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| Investment Objective/Strategy -
First Trust Strategic High Income Fund is a diversified, closed-end management investment company. The Fund's primary investment objective is to seek a high level of current income. The Fund seeks capital growth as a secondary objective. The Fund will seek to achieve its investment objective by investing at least 80% of its managed assets in a diversified portfolio of high income producing securities that the investment sub-advisor believes offer attractive yield and capital appreciation potential. |
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| There can be no assurance that the Fund's investment objectives will be achieved. |
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Fund Overview
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| Ticker |
FHI |
| Fund Type |
High Yield Bond |
| Portfolio Manager/Sub-Advisor |
Brookfield Investment Management Inc. |
| Investment Advisor |
First Trust Advisors L.P. |
| Investor Servicing Agent |
BNY Mellon Investment Servicing (US) Inc. |
| CUSIP |
337347108 |
| Fiscal Year-End |
10/31 |
| Exchange |
NYSE |
| Inception |
7/26/2005 |
| Inception Price |
$20.00 |
| Inception NAV |
$19.10 |
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| Share Price and NAV History (Since Inception) |
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Past performance is not indicative of future results.
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Current Fund Data (as of 9/1/2010)
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| Closing Share Price |
$3.34 |
| Closing NAV |
$3.62 |
| Discount to NAV |
7.73% |
| Total Managed Assets |
$40,554,136 |
| Common Shares Outstanding |
9,150,594 |
| Dividend Frequency |
Monthly |
| Dividend per Share Amt1 |
$0.0250 |
| Distribution Rate2 |
8.98% |
| Daily Volume |
35,752 |
| Average 30-Day Daily Volume |
45,975 |
| Closing Share Price 52-Week High/Low |
$3.40 / $2.53 |
| Closing NAV 52-Week High/Low |
$3.67 / $2.74 |
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Expense Ratios (as of 4/30/2010)
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| Annual Expenses |
Percent of
Net Assets |
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| Management Fees |
0.90% |
| Other Expenses |
1.88% |
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| Total Annual Expenses |
2.78% |
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Leverage Information (as of
9/1/2010
)4
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| Total Net Assets with Leverage |
$40,554,136 |
| Amount Attributable to Common Shares |
$33,160,095 |
| Amount Attributable to Preferred Shares |
$0 |
| Amount Attributable to Other Borrowings |
$7,394,041 |
| Leverage (% of Total Net Assets) |
18.23% |
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| Cumulative Total Returns
(as of 7/31/2010)3
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| Period |
Share Price (%) |
NAV (%) |
| 3 Months |
3.06 |
6.81 |
| 1 Year |
27.46 |
37.69 |
| 3 Years |
-66.70 |
-63.84 |
| 5 Years |
-64.53 |
-58.93 |
| Year to Date |
20.52 |
22.01 |
| Inception to date |
-64.39 |
-59.02 |
| Calendar Year Returns
(as of 12/31/2009)3
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| Period |
Share Price (%) |
NAV (%) |
| 2006 |
27.42 |
15.90 |
| 2007 |
-35.66 |
-25.59 |
| 2008 |
-45.63 |
-52.66 |
| 2009 |
-30.86 |
-20.20 |
| Average Annual Returns
(as of 7/31/2010)3
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| Period |
Share Price (%) |
NAV (%) |
| 3 Years |
-30.69 |
-28.76 |
| 5 Years |
-18.72 |
-16.31 |
| Inception to date |
-18.61 |
-16.30 |
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Asset |
Percent (%) |
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Corporate Bonds and Notes |
68.40 |
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U.S. Government Agency Mortgage-Backed Securities |
10.20 |
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Manufactured Housing Loans |
7.00 |
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Commercial Mortgage-Backed Securities |
5.50 |
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Credit Card Receivables |
4.50 |
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Residential Mortgage-Backed Securities |
3.30 |
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CLOs |
0.50 |
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Senior Floating-Rate Note |
0.40 |
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CDOs |
0.10 |
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Equity |
0.10 |
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Franchise Loans* |
0.00 |
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The information above is based on the "Total Investments" and does not include Cash and other assets and liabilities. When using Total Fund Assets, which does include cash and other assets, the Portfolio Composition would be as follows: Corporate Bonds and Notes 55.0, Cash and Other Assets 19.7, U.S. Government Agency Mortgage-Backed Securities 8.2, Manufactured Housing Loans 5.6, Commercial Mortgage-Backed Securities 4.4, Credit Card ABS 3.6, Residential Mortgage-Backed Securities 2.6, CLOs 0.4, Senior Floating-Rate Note 0.3, CDOs 0.1, Equity 0.1, Franchise Loans 0.0*.
*Amount is less than 0.1%.
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Credit Quality |
Percent (%) |
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AAA |
16.50 |
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BBB- |
0.90 |
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BB+ |
2.30 |
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BB |
10.20 |
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BB- |
8.50 |
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B+ |
11.30 |
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B |
9.50 |
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B- |
16.30 |
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CCC+ |
9.50 |
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CCC |
3.30 |
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CCC- |
0.60 |
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CC |
2.30 |
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C |
3.40 |
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D |
5.40 |
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The credit quality and ratings information presented above reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs). For situations in which a security is rated by more than one NRSRO and the ratings are not equivalent, the ratings are averaged. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher.
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| Footnotes
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| 1 |
Most recent distribution paid or declared through today's date. Subject to change in the future. |
| 2 |
Distribution rates are calculated by annualizing the most recent distribution paid or declaration through today's date and then dividing by the most recent market price. Any distribution adjustment will not be reflected until after the declaration date for the next distribution. The distribution rate may include realized short-term capital gains and/or a return of capital. Final determination of the source and tax status of all distributions paid in the current year will be made after year-end. |
| 3 |
Total return is the combination of reinvested dividend income and reinvested capital gains distributions, at prices obtained by the Dividend Reinvestment Plan, if any, and changes in the NAV and Share Price. The NAV total return does not reflect sales load. Past performance is not indicative of future results. |
| 4 |
Other Borrowings represents a Revolving Credit and Security Agreement with Liberty Street Funding Corp., as conduit lender, and The Bank of Nova Scotia, as secondary lender, which provides for a revolving credit facility to be used as leverage for the Fund. The total commitment under the Revolving Credit and Security Agreement is $87,000,000. |
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Information is based upon trade date plus one recording of security transactions. Therefore, trades on the last day of the period are not reflected. |
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Risk Considerations
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The Fund is subject to various risks, including: Investment and Market Risk, Management Risk, Value Investing Risk, Below-investment Grade Securities Risk, Fixed-Income Securities Risk, Issuer Risk, Interest Rate Risk, Reinvestment Risk, Prepayment Risk, Mortgage-Backed Securities risk, Asset-Backed Securities Risk, Convertible Securities Risk, Municipal Securities Risk, Non-U.S. Securities Risk, Non-U.S. Government Securities Risk, Currency Risk, Distressed Securities Risk, Equity Securities Risk, Preferred Stock Risk, Inflation/Deflation Risk, Market Discount From Net Asset Value Risk, Leverage Risk, Derivatives Risk, Portfolio Turnover Risk, Market disruption Risk, Illiquid/Restricted Securities Risk, Certain Affiliations, Anti-Takeover Provisions, and Secondary Market for the Fund's Shares.
Below-investment grade 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 and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high-yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the Fund is subject to the following specific risks: (a) increased price sensitivity to changing interest rates and to a deteriorating economic environment; (b) greater risk of loss due to default or declining credit quality; (c) adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments; and (d) a negative perception of the high-yield market may depress the price and liquidity of high-yield securities.
The risks of investing in the Fund are spelled out in the prospectus, shareholder report and other regulatory filings.
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