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First Trust Mortgage Income Fund (FMY)
  • Effective September 19, 2016, the portfolio management of the Fund transitioned to the First Trust Mortgage Securities Team, led by Jim Snyder and Jeremiah Charles. Schroder Investment Management North America Inc. acquired the portfolio management team of Brookfield Investment Management Inc., previously responsible for the portfolio management of the Fund, resulting in the automatic termination of the investment sub-advisory agreement among Brookfield, First Trust and the Fund. In connection with the change in portfolio management, First Trust agreed to lower the investment management fee payable by the Fund to a rate of 0.85% of the Fund’s managed assets, a decrease from the Fund’s previous investment management fee of 1.00% of the Fund's managed assets.
Investment Objective/Strategy - First Trust Mortgage 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. As a secondary objective, the Fund will seek to preserve capital. The Fund will pursue its 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 investment advisor, offer an attractive combination of credit quality, yield and maturity.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
Fund TypeFixed Income
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBNY Mellon Investment Servicing (US) Inc.
Fiscal Year-End10/31
Inception Price$20.00
Inception NAV$19.10
Current Fund Data (as of 10/26/2016)
Closing NAV1$15.52
Closing Share Price2$14.00
Discount to NAV9.79%
Total Net Assets$65,384,153
Common Shares Outstanding4,213,115
Dividend FrequencyMonthly
Dividend Per Share Amt3$0.0650
Distribution Rate45.57%
Daily Volume6,911
Average 30-Day Daily Volume9,458
Closing Share Price 52-Week High/Low$14.77 / $13.84
Closing NAV 52-Week High/Low$16.06 / $15.43
Expense Ratios (as of 4/30/2016)
Annual ExpensesPercent of
Net Assets
Percent of
Management Fees1.08%1.00%
Other Expenses
Total Operating Expenses1.46%1.36%
Leverage Costs0.05%0.05%
Total Annual Expenses1.51%1.41%
Leverage costs include interest, fees and any upfront/offering costs associated with borrowings by the Fund.
Leverage Information7
The Fund currently has no outstanding leverage.
Asset Type Breakdown (as of 8/31/2016)8
  Asset Percent
Mortgage-Backed Securities 80.63%
U.S. Government Agency MBS 17.59%
Asset-Backed Securities 1.78%
Portfolio Characteristics (as of 8/31/2016)8
Weighted Average Effective Duration50.87 Years
Weighted Average Life5.16 Years
Share Price and NAV History (Since Inception)
Past performance is not indicative of future results.
% Premium/Discount (Since Inception)
Cumulative Total Returns (as of 9/30/2016)6
Period Share Price NAV
3 Months 1.42% 1.48%
1 Year 6.93% 2.60%
3 Years 14.29% 7.71%
5 Years 13.58% 25.10%
10 Years 92.53% 84.68%
Year to Date 3.99% 2.28%
Inception to Date 71.16% 92.50%
Calendar Year Returns (as of 12/31/2015)6
Period Share Price NAV
2006 12.33% 5.19%
2007 9.62% 7.69%
2008 4.63% -5.68%
2009 19.84% 32.32%
2010 16.75% 8.82%
2011 9.48% 0.01%
2012 2.35% 11.21%
2013 -5.77% 6.04%
2014 1.98% 1.97%
2015 4.30% 1.36%
Average Annual Returns (as of 9/30/2016)6
Period Share Price NAV
3 Years 4.55% 2.51%
5 Years 2.58% 4.58%
10 Years 6.77% 6.33%
Inception to Date 4.85% 5.94%
Credit Quality Breakdown (as of 8/31/2016)8
Credit Quality Percent
AAA 24.71%
AA+ 16.52%
AA 6.08%
AA- 6.84%
A+ 10.31%
A 1.95%
A- 1.78%
BBB 4.28%
BBB- 1.74%
BB+ 1.33%
BB 1.53%
BB- 3.55%
B+ 1.32%
B 1.25%
CCC+ 1.50%
CCC 8.57%
CCC- 0.16%
CC 4.93%
D 1.56%
NR 0.09%
The credit quality information presented reflects the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies, Inc., Moody’s Investors Service, Inc., Fitch Ratings, DBRS, Inc., Kroll Bond Rating Agency, Inc., Morningstar Credit Ratings, LLC, or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and ratings are not equivalent, the highest rating is used. Sub-investment grade ratings are those rated BB+/Ba1 or lower. Investment grade ratings are those rated BBB-/Baa3 or higher. The credit ratings shown relate to the creditworthiness of the issuers of the underlying securities in the Fund, and not to the Fund or its shares. Credit ratings are subject to change.
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's common shares outstanding.
2 Fund shares are purchased and sold on an exchange at their share price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 Most recent distribution paid or declared to today's date. Subject to change in the future. There is no guarantee that the fund will declare dividends.
4 Distribution rates are calculated by annualizing the most recent distribution paid or declared through today's date and then dividing by the most recent market price. The distribution consists of the sum of net investment income, net realized short-term capital gains, net realized long-term capital gains, and return of capital. Distribution rates may vary. Any distribution adjustment will not be reflected until after the declaration date for the next distribution. See the fund's 19a-1 Notices, if any, located under the "News & Literature" section of the website for estimates of distribution sources. Final determination of the source and tax status of all distributions paid in the current year will be made after year-end.
5 A measure of a bond's sensitivity to interest rate changes that reflects the change in a bond's price given a change in yield. It accounts for the likelihood of changes in the timing of cash flows in response to interest rate movements.
6 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 takes into account the fund's total annual expenses and does not reflect sales load. Past performance is not indicative of future results.
7 Leverage is a technique where a closed-end fund's manager borrows assets at one rate and invests the proceeds from the borrowed assets at another rate, seeking to increase yield and total return. Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.
8 Market value information used in calculating the percentages is based upon trade date plus one recording of transactions, which can differ from regulatory financial reports (Forms N-CSR and N-Q) that are based on trade date recording of security transactions. Holdings are subject to change.

Risk Considerations

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.

The debt securities in which the fund invests are subject to certain risks, including issuer risk, reinvestment risk, prepayment risk, credit risk, and interest rate 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.

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.

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 prospectus, shareholder report and other regulatory filings.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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