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)
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.
(b) Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
Not applicable.
(a) Not
applicable.
(b) Not
applicable.
Not applicable.
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.
Not applicable.
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.
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.
I, James M. Dykas, certify that:
I, Derek D. Maltbie, certify that:
I, James M. Dykas, Chairman of the Board, President
and Chief Executive Officer of First Trust High Income Long/Short Fund (the “Registrant”), certify that:
I, Derek D. Maltbie, Treasurer, Chief Financial Officer
and Chief Accounting Officer of First Trust High Income Long/Short Fund (the “Registrant”), certify that:
N-2
|
6 Months Ended |
|
Apr. 30, 2024
$ / shares
shares
|
|---|
| Cover [Abstract] |
|
| Entity Central Index Key |
0001494530
|
| Amendment Flag |
false
|
| Entity Inv Company Type |
N-2
|
| Document Type |
N-CSRS
|
| Entity Registrant Name |
First Trust High Income Long/Short Fund
|
| General Description of Registrant [Abstract] |
|
| Investment Objectives and Practices [Text Block] |
The Fund’s primary investment objective is to provide current income. The Fund’s secondary objective is capital appreciation. The Fund seeks to achieve its investment objectives by investing, under normal market
conditions, a majority of its assets in a diversified portfolio of U.S. and foreign (including emerging markets) high-yield corporate fixed-income
securities of varying maturities that are rated below-investment grade at the time of purchase. For purposes of this strategy, “corporate fixed-income securities” include corporate bonds, debentures, notes, commercial paper and other similar types of corporate
debt instruments, including instruments issued by corporations with direct or indirect government ownership, as well as asset-backed
securities, preferred shares, senior floating-rate loan participations, commitments and assignments (“Senior Loans”)(1), payment-in-kind securities, zero-coupon bonds, bank certificates of deposit, fixed time deposits, bankers’ acceptances and derivative instruments that provide the same or similar economic impact as a physical investment in the above securities. Below-investment
grade fixed-income securities are commonly referred to as “high-yield” or “junk” bonds and are considered speculative with respect to the issuer’s capacity to pay interest and repay principal. As part of its investment strategy, the Fund intends to maintain
both long and short positions in securities under normal market conditions. The Fund will take long positions in securities that MacKay Shields LLC (“MacKay” or the “Sub-Advisor”) believes offer the potential for attractive returns and that it considers in the aggregate to have the potential to outperform the Fund’s benchmark, the ICE BofA US High Yield Constrained Index (the “Index”). The Fund will take short positions in securities that the Sub-Advisor believes in the aggregate will underperform the Index. The Fund’s long positions, either directly or through derivatives, may total up to 130% of the Fund’s Managed Assets. The Fund’s short positions, either directly or through derivatives, may total up to 30% of the Fund’s Managed Assets. “Managed Assets” means the average daily gross asset value of the Fund (which includes the principal amount of any borrowings), minus the sum of the Fund’s liabilities. There can be no assurance that the Fund will achieve its investment objectives. The Fund may not be appropriate for
all investors.
|
| Risk Factors [Table Text Block] |
Principal Risks
The Fund is a closed-end management investment company designed primarily as a long-term
investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty
inherent in all investments, there can be no assurance that the Fund will achieve its investment objectives. The following discussion
summarizes the principal risks associated with investing in the Fund, which includes the risk that you could lose some or all of
your investment in the Fund. The Fund is subject to the informational requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940 and, in accordance therewith, files reports, proxy statements and other information that is available
for review. The order of the below risk factors does not indicate the significance of any particular risk factor.
Credit Agency Risk. Credit ratings are determined by credit rating agencies and are only the opinions
of such entities. Ratings assigned by a rating agency are not absolute standards of credit quality and do not
evaluate market risk or the liquidity of securities. Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings may adversely affect the credit ratings of securities held by the Fund or such credit rating agency’s ability to evaluate creditworthiness and, as a result, may adversely affect those securities’ perceived or actual credit risk.
Credit and Below-Investment Grade Securities Risk. Credit risk is the risk that the issuer or other obligated party of a debt security
in the Fund’s portfolio will fail to pay dividends and/or interest or repay principal when due. Below-investment grade instruments including instruments that are not rated but judged to be of comparable quality, are
commonly referred to as high-yield securities or “junk” bonds and are considered speculative with respect to the issuer’s capacity to pay dividends or interest and repay principal and are susceptible to default or decline in market value due to adverse economic and
business developments. High-yield securities are often unsecured and subordinated to other creditors of the issuer. The market values
for high-yield securities tend to be very volatile, and these securities are generally less liquid than investment grade securities. For
these reasons, an investment in the Fund is subject to the following specific risks: (i) increased price sensitivity to changing interest
rates and to a deteriorating economic environment; (ii) greater risk of loss due to default or declining credit quality; (iii) adverse
company specific events more likely to render the issuer unable to make dividend, interest and/or principal payments; (iv) negative perception
of the high-yield market which may depress the price and liquidity of high-yield securities; (v) volatility; and (vi) liquidity.
Currency Risk. The value of securities denominated or quoted in foreign currencies may be adversely
affected by fluctuations in the relative currency exchange rates and by exchange control regulations. The Fund’s investment performance may be negatively affected by a devaluation of a currency in which the Fund’s investments are denominated or quoted. Further, the Fund’s investment performance may be significantly affected, either positively or negatively, by currency exchange
rates because the U.S. dollar value of securities denominated or quoted in another currency will increase or decrease in response to
changes in the value of such currency in relation to the U.S. dollar.
Current Market Conditions Risk. 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,
which remains at elevated levels, 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. U.S.
regulators have proposed several changes to market and issuer regulations which would directly impact the Fund, and any regulatory changes could adversely impact the Fund’s ability to achieve its investment strategies or make certain investments. 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. The ongoing
adversarial political climate in the United States, as well as political and diplomatic events both domestic and abroad, have and may
continue to have an adverse impact the U.S. regulatory landscape, markets and investor behavior, which could have a negative impact on the Fund’s investments and operations. Other unexpected political, regulatory and diplomatic events within the U.S. and abroad
may affect investor and consumer confidence and may adversely impact financial markets and the broader economy. For example, 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 economies of the United
States and its trading partners, as well as the financial markets generally, may be adversely impacted by trade disputes and other
matters. For example, the United States has imposed trade barriers and restrictions on China. In addition, the Chinese government
is engaged in a longstanding dispute with Taiwan, continually threatening an invasion. If the political climate between the
United States and China does not improve or continues to deteriorate, if China were to attempt invading Taiwan, or if other geopolitical
conflicts develop or worsen, economies, markets and individual securities may be adversely affected, and the value of the Fund’s assets may go down. 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. While vaccines have been developed, there is no guarantee that vaccines will be effective
against emerging future variants of the disease. As this global pandemic illustrated, such events may affect certain geographic
regions, countries, sectors and industries more significantly than others. Advancements in technology may also adversely impact markets
and the overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced development
and increased regulation of artificial intelligence. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s portfolio investments and could result in disruptions in the trading markets.
Cyber Security Risk. The Fund is susceptible to potential operational risks through breaches in cyber
security. A breach in cyber security refers to both intentional and unintentional events that may cause the Fund
to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause the Fund to incur
regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.
Cyber security breaches may involve unauthorized access to the Fund’s digital information systems through “hacking” or malicious software coding, but may also result from outside attacks such as denial-of-service attacks through efforts to make network
services unavailable to intended users. In addition, cyber security breaches of the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or Sub-Advisor, as applicable, or issuers in which the Fund invests, can also subject
the Fund to many of the same risks associated with direct cyber security breaches. The Fund has established risk management systems designed
to reduce the risks associated with cyber security. However, there is no guarantee that such efforts will succeed, especially
because the Fund does not directly control the cyber security systems of issuers or third party service providers. Substantial costs may
be incurred by the Fund in order to resolve or prevent cyber incidents in the future.
Distressed Securities Risk. Distressed securities frequently do not produce income while they are outstanding.
The Fund may be required to incur certain extraordinary expenses in order to protect and recover its
investment. The Fund also will be subject to significant uncertainty as to when and in what manner and for what value the obligations
evidenced by the distressed securities will eventually be satisfied. Distressed securities might be repaid only after lengthy
workout, bankruptcy or similar proceedings, during which the issuer may not make any interest or other payments. Because there typically
is substantial uncertainty regarding the outcome of such proceedings, there is a high risk of loss, including loss of the entire investment.
Fixed-Income Securities Risk. An investment in fixed-income securities is subject to certain risks, including:
•
Issuer Risk. The value of fixed-income securities may decline for a number of reasons which directly
relate to the issuer, such as management performance, leverage and reduced demand for the issuer’s goods and services. In addition, an issuer of fixed-income securities may default on its obligation to pay interest and repay principal.
•
Prepayment Risk. Prepayment risk is the risk that the issuer of a debt security will repay principal
prior to the scheduled maturity date. During periods of declining interest rates, the issuer of a security
may exercise its option to prepay principal earlier than scheduled, forcing the Fund to reinvest the proceeds from such prepayment
in lower yielding securities, which may result in a decline in the Fund’s income and distributions to common shareholders.
•
Reinvestment Risk. 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.
Forward Foreign Currency Exchange Contracts Risk. Forward foreign currency exchange contracts involve certain risks, including the risk of failure of the counterparty to perform its obligations under the contract
and the risk that the use of forward contracts may not serve as a complete hedge because of an imperfect correlation between movements
in the prices of the contracts and the prices of the currencies hedged. While forward foreign currency exchange contracts may limit
the risk of loss due to a decline in the value of the hedged currencies, they also may limit any potential gain that might result should
the value of the currencies increase. In addition, because forward currency exchange contracts are privately negotiated transactions,
there can be no assurance that the Fund will have flexibility to roll-over a forward currency exchange contract upon its expiration
if it desires to do so. Hedging against a decline in the value of a currency does not eliminate fluctuations in the value of a portfolio security
traded in that currency or prevent a loss if the value of the security declines. Moreover, it may not be possible for the Fund to hedge
against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a price
above the devaluation level it anticipates. The cost to the Fund of engaging in currency exchange transactions varies with such factors as the
currency involved, the length of the contract period and prevailing market conditions.
Illiquid and Restricted Securities Risk. The Fund may invest in securities that are restricted and/or illiquid. Restricted
securities are securities that cannot be offered for public resale unless registered under the applicable
securities laws or that have a contractual restriction that prohibits or limits their resale. Restricted securities may be illiquid
as they generally are not listed on an exchange and may have no active trading market. Investments in restricted securities could have the effect of increasing the amount of the Fund’s assets invested in illiquid securities if qualified institutional buyers are unwilling
to purchase these securities. Illiquid and restricted securities may be difficult to dispose of at a fair price at the times when the Fund
believes it is desirable to do so. The market price of illiquid and restricted securities generally is more volatile than that of more liquid
securities, which may adversely affect the price that the Fund pays for or recovers upon the sale of such securities. Illiquid and restricted
securities are also more difficult to value, especially in challenging markets.
Inflation Risk. The Fund invests in securities that are subject to inflation risk. Inflation risk
is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the
value of money. As inflation increases, the present value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect to debt securities. Inflation rates may change frequently and drastically as a result of various factors, including unexpected
shifts in the domestic or global economy, and the Fund’s investments may not keep pace with inflation, which may result in losses to Fund investors.
Interest Rate Risk. Interest rate risk is the risk that securities will decline in value because of changes
in market interest rates. For fixed rate securities, when market interest rates rise, the market value of such securities
generally will fall. Investments in fixed rate securities with long-term maturities may experience significant price declines if
long-term interest rates increase. During periods of rising interest rates, the average life of certain types of securities may be extended
because of slower than expected prepayments. This may lock in a below-market yield, increase the security’s duration and further reduce the value of the security. Fixed rate securities with longer durations tend to be more sensitive to changes in interest rates, usually
making them more volatile than securities with shorter durations. The duration of a security will be expected to change over time
with changes in market factors and time to maturity.
The interest rates payable on floating rate securities are not fixed and may fluctuate
based upon changes in market rates. As short-term interest rates decline, interest payable on floating rate securities typically decreases.
Alternatively, during periods of rising interest rates, interest payable on floating rate securities typically increases. Changes
in interest rates on floating rate securities may lag behind changes in market rates or may have limits on the maximum increases in interest rates.
The value of floating rate securities may decline if their interest rates do not rise as much, or as quickly, as interest rates
in general.
Many financial instruments use or may use a floating rate based upon the LIBOR. The United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates LIBOR, has ceased making LIBOR available as a reference rate over a phase-out period that began December 31, 2022. 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 or that instruments using an alternative rate will have the same volume or liquidity. The unavailability or replacement of LIBOR
may affect the value, liquidity or return on certain Fund investments and may result in costs incurred in connection with closing out positions
and entering into new trades. Any potential effects of the transition away from LIBOR on the Fund or on certain instruments in
which the Fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result
in losses to the Fund.
Leverage Risk. The use of leverage by the Fund can magnify the effect of any losses. If the income
and gains from the securities and investments purchased with leverage proceeds do not cover the cost of leverage, the
return to the common shares will be less than if leverage had not been used. Leverage involves risks and special considerations for
common shareholders including: (i) the likelihood of greater volatility of net asset value and market price of the common shares than
a comparable portfolio without leverage; (ii) the risk that fluctuations in interest rates on borrowings will reduce the return to the
common shareholders or will result in fluctuations in the dividends paid on the common shares; (iii) in a declining market, the use of leverage
is likely to cause a greater decline in the net asset value of the common shares than if the Fund were not leveraged, which may result
in a greater decline in the market price of the common shares; and (iv) when the Fund uses certain types of leverage, the investment
advisory fee payable to the Advisor and by the Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.
Management Risk and Reliance on Key Personnel. The implementation of the Fund’s investment strategy depends upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some
of whom have unique talents and experience and would be difficult to replace. The loss or interruption of the services of a key
member of the portfolio management team could have a negative impact on the Fund.
Market Discount from Net Asset Value. Shares of closed-end investment companies such as the Fund frequently trade at a
discount from their net asset value. The Fund cannot predict whether its common shares will
trade at, below or above net asset value.
Market Risk. Investments held by the Fund, as well as shares of the Fund itself, are subject to
market fluctuations caused by real or perceived economic conditions, political events, regulatory factors or market developments,
changes in interest rates and perceived trends in securities prices. Shares of the 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, market manipulation, government defaults, government shutdowns, regulatory actions, political
changes, diplomatic developments, the imposition of sanctions and other similar measures, spread of infectious diseases
or other public health issues, recessions, or other events could have a significant negative impact on the Fund and its investments. Any
of such circumstances could have a materially negative impact on the value of the Fund’s shares, the liquidity of an investment, and result in increased market volatility. During any such events, the Fund’s shares may trade at increased premiums or discounts to their net asset value, the bid/ask spread on the Fund’s shares may widen and the returns on investment may fluctuate.
Non-U.S. Securities Risk. Investing in securities of non-U.S. issuers, which are generally denominated in non-U.S.
currencies, may involve certain risks not typically associated with investing in securities of U.S.
issuers. These risks include: (i) there may be less publicly available information about non-U.S. issuers or markets due to less rigorous
disclosure or accounting standards or regulatory practices; (ii) non-U.S. markets may be smaller, less liquid and more volatile than
the U.S. market; (iii) potential adverse effects of fluctuations in currency exchange rates or controls on the value of the Fund’s investments; (iv) the economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession;
(v) the impact of economic, political, social or diplomatic events; (vi) certain non-U.S. countries may impose restrictions on the
ability of non-U.S. issuers to make payments of principal and interest to investors located in the United States due to blockage of
non-U.S. currency exchanges or otherwise; and (vii) withholding and other non-U.S. taxes may decrease the Fund’s return. Foreign companies are generally not subject to the same accounting, auditing and financial reporting standards as are U.S. companies. In addition,
there may be difficulty in obtaining or enforcing a court judgment abroad, including in the event the issuer of a non-U.S.
security defaults or enters bankruptcy, administration or other proceedings. These risks may be more pronounced to the extent
that the Fund invests a significant amount of its assets in companies located in one region or in emerging markets.
Operational Risk. The Fund is subject to risks arising from various operational factors, including,
but not limited to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. The Fund relies on third-parties for
a range of services, including custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its investment objective. Although the Fund and the Advisor seek to reduce these operational risks through controls
and procedures, there is no way to completely protect against such risks.
Potential Conflicts of Interest Risk. First Trust, MacKay and the portfolio managers have interests which may conflict
with the interests of the Fund. In particular, First Trust and MacKay currently manage and
may in the future manage and/or advise other investment funds or accounts with the same or substantially similar investment objective
and strategies as the Fund. In addition, while the Fund is using certain types of leverage, the amount of the fees paid to First
Trust (and by First Trust to MacKay) for investment advisory and management services are higher than if the Fund did not use leverage
because the fees paid are calculated based on managed assets. Therefore, First Trust and MacKay could have a financial incentive
to leverage the Fund.
Preferred Securities Risk. Preferred securities combine some of the characteristics of both common stocks and
bonds. Preferred securities are typically subordinated to bonds and other debt securities in a company’s capital structure in terms of priority to corporate income, subjecting them to greater credit risk than those debt securities. Generally,
holders of preferred securities have no voting rights with respect to the issuing company unless preferred dividends have been in arrears
for a specified number of periods, at which time the preferred security holders may obtain limited rights. In certain circumstances,
an issuer of preferred securities may defer payment on the securities and, in some cases, redeem the securities prior to a specified date.
Preferred securities may also be substantially less liquid than other securities, including common stock.
Reorganization Risk. The Board of Trustees and shareholders of the Fund have approved the reorganization
of the Fund into ACP. The transaction is anticipated to be consummated in July 2024, subject to the satisfaction
of applicable regulatory requirements and approvals and customary closing conditions. There is no assurance whether such approvals
will be obtained or conditions met. Under the terms of the transaction, shareholders of the Fund would receive shares of ACP,
which will have its own investment strategies, and thereafter cease to be a shareholder of the Fund. More information on the transaction,
including the risks and considerations associated with the transaction as well as the risks of investing in ACP, is contained in the
proxy statement/prospectus related to the Reorganization as filed with the SEC.
Short Selling Risk. The Fund engages in short selling. Short sales are transactions in which the Fund
sells a security that it does not own but can borrow in the market and allows the Fund to profit from a decline in the
market price (to the extent such decline exceeds the transaction costs and the costs of borrowing the securities). 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.
Because losses on short sales arise from increases in the value of the security sold short, such losses are theoretically unlimited. It is possible that the Fund’s long securities positions will decline in value at the same time that the value of its short securities positions
increase, thereby increasing potential losses to the Fund. In addition, the Fund’s short selling strategies will limit its ability to fully benefit from increases in the fixed-income markets.
The Fund may not be able to borrow a security that it needs to deliver or it may not
be able to close out a short position at an acceptable price and may have to sell related long positions before it had intended
to do so. Thus, the Fund may not be able to successfully implement its short sale strategy due to limited availability of desired
securities or for other reasons. Also, there is the risk that the counterparty to a short sale may fail to honor its contractual terms, causing
a loss to the Fund. Further, when the Fund is selling a security short, it must maintain a segregated account of cash or high-grade
securities equal to the margin requirement. As a result, the Fund may maintain high levels of cash or other liquid assets, which may limit the Fund’s ability to pursue other opportunities.
U.S. Government Securities Risk. U.S. government securities are subject to interest rate risk but generally do not
involve the credit risks associated with investments in other types of debt securities. As a result,
the yields available from U.S. government securities are generally lower than the yields available from other debt securities. U.S. government
securities are guaranteed only as to the timely payment of interest and the payment of principal when held to maturity.
Valuation Risk. Unlike publicly traded common stock which trades on national exchanges, there is
no central place or exchange for fixed-income securities trading. Fixed-income securities generally trade on an “over-the-counter” market which may be anywhere in the world where the buyer and seller can settle on a price. Due to the lack of centralized
information and trading, the valuation of fixed-income securities may carry more risk than that of common stock. Uncertainties
in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of valuation models
and processes may lead to inaccurate asset pricing.
|
| Share Price |
$ 11.66
|
| NAV Per Share |
$ 12.48
|
| Latest Premium (Discount) to NAV [Percent] |
(6.57%)
|
| Capital Stock, Long-Term Debt, and Other Securities [Abstract] |
|
| Outstanding Security, Title [Text Block] |
Common Shares outstanding (unlimited number of Common Shares has been authorized)
|
| Outstanding Security, Held [Shares] | shares |
33,291,015
|
| Document Period End Date |
Apr. 30, 2024
|
| Credit Agency Risk [Member] |
|
| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Credit Agency Risk. Credit ratings are determined by credit rating agencies and are only the opinions
of such entities. Ratings assigned by a rating agency are not absolute standards of credit quality and do not
evaluate market risk or the liquidity of securities. Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings may adversely affect the credit ratings of securities held by the Fund or such credit rating agency’s ability to evaluate creditworthiness and, as a result, may adversely affect those securities’ perceived or actual credit risk.
|
| Credit And Below Investment Grade Securities Risk [Member] |
|
| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Credit and Below-Investment Grade Securities Risk. Credit risk is the risk that the issuer or other obligated party of a debt security
in the Fund’s portfolio will fail to pay dividends and/or interest or repay principal when due. Below-investment grade instruments including instruments that are not rated but judged to be of comparable quality, are
commonly referred to as high-yield securities or “junk” bonds and are considered speculative with respect to the issuer’s capacity to pay dividends or interest and repay principal and are susceptible to default or decline in market value due to adverse economic and
business developments. High-yield securities are often unsecured and subordinated to other creditors of the issuer. The market values
for high-yield securities tend to be very volatile, and these securities are generally less liquid than investment grade securities. For
these reasons, an investment in the Fund is subject to the following specific risks: (i) increased price sensitivity to changing interest
rates and to a deteriorating economic environment; (ii) greater risk of loss due to default or declining credit quality; (iii) adverse
company specific events more likely to render the issuer unable to make dividend, interest and/or principal payments; (iv) negative perception
of the high-yield market which may depress the price and liquidity of high-yield securities; (v) volatility; and (vi) liquidity.
|
| Currency Risk [Member] |
|
| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Currency Risk. The value of securities denominated or quoted in foreign currencies may be adversely
affected by fluctuations in the relative currency exchange rates and by exchange control regulations. The Fund’s investment performance may be negatively affected by a devaluation of a currency in which the Fund’s investments are denominated or quoted. Further, the Fund’s investment performance may be significantly affected, either positively or negatively, by currency exchange
rates because the U.S. dollar value of securities denominated or quoted in another currency will increase or decrease in response to
changes in the value of such currency in relation to the U.S. dollar.
|
| Current Market Conditions Risk [Member] |
|
| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Current Market Conditions Risk. 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,
which remains at elevated levels, 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. U.S.
regulators have proposed several changes to market and issuer regulations which would directly impact the Fund, and any regulatory changes could adversely impact the Fund’s ability to achieve its investment strategies or make certain investments. 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. The ongoing
adversarial political climate in the United States, as well as political and diplomatic events both domestic and abroad, have and may
continue to have an adverse impact the U.S. regulatory landscape, markets and investor behavior, which could have a negative impact on the Fund’s investments and operations. Other unexpected political, regulatory and diplomatic events within the U.S. and abroad
may affect investor and consumer confidence and may adversely impact financial markets and the broader economy. For example, 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 economies of the United
States and its trading partners, as well as the financial markets generally, may be adversely impacted by trade disputes and other
matters. For example, the United States has imposed trade barriers and restrictions on China. In addition, the Chinese government
is engaged in a longstanding dispute with Taiwan, continually threatening an invasion. If the political climate between the
United States and China does not improve or continues to deteriorate, if China were to attempt invading Taiwan, or if other geopolitical
conflicts develop or worsen, economies, markets and individual securities may be adversely affected, and the value of the Fund’s assets may go down. 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. While vaccines have been developed, there is no guarantee that vaccines will be effective
against emerging future variants of the disease. As this global pandemic illustrated, such events may affect certain geographic
regions, countries, sectors and industries more significantly than others. Advancements in technology may also adversely impact markets
and the overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced development
and increased regulation of artificial intelligence. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s portfolio investments and could result in disruptions in the trading markets.
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| Cyber Security Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Cyber Security Risk. The Fund is susceptible to potential operational risks through breaches in cyber
security. A breach in cyber security refers to both intentional and unintentional events that may cause the Fund
to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause the Fund to incur
regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.
Cyber security breaches may involve unauthorized access to the Fund’s digital information systems through “hacking” or malicious software coding, but may also result from outside attacks such as denial-of-service attacks through efforts to make network
services unavailable to intended users. In addition, cyber security breaches of the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or Sub-Advisor, as applicable, or issuers in which the Fund invests, can also subject
the Fund to many of the same risks associated with direct cyber security breaches. The Fund has established risk management systems designed
to reduce the risks associated with cyber security. However, there is no guarantee that such efforts will succeed, especially
because the Fund does not directly control the cyber security systems of issuers or third party service providers. Substantial costs may
be incurred by the Fund in order to resolve or prevent cyber incidents in the future.
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| Distressed Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Distressed Securities Risk. Distressed securities frequently do not produce income while they are outstanding.
The Fund may be required to incur certain extraordinary expenses in order to protect and recover its
investment. The Fund also will be subject to significant uncertainty as to when and in what manner and for what value the obligations
evidenced by the distressed securities will eventually be satisfied. Distressed securities might be repaid only after lengthy
workout, bankruptcy or similar proceedings, during which the issuer may not make any interest or other payments. Because there typically
is substantial uncertainty regarding the outcome of such proceedings, there is a high risk of loss, including loss of the entire investment.
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| Fixed Income Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Fixed-Income Securities Risk. An investment in fixed-income securities is subject to certain risks, including:
•
Issuer Risk. The value of fixed-income securities may decline for a number of reasons which directly
relate to the issuer, such as management performance, leverage and reduced demand for the issuer’s goods and services. In addition, an issuer of fixed-income securities may default on its obligation to pay interest and repay principal.
•
Prepayment Risk. Prepayment risk is the risk that the issuer of a debt security will repay principal
prior to the scheduled maturity date. During periods of declining interest rates, the issuer of a security
may exercise its option to prepay principal earlier than scheduled, forcing the Fund to reinvest the proceeds from such prepayment
in lower yielding securities, which may result in a decline in the Fund’s income and distributions to common shareholders.
•
Reinvestment Risk. 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.
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| Forward Foreign Currency Exchange Contracts Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Forward Foreign Currency Exchange Contracts Risk. Forward foreign currency exchange contracts involve certain risks, including the risk of failure of the counterparty to perform its obligations under the contract
and the risk that the use of forward contracts may not serve as a complete hedge because of an imperfect correlation between movements
in the prices of the contracts and the prices of the currencies hedged. While forward foreign currency exchange contracts may limit
the risk of loss due to a decline in the value of the hedged currencies, they also may limit any potential gain that might result should
the value of the currencies increase. In addition, because forward currency exchange contracts are privately negotiated transactions,
there can be no assurance that the Fund will have flexibility to roll-over a forward currency exchange contract upon its expiration
if it desires to do so. Hedging against a decline in the value of a currency does not eliminate fluctuations in the value of a portfolio security
traded in that currency or prevent a loss if the value of the security declines. Moreover, it may not be possible for the Fund to hedge
against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a price
above the devaluation level it anticipates. The cost to the Fund of engaging in currency exchange transactions varies with such factors as the
currency involved, the length of the contract period and prevailing market conditions.
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| Illiquid And Restricted Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Illiquid and Restricted Securities Risk. The Fund may invest in securities that are restricted and/or illiquid. Restricted
securities are securities that cannot be offered for public resale unless registered under the applicable
securities laws or that have a contractual restriction that prohibits or limits their resale. Restricted securities may be illiquid
as they generally are not listed on an exchange and may have no active trading market. Investments in restricted securities could have the effect of increasing the amount of the Fund’s assets invested in illiquid securities if qualified institutional buyers are unwilling
to purchase these securities. Illiquid and restricted securities may be difficult to dispose of at a fair price at the times when the Fund
believes it is desirable to do so. The market price of illiquid and restricted securities generally is more volatile than that of more liquid
securities, which may adversely affect the price that the Fund pays for or recovers upon the sale of such securities. Illiquid and restricted
securities are also more difficult to value, especially in challenging markets.
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| Inflation Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Inflation Risk. The Fund invests in securities that are subject to inflation risk. Inflation risk
is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the
value of money. As inflation increases, the present value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect to debt securities. Inflation rates may change frequently and drastically as a result of various factors, including unexpected
shifts in the domestic or global economy, and the Fund’s investments may not keep pace with inflation, which may result in losses to Fund investors.
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| Leverage Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Leverage Risk. The use of leverage by the Fund can magnify the effect of any losses. If the income
and gains from the securities and investments purchased with leverage proceeds do not cover the cost of leverage, the
return to the common shares will be less than if leverage had not been used. Leverage involves risks and special considerations for
common shareholders including: (i) the likelihood of greater volatility of net asset value and market price of the common shares than
a comparable portfolio without leverage; (ii) the risk that fluctuations in interest rates on borrowings will reduce the return to the
common shareholders or will result in fluctuations in the dividends paid on the common shares; (iii) in a declining market, the use of leverage
is likely to cause a greater decline in the net asset value of the common shares than if the Fund were not leveraged, which may result
in a greater decline in the market price of the common shares; and (iv) when the Fund uses certain types of leverage, the investment
advisory fee payable to the Advisor and by the Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.
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| Management Risk And Reliance On Key Personnel [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Management Risk and Reliance on Key Personnel. The implementation of the Fund’s investment strategy depends upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some
of whom have unique talents and experience and would be difficult to replace. The loss or interruption of the services of a key
member of the portfolio management team could have a negative impact on the Fund.
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| Market Discount From Net Asset Value [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Market Discount from Net Asset Value. Shares of closed-end investment companies such as the Fund frequently trade at a
discount from their net asset value. The Fund cannot predict whether its common shares will
trade at, below or above net asset value.
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| Market Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Market Risk. Investments held by the Fund, as well as shares of the Fund itself, are subject to
market fluctuations caused by real or perceived economic conditions, political events, regulatory factors or market developments,
changes in interest rates and perceived trends in securities prices. Shares of the 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, market manipulation, government defaults, government shutdowns, regulatory actions, political
changes, diplomatic developments, the imposition of sanctions and other similar measures, spread of infectious diseases
or other public health issues, recessions, or other events could have a significant negative impact on the Fund and its investments. Any
of such circumstances could have a materially negative impact on the value of the Fund’s shares, the liquidity of an investment, and result in increased market volatility. During any such events, the Fund’s shares may trade at increased premiums or discounts to their net asset value, the bid/ask spread on the Fund’s shares may widen and the returns on investment may fluctuate.
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| Non U S Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Non-U.S. Securities Risk. Investing in securities of non-U.S. issuers, which are generally denominated in non-U.S.
currencies, may involve certain risks not typically associated with investing in securities of U.S.
issuers. These risks include: (i) there may be less publicly available information about non-U.S. issuers or markets due to less rigorous
disclosure or accounting standards or regulatory practices; (ii) non-U.S. markets may be smaller, less liquid and more volatile than
the U.S. market; (iii) potential adverse effects of fluctuations in currency exchange rates or controls on the value of the Fund’s investments; (iv) the economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession;
(v) the impact of economic, political, social or diplomatic events; (vi) certain non-U.S. countries may impose restrictions on the
ability of non-U.S. issuers to make payments of principal and interest to investors located in the United States due to blockage of
non-U.S. currency exchanges or otherwise; and (vii) withholding and other non-U.S. taxes may decrease the Fund’s return. Foreign companies are generally not subject to the same accounting, auditing and financial reporting standards as are U.S. companies. In addition,
there may be difficulty in obtaining or enforcing a court judgment abroad, including in the event the issuer of a non-U.S.
security defaults or enters bankruptcy, administration or other proceedings. These risks may be more pronounced to the extent
that the Fund invests a significant amount of its assets in companies located in one region or in emerging markets.
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| Operational Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Operational Risk. The Fund is subject to risks arising from various operational factors, including,
but not limited to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. The Fund relies on third-parties for
a range of services, including custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its investment objective. Although the Fund and the Advisor seek to reduce these operational risks through controls
and procedures, there is no way to completely protect against such risks.
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| Potential Conflict Of Interest Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Potential Conflicts of Interest Risk. First Trust, MacKay and the portfolio managers have interests which may conflict
with the interests of the Fund. In particular, First Trust and MacKay currently manage and
may in the future manage and/or advise other investment funds or accounts with the same or substantially similar investment objective
and strategies as the Fund. In addition, while the Fund is using certain types of leverage, the amount of the fees paid to First
Trust (and by First Trust to MacKay) for investment advisory and management services are higher than if the Fund did not use leverage
because the fees paid are calculated based on managed assets. Therefore, First Trust and MacKay could have a financial incentive
to leverage the Fund.
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| Preferred Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Preferred Securities Risk. Preferred securities combine some of the characteristics of both common stocks and
bonds. Preferred securities are typically subordinated to bonds and other debt securities in a company’s capital structure in terms of priority to corporate income, subjecting them to greater credit risk than those debt securities. Generally,
holders of preferred securities have no voting rights with respect to the issuing company unless preferred dividends have been in arrears
for a specified number of periods, at which time the preferred security holders may obtain limited rights. In certain circumstances,
an issuer of preferred securities may defer payment on the securities and, in some cases, redeem the securities prior to a specified date.
Preferred securities may also be substantially less liquid than other securities, including common stock.
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| Reorganization Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Reorganization Risk. The Board of Trustees and shareholders of the Fund have approved the reorganization
of the Fund into ACP. The transaction is anticipated to be consummated in July 2024, subject to the satisfaction
of applicable regulatory requirements and approvals and customary closing conditions. There is no assurance whether such approvals
will be obtained or conditions met. Under the terms of the transaction, shareholders of the Fund would receive shares of ACP,
which will have its own investment strategies, and thereafter cease to be a shareholder of the Fund. More information on the transaction,
including the risks and considerations associated with the transaction as well as the risks of investing in ACP, is contained in the
proxy statement/prospectus related to the Reorganization as filed with the SEC.
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| Short Selling Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Short Selling Risk. The Fund engages in short selling. Short sales are transactions in which the Fund
sells a security that it does not own but can borrow in the market and allows the Fund to profit from a decline in the
market price (to the extent such decline exceeds the transaction costs and the costs of borrowing the securities). 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.
Because losses on short sales arise from increases in the value of the security sold short, such losses are theoretically unlimited. It is possible that the Fund’s long securities positions will decline in value at the same time that the value of its short securities positions
increase, thereby increasing potential losses to the Fund. In addition, the Fund’s short selling strategies will limit its ability to fully benefit from increases in the fixed-income markets.
The Fund may not be able to borrow a security that it needs to deliver or it may not
be able to close out a short position at an acceptable price and may have to sell related long positions before it had intended
to do so. Thus, the Fund may not be able to successfully implement its short sale strategy due to limited availability of desired
securities or for other reasons. Also, there is the risk that the counterparty to a short sale may fail to honor its contractual terms, causing
a loss to the Fund. Further, when the Fund is selling a security short, it must maintain a segregated account of cash or high-grade
securities equal to the margin requirement. As a result, the Fund may maintain high levels of cash or other liquid assets, which may limit the Fund’s ability to pursue other opportunities.
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| U S Government Securities Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
U.S. Government Securities Risk. U.S. government securities are subject to interest rate risk but generally do not
involve the credit risks associated with investments in other types of debt securities. As a result,
the yields available from U.S. government securities are generally lower than the yields available from other debt securities. U.S. government
securities are guaranteed only as to the timely payment of interest and the payment of principal when held to maturity.
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| Valuation Risk [Member] |
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| General Description of Registrant [Abstract] |
|
| Risk [Text Block] |
Valuation Risk. Unlike publicly traded common stock which trades on national exchanges, there is
no central place or exchange for fixed-income securities trading. Fixed-income securities generally trade on an “over-the-counter” market which may be anywhere in the world where the buyer and seller can settle on a price. Due to the lack of centralized
information and trading, the valuation of fixed-income securities may carry more risk than that of common stock. Uncertainties
in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of valuation models
and processes may lead to inaccurate asset pricing.
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| Interest Rate Risk [Member] |
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| General Description of Registrant [Abstract] |
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| Risk [Text Block] |
Interest Rate Risk. Interest rate risk is the risk that securities will decline in value because of changes
in market interest rates. For fixed rate securities, when market interest rates rise, the market value of such securities
generally will fall. Investments in fixed rate securities with long-term maturities may experience significant price declines if
long-term interest rates increase. During periods of rising interest rates, the average life of certain types of securities may be extended
because of slower than expected prepayments. This may lock in a below-market yield, increase the security’s duration and further reduce the value of the security. Fixed rate securities with longer durations tend to be more sensitive to changes in interest rates, usually
making them more volatile than securities with shorter durations. The duration of a security will be expected to change over time
with changes in market factors and time to maturity.
The interest rates payable on floating rate securities are not fixed and may fluctuate
based upon changes in market rates. As short-term interest rates decline, interest payable on floating rate securities typically decreases.
Alternatively, during periods of rising interest rates, interest payable on floating rate securities typically increases. Changes
in interest rates on floating rate securities may lag behind changes in market rates or may have limits on the maximum increases in interest rates.
The value of floating rate securities may decline if their interest rates do not rise as much, or as quickly, as interest rates
in general.
Many financial instruments use or may use a floating rate based upon the LIBOR. The United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates LIBOR, has ceased making LIBOR available as a reference rate over a phase-out period that began December 31, 2022. 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 or that instruments using an alternative rate will have the same volume or liquidity. The unavailability or replacement of LIBOR
may affect the value, liquidity or return on certain Fund investments and may result in costs incurred in connection with closing out positions
and entering into new trades. Any potential effects of the transition away from LIBOR on the Fund or on certain instruments in
which the Fund invests can be difficult to ascertain, and they may vary depending on a variety of factors, and they could result
in losses to the Fund.
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