First Trust Mortgage Income Fund (the "Fund") (NYSE: FMY) has
decreased its regularly scheduled monthly common share distribution
to $0.075 per share from $0.0825 per share. The distribution will
be payable on September 16, 2024, to shareholders of record as of
September 3, 2024. The ex-dividend date is expected to be September
3, 2024. The monthly distribution information for the Fund appears
below.
First Trust Mortgage
Income Fund (FMY):
Distribution per share:
$0.075
Distribution Rate based on the August 19,
2024 NAV of $12.89:
6.98%
Distribution Rate based on the August 19,
2024 closing market price of $12.45:
7.23%
Decrease from previous distribution of
$0.0825:
-9.09%
A portion of this distribution may come from net investment
income, net short-term realized capital gains or return of capital.
The final determination of the source and tax status of all
distributions paid in 2024 will be made after the end of 2024 and
will be provided on Form 1099-DIV.
In seeking to balance the Fund’s objectives of providing a high
level of income while attempting to preserve capital, we believe a
reduction in the distribution from $0.0825 per share to $0.0750 per
share will bring the distribution more in line with the expected
current earning potential of the Fund.
The Fund is a diversified, closed-end management investment
company that seeks to provide a high level of current income. As a
secondary objective, the Fund seeks to preserve capital. The Fund
pursues these investment objectives by investing primarily in
mortgage-backed securities representing part ownership in a pool of
either residential or commercial mortgage loans that, in the
opinion of the Fund's portfolio managers, offer an attractive
combination of credit quality, yield and maturity.
First Trust Advisors L.P. ("FTA") is a federally registered
investment advisor and serves as the Fund's investment advisor. FTA
and its affiliate First Trust Portfolios L.P. ("FTP"), a FINRA
registered broker-dealer, are privately-held companies that provide
a variety of investment services. FTA has collective assets under
management or supervision of approximately $235 billion as of July
31, 2024 through unit investment trusts, exchange-traded funds,
closed-end funds, mutual funds and separate managed accounts. FTA
is the supervisor of the First Trust unit investment trusts, while
FTP is the sponsor. FTP is also a distributor of mutual fund shares
and exchange-traded fund creation units. FTA and FTP are based in
Wheaton, Illinois.
Principal Risk Factors: Risks are inherent in all investing.
Certain risks applicable to the Fund are identified below, which
includes the risk that you could lose some or all of your
investment in the Fund. The principal risks of investing in the
Fund are spelled out in the Fund's annual shareholder reports. The
order of the below risk factors does not indicate the significance
of any particular risk factor. The Fund also files reports, proxy
statements and other information that is available for
review.
Past performance is no assurance of future results. Investment
return and market value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their
original cost. There can be no assurance that the Fund's investment
objectives will be achieved. The Fund may not be appropriate for
all investors.
Market risk is the risk that a particular investment, or shares
of a fund in general may fall in value. Investments held by the
Fund are subject to market fluctuations caused by real or perceived
adverse economic conditions, political events, regulatory factors
or market developments, changes in interest rates and perceived
trends in securities prices. Shares of a fund could decline in
value or underperform other investments as a result. In addition,
local, regional or global events such as war, acts of terrorism,
market manipulation, government defaults, government shutdowns,
regulatory actions, political changes, diplomatic developments, the
imposition of sanctions and other similar measures, spread of
infectious disease or other public health issues, recessions,
natural disasters or other events could have significant negative
impact on a fund and its investments.
Current market conditions risk is the risk that a particular
investment, or shares of the fund in general, may fall in value due
to current market conditions. As a means to fight inflation, the
Federal Reserve and certain foreign central banks have raised
interest rates and expect to continue to do so, and the Federal
Reserve has announced that it intends to reverse previously
implemented quantitative easing. Recent and potential future bank
failures could result in disruption to the broader banking industry
or markets generally and reduce confidence in financial
institutions and the economy as a whole, which may also heighten
market volatility and reduce liquidity. Ongoing armed conflicts
between Russia and Ukraine in Europe and among Israel, Hamas and
other militant groups in the Middle East, have caused and could
continue to cause significant market disruptions and volatility
within the markets in Russia, Europe, the Middle East and the
United States. The hostilities and sanctions resulting from those
hostilities have and could continue to have a significant impact on
certain fund investments as well as fund performance and liquidity.
The COVID-19 global pandemic, or any future public health crisis,
and the ensuing policies enacted by governments and central banks
have caused and may continue to cause significant volatility and
uncertainty in global financial markets, negatively impacting
global growth prospects.
The debt securities in which the Fund invests are subject to
certain risks, including issuer risk, reinvestment risk, prepayment
risk, credit risk, interest rate risk and liquidity risk. Issuer
risk is the risk that the value of fixed-income securities may
decline for a number of reasons which directly relate to the
issuer. Reinvestment risk is the risk that income from the Fund's
portfolio will decline if the Fund invests the proceeds from
matured, traded or called bonds at market interest rates that are
below the Fund portfolio's current earnings rate. Prepayment risk
is the risk that, upon a prepayment, the actual outstanding debt on
which the Fund derives interest income will be reduced. Credit risk
is the risk that an issuer of a security will be unable or
unwilling to make dividend, interest and/or principal payments when
due and that the value of a security may decline as a result.
Interest rate risk is the risk that fixed-income securities will
decline in value because of changes in market interest rates.
Liquidity risk is the risk that illiquid and restricted securities
may be difficult to value and to dispose of at a fair price at the
times when the Fund believes it is desirable to do so.
A mortgage-backed security may be negatively affected by the
quality of the mortgages underlying such security and the structure
of its issuer. For example, if a mortgage underlying a particular
mortgage-backed security defaults, the value of that security may
decrease. Moreover, a downturn in the markets for residential or
commercial real estate or a general economic downturn could
negatively affect both the price and liquidity of privately issued
mortgage-backed securities. A portion of the Fund's managed assets
may be invested in subordinated classes of mortgage-backed
securities. Such subordinated classes are subject to a greater
degree of non-payment risk than are senior classes of the same
issuer or agency.
To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as
a reference interest rate, it is subject to LIBOR Risk. LIBOR has
ceased to be made available as a reference rate and there is no
assurance that any alternative reference rate, including the
Secured Overnight Financing Rate ("SOFR"), will be similar to or
produce the same value or economic equivalence as LIBOR. The
unavailability or replacement of LIBOR may affect the value,
liquidity or return on certain fund investments and may result in
costs incurred in connection with closing out positions and
entering into new trades. Any potential effects of the transition
away from LIBOR on a fund or on certain instruments in which a fund
invests is difficult to predict and could result in losses to the
fund.
Investments in asset-backed or mortgage-backed securities
offered by non-governmental issuers, such as commercial banks,
savings and loans, private mortgage insurance companies, mortgage
bankers and other secondary market issuers are subject to
additional risks.
The primary risks associated with the use of futures contracts
are (a) the imperfect correlation between the change in market
value of the instruments or indices underlying the futures
contracts and the price of the futures contracts; (b) possible lack
of a liquid secondary market for a futures contract and the
resulting inability to close a futures contract when desired; (c)
losses caused by unanticipated market movements, which are
potentially unlimited; (d) the investment adviser's inability to
predict correctly the direction of securities prices, interest
rates, currency exchange rates and other economic factors; and (e)
the possibility that the counterparty will default in the
performance of its obligations.
If a security sold short increases in price, the Fund may have
to cover its short position at a higher price than the short sale
price, resulting in a loss.
Repurchase agreements are subject to the risk of failure. If the
Fund's counterparty defaults on its obligations and the Fund is
delayed or prevented from recovering the collateral, or if the
value of the collateral is insufficient, the Fund may realize a
loss.
Use of leverage can result in additional risk and cost, and can
magnify the effect of any losses.
The risks of investing in the Fund are spelled out in the
shareholder reports and other regulatory filings.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA,
the Internal Revenue Code or any other regulatory framework.
Financial professionals are responsible for evaluating investment
risks independently and for exercising independent judgment in
determining whether investments are appropriate for their
clients.
The Fund's daily closing New York Stock Exchange price and net
asset value per share as well as other information can be found at
https://www.ftportfolios.com or by calling 1-800-988-5891.
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