First Trust Mortgage Income Fund (the "Fund") (NYSE: FMY) has
declared the Fund’s regularly scheduled monthly common share
distribution in the amount of $0.06 per share payable on March 15,
2021, to shareholders of record as of March 2, 2021. The
ex-dividend date is expected to be March 1, 2021. The monthly
distribution information for the Fund appears below.
First Trust Mortgage
Income Fund (FMY):
Distribution per share:
$0.06
Distribution Rate based on the February
19, 2021 NAV of $14.39:
5.00%
Distribution Rate based on the February
19, 2021 closing market price of $13.65:
5.27%
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 2021 will be made after the end of 2021 and
will be provided on Form 1099-DIV.
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 $174 billion as of
January 31, 2021 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.
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.
Principal Risk Factors: Securities held by a fund, as well as
shares of a fund itself, are subject to market fluctuations caused
by factors such as general economic conditions, political events,
regulatory or market developments, changes in interest rates and
perceived trends in securities prices. Shares of a fund could
decline in value or underperform other investments as a result of
the risk of loss associated with these market fluctuations. In
addition, local, regional or global events such as war, acts of
terrorism, spread of infectious diseases or other public health
issues, recessions, or other events could have a significant
negative impact on a fund and its investments. Such events may
affect certain geographic regions, countries, sectors and
industries more significantly than others. The outbreak of the
respiratory disease designated as COVID-19 in December 2019 has
caused significant volatility and declines in global financial
markets, which have caused losses for investors. The COVID-19
pandemic may last for an extended period of time and will continue
to impact the economy for the foreseeable future.
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, extension 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.
Extension risk is the risk that, when interest rates rise, certain
obligations will be paid off by the issuer (or other obligated
party) more slowly than anticipated, causing the value of these
debt securities to fall. 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.
The United Kingdom’s Financial Conduct Authority, which
regulates LIBOR, intends to cease making LIBOR available for use as
a reference rate over a phase-out period that is currently expected
to begin after the end of 2021, although the specific timing of the
phase out of LIBOR continues to be discussed and negotiated across
the industry and in various jurisdictions. The unavailability or
replacement of LIBOR may affect the value, liquidity or return on
certain Fund investments and may result in costs incurred in
connection with closing out positions and entering into new trades.
Any potential effects of the transition away from LIBOR on the fund
or on certain instruments in which the fund invests can be
difficult to ascertain, and they may vary depending on a variety of
factors. Any such effects of the transition away from LIBOR, as
well as other unforeseen effects, could result in losses to the
fund. Manipulation of the LIBOR rate-setting process would raise
the risk of adverse impacts to a fund if a fund received a payment
based upon LIBOR and such manipulation of LIBOR resulted in lower
resets than would have occurred had there been no manipulation.
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
www.ftportfolios.com or by calling 1-800-988-5891.
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