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First Trust High Income Long/Short Fund (FSD)
Investment Objective/Strategy - First Trust High Income Long/Short Fund is a diversified, closed-end management investment company. The Fund's primary investment objective is to provide current income. The Fund has a secondary objective of capital appreciation. The Fund will seek 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. The Fund's investments in 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.
There can be no assurance that the Fund's investment objectives will be achieved.
Fund Overview
Fund TypeHigh Yield Bond
Investment AdvisorFirst Trust Advisors L.P.
Portfolio Manager/Sub-AdvisorMacKay Shields LLC
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 1/23/2018)
Closing NAV1$18.03
Closing Share Price2$16.74
Discount to NAV7.15%
Total Net Assets$539,839,151
Common Shares Outstanding29,947,157
Dividend FrequencyMonthly
Dividend Per Share Amt3$0.1280
Distribution Rate49.18%
Daily Volume108,062
Average 30-Day Daily Volume169,568
Closing Share Price 52-Week High/Low$17.32 / $16.07
Closing NAV 52-Week High/Low$18.34 / $17.70
Expense Ratios (as of 10/31/2017)
Annual ExpensesPercent of
Net Assets
Percent of
Management Fees1.00%1.00%
Other Expenses
Total Operating Expenses1.19%1.19%
Leverage Costs0.67%0.67%
Total Annual Expenses1.86%1.86%
Leverage costs include the interest expense on investments sold short.
Leverage Information7
The Fund currently uses proceeds received from short sales to buy additional assets, thereby leveraging the Fund.
Industry Breakdown (as of 11/30/2017)8
  Industry Percent
Basic Industry 14.11%
Telecommunications 9.30%
Energy 8.31%
Healthcare 7.87%
Capital Goods 7.64%
Services 7.32%
Technology & Electronics 6.71%
Leisure 5.30%
Banking 5.26%
Media 5.25%
Consumer Goods 4.95%
Automotive 4.80%
Financial Services 3.11%
Retail 2.99%
Insurance 2.82%
Transportation 2.42%
Commercial Mortgage-Backed Securities 0.68%
Utility 0.50%
Collateralized Mortgage Obligations 0.32%
Foreign Sovereign 0.25%
Asset Backed 0.09%
Asset Type Breakdown (as of 11/30/2017)8
Asset Percent
Corporate Bonds and Notes 71.93%
Foreign Corporate Bonds and Notes 19.42%
Capital Preferred Securities 6.38%
Mortgage Backed 1.00%
Senior Floating-Rate Loan Interests 0.93%
Foreign Sovereign Bonds and Notes 0.25%
Asset-Backed Securities 0.09%
Share Price and NAV History (Since Inception)
Past performance is not indicative of future results.
% Premium/Discount (Since Inception)
Cumulative Total Returns (as of 12/31/2017)6
Period Share Price NAV
3 Months -0.45% 0.86%
1 Year 11.64% 10.24%
3 Years 31.47% 22.14%
5 Years 34.20% 36.67%
Year to Date 11.64% 10.24%
Inception to Date 47.28% 67.73%
Calendar Year Returns (as of 12/31/2017)6
Period Share Price NAV
2011 -7.84% -3.99%
2012 29.31% 23.89%
2013 2.59% 9.36%
2014 -0.50% 2.33%
2015 -4.59% -5.01%
2016 23.35% 16.56%
2017 11.64% 10.24%
Average Annual Returns (as of 12/31/2017)6
Period Share Price NAV
3 Years 9.55% 6.89%
5 Years 6.06% 6.45%
Inception to Date 5.48% 7.38%
Credit Quality of Fixed-Income Investments (as of 11/30/2017)8
  Credit Quality Percent
BBB- and above 13.49%
BB 53.51%
B 28.17%
CCC+ and below 4.83%
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.
Percentages of credit quality are based on the Fixed-Income Investments Long positions only; Short positions are excluded.
Portfolio Statistics (as of 11/30/2017)8
Avg Position Size as % of Total Investments0.41%
Largest Position as % of Total Investments1.55%
Weighted Average Effective Duration54.77 Years
Weighted Average Effective Maturity6.89 Years
Weighted Average Yield-to-Worst5.71%
Gross Assets104.06%
Net Long Positions84.30%
Short Positions-19.76%
Short Position Exposure - U.S. Treasury Securities90.89%
Short Position Exposure - Corporate Bond Securities9.11%
NOTE: Portfolio Statistics are exclusive of cash and other assets and liabilities.
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 fund invests in non-investment grade debt instruments, commonly referred to as "high-yield securities". High yield securities are subject to greater market fluctuations and risk of loss than securities with higher ratings. Lower-quality debt tends to be less liquid than higher-quality debt.

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.

In times of unusual or adverse market, economic, regulatory or political conditions, the fund may not be able, fully or partially, to implement its short selling strategy. Short selling creates special risks which could result in increased volatility of returns and may result in greater gains or greater losses.

The fund invests in securities of non-U.S. issuers which are subject to higher volatility than securities of U.S. issuers. Because the fund invests in non-U.S. securities, you may lose money if the local currency of a non-U.S. market depreciates against the U.S. dollar.

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
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 and the Internal Revenue Code. First Trust has no knowledge of and has not been provided any information regarding any investor. Financial advisors must determine whether particular investments are appropriate for their clients. First Trust believes the financial advisor is a fiduciary, is capable of evaluating investment risks independently and is responsible for exercising independent judgment with respect to its retirement plan clients.
First Trust Portfolios L.P.  Member SIPC and FINRA.
First Trust Advisors L.P.
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