, government defaults, government shutdowns,
regulatory actions, political changes, diplomatic developments, the
imposition of sanctions and other similar measures, spread of
infectious disease or other public health issues, recessions,
natural disasters or other events could have significant negative
impact on a fund and its investments.
Current market conditions risk is the risk that a particular
investment, or shares of the fund in general, may fall in value due
to current market conditions. As a means to fight inflation, the
Federal Reserve and certain foreign central banks have raised
interest rates and expect to continue to do so, and the Federal
Reserve has announced that it intends to reverse previously
implemented quantitative easing. Recent and potential future bank
failures could result in disruption to the broader banking industry
or markets generally and reduce confidence in financial
institutions and the economy as a whole, which may also heighten
market volatility and reduce liquidity. Ongoing armed conflicts
between Russia and Ukraine in Europe and among Israel, Hamas and
other militant groups in the Middle East, have caused and could
continue to cause significant market disruptions and volatility
within the markets in Russia, Europe, the Middle East and the
United States. The hostilities and sanctions resulting from those
hostilities have and could continue to have a significant impact on
certain fund investments as well as fund performance and liquidity.
The COVID-19 global pandemic, or any future public health crisis,
and the ensuing policies enacted by governments and central banks
have caused and may continue to cause significant volatility and
uncertainty in global financial markets, negatively impacting
global growth prospects.
Because the Fund is concentrated in securities issued by energy
infrastructure companies, it will be more susceptible to adverse
economic or regulatory occurrences affecting that industry,
including high interest costs, high leverage costs, the effects of
economic slowdown, surplus capacity, increased competition,
uncertainties concerning the availability of fuel at reasonable
prices, the effects of energy conservation policies and other
factors. Investments in securities of MLPs involve certain risks
different from or in addition to the risks of investing in common
stocks. The number of energy-related MLPs has declined since 2014.
The industry is witnessing the consolidation or simplification of
corporate structures where the MLP sleeve of capital is being
eliminated. As a result of the foregoing, the Fund's MLP
investments could become less diverse and the Fund may increase its
non-MLP investments consistent with its investment objective and
policies. Changes in tax laws or regulations, or interpretations
thereof in the future, could adversely affect the Fund or the MLPs,
MLP-related entities and other energy sector and energy utility
companies in which the Fund invests.
The Fund invests in securities of non-U.S. issuers which are
subject to higher volatility than securities of U.S. issuers.
Because the Fund invests in non-U.S. securities, you may lose money
if the local currency of a non-U.S. market depreciates against the
U.S. dollar.
There can be no assurance as to what portion of the
distributions paid to the Fund's Common Shareholders will consist
of tax-advantaged qualified dividend income.
To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as
a reference interest rate, it is subject to LIBOR Risk. LIBOR has
ceased to be made available as a reference rate and there is no
assurance that any alternative reference rate, including the
Secured Overnight Financing Rate ("SOFR"), will be similar to or
produce the same value or economic equivalence as LIBOR. The
unavailability or replacement of LIBOR may affect the value,
liquidity or return on certain fund investments and may result in
costs incurred in connection with closing out positions and
entering into new trades. Any potential effects of the transition
away from LIBOR on a fund or on certain instruments in which a fund
invests is difficult to predict and could result in losses to the
fund.
As the writer (seller) of a call option, the Fund forgoes,
during the life of the option, the opportunity to profit from
increases in the market value of the portfolio security covering
the option above the sum of the premium and the strike price of the
call option but retains the risk of loss should the price of the
underlying security decline. The value of call options written by
the Fund may be adversely affected if the market for the option is
reduced or becomes illiquid. There can be no assurance that a
liquid market will exist when the Fund seeks to close out an option
position.
If short-term interest rates are lower than the Fund's fixed
rate of payment on an interest rate swap, the swap will reduce
common share net earnings. In addition, a default by the
counterparty to a swap transaction could also negatively impact the
performance of the common shares.
Use of leverage can result in additional risk and cost, and can
magnify the effect of any losses.
The risks of investing in the Fund are spelled out in the
shareholder reports and other regulatory filings.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA,
the Internal Revenue Code or any other regulatory framework.
Financial professionals are responsible for evaluating investment
risks independently and for exercising independent judgment in
determining whether investments are appropriate for their
clients.
The Fund's daily closing New York Stock Exchange price and net
asset value per share as well as other information can be found at
https://www.ftportfolios.com or by calling 1-800-988-5891.
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