WHITON, Illinois – (BUSINESS WIRING) – First Trust Mortgage Income Fund (“The Fund”) (NYSE: FMY) has announced a regular monthly distribution of the Fund’s common shares in the amount of USD 0.06 per share, payable on July 15, 2021, to registered shareholders as of July. 2, 2021. The ex-dividend date is expected to be 1 July 2021. Information on the monthly distribution for the Fund is presented below.
First Trust Mortgage Income Fund (FMY):
Distribution per share:
US $ 0.06
Allocation rate based on net worth as at 18 June 2021 of $ 14.16:
The allocation rate is based on the market closing price on June 18, 2021 of $ 13.53:
Some of this allocation may come from net investment income, net short-term realized capital gains, or capital returns. 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 presented in the 1099-DIV form.
The fund is a diversified closed-end investment management company that seeks to provide a high level of current income. As a secondary goal, the Fund seeks to preserve capital. The Fund pursues these investment objectives by investing primarily in mortgage-backed securities, which are part of the property in a pool of residential or commercial mortgages, which, according to the Fund’s portfolio managers, offer an attractive combination of credit quality, yield and maturity.
First Trust Advisors LP (“FTA”) is a federally registered investment advisor and acts as an investment advisor to the Fund. FTA and its subsidiary First Trust Portfolios LP (FTP), a broker-dealer registered with FINRA, are private companies that provide a variety of investment services. As of May 31, 2021, the FTA has approximately $ 199 billion in collective assets under management or supervision through mutual funds, exchange-traded funds, closed-end funds, mutual funds and segregated managed accounts. The FTA is the supervisory authority for First Trust mutual funds, and FTP is the sponsor. FTP is also a distributor of mutual fund units and ETF units. FTA and FTP are based in Wheaton, Illinois.
Past performance is not a guarantee of future performance. The return on investment and the market value of the investment in the Fund will fluctuate. When sold, shares may be worth more or less than their original value. There is no guarantee that the investment objectives of the Fund will be achieved. The fund may not be suitable for all investors.
Key risk factors: The securities held by the fund, as well as the shares of the 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. Fund shares may fall in value or yield to other investments as a result of the risk of losses associated with these market fluctuations. In addition, local, regional or global events such as war, terrorist attacks, the spread of infectious diseases or other public health problems, recessions or other events can have a significant negative impact on the fund and its investments. Such events can affect some geographic regions, countries, sectors and industries more than others. An outbreak of a respiratory illness, designated COVID-19, in December 2019 caused significant volatility and downturn in global financial markets, resulting in losses for investors. Although the development of vaccines has slowed the spread of the virus and allowed “reasonably” normal business activity to resume in the United States, many countries continue to impose isolation measures in an attempt to slow the spread. In addition, there is no guarantee that vaccines will be effective against new variants of the disease.
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 decrease for a number of reasons that directly relate to the issuer. Reinvestment risk is the risk that the return on the Fund’s portfolio will decrease if the Fund invests proceeds from redeemed, outstanding or recalled bonds at market interest rates that are lower than the current rate of return of the Fund’s portfolio. Prepayment risk is the risk that, following early repayment, the actual outstanding debt on which the Fund receives interest income will be reduced. Credit risk is the risk that the issuer of a security is unable or unwilling to pay dividends, interest and / or principal on a due date, and that as a result, the value of the security may decrease. Interest rate risk is the risk that fixed income securities will fall in value due to changes in market interest rates. Liquidity risk is the risk that illiquid and restricted securities may be difficult to value and sell at a fair price at the time the Fund deems it desirable.
A mortgage-backed security may be adversely affected by the quality of the underlying bonds and the structure of its issuer. For example, if the mortgage underlying a particular mortgage-backed security defaults, the value of that security may decrease. Moreover, a downturn in residential or commercial real estate markets or a general economic downturn could negatively affect both the price and liquidity of private mortgage-backed securities. Part of the Fund’s managed assets can be invested in subordinated classes of mortgage-backed securities. These subordinate classes are subject to a greater degree of non-payment risk than the older classes of the same issuer or agency.
If the fund invests in floating or variable rate obligations that use the London Interbank Offered Rate (“LIBOR”) as the reference interest rate, it is exposed to LIBOR risk. The UK Financial Conduct Authority, which regulates LIBOR, will no longer provide LIBOR as a reference rate during the phase-out period, which will begin immediately after 31 December 2021. The absence or replacement of LIBOR may affect the value, liquidity or profitability of certain investments in funds and may result in costs incurred in closing positions and entering into new transactions. Any potential consequences of switching from LIBOR for the fund or certain instruments in which the fund invests can be difficult to determine and can vary depending on many factors and could result in losses for the fund.
Investments in asset-backed or mortgage-backed securities offered by non-government issuers such as commercial banks, loans and savings, private mortgage insurance companies, mortgage bankers and other secondary market issuers are subject to additional risks.
The main risks associated with the use of futures contracts are (a) imperfect correlation between changes in the market value of instruments or indices underlying futures contracts and the price of futures contracts; (b) the possible absence of a liquid secondary market for the futures contract and, as a consequence, the inability to close the futures contract if desired; (c) losses caused by unforeseen market movements that are potentially unlimited; (d) failure of the investment advisor to correctly predict the direction of movement of securities prices, interest rates, exchange rates and other economic factors; and (e) the likelihood that the counterparty will default on its obligations.
If short selling securities increases in value, the Fund may have to cover its short position at a higher price than the short selling price, resulting in losses.
Buyback agreements are at risk of rejection. If the counterparty of the Fund does not fulfill its obligations and the Fund is delayed or cannot receive the collateral, or if the value of the collateral is insufficient, the Fund may suffer losses.
Using leverage can lead to additional risk and cost, and can also increase the impact of any losses.
The risks of investing in the Fund are spelled out in the reports of shareholders and other regulatory documents.
The information provided is not intended to be used as investment advice or advice to any particular person. In providing this information, First Trust is under no obligation to provide advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for independently assessing investment risks and for making independent judgments in determining whether an investment is appropriate for their clients.
NYSE daily closing 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.