Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 
First Trust Preferred Securities and Income Fund (FPEAX)
Investment Objective/Strategy - The First Trust Preferred Securities and Income Fund seeks to provide current income and total return by investing, under normal market conditions, at least 80% of its net assets (including investment borrowings) in preferred securities and other securities with similar economic characteristics.
There can be no assurance that the Fund's investment objectives will be achieved. The Fund may not be appropriate for all investors.
Fund Overview
TickerFPEAX
Fund TypePreferred Income
Investment AdvisorFirst Trust Advisors L.P.
Portfolio Manager/Sub-AdvisorStonebridge Advisors LLC
CUSIP33738A107
Share ClassClass A
Fiscal Year-End10/31
Inception Date2/25/2011
Minimum Investment Amount$2,500
Minimum Subsequent Investment Amount$50
Maximum Initial Sales Charge4.50%
Gross Expense Ratio*1.36%
Net Expense Ratio*1.36%
* As of 3/1/2021
Pursuant to contract, First Trust has agreed to waive fees and/or pay fund expenses to prevent the net expense ratio of any class of shares of the fund from exceeding 1.15% per year, excluding 12b-1 distribution and service fees, acquired fund fees and expenses and certain other expenses as described in the prospectus, through 2/28/2022, and to not exceed 1.50% per year from 3/01/2022 through 2/28/2031. Net expense ratio shown above includes acquired fund fees and certain other expenses as described in the prospectus.
Current Fund Data (as of 10/26/2021)
Net Asset Value1$22.59
Total Net Assets$323,980,210
Outstanding Shares2,469,158
NAV 52-Week High/Low$22.83 / $21.29
Top 10 Holdings (as of 9/30/2021)9
Holding Percent
Barclays PLC, 8.00% 2.48%
AerCap Holdings NV, 5.88%, 10/10/79 2.04%
US Dollars 2.03%
Emera, Inc., 6.75%, 6/15/76 1.94%
Enbridge, Inc., 6.00%, 1/15/77 1.57%
Wells Fargo & Co., 7.50% 1.51%
Credit Suisse Group AG, 7.50% 1.34%
Credit Agricole S.A., 8.13% 1.29%
Societe Generale S.A., 5.38% 1.28%
Lloyds Banking Group PLC, 7.50% 1.16%
To download all holdings, click here.
Industry Breakdown (as of 9/30/2021)9
Industry Percent
Banks 42.64%
Insurance 14.92%
Capital Markets 10.47%
Oil, Gas & Consumable Fuels 7.71%
Electric Utilities 4.25%
Diversified Financial Services 3.75%
Trading Companies & Distributors 3.37%
Food Products 3.34%
Multi-Utilities 2.21%
Real Estate Management & Development 1.32%
Consumer Finance 1.28%
Mortgage Real Estate Investment Trusts (REITs) 0.81%
Real Estate Investment Trusts (REITs) 0.81%
Transportation Infrastructure 0.81%
Energy Equipment & Services 0.55%
Gas Utilities 0.52%
Wireless Telecommunication Services 0.46%
Independent Power and Renewable Electricity Producers 0.42%
Diversified Telecommunication Services 0.36%
Security Type Breakdown (as of 9/30/2021)9
Security Percent
Fixed-to-Floating Rate and Fixed-to-Variable Rate Securities 79.10%
Fixed Rate Securities 17.27%
Floating Rate Securities 3.32%
Step-up Rate Securities 0.31%
Fund Characteristics (as of 9/30/2021)
Weighted Average Effective Duration63.98 Years
% Institutional Securities (e.g. $1000 par)782.08%
% Retail Securities (e.g. $25 par)817.92%
Weighted Average % of Par11108.44%
NAV History (Since Inception)
Past performance is not indicative of future results.
Distribution Information
Dividend FrequencyMonthly
Dividend per Share Amt (as of 10/26/2021)2$0.0753
30-Day SEC Yield (as of 9/30/2021)33.13%
Unsubsidized 30-Day SEC Yield (as of 9/30/2021)43.13%
Distribution Rate (as of 9/30/2021)54.51%
Credit Quality Breakdown (as of 9/30/2021)9
  Credit Quality Percent
A 0.72%
A- 0.39%
BBB+ 10.25%
BBB 23.11%
BBB- 26.81%
BB+ 22.67%
BB 9.24%
BB- 1.79%
B+ 1.20%
B 0.94%
NR 2.88%
The credit quality and ratings information presented above reflect the ratings assigned by one or more nationally recognized statistical rating organizations (NRSROs), including Standard & Poor's Rating Group, a division of the McGraw Hill Companies, Inc., Moody's Investors Service, Inc., Fitch Ratings, or a comparably rated NRSRO. For situations in which a security is rated by more than one NRSRO and the ratings are not equivalent, the highest ratings are 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.
Country Breakdown (as of 9/30/2021)9
Country Percent
United States 52.30%
United Kingdom 9.09%
Canada 7.23%
France 6.78%
Switzerland 4.60%
Bermuda 4.59%
Netherlands 3.51%
Australia 2.65%
Italy 2.22%
Spain 2.04%
Mexico 1.18%
Finland 1.00%
Denmark 0.99%
Japan 0.83%
Germany 0.42%
Sweden 0.34%
Chile 0.23%
Month End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Without Sales Charge 1.00% 4.76% 11.84% 7.56% 6.32% 6.85% 6.60%
With Sales Charge -3.55% 0.05% 6.80% 5.92% 5.34% 6.36% 6.14%
Index Performance **
ICE BofA US Investment Grade Institutional Capital Securities Index 0.95% 3.02% 7.65% 8.28% 6.33% N/A N/A
Blended Benchmark 0.48% 3.61% 9.04% 8.30% 6.89% N/A N/A
ICE BofA Fixed Rate Preferred Securities Index 0.22% 2.21% 6.86% 7.09% 5.54% 6.79% 6.44%
Prior Blended Benchmark 0.59% 2.42% 6.78% 7.88% 5.94% 7.27% 6.62%
Quarter End Performance (as of 9/30/2021)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception10
Fund Performance *
Without Sales Charge 1.00% 4.76% 11.84% 7.56% 6.32% 6.85% 6.60%
With Sales Charge -3.55% 0.05% 6.80% 5.92% 5.34% 6.36% 6.14%
Index Performance **
ICE BofA US Investment Grade Institutional Capital Securities Index 0.95% 3.02% 7.65% 8.28% 6.33% N/A N/A
Blended Benchmark 0.48% 3.61% 9.04% 8.30% 6.89% N/A N/A
ICE BofA Fixed Rate Preferred Securities Index 0.22% 2.21% 6.86% 7.09% 5.54% 6.79% 6.44%
Prior Blended Benchmark 0.59% 2.42% 6.78% 7.88% 5.94% 7.27% 6.62%

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

**Index performance information is for illustrative purposes only. Indexes do not charge management fees or brokerage expenses and no such fees or expenses were deducted from the performance shown. All Index returns assume that dividends are reinvested when they are received. Indexes are unmanaged and an investor cannot invest directly in an index.

ICE BofA US Investment Grade Institutional Capital Securities Index - The Index tracks the performance of US dollar denominated investment grade hybrid capital corporate and preferred securities publicly issued in the US domestic market.

Blended Benchmark - The Benchmark consists of a 30/30/30/10 blend of the ICE BofA Core Plus Fixed Rate Preferred Securities Index, the ICE BofA US Investment Grade Institutional Capital Securities Index, the ICE USD Contingent Capital Index and the ICE BofA US High Yield Institutional Capital Securities Index. The Blended Benchmark is intended to reflect the proportional market cap of each segment of the preferred and hybrid securities market. The Blended Benchmark returns are calculated by using the monthly returns of the four indices during each period shown above. At the beginning of each month the four indices are rebalanced to a 30/30/30/10 ratio to account for divergence from that ratio that occurred during the course of each month. The monthly returns are then compounded for each period shown above, giving the performance for the Blended Index for each period shown above. On July 6, 2021, the Fund's benchmark changed from the Prior Blended Benchmark to the Blended Benchmark, because the Advisor believes that the Blended Benchmark better reflects the investment strategies of the Fund.

ICE BofA Core Plus Fixed Rate Preferred Securities Index - The Index tracks the performance of fixed rate US dollar denominated preferred securities issued in the US domestic market.

ICE USD Contingent Capital Index - The Index tracks the performance of investment grade and below investment grade contingent capital debt publicly issued in the major domestic and eurobond markets.

ICE BofA US High Yield Institutional Capital Securities Index - The Index tracks the performance of US dollar denominated sub-investment grade hybrid capital corporate and preferred securities publicly issued in the US domestic market.

ICE BofA Fixed Rate Preferred Securities Index - The Index tracks the performance of fixed rate US dollar denominated preferred securities issued in the US domestic market.

Prior Blended Benchmark - The Benchmark consists of a 50/50 blend of the ICE BofA Fixed Rate Preferred Securities Index and the ICE BofA U.S. Capital Securities Index. The Prior Blended Benchmark returns are calculated by using the monthly return of the two indices during each period shown above. At the beginning of each month the two indices are rebalanced to a 50-50 ratio to account for divergence from that ratio that occurred during the course of each month. The monthly returns are then compounded for each period shown above, giving the performance for the Prior Blended Benchmark for each period shown above.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares .
2 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.
3 The 30-day SEC yield is calculated by dividing the net investment income per share earned during the most recent 30-day period by the maximum offering price per share on the last day of the period and includes the effects of fee waivers and expense reimbursements, if applicable.
4 The unsubsidized 30-day SEC yield is calculated the same as the 30-day SEC yield, however it excludes contractual fee waivers and expense reimbursements.
5 Distribution Rate is calculated by dividing the fund's most recent ordinary distribution paid or declared, on an annualized basis, by the NAV price. Distribution rates may vary.
6 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.
7 Institutional Securities are predominantly $1000 par securities and only trade over-the-counter.
8 Retail Securities are predominantly $25 par securities but also include exchange-traded $20, $50, and $100 par securities.
9 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-PORT Part F) that are based on trade date recording of security transactions. Holdings are subject to change.
10 Inception Date is 2/25/2011
11 The weighted average % of par reflects the average price of the fixed income securities within the portfolio as a % of the underlying face value. This is calculated as a weighted average using the market values of each security within the portfolio. A value above 100 indicates that the underlying securities are trading at a premium, on average, and a value below 100 indicates that the underlying securities are trading at a discount, on average. The face value of a bond is typically $100 or $1000 and the face value of an exchange-traded retail security is typically $25.

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

The Fund is subject to the following risks:

You could lose money by investing in the Fund. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

A mutual fund’s share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost.

The Fund and the Fund’s advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks.

The Fund is subject to certain risks specifically associated with investments in the securities of European issuers. Political or economic disruptions in European countries, even in countries in which the Fund is not invested, may adversely affect security values and thus the Fund’s holdings.

The Fund is subject to call risk, credit risk, income risk, inflation risk, interest rate risk, extension risk, and prepayment risk. Certain securities held by the Fund are subject to call, credit, inflation, income, interest rate, extension, and prepayment risks. These risks could result in a decline in a security’s value and/or income, increased volatility as interest rates rise or fall and an adverse impact on the Fund’s performance.

From time to time, spreads (i.e., the difference in yield between debt securities that have different credit qualities or other differences) may increase, which may reduce the market value of some of the Fund’s debt securities.

Securities with a floating or variable interest rate component can be less sensitive to interest rate changes than securities with fixed interest rates but may decline in value if their interest rates do not rise as much, or as quickly, as interest rates in general. While fixed-to-floating rate securities can be less sensitive to interest rate risk than fixed-rate securities they generally carry lower yields than similar fixed-rate securities.

Claims of holders of hybrid capital securities of an issuer are generally subordinated to those of holders of traditional debt securities in bankruptcy, and thus hybrid capital securities may be more volatile and subject to greater risks than traditional debt securities.

Financial companies are especially subject to the adverse effects of economic recession, currency exchange rates, government regulation, decreases in the availability of capital, volatile interest rates, portfolio concentrations in geographic markets and in commercial and residential real estate loans, and competition from new entrants in their fields of business.

A fund’s shares will change in value, and you could lose money by investing in a fund. One of the principal risks of investing in a fund is market risk. Market risk is the risk that a particular stock owned by a fund, fund shares or stocks in general may fall in value. There can be no assurance that a fund’s investment objective will be achieved. The outbreak of the respiratory disease designated as COVID-19 in December 2019 has caused significant volatility and declines in global financial markets, which have caused losses for investors. While the development of vaccines has slowed the spread of the virus and allowed for the resumption of "reasonably" normal business activity in the United States, many countries continue to impose lockdown measures in an attempt to slow the spread. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease.

The Fund may invest in securities issued by companies concentrated in a particular asset, sector, industry or region which involves additional risks including limited diversification.

An investment in a fund containing securities of non-U.S. issuers is subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.

Actively managed funds are subject to the risk that the advisor or sub-advisor will apply investment techniques that may not have the desired result.

As the use of Internet technology has become more prevalent in the course of business, the Fund has become more susceptible to potential operational risk through breaches in cyber security.

High-yield securities or “junk” bonds are subject to greater market fluctuations and risk of loss than securities with higher ratings, and therefore, are considered to be highly speculative. These securities are issued by companies that may have limited operating history, narrowly focused operations and/or other impediments to the timely payment of periodic interest or principal at maturity.

The Fund may hold certain investments that may be subject to restrictions on resale, trade over-the-counter or in limited volume, or lack an active trading market. The Fund may not be able to sell or close out of such investments at favorable times or prices (or at all). Illiquid securities may trade at a discount than more liquid investments and may be subject to wide fluctuations in market value.

Contingent convertible securities (“CoCos”) may provide for mandatory conversion into common stock of the issuer under certain circumstances. Since the common stock of the issuer may not pay a dividend, investors in these instruments could experience a reduced income rate, potentially to zero, and conversion would deepen the subordination of the investor, hence worsening standing in a bankruptcy.

Preferred securities are typically subordinated to bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments.

Real estate investment trusts (REITs) and other real estate related companies are subject to certain risks, including changes in the real estate market, vacancy rates and competition, volatile interest rates and economic recession.

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. The Fund may be unable to sell a restricted security on short notice or may be able to sell them only at a price below current value.

There is no central place or exchange for trading most debt securities. Debt securities generally trade on an “over-the-counter” market and therefore, the valuation of debt securities may carry more uncertainty and risk than that of publicly traded securities.

Please see the Fund’s prospectus for a complete description of the risks of investing in the Fund.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.