First Trust Advisors L.P. ("FTA") announces the declaration of
the monthly distributions for certain exchange-traded funds advised
by FTA.
The following dates apply to today's distribution
declarations:
Expected Ex-Dividend Date:
March 11, 2022
Record Date:
March 14, 2022
Payable Date:
March 31, 2022
Ticker
Exchange
Fund
Name
Frequency
Ordinary
Income
Per
Share
Amount
ACTIVELY MANAGED
EXCHANGE-TRADED FUNDS
First Trust Exchange-Traded
Fund VIII
FCEF
Nasdaq
First Trust CEF Income
Opportunity ETF
Monthly
$0.1150
MCEF
Nasdaq
First Trust Municipal CEF Income
Opportunity ETF
Monthly
$0.0650
FTA is a federally registered investment advisor and serves as
the Funds' 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 $210 billion as of February 28, 2022 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.
You should consider the investment objectives, risks, charges
and expenses of a Fund before investing. Prospectuses for the Funds
contain this and other important information and are available free
of charge by calling toll-free at 1-800-621-1675 or visiting
https://www.ftportfolios.com. A prospectus should be read carefully
before investing.
Principal Risk Factors: Past performance is no assurance of
future results. Investment return and market value of an investment
in a Fund will fluctuate. Shares, when sold, may be worth more or
less than their original cost.
A Fund's shares will change in value, and you could lose money
by investing in a Fund. An investment in a Fund is not a deposit of
a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. There can
be no assurance that a Fund's investment objectives will be
achieved. An investment in a Fund involves risks similar to those
of investing in any portfolio of equity securities traded on
exchanges. The risks of investing in each Fund are spelled out in
its prospectus, shareholder report, and other regulatory
filings.
Securities held by a fund, as well as shares of a fund itself,
are subject to market fluctuations caused by factors such as
general economic conditions, political events, regulatory 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 of the risk of loss
associated with these market fluctuations. In addition, local,
regional or global events such as war, acts of terrorism, spread of
infectious diseases or other public health issues, recessions, or
other events could have a significant negative impact on a fund and
its investments. Such events may affect certain geographic regions,
countries, sectors and industries more significantly than others.
The outbreak of the respiratory disease designated as COVID-19 in
December 2019 has caused significant volatility and declines in
global financial markets, which have caused losses for investors.
While the development of vaccines has slowed the spread of the
virus and allowed for the resumption of "reasonably" normal
business activity in the United States, many countries continue to
impose lockdown measures in an attempt to slow the spread.
Additionally, there is no guarantee that vaccines will be effective
against emerging variants of the disease.
Investors buying or selling Fund shares on the secondary market
may incur customary brokerage commissions. Investors who sell Fund
shares may receive less than the share's net asset value. Shares
may be sold throughout the day on the exchange through any
brokerage account. However, unlike mutual funds, shares may only be
redeemed directly from the Fund by authorized participants, in very
large creation/redemption units. If the Fund's authorized
participants are unable to proceed with creation/redemption orders
and no other authorized participant is able to step forward to
create or redeem, Fund shares may trade at a discount to the Fund's
net asset value and possibly face delisting.
One of the principal risks of investing in a Fund is market
risk. Market risk is the risk that a particular security owned by a
Fund, Fund shares or securities in general may fall in value.
An actively managed ETF is subject to management risk because it
is an actively managed portfolio. In managing such a Fund's
investment portfolio, the portfolio managers, management teams,
advisor or sub-advisor, will apply investment techniques and risk
analyses that may not have the desired result.
First Trust Municipal CEF Income Opportunity ETF (MCEF) and
First Trust CEF Income Opportunity ETF (FCEF) invest in closed-end
funds (“CEFs”). Because the shares of CEFs cannot be redeemed upon
demand, shares of many CEFs will trade on exchanges at market
prices rather than net asset value, which may cause the shares to
trade at a price greater than NAV (premium) or less than NAV
(discount). There can be no assurance that the market discount on
shares of any CEF purchased by MCEF or FCEF will ever decrease or
when MCEF or FCEF seeks to sell shares of a CEF it can receive the
NAV for those shares. MCEF and FCEF may also be exposed to higher
volatility in the market due to the indirect use of leverage
through their investment in CEFs. CEFs may issue senior securities
in an attempt to enhance returns.
An underlying CEF that is concentrated in securities of
companies in a certain sector or industry involves additional
risks, including limited diversification. An investment in an
underlying CEF concentrated in a single country or region may be
subject to greater risks of adverse events and may experience
greater volatility than a Fund that is more broadly diversified
geographically.
An underlying CEF may invest in small capitalization and
mid-capitalization companies. Such companies may experience greater
price volatility than larger, more established companies.
An investment in an underlying CEF containing securities of
non-U.S. issuers is subject to additional risks, including currency
fluctuations, political risks, withholding, the lack of adequate
financial information, and exchange control restrictions impacting
non-U.S. issuers. These risks may be heightened for securities of
companies located in, or with significant operations in, emerging
market countries. An underlying CEF may invest in depositary
receipts which may be less liquid than the underlying shares in
their primary trading market.
Certain underlying CEFs are subject to credit risk, call risk,
income risk, interest rate risk, prepayment risk and zero coupon
bond risk. Credit risk is the risk that an issuer of a security
will be unable or unwilling to make dividend, interest and/or
principal payments when due and that the value of a security may
decline as a result. Credit risk is heightened for floating-rate
loans and high-yield securities. Call risk is the risk that if an
issuer calls higher-yielding debt instruments held by a Fund,
performance could be adversely impacted. Income risk is the risk
that income from a Fund's fixed-income investments could decline
during periods of falling interest rates. Interest rate risk is the
risk that the value of the fixed-income securities in a Fund will
decline because of rising market interest rates. Prepayment risk is
the risk that during periods of falling interest rates, an issuer
may exercise its right to pay principal on an obligation earlier
than expected. This may result in a decline in a Fund's income.
Zero coupon bond risk is the risk that zero coupon bonds may be
highly volatile as interest rates rise or fall because they do not
pay interest on a current basis.
The funds may invest in CEFs and/or ETFs that hold high-yield
securities. High-yield securities, or "junk" bonds, are subject to
greater market fluctuations and risk of loss than securities with
higher ratings, and therefore, may be highly speculative. These
securities are issued by companies that may have limited operating
history, narrowly focused operations, and/or other impediments to
the timely payment of periodic interest and principal at maturity.
The market for high-yield securities is smaller and less liquid
than that for investment grade securities.
Certain of the fixed-income securities held by certain
underlying funds may not have the benefit of covenants which could
reduce the ability of the issuer to meet its payment obligations
and might result in increased credit risk.
Income from municipal bonds held by an underlying CEF could be
declared taxable because of, among other things, unfavorable
changes in tax laws, adverse interpretations by the Internal
Revenue Service or state tax authorities, or noncompliant conduct
of a bond issuer.
Master limited partnerships (“MLPs”) are subject to certain
risks, including price and supply fluctuations caused by
international politics, energy conservation, taxes, price controls,
and other regulatory policies of various governments. In addition,
there is the risk that an MLP could be taxed as a corporation,
resulting in decreased returns from such MLP.
The use of futures, options, and other derivatives can lead to
losses because of adverse movements in the price or value of the
underlying asset, index or rate, which may be magnified by certain
features of the derivatives. These risks are heightened when an
underlying CEF's portfolio managers use derivatives to enhance an
underlying CEF's return or as a substitute for a position or
security, rather than solely to hedge (or offset) the risk of a
position or security held by an underlying CEF.
A Fund’s investment in CEFs and ETFs involves additional
expenses that would not be present in a direct investment in the
underlying funds. In addition, a Fund's investment performance and
risks may be related to the investment and performance of the
underlying funds.
Income from the Funds may be subject to the federal alternative
minimum income tax.
Certain underlying CEFs may invest in distressed securities and
many distressed securities are illiquid or trade in low volumes and
thus may be more difficult to value. Illiquid securities involve
the risk that the securities will not be able to be sold at the
time desired by an underlying CEF or at prices approximately the
value at which an underlying CEF is carrying the securities on its
books.
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. The United
Kingdom’s Financial Conduct Authority, which regulates LIBOR, will
cease making LIBOR available as a reference rate over a phase-out
period that began December 31, 2021. 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 the fund
or on certain instruments in which the fund invests can be
difficult to ascertain, and they may vary depending on a variety of
factors, and they could result in losses to the fund.
Each fund is subject to risks arising from various operational
factors, including, but not limited to, human error, processing and
communication errors, errors of a fund’s service providers,
counterparties or other third parties, failed or inadequate
processes and technology or systems failures. Although the funds
and the Advisor seek to reduce these operational risks through
controls and procedures, there is no way to completely protect
against such risks.
The senior loan market has seen a significant increase in loans
with weaker lender protections including, but not limited to,
limited financial maintenance covenants or, in some cases, no
financial maintenance covenants (i.e., “covenant-lite loans”) that
would typically be included in a traditional loan agreement and
general weakening of other restrictive covenants applicable to the
borrower such as limitations on incurrence of additional debt,
restrictions on payments of junior debt or restrictions on
dividends and distributions. Weaker lender protections such as the
absence of financial maintenance covenants in a loan agreement and
the inclusion of “borrower-favorable” terms may impact recovery
values and/or trading levels of senior loans in the future. The
absence of financial maintenance covenants in a loan agreement
generally means that the lender may not be able to declare a
default if financial performance deteriorates. This may hinder an
underlying fund’s ability to reprice credit risk associated with a
particular borrower and reduce an underlying fund’s ability to
restructure a problematic loan and mitigate potential loss. As a
result, an underlying fund’s exposure to losses on investments in
senior loans may be increased, especially during a downturn in the
credit cycle or changes in market or economic conditions.
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 Securities and Exchange Commission (“SEC”) has adopted Rule
12d1-4 under the Investment Company Act of 1940 (the “1940 Act”)
which the funds must comply with in order to invest in shares of
other investment companies (“acquired funds”) beyond the statutory
limits of Section 12 of the 1940 Act. Rule 12d1-4 permits a fund to
invest beyond the statutory limits subject to a set of new
conditions, including limits on control and voting of acquired
funds’ shares, evaluations and findings by the fund's investment
adviser, fund investing agreements, and limits on most three-tier
fund structures. Rule 12d1-4 replaces certain exemptive relief and
no-action letters from the SEC which have been rescinded. These
regulatory changes may adversely impact the fund’s ability to
pursue its investment objective as the fund may not be able to
invest in certain funds it would otherwise have invested in without
the Rule 12d1-4 restrictions. Additionally, the limitations under
Rule 12d1-4 may impact the Advisor’s ability to allocate shares of
acquired funds among the fund and other funds in the Advisor’s
complex, which could negatively impact the fund. Other funds may
also use Rule 12d1-4 to limit or prohibit the fund from investing
in them. These limitations could negatively impact fund
performance. In order to comply with certain provisions of Rule
12d1-4, notwithstanding anything to the contrary in each fund's
prospectus, summary prospectus, or statement of additional
information, each fund generally intends to effect creations for
cash rather than in-kind. As a result, an investment in the fund
may be less tax-efficient than an investment in an exchange-traded
fund that effects its creations only in-kind.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220310005810/en/
Press Inquiries: Ryan Issakainen, 630-765-8689 Broker Inquiries:
Sales Team, 866-848-9727 Analyst Inquiries: Stan Ueland,
630-517-7633
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