Form N-CSRS - Certified Shareholder Report, Semi-Annual
July 02 2024 - 4:17PM
Edgar (US Regulatory)
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N-CSRS
0001556336
0001556336
2023-10-31
2024-04-30
0001556336
2024-04-30
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22738
First Trust MLP and Energy Income Fund
(Exact name of registrant as specified in charter)
10 Westport Road Suite C101A
Wilton, CT 06897
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)
Registrant’s telephone number, including
area code: 630-765-8000
Date of fiscal year end: October 31
Date of reporting period: April 30, 2024
Form N-CSR is to be used by management investment
companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required
to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use
the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information
specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection
of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”)
control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing
the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection
of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
| (a) | | The Report to Shareholders is attached herewith. |
First Trust
MLP and Energy Income Fund (FEI)
Semi-Annual Report
For the Six Months Ended
April 30, 2024
First Trust MLP and Energy Income Fund (FEI)
Semi-Annual Report
April 30, 2024
Caution Regarding Forward-Looking Statements
This report contains certain forward-looking statements within the meaning of the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements
regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. (“First Trust” or the “Advisor”) and/or Energy Income Partners, LLC (“EIP” or the “Sub-Advisor”) and their respective representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical
fact. For example, forward-looking statements include the use of words such as “anticipate,” “estimate,” “intend,” “expect,” “believe,” “plan,” “may,” “should,” “would” or other words that convey uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements of First Trust MLP and Energy Income Fund (the “Fund”) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
When evaluating the information included in this report, you are cautioned not to place undue reliance on these forward-looking
statements, which reflect the judgment of the Advisor and/or Sub-Advisor and their respective representatives only as of
the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances
that arise after the date hereof.
Performance and Risk Disclosure
There is no assurance that the Fund will achieve its investment objective. The Fund
is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund.
Performance data quoted represents past performance, which is no guarantee of future
results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures,
please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and common share price
will fluctuate and Fund shares, when sold, may be worth more or less than their original cost.
The Advisor may also periodically provide additional information on Fund performance on the Fund’s web page at www.ftportfolios.com.
How to Read This Report
This report contains information that may help you evaluate your investment in the
Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund’s performance and investment approach.
By reading the portfolio commentary by the portfolio management team of the Fund,
you may obtain an understanding of how the market environment affected the Fund’s performance. The statistical information that follows may help you understand the Fund’s performance compared to that of relevant market benchmarks.
It is important to keep in mind that the opinions expressed by personnel of First
Trust and EIP are just that: informed opinions. They should not be considered to be promises or advice. The opinions, like the statistics,
cover the period through the date on the cover of this report. The material risks of investing in the Fund are spelled out in the prospectus,
the statement of additional information, this report and other Fund regulatory filings.
First Trust MLP and Energy Income Fund (FEI)
Semi-Annual Letter from the Chairman and CEO
April 30, 2024
Dear Shareholders,
First Trust is pleased to provide you with the semi-annual report for the First Trust MLP and Energy Income Fund (the “Fund”), which contains detailed information about the Fund for the six months ended April 30, 2024.
On March 16, 2022, the Federal Reserve (the “Fed”) initiated the first of what have been eleven increases to the Federal Funds target rate thus far in the current cycle. Given its potential impact, financial pundits have been debating the direction and timing of the Fed’s interest rate policy ever since. In December 2023, the Fed gave some guidance, announcing
that it expected to implement up to three interest rate cuts totaling 75 basis points (“bps”) in 2024. Investors responded to the news with exuberance. In the U.S., the S&P 500® Index surged by 10.56% on a total return basis in the first quarter of 2024, adding
to its already stunning 26.29% total return in 2023. For comparison, the yield on the 10-Year Treasury Note (“T-Note”) stood at 3.80% on December 27, 2023, down a stunning 119 bps from its most recent high of 4.99% set just months prior on October 19, 2023. Bond
yields generally move in the opposite direction of prices. Given this relationship, the decline in the 10-Year T-Note’s yield is indicative of investor’s desire to lock in higher income payments prior to the Fed reducing its policy rate.
At this point, it makes sense to step back and highlight several ways the Fed’s interest rate policy has impacted the U.S. economy. We’ll start with the good news. On April 30, 2024, inflation, as measured by the trailing
12-month rate on the Consumer Price Index, stood at 3.4%, down significantly from its most recent peak of 9.1% set in June 2022. Additionally,
the higher Federal Funds target rate has been a boon for those investors with assets in fixed income, money market, and other
interest-bearing accounts. The total value of assets held in U.S. money market accounts stood at $6.0 trillion on May 1, 2024, nearly
double where it stood just five years ago. Notably, the weekly yield on the benchmark U.S. Treasury 3-Month Money Market Index
more than doubled from 2.40% to 5.32% between the end of April 2019 and April 2024.
Now for the not-so-good news. Higher interest rates often restrict the ability of
consumers and businesses to spend and finance growth, respectively. While the consumer has remained relatively unscathed thus far,
evidence that they are stretching their budgets is mounting. The Federal Reserve Bank of New York reported that the total balance of
U.S. credit card debt stood at a record $1.13 trillion at the end of 2023, while the average annual percentage rate for all cards
rose to a record 21.59% in the first quarter of 2024. Perhaps unsurprisingly, delinquency rates have been surging. Data from the Federal
Reserve Bank of St. Louis revealed that the delinquency rate on credit card loans for all U.S. commercial banks rose to 3.10%
in the fourth quarter of 2023, up from 2.62% in the fourth quarter of 2019 (pre-COVID-19). In April 2024, 43% of small and mid-sized U.S.
businesses were unable to pay their rent on time and in full. In addition, higher interest rates are impacting economic growth.
In the U.S., real gross domestic product growth was a tepid 1.6% in the first quarter of 2024, far below consensus expectations of 2.5%.
Not even the U.S. government is immune to the impacts of higher interest rates. At the end of the first quarter of 2024, the interest
payments paid by the Federal government stood at a record $1.06 trillion, nearly double their total of $0.56 trillion at the end of the
fourth quarter of 2019.
Thank you for giving First Trust the opportunity to play a role in your financial
future. We value our relationship with you.
Sincerely,
James A. Bowen
Chairman of the Board of Trustees
Chief Executive Officer of First Trust Advisors L.P.
First Trust MLP and Energy Income Fund (FEI)
“AT A GLANCE”
As of April 30, 2024 (Unaudited)
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Symbol on New York Stock Exchange
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Common Share Net Asset Value (“NAV”)
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Premium (Discount) to NAV
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Net Assets Applicable to Common Shares
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Current Distribution per Common Share(1)
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Current Annualized Distribution per Common Share
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Current Distribution Rate on Common Share Price(2)
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Current Distribution Rate on NAV(2)
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Common Share Price & NAV (weekly closing price)
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Average Annual Total Returns
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Inception
(11/27/12)
to 4/30/24
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Alerian MLP Total Return Index
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% of
Long-Term
Investments
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Electric Power & Transmission
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Petroleum Product Transmission
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% of Total
Long-Term
Investments
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Enterprise Products Partners, L.P.
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Public Service Enterprise Group, Inc.
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Cheniere Energy Partners, L.P.
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(1)
Most recent distribution paid through April 30, 2024. Subject to change in the future.
(2)
Distribution rates are calculated by annualizing the most recent distribution paid
through the report date and then dividing by Common Share Price or NAV, as applicable, as of April 30, 2024. Subject to change in the future.
(3)
Total return is based on the combination of reinvested dividend, capital gain, and
return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common
Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance
is not indicative of future results.
First Trust MLP and Energy Income Fund (FEI)
Semi-Annual Report
April 30, 2024 (Unaudited)
Merger
The merger of First Trust MLP and Energy Income Fund (the “Fund”) into FT Energy Income Partners Enhanced Income ETF (NYSE Arca: EIPI), was successfully completed prior to the opening of the NYSE Arca on May
6, 2024. Through the merger, a wholly-owned subsidiary of EIPI acquired all of the assets and liabilities of the Fund in a tax-free
transaction, and shares of the Fund were converted to newly-issued shares of EIPI in an aggregate amount equal to the value of the net
assets of the Fund. After the merger, the Fund ceased operation.
Advisor
First Trust Advisors L.P. (“First Trust” or the “Advisor”) serves as the investment advisor to the Fund. First Trust is responsible for the ongoing monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund.
Sub-Advisor
Energy Income Partners, LLC
Energy Income Partners, LLC (“EIP”), located in Westport, CT, was founded in 2003 to provide professional asset management services in publicly traded energy-related infrastructure companies with above average
dividend payout ratios operating pipelines and related storage and handling facilities, electric power transmission and distribution
as well as long contracted or regulated power generation from renewables and other sources. The corporate structure of the portfolio
companies includes C-corporations, partnerships and energy infrastructure real estate investment trusts. EIP mainly focuses
on investments in assets that receive steady fee-based or regulated income from their corporate and individual customers. EIP manages
or supervises approximately $5.0 billion of assets as of April 30, 2024. EIP advises two privately offered partnerships for U.S.
high net worth individuals and an open-end mutual fund. EIP also manages separately managed accounts and provides its model portfolio
to unified managed accounts. Finally, EIP serves as a sub-advisor to three closed-end management investment companies in addition
to the Fund, three actively managed exchange-traded funds and a sleeve of a series of a variable insurance trust. EIP
is a registered investment advisor with the Securities and Exchange Commission.
Portfolio Management Team
James J. Murchie – Co-Portfolio Manager, Founder and CEO of Energy Income Partners, LLC
Eva Pao – Co-Portfolio Manager, Principal of Energy Income Partners, LLC
John Tysseland – Co-Portfolio Manager, Principal of Energy Income Partners, LLC
The portfolio managers are primarily and jointly responsible for the day-to-day management of the Fund’s portfolio.
Commentary
First Trust MLP and Energy Income Fund
The Fund’s investment objective is to seek a high level of total return with an emphasis on current distributions paid to common shareholders. Under normal market conditions, the Fund invests at least 85% of its
managed assets in equity and debt securities of publicly traded master limited partnerships (“MLPs”), MLP-related entities and other energy sector and energy utilities companies that EIP believes offer opportunities for growth and income. There can be no assurance that the Fund’s investment objective will be achieved. The Fund may not be appropriate for all investors.
Market Recap
As measured by the Alerian MLP Total Return Index (“AMZX” or “MLP Benchmark”), the total return for the MLP Benchmark for the six-month period ended April 30, 2024, was 17.60%. For AMZX, this return reflects
a positive 3.74% from distribution payments, while the remaining return is due to share price appreciation. These figures are according
to data collected from Bloomberg. While in the short term, market share price appreciation can be volatile, we believe that over
the long term, share price appreciation will approximate growth in per share earnings and quarterly cash distributions paid by
the companies in the portfolio.
Portfolio Commentary (Continued)
First Trust MLP and Energy Income Fund (FEI)
Semi-Annual Report
April 30, 2024 (Unaudited)
Performance Analysis
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Average Annual Total Returns
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Inception
(11/27/12)
to 4/30/24
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Alerian MLP Total Return Index
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Performance figures assume reinvestment of all distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund’s past performance does not predict future performance.
On a net asset value (“NAV”) basis, for the six-month period ended April 30, 2024, the Fund provided a total return(1) of 11.47%, including the reinvestment of distributions. This compares, according to collected
data, to a total return of 20.98% for the S&P 500® Index (the “Index”) and 17.60% for AMZX. On a market value basis, the Fund had a total return(1) , including the reinvestment of distributions, of 18.66% for the same period. At the end of the period, the Fund was
priced at $9.67 per Common Share, while the NAV was $9.86 per Common Share, a discount of 1.93%. On October 31, 2023, the Fund
was priced at $8.43 per Common Share, while the NAV was $9.15 per Common Share, a discount of 7.87%.
For the six-month period ended April 30, 2024, the Fund’s NAV underperformed the MLP Benchmark by 613 basis points (“bps”). The underperformance of the Fund relative to the Benchmark was due to our overweight positions
in utilities that are not included in the Benchmark and three, in our opinion, low-quality MLPs that re-rated over the last
six months which are in the AMZX that we do not own.
The PHLX Utility Sector Index (“UTY”) posted its second worst relative performance in 2023 compared to the Index since its inception in 1988. This trend continued in the first quarter of 2024 with negative
comments by Warren Buffett nearly marking the bottom for utilities. In his annual letter, Buffett highlighted wildfire risks that
could cost his utility in Oregon billions in damages from lawsuits. Some states have passed laws to cap payouts if a utility is found culpable
in the event of a wildfire. Other states have not, and Buffett pointed to this as a risk that these states might not be able to attract low-cost
capital where regulated returns are capped but the potential liabilities are open-ended.
(1)
Total return is based on the combination of reinvested dividend, capital gain and
return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per Common Share for NAV returns and changes
in Common Share price for market value returns. Total returns do not reflect a sales load and are not annualized for periods of less than one year.
Portfolio Commentary (Continued)
First Trust MLP and Energy Income Fund (FEI)
Semi-Annual Report
April 30, 2024 (Unaudited)
Wildfire risk is not a new issue for utilities. California already faced this problem
after its largest utility filed for bankruptcy due to mounting wildfire claims and the remaining California utilities were viewed by investors
as almost un-investable. California eventually passed legislation that set up a wildfire fund and more constructive prudency standards
to defuse the issue. Regardless, the entire Utilities sector traded down following the Buffett letter despite wildfire risk being
a nuanced issue. Since Buffett published his letter in late February 2024, the UTY has outperformed the Index by 6% and has continued this
outperformance so far in the second quarter of 2024.(2)
Two important factors affecting the return of the Fund, relative to the MLP Benchmark, are the Fund’s accrual for taxes and the use of financial leverage through a line of credit. The Fund uses leverage because its portfolio
managers believe that, over time, leverage can enhance total return for common shareholders. However, the use of leverage can also
increase the volatility of the NAV and, therefore, the share price. For example, if the prices of securities held by the Fund decline,
the effect of changes in common share NAV and common share total return loss would be magnified by the use of leverage. Conversely,
leverage may enhance common share returns during periods when the prices of securities held by the Fund generally are rising.
Unlike the Fund, the MLP Benchmark is not leveraged, nor are its returns net of an accrual for taxes. Leverage had a positive
impact on the performance of the Fund over the period. Derivatives also had a positive impact on the performance of the Fund over
the reporting period. The accrual for taxes had a negative impact on the performance of the Fund over the reporting period.
The Fund has a practice of seeking to maintain a relatively stable monthly distribution,
which may be changed at any time. The practice has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV. However, the Advisor believes the practice helps maintain the Fund’s competitiveness and may benefit the Fund’s market price and premium/discount to the Fund’s NAV. The monthly distribution rate began and ended the period at $0.05 per share. At the $0.05
per share monthly distribution rate, the annualized distribution rate at April 30, 2024 was 6.09% at NAV and 6.20% at market
price. The final determination of the source and tax status of all 2024 distributions will be made after the end of 2024 and will be
provided on Form 1099-DIV. The foregoing is not to be construed as tax advice. Please consult your tax advisor for further information
regarding tax matters.
Market and Fund Outlook
The underperformance of the Fund relative to the broad market was not remarkable as
most of the Index performance was driven by a select few companies with the ten largest companies of the Index accounting for approximately
41% of the Index performance over the last six months. As of April 30, 2024, the Fund trades at a 38% discount relative
to the Index that trades at a forward 12-month P/E of 19.9x versus 18.5x a year ago.(3) Our view is optimistic regarding the Fund’s portfolio based on continued earnings growth among the energy infrastructure companies coupled with low valuations relative to the Index
based on forward 12-month earnings expectations.
The theme that continued to gain steam throughout the first quarter of 2024 was the potential for artificial intelligence (“AI”) to drive real electric demand growth through 2030. Energy efficiency has held U.S. electricity
consumption basically flat(4) for more than 15 years. But utilities are now preparing for a demand surge driven from a variety of
sources including the electrification of new sectors, the on-shoring of manufacturing and growth in AI that demands four to five times the
power of traditional data centers.(5) The rapid growth in data centers alone has organizations that operate the transmission lines
forecasting annual load growth of nearly 5% in some areas compared to forecasts from a year ago that were calling for no demand growth
for the foreseeable future.(6)
While actual load growth would almost certainly require a commensurate acceleration
of rate-based spending, and in turn, incremental earnings growth for regulated utilities, the upstream effects are also beginning to
take shape. Merchant power generators, such as Constellation Energy Corporation, have been early beneficiaries of this theme as investors
take note of the value of their merchant nuclear power fleet relative to current power prices. Moreover, there is very little
that can be added to the grid over the next five years that matches the needs of data centers for 24/7/365 power except natural gas generation.
To date, the natural gas story in the U.S. has been driven by low-cost supply and liquefied natural gas exports. Now another leg
of growth is beginning to emerge from power generation, and natural gas pipeline companies’ management teams are already addressing some of these opportunities on their first quarter conference calls.
We are optimistic about the technological breakthroughs in energy and invest in companies
like renewable developers and network utilities that, where renewable resources are abundant, benefit from the lower cost
and higher performance of renewables, batteries, and other new grid-related innovations. But we are not venture capitalists; companies in the Fund’s portfolio must have a track record
(2)
Source: Bloomberg as of May 9, 2024.
(4)
Source: EIA. https://www.eia.gov/electricity/annual/html/epa_01_03.html
(5)
Source: Dgtl Infra Real Estate 2.0 Report, “Data Center Power: A Comprehensive Guide”, July 26, 2023. https://dgtlinfra.com/data-center-power/
(6)
Source: PJM Load Forecast Report, January 2024. https://www.pjm.com/-/media/library/reports-notices/load-forecast/2024-load-report.ashx
Portfolio Commentary (Continued)
First Trust MLP and Energy Income Fund (FEI)
Semi-Annual Report
April 30, 2024 (Unaudited)
of profitability and a willingness to share some portion of that profitability through
distributions. While the names in the portfolio change over time, the strategy and the sources of earnings stability and growth remain
the same: investing in monopoly infrastructure that provides the low-cost way of shipping the lowest cost form of energy.
The Fund received approval to merge with other closed-end funds managed by EIP into
a managed exchange-trade fund, the FT Energy Income Partners Enhanced Income ETF (EIPI). The merger was effective May 6,
2024.
First Trust MLP and Energy Income Fund (FEI)
Portfolio of Investments
April 30, 2024 (Unaudited)
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COMMON STOCKS (a) – 63.8%
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Construction & Engineering –
1.0%
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Electric Utilities – 9.2%
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American Electric Power Co.,
Inc.
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Energy Equipment &
Services – 2.3%
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New Jersey Resources Corp.
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Independent Power &
Renewable Electricity
Producers – 2.0%
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Clearway Energy, Inc., Class A
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Public Service Enterprise Group,
Inc.
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Oil, Gas & Consumable Fuels –
33.0%
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Williams (The) Cos., Inc.
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Essential Utilities, Inc.
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MASTER LIMITED PARTNERSHIPS – 28.1%
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Westlake Chemical Partners, L.P.
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Energy Equipment &
Services – 0.4%
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USA Compression Partners, L.P.
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Independent Power &
Renewable Electricity
Producers – 1.5%
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NextEra Energy Partners, L.P. (b)
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Oil, Gas & Consumable Fuels –
25.1%
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Cheniere Energy Partners, L.P.
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Enterprise Products Partners, L.P.
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Hess Midstream, L.P.,
Class A (b)
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Plains All American Pipeline,
L.P.
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Plains GP Holdings, L.P.,
Class A (b)
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See Notes to Financial Statements
First Trust MLP and Energy Income Fund (FEI)
Portfolio of Investments (Continued)
April 30, 2024 (Unaudited)
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MASTER LIMITED PARTNERSHIPS (Continued)
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Oil, Gas & Consumable
Fuels (Continued)
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Total Master Limited
Partnerships
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Total Investments – 91.9%
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Net Other Assets and
Liabilities – 8.1%
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Securities are issued in U.S. dollars unless otherwise
indicated in the security description.
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This security is taxed as a “C” corporation for federal
income tax purposes.
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Abbreviations throughout the Portfolio of Investments:
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– American Depositary Receipt
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Valuation Inputs
A summary of the inputs used to value the Fund’s investments as of April 30, 2024 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):
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Level 2
Significant
Observable
Inputs
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Level 3
Significant
Unobservable
Inputs
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Master Limited
Partnerships*
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See Portfolio of Investments for industry breakout.
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See Notes to Financial Statements
First Trust MLP and Energy Income Fund (FEI)
Statement of Assets and Liabilities
April 30, 2024 (Unaudited)
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Investment securities sold
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Investment securities purchased
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Accumulated distributable earnings (loss)
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NET ASSET VALUE, per Common Share (par value $0.01 per Common Share)
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Number of Common Shares outstanding (unlimited number of Common Shares has been authorized)
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See Notes to Financial Statements
First Trust MLP and Energy Income Fund (FEI)
Statement of Operations
For the Six Months Ended April 30, 2024 (Unaudited)
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Interest and fees on loans
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Shareholder reporting fees
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Trustees’ fees and expenses
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NET INVESTMENT INCOME (LOSS) BEFORE TAXES
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Current federal income tax benefit (expense)
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Current state income tax benefit (expense)
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Deferred federal income tax benefit (expense)
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Deferred state income tax benefit (expense)
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Total income tax benefit (expense)
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NET INVESTMENT INCOME (LOSS)
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NET REALIZED AND UNREALIZED GAIN (LOSS):
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Net realized gain (loss) before taxes on:
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Written options contracts
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Foreign currency transactions
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Net realized gain (loss) before taxes
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Current federal income tax benefit (expense)
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Current state income tax benefit (expense)
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Total income tax benefit (expense)
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Net realized gain (loss) on investments, written options, swap contracts and foreign
currency transactions
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Net change in unrealized appreciation (depreciation) before taxes on:
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Written options contracts
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Foreign currency translation
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Net change in unrealized appreciation (depreciation) before taxes
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Deferred federal income tax benefit (expense)
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Deferred state income tax benefit (expense)
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Total income tax benefit (expense)
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Net change in unrealized appreciation (depreciation) on investments, written options,
swap contracts and foreign
currency translation
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NET REALIZED AND UNREALIZED GAIN (LOSS)
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NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
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See Notes to Financial Statements
First Trust MLP and Energy Income Fund (FEI)
Statements of Changes in Net Assets
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Six Months
Ended
4/30/2024
(Unaudited)
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Net investment income (loss)
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Net change in unrealized appreciation (depreciation)
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Net increase (decrease) in net assets resulting from operations
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DISTRIBUTIONS TO SHAREHOLDERS FROM:
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Total increase (decrease) in net assets
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Common Shares at end of period
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See Notes to Financial Statements
First Trust MLP and Energy Income Fund (FEI)
Statement of Cash Flows
For the Six Months Ended April 30, 2024 (Unaudited)
Cash flows from operating activities:
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Net increase (decrease) in net assets resulting from operations
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Adjustments to reconcile net increase (decrease) in net assets resulting from operations
to net cash
provided by operating activities:
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Proceeds from written options
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Return of capital received from investment in MLPs
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Net realized gain/loss on investments and written options
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Net change in unrealized appreciation/depreciation on investments and written options
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Net change in unrealized appreciation/depreciation on swap contracts
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Changes in assets and liabilities:
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Increase in income taxes receivable
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Increase in interest receivable
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Increase in reclaims receivable
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Decrease in dividends receivable
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Decrease in prepaid expenses
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Decrease in interest and fees payable on loans
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Decrease in income taxes payable
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Decrease in deferred income tax payable
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Decrease in investment advisory fees payable
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Decrease in audit and tax fees payable
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Decrease in legal fees payable
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Decrease in shareholder reporting fees payable
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Decrease in administrative fees payable
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Decrease in custodian fees payable
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Decrease in transfer agent fees payable
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Decrease in trustees’ fees and expenses payable
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Decrease in financial reporting fees payable
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Increase in other liabilities payable
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Increase in conversion expense payable
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Cash provided by operating activities
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Cash flows from financing activities:
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Distributions to Common Shareholders from investment operations
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Cash used in financing activities
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Increase in cash and cash segregated as collateral for open swap contracts (a)
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Cash and cash segregated as collateral for open swap contracts at beginning of period
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Cash and cash segregated as collateral for open swap contracts at end of period
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Supplemental disclosure of cash flow information:
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Cash paid during the period for interest and fees
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Cash paid during the period for taxes
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Includes net change in unrealized appreciation (depreciation) on foreign currency
of $(10,623).
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See Notes to Financial Statements
First Trust MLP and Energy Income Fund (FEI)
Financial Highlights
For a Common Share outstanding throughout each period
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Six Months
Ended
4/30/2024
(Unaudited)
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Net asset value, beginning of period
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Income from investment operations:
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Net investment income (loss)
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Net realized and unrealized gain (loss)
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Total from investment operations
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Distributions paid to shareholders from:
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Total distributions paid to Common
Shareholders
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Net asset value, end of period
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Market value, end of period
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Total return based on net asset value (c)
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Total return based on market value (c)
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Net assets, end of period (in 000’s)
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Ratios of expenses to average net assets:
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Including current and deferred income
taxes (d)
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Excluding current and deferred income
taxes
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Excluding current and deferred income taxes
and interest expense
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Ratios of net investment income (loss) to
average net assets:
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Net investment income (loss) ratio before
tax expenses
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Net investment income (loss) ratio including
tax expenses (d)
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Total loans outstanding (in 000’s)
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Asset coverage per $1,000 of
indebtedness (g)
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Based on average shares outstanding.
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During the fiscal year ended October 31, 2019, the Fund received a reimbursement from
the sub-advisor in the amount of $8,160
in connection with a trade error, which represents less than $0.01 per share. Since
the sub-advisor reimbursed the Fund, there was
no effect on the total return.
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Total return is based on the combination of reinvested dividend, capital gain and
return of capital distributions, if any, at prices
obtained by the Dividend Reinvestment Plan, and changes in net asset value per share
for net asset value returns and changes in
Common Share Price for market value returns. Total returns do not reflect sales load
and are not annualized for periods of less
than one year. Past performance is not indicative of future results.
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Includes current and deferred income taxes associated with each component of the Statement
of Operations.
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Amount is less than 0.01%.
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Calculated by subtracting the Fund’s total liabilities (not including the loans outstanding) from the Fund’s total assets, and dividing
by the outstanding loans balance in 000’s.
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See Notes to Financial Statements
Notes to Financial Statements
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
1. Organization
First Trust MLP and Energy Income Fund (the “Fund”) is a non-diversified, closed-end management investment company organized as a Massachusetts business trust on August 17, 2012, and is registered with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund trades under the ticker symbol “FEI” on the New York Stock Exchange (“NYSE”).
The Fund’s investment objective is to seek a high level of total return with an emphasis on current distributions paid to common shareholders. The Fund seeks to provide its common shareholders with a vehicle to
invest in a portfolio of cash-generating securities, with a focus on investing in publicly traded master limited partnerships (“MLPs”), MLP-related entities and other companies in the energy sector and energy utility industries. The Fund, under normal market conditions,
invests at least 85% of its managed assets in equity and debt securities of MLPs, MLP-related entities and other energy sector and
energy utility companies that Energy Income
Partners, LLC (“EIP” or the “Sub-Advisor”) believes offer opportunities for growth and income. There can be no assurance that the
Fund will achieve its investment objective. The Fund may not be appropriate for all
investors.
2. Significant Accounting Policies
The Fund is considered an investment company and follows accounting and reporting
guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, “Financial Services-Investment Companies.” The following is a summary of significant accounting policies consistently followed by the Fund in the preparation
of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from those estimates.
A. Portfolio Valuation
The net asset value (“NAV”) of the Common Shares of the Fund is determined daily as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the
NYSE closes early on a valuation day, the NAV is determined as of that time. Foreign securities are priced using data reflecting the
earlier closing of the principal markets for those securities. The Fund’s NAV per Common Share is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses, the value of call
options written (sold), dividends declared but unpaid, deferred income taxes and any borrowings of the Fund), by the total number of Common
Shares outstanding.
The Fund’s investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent readily available market quotations such
as last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party
pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party
pricing service or are determined by the Pricing Committee of the Fund’s investment advisor, First Trust Advisors L.P. (“First Trust” or the “Advisor”), in accordance with valuation procedures approved by the Fund’s Board of Trustees, and in accordance with provisions of the 1940 Act and rules thereunder. Investments valued by the Advisor’s Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. The Fund’s investments are valued as follows:
Common stocks, MLPs, and other equity securities listed on any national or foreign
exchange (excluding Nasdaq, Inc. (“Nasdaq”) and the London Stock Exchange Alternative Investment Market (“AIM”)) are valued at the last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the
official closing price. Securities traded on more than one securities exchange are valued at the last sale price or official closing
price, as applicable, at the close of the securities exchange representing the primary exchange for such securities.
Securities trading on foreign exchanges or over-the-counter markets that close prior
to the NYSE close may be valued using a systematic fair valuation model provided by a third-party pricing service. If these
foreign securities meet certain criteria in relation to the valuation model, their valuation is systematically adjusted to reflect
the impact of movement in the U.S. market after the close of the foreign markets.
Shares of open-end funds are valued based on NAV per share.
Exchange-traded options contracts are valued at the closing price in the market where
such contracts are principally traded. If no closing price is available, exchange-traded options contracts are valued at the mean
of their most recent bid and ask price, if both are available. Over-the-counter options contracts are valued as follows, depending
on the market in which the instrument trades: (1) the mean of their most recent bid and ask price, if available; or (2) a price
based on the equivalent exchange-traded option.
Equity securities traded in an over-the-counter market are valued at the close price
or the last trade price.
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
Swaps are fair valued utilizing quotations provided by a third-party pricing service
or, if the third-party pricing service does not provide a value, by quotes provided by the selling dealer or financial institution.
Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Advisor’s Pricing Committee at fair value. These securities generally include, but are not limited
to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended)
for which a third-party pricing service is unable to provide a market price; securities whose trading has been formally suspended; a
security whose market or fair value price is not available from a pre-established pricing source; a security with respect to which
an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of the Fund’s NAV or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the
third-party pricing service, does not reflect the security’s fair value. As a general principle, the current fair value of a security would appear to be the amount which the owner might reasonably expect to receive for the security upon its current sale. When fair value
prices are used, generally they will differ from market quotations or official closing prices on the applicable exchanges. A variety
of factors may be considered in determining the fair value of such securities, including, but not limited to, the following:
1)
the last sale price on the exchange on which they are principally traded or, for Nasdaq
and AIM securities, the official closing price;
3)
the size of the holding;
4)
the initial cost of the security;
5)
transactions in comparable securities;
6)
price quotes from dealers and/or third-party pricing services;
7)
relationships among various securities;
8)
information obtained by contacting the issuer, analysts, or the appropriate stock
exchange;
9)
an analysis of the issuer’s financial statements;
10)
the existence of merger proposals or tender offers that might affect the value of
the security; and
11)
other relevant factors.
If the securities in question are foreign securities, the following additional information
may be considered:
1)
the last sale price on the exchange on which they are principally traded;
2)
the value of similar foreign securities traded on other foreign markets;
3)
ADR trading of similar securities;
4)
closed-end fund or exchange-traded fund trading of similar securities;
5)
foreign currency exchange activity;
6)
the trading prices of financial products that are tied to baskets of foreign securities;
7)
factors relating to the event that precipitated the pricing problem;
8)
whether the event is likely to recur;
9)
whether the effects of the event are isolated or whether they affect entire markets,
countries or regions; and
10)
other relevant factors.
The Fund is subject to fair value accounting standards that define fair value, establish
the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation
as of the measurement date. The three levels of the fair value hierarchy are as follows:
•
Level 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide
pricing information on an ongoing basis.
•
Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following:
o
Quoted prices for similar investments in active markets.
o
Quoted prices for identical or similar investments in markets that are non-active.
A non-active market is a market where there are few transactions for the investment, the prices are not current, or price
quotations vary substantially either over time or among market makers, or in which little information is released publicly.
o
Inputs other than quoted prices that are observable for the investment (for example,
interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities,
credit risks, and default rates).
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
o
Inputs that are derived principally from or corroborated by observable market data
by correlation or other means.
•
Level 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the investment.
The inputs or methodologies used for valuing investments are not necessarily an indication
of the risk associated with investing in those investments. A summary of the inputs used to value the Fund’s investments as of April 30, 2024, is included with the Fund’s Portfolio of Investments.
B. Option Contracts
The Fund is subject to equity price risk in the normal course of pursuing its investment
objective and may write (sell) options to hedge against changes in the value of equities. Also, the Fund seeks to generate additional
income, in the form of premiums received, from writing (selling) the options. The Fund may write (sell) covered call or put options (“options”) on all or a portion of the MLPs and common stocks held in the Fund’s portfolio as determined to be appropriate by the Sub-Advisor. The number of options the Fund can write (sell) is limited by the amount of MLPs and common stocks the Fund holds in
its portfolio. The Fund will not write (sell) “naked” or uncovered options. When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is included in “Options written, at value” on the Fund’s Statement of Assets and Liabilities. Options are marked-to-market daily and their value will be affected by changes in the value and dividend rates of the underlying
equity securities, changes in interest rates, changes in the actual or perceived volatility of the securities markets and the underlying equity securities and the remaining time to the options’ expiration. The value of options may also be adversely affected if the market for
the options becomes less liquid or trading volume diminishes.
The options that the Fund writes (sells) will either be exercised, expire or be canceled
pursuant to a closing transaction. If the price of the underlying equity security exceeds the option’s exercise price, it is likely that the option holder will exercise the option. If an option written (sold) by the Fund is exercised, the Fund would be obligated to deliver the
underlying equity security to the option holder upon payment of the strike price. In this case, the option premium received by the Fund
will be added to the amount realized on the sale of the underlying security for purposes of determining gain or loss and is included in “Net realized gain (loss) before taxes on investments” on the Statement of Operations. If the price of the underlying equity security is less than the option’s strike price, the option will likely expire without being exercised. The option premium received by
the Fund will, in this case, be treated as short-term capital gain on the expiration date of the option. The Fund may also elect to close
out its position in an option prior to its expiration by purchasing an option of the same series as the option written (sold) by the Fund.
Gain or loss on options is presented separately as “Net realized gain (loss) before taxes on written options contracts” on the Statement of Operations.
The options that the Fund writes (sells) give the option holder the right, but not
the obligation, to purchase a security from the Fund at the strike price on or prior to the option’s expiration date. The ability to successfully implement the writing (selling) of covered call options depends on the ability of the Sub-Advisor to predict pertinent market movements,
which cannot be assured. Thus, the use of options may require the Fund to sell portfolio securities at inopportune times or
for prices other than current market value, which may limit the amount of appreciation the Fund can realize on an investment, or may cause
the Fund to hold a security that it might otherwise sell. As the writer (seller) of a covered option, the Fund foregoes, during the option’s life, the opportunity to profit from increases in the market value of the security covering the option above the sum of
the premium and the strike price of the option, but has retained the risk of loss should the price of the underlying security decline.
The writer (seller) of an option has no control over the time when it may be required to fulfill its obligation as a writer (seller) of the
option. Once an option writer (seller) has received an exercise notice, it cannot effect a closing purchase transaction in order to terminate
its obligation under the option and must deliver the underlying security to the option holder at the exercise price.
Over-the-counter options have the risk of the potential inability of counterparties to meet the terms of their contracts. The Fund’s maximum equity price risk for purchased options is limited to the premium initially
paid. In addition, certain risks may arise upon entering into option contracts including the risk that an illiquid secondary market will limit the Fund’s ability to close out an option contract prior to the expiration date and that a change in the value of the option
contract may not correlate exactly with changes in the value of the securities hedged.
The Fund did not hold any options contracts at April 30, 2024.
C. Swap Agreements
The Fund may enter into total return equity swap and interest rate swap agreements.
A swap is a financial instrument that typically involves the exchange of cash flows between two parties (“Counterparties”) on specified dates (settlement dates) where the cash flows are based on agreed upon prices, rates, etc. Interest income and interest expense
are recorded daily and for financial reporting purposes are presented on the Statement of Operations as “Net realized gain (loss) before taxes on swap contracts.” When an interest
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
rate swap is terminated, the Fund will record a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract, if any. Generally, the basis of the contracts, if any, is the premium received or paid. Swap agreements are individually negotiated and involve the risk of the potential
inability of the Counterparties to meet the terms of the agreement. In connection with these agreements, cash and securities may
be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in
the event of default under the swap agreement or bankruptcy/insolvency of a party to the swap agreement. In the event of a default
by a Counterparty, the Fund will seek withdrawal of the collateral and may incur certain costs exercising its rights with respect to the
collateral. If a Counterparty becomes bankrupt or otherwise fails to perform its obligations due to financial difficulties, the Fund
may experience significant delays in obtaining any recovery in a bankruptcy or other reorganization proceeding. The Fund may obtain only
limited recovery or may obtain no recovery in such circumstances.
Swap agreements may increase or decrease the overall volatility of the investments
of the Fund. The performance of swap agreements may be affected by changes in the specific interest rate, security, currency, or other
factors that determine the amounts of payments due to and from the Fund. The Fund’s maximum interest rate risk to meet its future payments under swap agreements is equal to the total notional amount. The notional amount represents the U.S. dollar value of the contract
as of the day of the opening transaction or contract reset. When the Fund enters into a swap agreement, any premium paid is included in “Swap contracts, at value” on the Statement of Assets and Liabilities.
The Fund held interest rate swap agreements to hedge against changes in borrowing rates under the Fund’s committed facility agreement. An interest rate swap agreement involves the Fund’s agreement to exchange a stream of interest payments for another party’s stream of cash flows. Interest rate swaps do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to interest rate swaps is limited to the
net amount of interest payments that the Fund is contractually obligated to make.
The Fund did not hold any swap contracts at April 30, 2024.
D. Restricted Cash
Restricted cash includes cash on deposit with other banks or brokers that is legally
restricted as to the withdrawal and primarily serves as collateral for open swap contracts. The Fund presents restricted cash activity within “Increase in cash and cash segregated as collateral for open swap contracts” and as part of “Cash and cash segregated as collateral for open swap contracts at beginning of period” and “Cash and cash segregated as collateral for open swap contracts at end of period” in the Statement of Cash Flows, along with a reconciliation of those balances in the Statement of Assets and Liabilities.
At April 30, 2024, the Fund had $0 in restricted cash.
E. Securities Transactions and Investment Income
Securities transactions are recorded as of the trade date. Realized gains and losses
from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest
income is recorded daily on the accrual basis, including amortization of premiums and accretion of discounts. The Fund will rely
to some extent on information provided by the MLPs, which is not necessarily timely, to estimate taxable income allocable to the MLP units held in the Fund’s portfolio and to estimate the associated deferred tax asset or liability. From time to time, the Fund
will modify its estimates and/or assumptions regarding its deferred tax liability as new information becomes available. To the
extent the Fund modifies its estimates and/or assumptions, the NAV of the Fund will likely fluctuate.
Distributions received from the Fund’s investments in MLPs generally are comprised of return of capital and investment income. The Fund records estimated return of capital and investment income based on historical
information available from each MLP. These estimates may subsequently be revised based on information received from the MLPs
after their tax reporting periods are concluded.
F. Foreign Currency
The books and records of the Fund are maintained in U.S. dollars. Foreign currencies,
investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investments and items of income and expense are translated on the respective dates of such transactions. Unrealized
gains and losses on assets and liabilities, other than investments in securities, which result from changes in foreign currency exchange rates have been included in “Net change in unrealized appreciation (depreciation) before taxes on foreign currency translation” on the Statement of Operations. Unrealized gains and losses on investments in securities which result from changes in foreign
exchange rates are included with fluctuations arising from changes in market price and are shown in “Net change in unrealized appreciation (depreciation) before taxes on investments” on the Statement of Operations. Net realized foreign currency gains and losses include
the effect of changes in exchange rates between trade date and settlement date on investment security transactions, foreign currency
transactions and interest and dividends received and are shown in “Net realized gain (loss) before taxes on foreign currency transactions” on the Statement of Operations. The portion
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
of foreign currency gains and losses related to fluctuations in exchange rates between
the initial purchase settlement date and subsequent sale trade date is included in “Net realized gain (loss) before taxes on investments” on the Statement of Operations.
G. Offsetting on the Statement of Assets and Liabilities
Offsetting assets and liabilities requires entities to disclose both gross and net
information about instruments and transactions eligible for offset on the Statement of Assets and Liabilities and disclose instruments and
transactions subject to master netting or similar agreements. These disclosure requirements are intended to help investors and other
financial statement users better assess the effect or potential effect of offsetting arrangements on the Fund’s financial position. The transactions subject to offsetting disclosures are derivative instruments, repurchase agreements and reverse repurchase agreements, and
securities borrowing and securities lending transactions.
For financial reporting purposes, the Fund does not offset financial assets and financial
liabilities that are subject to master netting arrangements (“MNAs”) or similar agreements on the Statement of Assets and Liabilities. MNAs provide the right, in the event of default (including bankruptcy and insolvency), for the non-defaulting counterparty
to liquidate the collateral and calculate the net exposure to the defaulting party or request additional collateral.
At April 30, 2024, the Fund did not have any derivative assets and liabilities.
H. Distributions to Shareholders
The Fund intends to make monthly distributions to Common Shareholders. The Fund’s distributions generally will consist of cash and paid-in kind distributions from MLPs or their affiliates, dividends from common stocks,
and income from other investments held by the Fund less operating expenses, including taxes. Distributions to Common Shareholders
are recorded on the ex-date and are based on U.S. GAAP, which may differ from their ultimate characterization for federal income
tax purposes.
Distributions made from current or accumulated earnings and profits of the Fund will
be taxable to shareholders as dividend income. Distributions that are in an amount greater than the Fund’s current and accumulated earnings and profits will represent a tax-deferred return of capital to the extent of a shareholder’s basis in the Common Shares, and such distributions will correspondingly increase the realized gain upon the sale of the Common Shares. Additionally, distributions not
paid from current or accumulated earnings and profits that exceed a shareholder’s tax basis in the Common Shares will generally be taxed as a capital gain.
Distributions of $13,568,671 paid during the six months ended April 30, 2024 are anticipated
to be characterized as taxable dividends for federal income tax purposes. The amounts may be eligible to be taxed as qualified
dividend income at the reduced capital gains rates, subject to shareholder period requirements. However, the ultimate determination
of the character of the distributions will be made after the 2024 calendar year. Distributions will automatically be reinvested in additional Common Shares pursuant to the Fund’s Dividend Reinvestment Plan unless cash distributions are elected by the shareholder.
I. Income Taxes
The Fund is treated as a regular C corporation for U.S. federal income tax purposes
and as such will be obligated to pay federal and applicable state and foreign corporate taxes on its taxable income. The Fund’s tax expense or benefit is included in the Statement of Operations based on the component of income or gains (losses) to which such expense
or benefit relates. This differs from most investment companies, which elect to be treated as “regulated investment companies” under the U.S. Internal Revenue Code of 1986, as amended. The various investments of the Fund may cause the Fund to be subject to
state income taxes on a portion of its income at various rates.
The tax deferral benefit the Fund derives from its investment in MLPs results largely
because the MLPs are treated as partnerships for federal income tax purposes. As a partnership, an MLP has no income tax liability
at the entity level. As a limited partner in the MLPs in which it invests, the Fund will be allocated its pro rata share of income, gains,
losses, deductions and credits from the MLPs, regardless of whether or not any cash is distributed from the MLPs.
To the extent that the distributions received from the MLPs exceed the net taxable
income realized by the Fund from its investment, a tax liability results. This tax liability is a deferred liability to the extent that MLP distributions received have not exceeded the Fund’s adjusted tax basis in the respective MLPs. To the extent that distributions from an MLP exceed the Fund’s adjusted tax basis, the Fund will recognize a taxable capital gain. For the six months ended April 30, 2024, distributions
of $5,974,195 received from MLPs have been reclassified as a return of capital. The cost basis of applicable MLPs has been
reduced accordingly.
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
The Fund’s provision for income taxes consists of the following:
Current federal income tax benefit (expense)
|
|
Current state income tax benefit (expense)
|
|
Current foreign income tax benefit (expense)
|
|
Deferred federal income tax benefit (expense)
|
|
Deferred state income tax benefit (expense)
|
|
Total income tax benefit (expense)
|
|
Deferred income taxes reflect the net tax effect of temporary differences between
the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. At April 30, 2024,
the Fund had a net operating loss carryforward for state income tax purposes of $52,326,331. The Fund’s 2024 income tax provision includes a full valuation allowance against the deferred tax assets associated with the state net operating losses. Components of the Fund’s deferred tax assets and liabilities as of April 30, 2024 are as follows:
Deferred tax assets:
Federal net operating loss
|
|
|
|
|
|
|
|
State capital loss carryforward
|
|
|
|
|
Total deferred tax assets
|
|
Less: valuation allowance
|
|
|
|
|
Deferred tax liabilities:
|
|
Unrealized gains on investment securities
|
|
Total deferred tax liabilities
|
|
Total net deferred tax liabilities
|
|
Total income taxes differ from the amount computed by applying the federal income
tax rate of 21% to net investment income and realized and unrealized gains on investments.
Application of statutory income tax rate
|
|
|
|
|
Change in valuation allowance
|
|
Current year change in tax rate
|
|
|
|
|
|
|
|
The Fund intends to utilize provisions of the federal income tax laws, which allow
it to carry realized capital losses forward for five years following the year of the loss and offset such loss against any future realized
capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net
unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At October 31, 2023, the Fund had a
capital loss carryforward of $101,206,502 that will expire on October 31, 2025.
The Fund is subject to accounting standards that establish a minimum threshold for
recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. Taxable
years ended 2020, 2021, 2022, and 2023 remain open to federal and state audit. As of April 30, 2024, management has evaluated the application
of these standards to the Fund and has determined that no provision for income tax is required in the Fund’s financial statements for uncertain tax positions. The Montana Department of Revenue initiated a corporate income tax audit for the Fund’s 2015-2019 tax years. The audit is currently open.
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
As of April 30, 2024, the aggregate cost, gross unrealized appreciation, gross unrealized
depreciation, and net unrealized appreciation/(depreciation) on investments (including short positions and derivatives,
if any) for federal income tax purposes were as follows:
|
|
Gross
Unrealized
Appreciation
|
Gross
Unrealized
(Depreciation)
|
Net Unrealized
Appreciation
(Depreciation)
|
|
|
|
|
|
J. Expenses
The Fund will pay all expenses directly related to its operations.
3. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements
First Trust, the investment advisor to the Fund, is a limited partnership with one
limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois
corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust is responsible for the ongoing monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund. For these services, First Trust is entitled to a monthly fee calculated at an annual rate of 1.00% of the Fund’s Managed Assets (the average daily total asset value of the Fund minus the sum of the Fund’s liabilities other than the principal amount of borrowings). First Trust also provides fund reporting services to the Fund for a flat annual fee in the amount
of $9,250.
EIP serves as the Fund’s sub-advisor and manages the Fund’s portfolio subject to First Trust’s supervision. The Sub-Advisor receives a monthly sub-advisory fee calculated at an annual rate of 0.50% of the Fund’s Managed Assets that is paid by First Trust out of its investment advisory fee.
First Trust Capital Partners, LLC (“FTCP”), an affiliate of First Trust, owns, through a wholly-owned subsidiary, a 15% ownership interest in each of EIP and EIP Partners, LLC, an affiliate of EIP.
Computershare, Inc. (“Computershare”) serves as the Fund’s transfer agent in accordance with certain fee arrangements. As transfer agent, Computershare is responsible for maintaining shareholder records for the Fund.
The Bank of New York Mellon (“BNYM”) serves as the Fund’s administrator, fund accountant, and custodian in accordance with certain fee arrangements. As administrator and fund accountant, BNYM is responsible
for providing certain administrative and accounting services to the Fund, including maintaining the Fund’s books of account, records of the Fund’s securities transactions, and certain other books and records. As custodian, BNYM is responsible for custody of the Fund’s assets. BNYM is a subsidiary of The Bank of New York Mellon Corporation, a financial holding company.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor or any of their affiliates (“Independent Trustees”) is paid a fixed annual retainer that is allocated equally among each fund in the First
Trust Fund Complex. Each Independent Trustee is also paid an annual per fund fee that varies based on whether the fund is a closed-end
or other actively managed fund, a target outcome fund or an index fund.
Additionally, the Chairs of the Audit Committee, Nominating and Governance Committee
and Valuation Committee, the Vice Chair of the Audit Committee, the Lead Independent Trustee and the Vice Lead Independent Trustee
are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First
Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection
with all meetings. The Committee Chairs, the Audit Committee Vice Chair, the Lead Independent Trustee and the Vice Lead Independent
Trustee rotate periodically in serving in such capacities. The officers and “Interested” Trustee receive no compensation from the Fund for acting in such capacities.
4. Purchases and Sales of Securities
The cost of purchases and proceeds from sales of securities, excluding short-term
investments, for the six months ended April 30, 2024, were $197,543,215 and $305,111,405, respectively.
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
5. Derivative Transactions
The following table presents the amount of net realized gain (loss) and change in
net unrealized appreciation (depreciation) recognized for the six months ended April 30, 2024, on derivative instruments, as well as the
primary underlying risk exposure associated with each instrument.
Statement of Operations Location
|
|
|
|
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Net realized gain (loss) before taxes on written options contracts
|
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Net change in unrealized appreciation (depreciation) before taxes on written options
contracts
|
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Interest Rate Risk Exposure
|
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Net realized gain (loss) before taxes on swap contracts
|
|
Net change in unrealized appreciation (depreciation) before taxes on swap contracts
|
|
During the six months ended April 30, 2024, the premiums for written options opened
were $1,567,056, and the premiums for written options closed, exercised and expired were $2,808,752.
The average notional value of interest rate swaps was $42,385,414 for the six months
ended April 30, 2024.
6. Borrowings
The Fund had a credit agreement with The Bank of Nova Scotia, which provided a secured
line of credit where Fund assets were pledged against advances made to the Fund. The maximum commitment amount was $135,000,000.
The borrowing rate on new loans and rollovers of existing loans was (i) for daily simple SOFR loans, the daily simple
SOFR rate plus 95 basis points plus the SOFR adjustment of 11.448 basis points, (ii) for term SOFR loans, the applicable term SOFR
rate plus 95 basis points plus the SOFR adjustment of: (A) 10 basis points for a loan with a one month interest period, (B)
25 basis points for a loan with a three month interest period, and (C) 40 basis points for a loan with a six month interest period, and (iii)
for ABR loans, the greatest of (A) the Prime Rate in effect, (B) 2.00% plus the Federal Funds Effective Rate, and (C) 2.00% plus the daily
simple SOFR rate. Under the credit agreement, the Fund paid a commitment fee of 0.25% when the loan balance was less than 75% of
the maximum commitment. As of April 25, 2024, the Fund did not have any outstanding borrowings and the credit agreement was
terminated. For the period ended April 25, 2024, the average amount outstanding was $89,991,525. The high and low annual interest
rates during the period ended April 25, 2024 were 6.42% and 6.37%, respectively, and the average weighted average interest rate
was 6.38%. The interest and fees are included in “Interest and fees on loans” on the Statement of Operations.
7. Indemnification
The Fund has a variety of indemnification obligations under contracts with its service providers. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these contracts and expects the risk of loss to be remote.
8. Industry Concentration Risk
Under normal market conditions, the Fund invests at least 85% of its managed assets
in equity and debt securities of MLPs, MLP-related entities and other energy sector and energy utility companies. Given this
industry concentration, the Fund is more susceptible to adverse economic or regulatory occurrences affecting that industry
than an investment company that is not concentrated in a single industry. Energy issuers may be subject to a variety of factors that may
adversely affect their business or operations, including high interest costs in connection with capital construction programs, high
leverage costs associated with environmental and other regulations, regulatory risk associated with the changes in the methodology
of determining prices that energy companies may charge for their products and services, the effects of economic slowdown, surplus
capacity, increased competition from other providers of services, uncertainties concerning the availability of fuel at reasonable prices,
the effects of energy conservation policies and other factors.
9. Subsequent Events
Management has evaluated the impact of all subsequent events to the Fund through the
date the financial statements were issued, and has determined that there was the following subsequent event:
The mergers of First Trust Energy Income and Growth Fund (NYSE American: FEN), First
Trust MLP and Energy Income Fund (NYSE: FEI), First Trust New Opportunities MLP & Energy Fund (NYSE: FPL), and First
Trust Energy Infrastructure Fund
Notes to Financial Statements (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
(NYSE: FIF) (the “Target Funds” or each, individually, a “Target Fund”), into FT Energy Income Partners Enhanced Income ETF (NYSE Arca: EIPI), were successfully completed prior to the opening of the NYSE Arca
on May 6, 2024.
Through the mergers, wholly-owned subsidiaries of EIPI acquired all of the assets
and liabilities of the Target Funds in tax-free transactions, and shares of each Target Fund were converted to newly-issued shares
of EIPI in an aggregate amount equal to the value of the net assets of each Target Fund. The transactions took place based upon the Target Funds’ closing net asset values on May 3, 2024. The exchange ratios at which shares of the Target Funds were converted to shares
of EIPI are listed below:
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|
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First Trust Energy Income and Growth Fund
|
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|
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First Trust MLP and Energy Income Fund
|
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First Trust New Opportunities MLP & Energy Fund
|
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First Trust Energy Infrastructure Fund
|
|
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
Dividend Reinvestment Plan
If your Common Shares are registered directly with the Fund or if you hold your Common
Shares with a brokerage firm that participates in the Fund’s Dividend Reinvestment Plan (the “Plan”), unless you elect, by written notice to the Fund, to receive cash distributions, all dividends, including any capital gain distributions, on your Common
Shares will be automatically reinvested by Computershare Trust Company N.A. (the “Plan Agent”), in additional Common Shares under the Plan. If you elect to receive cash distributions, you will receive all distributions in cash paid by check mailed directly
to you by the Plan Agent, as the dividend paying agent.
If you decide to participate in the Plan, the number of Common Shares you will receive
will be determined as follows:
(1)
If Common Shares are trading at or above net asset value (“NAV”) at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95%
of the market price on that date.
(2)
If Common Shares are trading below NAV at the time of valuation, the Plan Agent will
receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants’ accounts. It is possible that the market price for the Common Shares may increase before the Plan
Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed
the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had
been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to
purchase Common Shares in the open market within 30 days of the valuation date except where temporary curtailment or
suspension of purchases is necessary to comply with federal securities laws. Interest will not be paid on any uninvested cash
payments.
You may elect to opt-out of or withdraw from the Plan at any time by giving written
notice to the Plan Agent, or by telephone at (866) 340-1104, in accordance with such reasonable requirements as the Plan Agent
and the Fund may agree upon. If you withdraw or the Plan is terminated, you will receive a certificate for each whole share in your
account under the Plan, and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will
sell your shares and send you the proceeds, minus brokerage commissions.
The Plan Agent maintains all Common Shareholders’ accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Common Shares in your
account will be held by the Plan Agent in non-certificated form. The Plan Agent will forward to each participant any proxy solicitation
material and will vote any shares so held only in accordance with proxies returned to the Fund. Any proxy you receive will include
all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions in
Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes
open market purchases.
Automatically reinvesting dividends and distributions does not mean that you do not
have to pay income taxes due upon receiving dividends and distributions. Capital gains and income are realized although cash is
not received by you. Consult your financial advisor for more information.
If you hold your Common Shares with a brokerage firm that does not participate in
the Plan, you will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described
above.
The Fund reserves the right to amend or terminate the Plan if in the judgment of the
Board of Trustees the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves
the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained
by writing Computershare, Inc., P.O. Box 43006, Providence, RI 02940-3006.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Fund uses to determine how to
vote proxies and information on how the Fund voted proxies relating to portfolio investments during the most recent 12-month period
ended June 30 is available (1) without charge, upon request, by calling (800) 988-5891; (2) on the Fund’s website at www.ftportfolios.com; and (3) on the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.
Portfolio Holdings
The Fund files portfolio holdings information for each month in a fiscal quarter within
60 days after the end of the relevant fiscal quarter on Form N-PORT. Portfolio holdings information for the third month of each
fiscal quarter will be publicly available on the
Additional Information (Continued)
First Trust MLP and Energy Income Fund (FEI)
April 30, 2024 (Unaudited)
SEC’s website at www.sec.gov. The Fund’s complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the semi-annual and annual reports to shareholders, respectively,
and is filed with the SEC on Form N-CSR. The semi-annual and annual report for the Fund is available to investors within 60 days after the period to which it relates. The Fund’s Forms N-PORT and Forms N-CSR are available on the SEC’s website listed above.
Submission of Matters to a Vote of Shareholders
At a joint special meeting of shareholders held on February 29, 2024 (the “February Meeting”), shareholders of First Trust MLP and Energy Income Fund (“FEI”), First Trust New Opportunities MLP & Energy Fund (“FPL”), First Trust Energy Income and Growth Fund (“FEN”), and First Trust Energy Infrastructure Fund (“FIF”) (each a Fund and, collectively, the “MLP Funds”) approved the mergers of each of the MLP Funds into a newly-formed exchange-traded fund, FT Energy
Income Partners Enhanced Income ETF (“EIPI”), with FIF designated as the surviving fund for tax and accounting purposes (for each Fund, a “Proposal”). FEI shareholders cast 22,719,901 votes in favor of the Proposal, 529,354 against the Proposal, and
969,772 shares abstained. FPL shareholders cast 11,895,127 votes in favor of the Proposal, 395,698 against the Proposal, and 368,665
shares abstained. FEN shareholders cast 8,946,908 votes in favor of the Proposal, 502,446 against the Proposal, and 612,874
shares abstained. FIF shareholders cast 7,644,082 votes in favor of the Proposal, 192,084 against the Proposal, and 281,605 shares abstained.
Immediately prior to the consummation of the mergers, EIPI adopted the net asset value (“NAV”) per share of FIF as of the close of business on May 3, 2024. The mergers were effective as of the opening of business of the New York Stock Exchange on May 6, 2024.
Upon completion of the mergers, common shareholders of each of the MLP Funds received shares of EIPI with a value equal to
the aggregate NAV of their shares held in the respective MLP Funds prior to the merger, with such shareholders thus becoming EIPI
shareholders and the MLP Funds being thereafter terminated.
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISOR
Energy Income Partners, LLC
10 Wright Street
Westport, CT 06880
ADMINISTRATOR,
FUND ACCOUNTANT,
AND CUSTODIAN
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
TRANSFER AGENT
Computershare, Inc.
P.O. Box 43006
Providence, RI 02940
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 South Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
320 South Canal Street
Chicago, IL 60606
(b) Not applicable.
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
|
(a) |
Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included
as part of the report to shareholders filed under Item 1 of this form. |
Item 7. Disclosure of Proxy Voting
Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies.
(a)
Not applicable.
|
(b) |
There has been no change, as of the date of this filing, in any of the portfolios managers identified in response
to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR. |
Item 9. Purchases of Equity Securities
by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the
procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented
after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407)
(as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
|
(a) |
The registrant’s principal executive and principal financial officers, or persons performing similar
functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the
filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures
required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act
of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
|
(b) |
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d)
under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End
Management Investment Companies.
Item [18.]. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 14. Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
| (registrant) |
|
First Trust MLP and Energy Income Fund |
| By (Signature and Title)* |
|
/s/ James M. Dykas |
| |
|
James M. Dykas, President and Chief Executive Officer
(principal executive officer) |
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By (Signature and Title)* |
|
/s/ James M. Dykas |
| |
|
James M. Dykas, President and Chief Executive Officer
(principal executive officer) |
| By (Signature and Title)* |
|
/s/ Derek D. Maltbie |
| |
|
Derek D. Maltbie, Treasurer, Chief Financial Officer
and Chief Accounting Officer
(principal financial
officer) |
* Print the name and title of each signing officer under his
or her signature.
Certification Pursuant to Rule 30a-2(a) under
the 1940 Act and Section 302
of the Sarbanes-Oxley Act
I, James M. Dykas, certify that:
| 1. | I have reviewed this report on Form N-CSR of First Trust MLP and Energy Income Fund; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this
report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Date: |
|
July 2, 2024 |
|
/s/ James M. Dykas |
|
| |
|
|
|
James M. Dykas, President and Chief Executive Officer
(principal executive officer) |
|
Certification Pursuant to Rule 30a-2(a) under
the 1940 Act and Section 302
of the Sarbanes-Oxley Act
I, Derek D. Maltbie, certify that:
| 1. | I have reviewed this report on Form N-CSR of First Trust MLP and Energy Income Fund; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this
report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
| Date: |
|
July 2, 2024 |
|
/s/ Derek D. Maltbie |
|
| |
|
|
|
Derek D. Maltbie, Treasurer, Chief Financial Officer
and
Chief Accounting Officer
(principal financial officer) |
|
Certification Pursuant to Rule 30a-2(b) under the
1940 Act and Section 906
of the Sarbanes-Oxley Act
I, James M. Dykas, President and Chief Executive Officer
of First Trust MLP and Energy Income Fund (the “Registrant”), certify that:
| 1. | The Form N-CSR of the Registrant (the “Report”) fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Registrant. |
| Date: |
|
July 2, 2024 |
|
/s/ James M. Dykas |
|
| |
|
|
|
James M. Dykas, President and Chief Executive Officer
(principal executive officer) |
|
I, Derek D. Maltbie, Treasurer, Chief Financial Officer
and Chief Accounting Officer of First Trust MLP and Energy Income Fund (the “Registrant”), certify that:
| 1. | The Form N-CSR of the Registrant (the “Report”) fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Registrant. |
| Date: |
|
July 2, 2024 |
|
/s/ Derek D. Maltbie |
|
| |
|
|
|
Derek D. Maltbie, Treasurer, Chief Financial Officer
and
Chief Accounting Officer
(principal financial officer) |
|
v3.24.2
N-2
|
6 Months Ended |
|
Apr. 30, 2024
$ / shares
shares
|
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