0001567569 2025-10-30 2026-04-30 0001567569 2026-04-30 0001567569 FPF:ContingentConvertibleSecuritiesRiskMember 2025-10-30 2026-04-30 0001567569 FPF:CreditAgencyRiskMember 2025-10-30 2026-04-30 0001567569 FPF:CreditAndBelowInvestmentGradeSecuritiesRiskMember 2025-10-30 2026-04-30 0001567569 FPF:CurrentMarketConditionsRiskMember 2025-10-30 2026-04-30 0001567569 FPF:CyberSecurityRiskMember 2025-10-30 2026-04-30 0001567569 FPF:EuropeRiskMember 2025-10-30 2026-04-30 0001567569 FPF:IlliquidAndRestrictedSecuritiesRiskMember 2025-10-30 2026-04-30 0001567569 FPF:InflationRiskMember 2025-10-30 2026-04-30 0001567569 FPF:InterestRateAndDurationRiskMember 2025-10-30 2026-04-30 0001567569 FPF:LeverageRiskMember 2025-10-30 2026-04-30 0001567569 FPF:ManagementRiskAndRelianceOnKeyPersonnelMember 2025-10-30 2026-04-30 0001567569 FPF:MarketDiscountFromNetAssetValueMember 2025-10-30 2026-04-30 0001567569 FPF:MarketRiskMember 2025-10-30 2026-04-30 0001567569 FPF:NonUSSecuritiesRiskMember 2025-10-30 2026-04-30 0001567569 FPF:OperationalRiskMember 2025-10-30 2026-04-30 0001567569 FPF:PotentialConflictsOfInterestRiskMember 2025-10-30 2026-04-30 0001567569 FPF:PreferredHybridPreferredAndDebtSecuritiesRiskMember 2025-10-30 2026-04-30 0001567569 FPF:ReverseRepurchaseAgreementsRiskMember 2025-10-30 2026-04-30 0001567569 FPF:RisksOfConcentrationInTheFinancialsSectorMember 2025-10-30 2026-04-30 0001567569 FPF:SmallerCompaniesRiskMember 2025-10-30 2026-04-30 0001567569 FPF:TrustPreferredSecuritiesRiskMember 2025-10-30 2026-04-30 0001567569 FPF:ValuationRiskMember 2025-10-30 2026-04-30 shares iso4217:USD shares pure false N-2 N-CSRS 0001567569 First Trust Intermediate Duration Preferred & Income Fund 2026-04-30 -0.0534 Number of Common Shares outstanding (unlimited number of Common Shares has been authorized) 60847827 19.46 18.42 <span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The primary investment objective is to seek a high level of current income. The Fund has a secondary objective of capital appreciation. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its “Managed Assets” (the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">average daily total asset value of the Fund minus the sum of the Fund’s liabilities other than the principal amount of borrowings or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">reverse repurchase agreements, if any), in preferred securities and other income producing securities issued by U.S. and non-U.S. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">companies, including traditional preferred securities, hybrid preferred securities that have investment and economic characteristics of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">both preferred securities and debt securities, floating rate and fixed-to-floating rate preferred securities, debt securities, convertible </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities and contingent convertible securities. There can be no assurance that the Fund will achieve its investment objectives. The </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Fund seeks to maintain, under normal market conditions, a duration of between three and eight years. The Fund may not be </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">appropriate for all investors.</span> <div id="xdx_80B_ecef--RiskFactorsTableTextBlock_zK347iKIKld" style="margin-top: 15pt"><span style="font: bold 10pt Times New Roman; color: #000000">Principal Risks</span></div> <div style="line-height: 11.5pt; margin-top: 3.5pt; text-align: left"> <div style="margin-top: 3pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The Fund is a closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">assurance that the Fund will achieve its investment objectives. The following discussion summarizes the principal risks associated with </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investing in the Fund, which includes the risk that you could lose some or all of your investment in the Fund.  The Fund is subject to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the informational requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940 and, in accordance </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">therewith, files reports, proxy statements and other information that is available for review.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11.5pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8.5pt; text-align: left"> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--ContingentConvertibleSecuritiesRiskMember_zsvi6zNX3gie" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Contingent Convertible Securities Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Contingent Convertible Securities (“CoCos”) are hybrid securities most commonly issued </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">by banking institutions that present risks similar to debt securities and convertible securities. CoCos are distinct in that they are </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">intended to either convert into equity or have their principal written down upon the occurrence of certain “triggers.” When an issuer’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">capital ratio falls below a specified trigger level, or in a regulator’s discretion depending on the regulator’s judgment about the issuer’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">solvency prospects, a CoCo may be written down, written off or converted into an equity security. Due to the contingent write-down, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">write-off and conversion feature, CoCos may have substantially greater risk than other securities in times of financial stress. If the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">trigger level is breached, the issuer’s decision to write down, write off or convert a CoCo may be outside its control, and the Fund may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">suffer a complete loss on an investment in CoCos with no chance of recovery even if the issuer remains in existence. CoCos are </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">usually issued in the form of subordinated debt instruments to provide the appropriate regulatory capital treatment. If an issuer </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">liquidates, dissolves or winds-up before a conversion to equity has occurred, the rights and claims of the holders of the CoCos (such as </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the Fund) against the issuer generally rank junior to the claims of holders of unsubordinated obligations of the issuer. In addition, if the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">CoCos are converted into the issuer’s underlying equity securities after a conversion event (i.e., a “trigger”), each holder will be further </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">subordinated. CoCos also may have no stated maturity and have fully discretionary coupons. This means coupon payments can be </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">canceled at the issuer’s discretion or at the request of the relevant regulatory authority in order to help the bank absorb losses, without </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">causing a default. In general, the value of CoCos is unpredictable and is influenced by many factors including, without limitation: the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; supply and demand for CoCos; general </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">market conditions and available liquidity; and economic, financial and political events that affect the issuer, its particular market or the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial markets in general.</span></div> <div id="xdx_8A6_zQAYC5qBmLU6"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8.5pt; text-align: left"> <div id="xdx_892_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAgencyRiskMember_zYjAVEe1ZPli" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Credit Agency Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Credit ratings are determined by credit rating agencies and are only the opinions of such entities. Ratings </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">assigned by a rating agency are not absolute standards of credit quality and do not evaluate market risk or the liquidity of securities. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings may adversely affect the credit </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">ratings of securities held by the Fund or such credit rating agency’s ability to evaluate creditworthiness and, as a result, may adversely </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">affect those securities’ perceived or actual credit risk.</span></div> <div id="xdx_8AD_zQdnG7AchR99"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8.5pt; text-align: left"> <div id="xdx_892_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAndBelowInvestmentGradeSecuritiesRiskMember_zLBSXAjxk5Wc" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Credit and Below-Investment Grade Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Credit risk is the risk that the issuer or other obligated party of a debt security </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">in the Fund’s portfolio will fail to pay, or it is perceived that it will fail to pay, dividends or interest and/or repay principal when due. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Below-investment grade instruments, including instruments that are not rated but judged to be of comparable quality, are commonly </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">referred to as high-yield securities or “junk” bonds and are considered speculative with respect to the issuer’s capacity to pay dividends </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">or interest and repay principal and are more susceptible to default or decline in market value than investment grade securities due to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">adverse economic and business developments. High-yield securities are often unsecured and subordinated to other creditors of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">issuer. The market values for high-yield securities tend to be very volatile, and these securities are generally less liquid than investment </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">grade securities. For these reasons, an investment in the Fund is subject to the following specific risks: (i) increased price sensitivity to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changing interest rates and to a deteriorating economic environment; (ii) greater risk of loss due to default or declining credit quality; </span></div> </div> <div style="clear: both"> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> <div> <div><span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_3"></span> <div style="page-break-after: always; position: relative"> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="float: left; margin-left: 36pt; margin-top: 1pt; width: 540pt; min-height: 654pt"> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(iii) adverse company specific events more likely to render the issuer unable to make dividend, interest and/or principal payments; </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(iv) negative perception of the high-yield market which may depress the price and liquidity of high-yield securities; (v) volatility; and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(vi) liquidity.</span></div> <div id="xdx_8A8_zsdvft5WZKI6" style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> <div style="line-height: 11.5pt; margin-top: 8.5pt; text-align: left"> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--CurrentMarketConditionsRiskMember_zmu9uzkz0uu2" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Current Market Conditions Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Current market conditions risk is the risk that a particular investment, or shares of the Fund in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">central banks have raised interest rates; however, the Federal Reserve has begun to lower interest rates and may continue to do so. U.S. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">regulators have proposed several changes to market and issuer regulations which would directly impact the Fund, and any regulatory </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changes could adversely impact the Fund’s ability to achieve its investment strategies or make certain investments. Potential future </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Additionally, challenges in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">commercial real estate markets, including high interest rates, declining valuations and elevated vacancies, could have a broader impact </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">on financial markets. The ongoing adversarial political climate in the United States, as well as political and diplomatic events both </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">domestic and abroad, have and may continue to have an adverse impact the U.S. regulatory landscape, markets and investor behavior, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">which could have a negative impact on the Fund’s investments and operations. The change in administration resulting from the 2024 </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">United States national elections could result in significant impacts to international trade relations, tax and immigration policies, and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">other aspects of the national and international political and financial landscape, which could affect, among other things, inflation and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the securities markets generally. Other unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investor and consumer confidence and may adversely impact financial markets and the broader economy. For example, ongoing armed </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">conflicts between Russia and Ukraine in Europe and among the United States, Israel, Iran, Hamas, Hezbollah and other militant </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Russia, Europe, and the Middle East, United States, and other nations. Such events may also disrupt global trade and supply chains, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">increase sanctions and other governmental actions, and contribute to volatility in oil and natural gas. The hostilities and sanctions </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">resulting from those hostilities have and could continue to have a significant impact on certain Fund investments as well as Fund </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">performance and liquidity. The economies of the United States and its trading partners, as well as the financial markets generally, may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">be adversely impacted by trade disputes, including the imposition of tariffs, and other matters. For example, the United States has </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">imposed trade barriers and restrictions on China. In addition, the Chinese government is engaged in a longstanding dispute with </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Taiwan, continually threatening an invasion. If the political climate between the United States and China does not improve or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">continues to deteriorate, if China were to attempt invading Taiwan, or if other geopolitical conflicts develop or worsen, economies, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">markets and individual securities may be adversely affected, and the value of the Fund’s assets may go down. A public health crisis and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the ensuing policies enacted by governments and central banks may cause significant volatility and uncertainty in global financial </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">markets, negatively impacting global growth prospects. As the COVID-19 global pandemic illustrated, such events may affect certain </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">geographic regions, countries, sectors and industries more significantly than others. Advancements in technology may also adversely </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">impact markets and the overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">development and increased regulation of artificial intelligence. Additionally, cyber security breaches of both government and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">non-government entities could have negative impacts on infrastructure and the ability of such entities, including the Fund, to operate </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">properly. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s portfolio investments </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">and could result in disruptions in the trading markets.</span></div> <div id="xdx_8A6_zkUIFoMvBPG"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8.5pt; text-align: left"> <div id="xdx_89D_ecef--RiskTextBlock_hcef--RiskAxis__custom--CyberSecurityRiskMember_z9rl7n2rFJA4" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Cyber Security Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> The Fund is susceptible to operational, information security and related risks through breaches in cyber security. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">suffer data corruption or lose operational capacity, any of which could result in a material adverse effect on the Fund or its </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">shareholders. Such events could cause the Fund to incur regulatory penalties, reputational damage, additional compliance costs </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized access to the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">digital information systems through “hacking” or malicious software coding, but may also result from outside attacks such as </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">denial-of-service attacks through efforts to make network services unavailable to intended users. Emerging threats like ransomware or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">zero-day exploits could also cause disruptions to Fund operations. In addition, cyber security breaches of the issuers of securities in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">which the Fund invests or the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or Sub-Advisor, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">as applicable, among many other third-party service providers, can also subject the Fund to many of the same risks associated with </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">direct cyber security breaches. Further, errors, misconduct, or compromise of accounts of employees of the Fund or its third-party </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">service providers can also create material cybersecurity risks. Although the Fund has established risk management systems designed to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">reduce the risks associated with cyber security, there is no guarantee that such efforts will succeed, especially because the Fund does </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">not directly control the cyber security systems of issuers or third party service providers. Cyber security incidents may also trigger </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Fund obligations under data privacy laws, potentially increasing notification and compliance burdens. Cyber security incidents </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">affecting issuers in whose securities the Fund invests may also have a negative impact on the value of the securities of such issuers, and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">in turn, the value of the Fund.</span></div> </div> </div> <div style="clear: both"> </div> </div> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> </div> <div> <div><span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_4"></span> <div style="page-break-after: always; position: relative"> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="float: left; margin-left: 36pt; margin-top: 1pt; width: 540pt; min-height: 654pt"> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Artificial intelligence (“AI”) and machine learning technologies used by the Fund, the Advisor or third-party service providers may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">allow the unintended introduction of vulnerabilities into infrastructures and applications, which could exacerbate these risks or result </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">in cyber incidents that implicate personal data. The Fund and its shareholders could be negatively impacted as a result of these cyber </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">risks associated with AI technologies. Substantial costs may be incurred by the Fund in order to resolve or prevent cyber incidents in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the future.</span></div> <div id="xdx_8A5_z7DAcx1L7tNl" style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--EuropeRiskMember_z8gyqQ2AScZg" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Europe Risk. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The Fund is subject to certain risks specifically associated with investments in the securities of European issuers. The </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">economies and markets of European countries are often closely connected and interdependent, and political or economic disruptions in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">European countries, even in countries in which the Fund is not invested, may adversely affect security values and thus the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">holdings. A significant number of countries in Europe are member states in the European Union (the “EU”), and the member states no </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">longer control their own monetary policies by directing independent interest rates for their currencies. In these member states, the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">authority to direct monetary policies, including money supply and official interest rates for the Euro, is exercised by the European </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Central Bank. Decreasing imports or exports, changes in governmental or EU regulations on trade, changes in the exchange rate of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">euro, the default or threat of default by an EU member country on its sovereign debt and/or an economic recession in an EU member </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">country may have significant adverse effects on the economies of EU member countries and the EU and Europe as a whole. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Separately, the EU faces issues involving its membership, structure, procedures and policies. The exit of one or more member </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">countries from the EU, such as the departure of the United Kingdom referred to as “Brexit”, could place the departing member’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">currency and banking system under severe stress or even in jeopardy. An exit by other member countries will likely result in increased </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">volatility, illiquidity and potentially lower economic growth in the affected markets, which may adversely affect the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investments.</span></div> <div id="xdx_8AA_z7cf0Te1V0ig"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--IlliquidAndRestrictedSecuritiesRiskMember_zqk4K9Ygwhb7" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Illiquid and Restricted Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The Fund may invest in securities that are restricted and/or illiquid. Restricted securities are </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">restriction that prohibits or limits their resale.  Restricted securities may be illiquid as they generally are not listed on an exchange and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may have no active trading market. Investments in restricted securities could have the effect of increasing the amount of the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase these securities. Illiquid and restricted </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities may be difficult to dispose of at a fair price at the times when the Fund believes it is desirable to do so. The market price of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">illiquid and restricted securities generally is more volatile than that of more liquid securities, which may adversely affect the price that </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the Fund pays for or recovers upon the sale of such securities. Illiquid and restricted securities are also more difficult to value, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">especially in challenging markets.</span></div> <div id="xdx_8A7_zjEobZzmBc4k"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89B_ecef--RiskTextBlock_hcef--RiskAxis__custom--InflationRiskMember_zMJwBRylOzne" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Inflation Risk. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The Fund invests in securities that are subject to inflation risk.  Inflation risk is the risk that the value of assets or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">income from investments will be worth less in the future as inflation decreases the value of money.  As inflation increases, the present </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect to debt securities. Inflation rates may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">change frequently and drastically as a result of various factors, including unexpected shifts in the domestic or global economy, and the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Fund’s investments may not keep pace with inflation, which may result in losses to Fund investors.</span></div> <div id="xdx_8A5_zehmievymEVj"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_896_ecef--RiskTextBlock_hcef--RiskAxis__custom--InterestRateAndDurationRiskMember_z1PJKDwiSkKg" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Interest Rate and Duration Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Interest rate risk is the risk that securities will decline in value because of changes in market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interest rates.  For fixed rate securities, when market interest rates rise, the market value of such securities generally will fall.  </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Investments in fixed rate securities with long-term maturities may experience significant price declines if long-term interest rates </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">increase.  During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">expected prepayments.  This may lock in a below-market yield, increase the security’s duration and further reduce the value of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">security.  Fixed rate securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">volatile than securities with shorter durations.  The duration of a security will be expected to change over time with changes in market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">factors and time to maturity.  Although the Fund seeks to maintain a duration, under normal market circumstances, excluding the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">effects of leverage, of between three and eight years, if the effect of the Fund’s use of leverage was included in calculating duration, it </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">could result in a longer duration for the Fund. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11.5pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div style="margin-top: 8pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The interest rates payable on floating rate securities are not fixed and may fluctuate based upon changes in market rates.  As short-term </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interest rates decline, interest payable on floating rate securities typically decreases.  Alternatively, during periods of rising interest </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rates, interest payable on floating rate securities typically increases.  Changes in interest rates on floating rate securities may lag behind </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changes in market rates or may have limits on the maximum increases in interest rates.  The value of floating rate securities may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">decline if their interest rates do not rise as much, or as quickly, as interest rates in general.</span></div> <div id="xdx_8A2_zohwoL9cZtt2"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11.5pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_894_ecef--RiskTextBlock_hcef--RiskAxis__custom--LeverageRiskMember_zQbj9GCrSmsg" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Leverage Risk. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The use of leverage by the Fund can magnify the effect of any losses. If the income and gains from the securities and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investments purchased with leverage proceeds do not cover the cost of leverage, the return to the common shares will be less than if </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">leverage had not been used. Leverage involves risks and special considerations for common shareholders including: (i) the likelihood </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">of greater volatility of net asset value and market price of the common shares than a comparable portfolio without leverage; (ii) the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">risk that fluctuations in interest rates on borrowings will reduce the return to the common shareholders or will result in fluctuations in </span></div> </div> </div> <div style="clear: both"> </div> </div> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> </div> <div> <div><span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_5"></span> <div style="page-break-after: always; position: relative"> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="float: left; margin-left: 36pt; margin-top: 1pt; width: 540pt; min-height: 654pt"> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the dividends paid on the common shares; (iii) in a declining market, the use of leverage is likely to cause a greater decline in the net </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the market price of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">common shares; and (iv) when the Fund uses certain types of leverage, the investment advisory fee payable to the Advisor and by the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.</span></div> <div id="xdx_8A3_z74vK9mkC1Ac" style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--ManagementRiskAndRelianceOnKeyPersonnelMember_zkkqPu81YtZ" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Management Risk and Reliance on Key Personnel</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The implementation of the Fund’s investment strategy depends upon the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and experience </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team could </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">have a negative impact on the Fund.</span></div> <div id="xdx_8A2_zZ0xXtmrivG7"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketDiscountFromNetAssetValueMember_zJxw4YkNmKld" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Market Discount from Net Asset Value</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Shares of closed-end investment companies such as the Fund frequently trade at a discount </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset value.</span></div> <div id="xdx_8A8_zrDrM7814nF5"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketRiskMember_znJ334G9sFDb" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Market Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Investments held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations caused by real or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">perceived adverse economic, political, and regulatory factors or market developments, changes in interest rates and perceived trends in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities prices. Shares of the Fund could decline in value or underperform other investments. In addition, local, regional or global </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">events such as war, acts of terrorism, market manipulation, government defaults, government shutdowns, regulatory actions, political </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changes, diplomatic developments, the imposition of sanctions and other similar measures, spread of infectious diseases or other </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">public health issues, recessions, natural disasters, or other events could have a significant negative impact on the Fund and its </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investments. Any of such circumstances could have a materially negative impact on the value of the Fund’s shares, the liquidity of an </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investment, and may result in increased market volatility. During any such events, the Fund’s shares may trade at increased premiums </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">or discounts to their net asset value, the bid/ask spread on the Fund’s shares may widen and the returns on investment may fluctuate.</span></div> <div id="xdx_8A3_zegkFdDyZnjl"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_895_ecef--RiskTextBlock_hcef--RiskAxis__custom--NonUSSecuritiesRiskMember_z1K0XC4362Vj" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Non-U.S. Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Investing in securities of non-U.S. issuers, which are generally denominated in non-U.S. currencies, may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">involve certain risks not typically associated with investing in securities of U.S. issuers. These risks include: (i) there may be less </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">publicly available information about non-U.S. issuers or markets due to less rigorous disclosure or accounting standards or regulatory </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">practices; (ii) non-U.S. markets may be smaller, less liquid and more volatile than the U.S. market; (iii) potential adverse effects of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">fluctuations in currency exchange rates or controls on the value of the Fund’s investments; (iv) the economies of non-U.S. countries </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may grow at slower rates than expected or may experience a downturn or recession; (v) the impact of economic, political, social or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">diplomatic events; (vi) certain non-U.S. countries may impose restrictions on the ability of non-U.S. issuers to make payments of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">principal and interest to investors located in the United States due to blockage of non-U.S. currency exchanges or otherwise; and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(vii) withholding and other non-U.S. taxes may decrease the Fund’s return. Foreign companies are generally not subject to the same </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">accounting, auditing and financial reporting standards as are U.S. companies. In addition, there may be difficulty in obtaining or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">enforcing a court judgment abroad. These risks may be more pronounced to the extent that the Fund invests a significant amount of its </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">assets in companies located in one region or in emerging markets.</span></div> <div id="xdx_8AA_z87KrrYdilr3"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_891_ecef--RiskTextBlock_hcef--RiskAxis__custom--OperationalRiskMember_zQg2OewqlMve" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Operational Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> The Fund is subject to risks arising from various operational factors, including, but not limited to, human error, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties, failed or inadequate </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">processes and technology or systems failures. These errors or failures may adversely affect the Fund’s operations, including its ability </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">to execute its investment process or calculate or disseminate its NAV in a timely manner. The Fund relies on third-parties for a range of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">services, including custody, valuation, and administration, among many others. Any delay or failure relating to engaging or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">maintaining such service providers may affect the Fund’s ability to meet its investment objective. Although the Fund and the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investment advisor seek to reduce these operational risks through controls and procedures, there is no way to completely protect </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">against such risks.</span></div> <div id="xdx_8AF_z4als39PVsY3"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11.5pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89D_ecef--RiskTextBlock_hcef--RiskAxis__custom--PotentialConflictsOfInterestRiskMember_z8cWhiyoLQGe" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Potential Conflicts of Interest Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. First Trust, Stonebridge and the portfolio managers have interests which may conflict with the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interests of the Fund. In particular, First Trust and Stonebridge currently manage and may in the future manage and/or advise other </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investment funds or accounts with the same or substantially similar investment objective and strategies as the Fund. In addition, while </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the Fund is using leverage, the amount of the fees paid to First Trust (and by First Trust to Stonebridge) for investment advisory and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">management services are higher than if the Fund did not use leverage because the fees paid are calculated based on managed assets. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Therefore, First Trust and Stonebridge have a financial incentive to leverage the Fund.</span></div> <div id="xdx_8AF_zstRLaBwJ2Ma"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--PreferredHybridPreferredAndDebtSecuritiesRiskMember_zTCfbpWY5eKj" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Preferred/Hybrid Preferred and Debt Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  An investment in preferred/hybrid preferred and debt securities is subject to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">certain risks, including:</span></div> </div> <div> <div style="clear: both; margin-top: 3pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Issuer Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. The value of these securities may decline for a number of reasons which directly relate to the issuer, such as </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">management performance, leverage and reduced demand for the issuer’s goods and services. Additionally, an issuer may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">default on its obligation to make distributions or repay principal.</span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Interest Rate Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Interest rate risk is the risk that fixed rate securities will decline in value because of changes in market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interest rates. When market interest rates rise, the market value of fixed rate securities generally will fall. Market value </span></div> </div> <div style="clear: both; position: relative"> </div> </div> </div> <div style="clear: both"> </div> </div> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> </div> <div> <div><span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_6"></span> <div style="page-break-after: always; position: relative"> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="float: left; margin-left: 36pt; margin-top: 1pt; width: 540pt; min-height: 654pt"> <div style="line-height: 11pt; margin-left: 36pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">generally falls further for fixed rate securities with longer duration. During periods of rising interest rates, the average life of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">certain types of securities may be extended because of slower than expected prepayments. This may lock in a below-market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">yield, increase the security’s duration and further reduce the value of the security. Investments in fixed rate securities with </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">long-term maturities may experience significant price declines if long-term interest rates increase.</span></div> <div> <div style="clear: both; margin-top: 3.5pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Floating Rate and Fixed-to-Floating Rate Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The market value of floating rate and fixed-to-floating rate securities may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rise in interest rates and the interest rate reset. Securities with a floating or variable interest rate component can be less </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">sensitive to interest rate changes than securities with fixed interest rates. A secondary risk associated with declining interest </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rates is the risk that income earned by the Fund on floating rate and fixed-to-floating rate securities may decline due to lower </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">coupon payments on floating rate securities.</span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3.5pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Prepayment Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Prepayment risk is the risk that the issuer of a debt security will repay principal prior to the scheduled </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">maturity date. During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">earlier than scheduled, forcing the Fund to reinvest the proceeds from such prepayment in lower yielding securities, which </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may result in a decline in the Fund’s income and distributions to common shareholders.</span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3.5pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Reinvestment Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the Fund invests the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">proceeds from matured, traded or called securities at market interest rates that are below the Fund portfolio’s current earnings </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rate.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11pt"> </span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Subordination Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Preferred securities are typically subordinated to bonds and other debt instruments in a company’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">capital structure, in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">credit risk than those debt instruments.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11pt"> </span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div style="margin-top: 8pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">In addition, preferred and hybrid preferred securities are subject to certain other risks, including deferral and omission risk, limited </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">voting rights risk and special redemption rights risk.</span></div> <div id="xdx_8A2_z5C9cWqPXAGl"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--ReverseRepurchaseAgreementsRiskMember_zQJtKzoGjNAj" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Reverse Repurchase Agreements Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. The Fund’s use of reverse repurchase agreements may involve leverage risk. There is also the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">risk that the market value of the securities acquired with the proceeds of the reverse repurchase agreement may decline below the price </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">of the securities that the Fund has sold but remains obligated to repurchase. In addition, there is a risk that the market value of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities retained by the Fund may decline. Reverse repurchase agreements also involve the risk that the purchaser fails to return the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities as agreed upon, files for bankruptcy or becomes insolvent. The Fund may be restricted from taking normal portfolio actions </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">during such time, could be subject to loss to the extent that the proceeds of the agreement are less than the value of securities subject </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">to the agreement and may experience adverse tax consequences.</span></div> <div id="xdx_8A0_zzHju38b0HUg"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--RisksOfConcentrationInTheFinancialsSectorMember_z66r3EwTQG8c" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Risks of Concentration in the Financials Sector</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Because the Fund invests 25% or more of its managed assets in the financials </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">sector, it will be more susceptible to adverse economic or regulatory occurrences affecting this sector, such as changes in interest rates, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">loan concentration and competition. The Fund may emphasize its investments in certain industries such as the banking and insurance </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">industries and therefore may make the Fund more economically vulnerable in the event of a downturn in those industries. Financial </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">companies are subject to extensive governmental regulation and intervention, which may adversely affect the scope of their activities, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the prices they can charge, the amount and types of capital they must maintain and, potentially, their size. Governmental regulation </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may change frequently and may have significant adverse consequences for financial companies, including effects not intended by such </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">regulation. The impact of more stringent capital requirements, or recent or future regulation in various countries, on any individual </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial company or on financial companies as a whole cannot be predicted. Certain risks may impact the value of investments in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial companies more severely than those of investments in other issuers, including the risks associated with companies that </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">operate with substantial financial leverage. Financial companies may also be adversely affected by volatility in interest rates, loan </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">losses and other customer defaults, decreases in the availability of money or asset valuations, credit rating downgrades and adverse </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">conditions in other related markets. Insurance companies in particular may be subject to severe price competition and/or rate </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">regulation, which may have an adverse impact on their profitability. Financial companies are also a target for cyber attacks and may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">experience technology malfunctions and disruptions as a result.</span></div> <div id="xdx_8A4_z08ypM0UF32h"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--SmallerCompaniesRiskMember_zB9xkoUscWhi" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Smaller Companies Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Small and/or mid capitalization companies may be more vulnerable to adverse general market or economic </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">developments, and their securities may be less liquid and may experience greater price volatility than larger, more established </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">companies as a result of several factors, including limited trading volumes, fewer products or financial resources, management </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market risk than </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">larger, more established companies.</span></div> <div id="xdx_8A4_zdGxDWHw5PD4"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> </div> <div style="line-height: 11.5pt; margin-top: 8pt; text-align: left"> <div id="xdx_895_ecef--RiskTextBlock_hcef--RiskAxis__custom--TrustPreferredSecuritiesRiskMember_zSr7xMPP19kb" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Trust Preferred Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The risks associated with trust preferred securities typically include the financial condition of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial institution that creates the trust, as the trust typically has no business operations other than holding the subordinated debt </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">issued by the financial institution and issuing the trust preferred securities and common stock backed by the subordinated debt. If a </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial institution is financially unsound and defaults on interest payments to the trust, the trust will not be able to make payments to </span></div> </div> </div> <div style="clear: both"> </div> </div> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> </div> <span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_7"></span> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">holders of the trust preferred securities such as the Fund. The issuer of trust preferred securities is generally able to defer or skip </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">payments for up to five years without being in default and certain enhanced trust preferred securities may have longer interest payment </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">deferral periods.</span></div> <div id="xdx_8A7_zcXyucxEinRh" style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> </span></div> <div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--ValuationRiskMember_zrQtTCi15JNk" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Valuation Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Unlike publicly traded common stock which trades on national exchanges, there is no central place or exchange for </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">certain preferred securities and debt securities trading. Preferred securities and debt securities generally trade on an “over-the- </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">counter” market which may be anywhere in the world where the buyer and seller can settle on a price. Due to the lack of centralized </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">information and trading, the valuation of certain preferred securities and debt securities may carry more risk than that of common </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">stock. Uncertainties in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">valuation models and processes may lead to inaccurate asset pricing.</span><span style="color: #000000; font-family: Times New Roman; font-size: 1pt"> </span></div> <div id="xdx_8AF_zzLiYlEoOLP6"> </div> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--ContingentConvertibleSecuritiesRiskMember_zsvi6zNX3gie" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Contingent Convertible Securities Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Contingent Convertible Securities (“CoCos”) are hybrid securities most commonly issued </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">by banking institutions that present risks similar to debt securities and convertible securities. CoCos are distinct in that they are </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">intended to either convert into equity or have their principal written down upon the occurrence of certain “triggers.” When an issuer’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">capital ratio falls below a specified trigger level, or in a regulator’s discretion depending on the regulator’s judgment about the issuer’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">solvency prospects, a CoCo may be written down, written off or converted into an equity security. Due to the contingent write-down, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">write-off and conversion feature, CoCos may have substantially greater risk than other securities in times of financial stress. If the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">trigger level is breached, the issuer’s decision to write down, write off or convert a CoCo may be outside its control, and the Fund may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">suffer a complete loss on an investment in CoCos with no chance of recovery even if the issuer remains in existence. CoCos are </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">usually issued in the form of subordinated debt instruments to provide the appropriate regulatory capital treatment. If an issuer </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">liquidates, dissolves or winds-up before a conversion to equity has occurred, the rights and claims of the holders of the CoCos (such as </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the Fund) against the issuer generally rank junior to the claims of holders of unsubordinated obligations of the issuer. In addition, if the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">CoCos are converted into the issuer’s underlying equity securities after a conversion event (i.e., a “trigger”), each holder will be further </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">subordinated. CoCos also may have no stated maturity and have fully discretionary coupons. This means coupon payments can be </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">canceled at the issuer’s discretion or at the request of the relevant regulatory authority in order to help the bank absorb losses, without </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">causing a default. In general, the value of CoCos is unpredictable and is influenced by many factors including, without limitation: the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; supply and demand for CoCos; general </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">market conditions and available liquidity; and economic, financial and political events that affect the issuer, its particular market or the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial markets in general.</span></div> <div id="xdx_892_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAgencyRiskMember_zYjAVEe1ZPli" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Credit Agency Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Credit ratings are determined by credit rating agencies and are only the opinions of such entities. Ratings </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">assigned by a rating agency are not absolute standards of credit quality and do not evaluate market risk or the liquidity of securities. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings may adversely affect the credit </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">ratings of securities held by the Fund or such credit rating agency’s ability to evaluate creditworthiness and, as a result, may adversely </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">affect those securities’ perceived or actual credit risk.</span></div> <div id="xdx_892_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAndBelowInvestmentGradeSecuritiesRiskMember_zLBSXAjxk5Wc" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Credit and Below-Investment Grade Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Credit risk is the risk that the issuer or other obligated party of a debt security </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">in the Fund’s portfolio will fail to pay, or it is perceived that it will fail to pay, dividends or interest and/or repay principal when due. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Below-investment grade instruments, including instruments that are not rated but judged to be of comparable quality, are commonly </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">referred to as high-yield securities or “junk” bonds and are considered speculative with respect to the issuer’s capacity to pay dividends </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">or interest and repay principal and are more susceptible to default or decline in market value than investment grade securities due to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">adverse economic and business developments. High-yield securities are often unsecured and subordinated to other creditors of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">issuer. The market values for high-yield securities tend to be very volatile, and these securities are generally less liquid than investment </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">grade securities. For these reasons, an investment in the Fund is subject to the following specific risks: (i) increased price sensitivity to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changing interest rates and to a deteriorating economic environment; (ii) greater risk of loss due to default or declining credit quality; </span></div> <div style="clear: both"> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> <span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_3"></span> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(iii) adverse company specific events more likely to render the issuer unable to make dividend, interest and/or principal payments; </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(iv) negative perception of the high-yield market which may depress the price and liquidity of high-yield securities; (v) volatility; and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(vi) liquidity.</span></div> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--CurrentMarketConditionsRiskMember_zmu9uzkz0uu2" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Current Market Conditions Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Current market conditions risk is the risk that a particular investment, or shares of the Fund in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">central banks have raised interest rates; however, the Federal Reserve has begun to lower interest rates and may continue to do so. U.S. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">regulators have proposed several changes to market and issuer regulations which would directly impact the Fund, and any regulatory </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changes could adversely impact the Fund’s ability to achieve its investment strategies or make certain investments. Potential future </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Additionally, challenges in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">commercial real estate markets, including high interest rates, declining valuations and elevated vacancies, could have a broader impact </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">on financial markets. The ongoing adversarial political climate in the United States, as well as political and diplomatic events both </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">domestic and abroad, have and may continue to have an adverse impact the U.S. regulatory landscape, markets and investor behavior, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">which could have a negative impact on the Fund’s investments and operations. The change in administration resulting from the 2024 </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">United States national elections could result in significant impacts to international trade relations, tax and immigration policies, and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">other aspects of the national and international political and financial landscape, which could affect, among other things, inflation and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the securities markets generally. Other unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investor and consumer confidence and may adversely impact financial markets and the broader economy. For example, ongoing armed </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">conflicts between Russia and Ukraine in Europe and among the United States, Israel, Iran, Hamas, Hezbollah and other militant </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Russia, Europe, and the Middle East, United States, and other nations. Such events may also disrupt global trade and supply chains, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">increase sanctions and other governmental actions, and contribute to volatility in oil and natural gas. The hostilities and sanctions </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">resulting from those hostilities have and could continue to have a significant impact on certain Fund investments as well as Fund </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">performance and liquidity. The economies of the United States and its trading partners, as well as the financial markets generally, may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">be adversely impacted by trade disputes, including the imposition of tariffs, and other matters. For example, the United States has </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">imposed trade barriers and restrictions on China. In addition, the Chinese government is engaged in a longstanding dispute with </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Taiwan, continually threatening an invasion. If the political climate between the United States and China does not improve or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">continues to deteriorate, if China were to attempt invading Taiwan, or if other geopolitical conflicts develop or worsen, economies, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">markets and individual securities may be adversely affected, and the value of the Fund’s assets may go down. A public health crisis and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the ensuing policies enacted by governments and central banks may cause significant volatility and uncertainty in global financial </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">markets, negatively impacting global growth prospects. As the COVID-19 global pandemic illustrated, such events may affect certain </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">geographic regions, countries, sectors and industries more significantly than others. Advancements in technology may also adversely </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">impact markets and the overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">development and increased regulation of artificial intelligence. Additionally, cyber security breaches of both government and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">non-government entities could have negative impacts on infrastructure and the ability of such entities, including the Fund, to operate </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">properly. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s portfolio investments </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">and could result in disruptions in the trading markets.</span></div> <div id="xdx_89D_ecef--RiskTextBlock_hcef--RiskAxis__custom--CyberSecurityRiskMember_z9rl7n2rFJA4" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Cyber Security Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> The Fund is susceptible to operational, information security and related risks through breaches in cyber security. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">suffer data corruption or lose operational capacity, any of which could result in a material adverse effect on the Fund or its </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">shareholders. Such events could cause the Fund to incur regulatory penalties, reputational damage, additional compliance costs </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized access to the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">digital information systems through “hacking” or malicious software coding, but may also result from outside attacks such as </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">denial-of-service attacks through efforts to make network services unavailable to intended users. Emerging threats like ransomware or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">zero-day exploits could also cause disruptions to Fund operations. In addition, cyber security breaches of the issuers of securities in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">which the Fund invests or the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or Sub-Advisor, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">as applicable, among many other third-party service providers, can also subject the Fund to many of the same risks associated with </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">direct cyber security breaches. Further, errors, misconduct, or compromise of accounts of employees of the Fund or its third-party </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">service providers can also create material cybersecurity risks. Although the Fund has established risk management systems designed to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">reduce the risks associated with cyber security, there is no guarantee that such efforts will succeed, especially because the Fund does </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">not directly control the cyber security systems of issuers or third party service providers. Cyber security incidents may also trigger </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Fund obligations under data privacy laws, potentially increasing notification and compliance burdens. Cyber security incidents </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">affecting issuers in whose securities the Fund invests may also have a negative impact on the value of the securities of such issuers, and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">in turn, the value of the Fund.</span></div> <div style="clear: both"> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> <span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_4"></span> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Artificial intelligence (“AI”) and machine learning technologies used by the Fund, the Advisor or third-party service providers may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">allow the unintended introduction of vulnerabilities into infrastructures and applications, which could exacerbate these risks or result </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">in cyber incidents that implicate personal data. The Fund and its shareholders could be negatively impacted as a result of these cyber </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">risks associated with AI technologies. Substantial costs may be incurred by the Fund in order to resolve or prevent cyber incidents in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the future.</span></div> <div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--EuropeRiskMember_z8gyqQ2AScZg" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Europe Risk. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The Fund is subject to certain risks specifically associated with investments in the securities of European issuers. The </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">economies and markets of European countries are often closely connected and interdependent, and political or economic disruptions in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">European countries, even in countries in which the Fund is not invested, may adversely affect security values and thus the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">holdings. A significant number of countries in Europe are member states in the European Union (the “EU”), and the member states no </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">longer control their own monetary policies by directing independent interest rates for their currencies. In these member states, the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">authority to direct monetary policies, including money supply and official interest rates for the Euro, is exercised by the European </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Central Bank. Decreasing imports or exports, changes in governmental or EU regulations on trade, changes in the exchange rate of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">euro, the default or threat of default by an EU member country on its sovereign debt and/or an economic recession in an EU member </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">country may have significant adverse effects on the economies of EU member countries and the EU and Europe as a whole. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Separately, the EU faces issues involving its membership, structure, procedures and policies. The exit of one or more member </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">countries from the EU, such as the departure of the United Kingdom referred to as “Brexit”, could place the departing member’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">currency and banking system under severe stress or even in jeopardy. An exit by other member countries will likely result in increased </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">volatility, illiquidity and potentially lower economic growth in the affected markets, which may adversely affect the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investments.</span></div> <div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--IlliquidAndRestrictedSecuritiesRiskMember_zqk4K9Ygwhb7" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Illiquid and Restricted Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The Fund may invest in securities that are restricted and/or illiquid. Restricted securities are </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">restriction that prohibits or limits their resale.  Restricted securities may be illiquid as they generally are not listed on an exchange and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may have no active trading market. Investments in restricted securities could have the effect of increasing the amount of the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">assets invested in illiquid securities if qualified institutional buyers are unwilling to purchase these securities. Illiquid and restricted </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities may be difficult to dispose of at a fair price at the times when the Fund believes it is desirable to do so. The market price of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">illiquid and restricted securities generally is more volatile than that of more liquid securities, which may adversely affect the price that </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the Fund pays for or recovers upon the sale of such securities. Illiquid and restricted securities are also more difficult to value, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">especially in challenging markets.</span></div> <div id="xdx_89B_ecef--RiskTextBlock_hcef--RiskAxis__custom--InflationRiskMember_zMJwBRylOzne" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Inflation Risk. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The Fund invests in securities that are subject to inflation risk.  Inflation risk is the risk that the value of assets or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">income from investments will be worth less in the future as inflation decreases the value of money.  As inflation increases, the present </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect to debt securities. Inflation rates may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">change frequently and drastically as a result of various factors, including unexpected shifts in the domestic or global economy, and the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Fund’s investments may not keep pace with inflation, which may result in losses to Fund investors.</span></div> <div id="xdx_896_ecef--RiskTextBlock_hcef--RiskAxis__custom--InterestRateAndDurationRiskMember_z1PJKDwiSkKg" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Interest Rate and Duration Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Interest rate risk is the risk that securities will decline in value because of changes in market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interest rates.  For fixed rate securities, when market interest rates rise, the market value of such securities generally will fall.  </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Investments in fixed rate securities with long-term maturities may experience significant price declines if long-term interest rates </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">increase.  During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">expected prepayments.  This may lock in a below-market yield, increase the security’s duration and further reduce the value of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">security.  Fixed rate securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">volatile than securities with shorter durations.  The duration of a security will be expected to change over time with changes in market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">factors and time to maturity.  Although the Fund seeks to maintain a duration, under normal market circumstances, excluding the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">effects of leverage, of between three and eight years, if the effect of the Fund’s use of leverage was included in calculating duration, it </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">could result in a longer duration for the Fund. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11.5pt"> </span></div> <div style="margin-top: 8pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The interest rates payable on floating rate securities are not fixed and may fluctuate based upon changes in market rates.  As short-term </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interest rates decline, interest payable on floating rate securities typically decreases.  Alternatively, during periods of rising interest </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rates, interest payable on floating rate securities typically increases.  Changes in interest rates on floating rate securities may lag behind </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changes in market rates or may have limits on the maximum increases in interest rates.  The value of floating rate securities may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">decline if their interest rates do not rise as much, or as quickly, as interest rates in general.</span></div> <div id="xdx_894_ecef--RiskTextBlock_hcef--RiskAxis__custom--LeverageRiskMember_zQbj9GCrSmsg" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Leverage Risk. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">The use of leverage by the Fund can magnify the effect of any losses. If the income and gains from the securities and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investments purchased with leverage proceeds do not cover the cost of leverage, the return to the common shares will be less than if </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">leverage had not been used. Leverage involves risks and special considerations for common shareholders including: (i) the likelihood </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">of greater volatility of net asset value and market price of the common shares than a comparable portfolio without leverage; (ii) the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">risk that fluctuations in interest rates on borrowings will reduce the return to the common shareholders or will result in fluctuations in </span></div> <div style="clear: both"> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> <span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_5"></span> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the dividends paid on the common shares; (iii) in a declining market, the use of leverage is likely to cause a greater decline in the net </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the market price of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">common shares; and (iv) when the Fund uses certain types of leverage, the investment advisory fee payable to the Advisor and by the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.</span></div> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--ManagementRiskAndRelianceOnKeyPersonnelMember_zkkqPu81YtZ" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Management Risk and Reliance on Key Personnel</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The implementation of the Fund’s investment strategy depends upon the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and experience </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team could </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">have a negative impact on the Fund.</span></div> <div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketDiscountFromNetAssetValueMember_zJxw4YkNmKld" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Market Discount from Net Asset Value</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Shares of closed-end investment companies such as the Fund frequently trade at a discount </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset value.</span></div> <div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketRiskMember_znJ334G9sFDb" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Market Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Investments held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations caused by real or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">perceived adverse economic, political, and regulatory factors or market developments, changes in interest rates and perceived trends in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities prices. Shares of the Fund could decline in value or underperform other investments. In addition, local, regional or global </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">events such as war, acts of terrorism, market manipulation, government defaults, government shutdowns, regulatory actions, political </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">changes, diplomatic developments, the imposition of sanctions and other similar measures, spread of infectious diseases or other </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">public health issues, recessions, natural disasters, or other events could have a significant negative impact on the Fund and its </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investments. Any of such circumstances could have a materially negative impact on the value of the Fund’s shares, the liquidity of an </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investment, and may result in increased market volatility. During any such events, the Fund’s shares may trade at increased premiums </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">or discounts to their net asset value, the bid/ask spread on the Fund’s shares may widen and the returns on investment may fluctuate.</span></div> <div id="xdx_895_ecef--RiskTextBlock_hcef--RiskAxis__custom--NonUSSecuritiesRiskMember_z1K0XC4362Vj" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Non-U.S. Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Investing in securities of non-U.S. issuers, which are generally denominated in non-U.S. currencies, may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">involve certain risks not typically associated with investing in securities of U.S. issuers. These risks include: (i) there may be less </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">publicly available information about non-U.S. issuers or markets due to less rigorous disclosure or accounting standards or regulatory </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">practices; (ii) non-U.S. markets may be smaller, less liquid and more volatile than the U.S. market; (iii) potential adverse effects of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">fluctuations in currency exchange rates or controls on the value of the Fund’s investments; (iv) the economies of non-U.S. countries </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may grow at slower rates than expected or may experience a downturn or recession; (v) the impact of economic, political, social or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">diplomatic events; (vi) certain non-U.S. countries may impose restrictions on the ability of non-U.S. issuers to make payments of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">principal and interest to investors located in the United States due to blockage of non-U.S. currency exchanges or otherwise; and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">(vii) withholding and other non-U.S. taxes may decrease the Fund’s return. Foreign companies are generally not subject to the same </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">accounting, auditing and financial reporting standards as are U.S. companies. In addition, there may be difficulty in obtaining or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">enforcing a court judgment abroad. These risks may be more pronounced to the extent that the Fund invests a significant amount of its </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">assets in companies located in one region or in emerging markets.</span></div> <div id="xdx_891_ecef--RiskTextBlock_hcef--RiskAxis__custom--OperationalRiskMember_zQg2OewqlMve" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Operational Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> The Fund is subject to risks arising from various operational factors, including, but not limited to, human error, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties, failed or inadequate </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">processes and technology or systems failures. These errors or failures may adversely affect the Fund’s operations, including its ability </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">to execute its investment process or calculate or disseminate its NAV in a timely manner. The Fund relies on third-parties for a range of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">services, including custody, valuation, and administration, among many others. Any delay or failure relating to engaging or </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">maintaining such service providers may affect the Fund’s ability to meet its investment objective. Although the Fund and the Fund’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investment advisor seek to reduce these operational risks through controls and procedures, there is no way to completely protect </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">against such risks.</span></div> <div id="xdx_89D_ecef--RiskTextBlock_hcef--RiskAxis__custom--PotentialConflictsOfInterestRiskMember_z8cWhiyoLQGe" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Potential Conflicts of Interest Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. First Trust, Stonebridge and the portfolio managers have interests which may conflict with the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interests of the Fund. In particular, First Trust and Stonebridge currently manage and may in the future manage and/or advise other </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">investment funds or accounts with the same or substantially similar investment objective and strategies as the Fund. In addition, while </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the Fund is using leverage, the amount of the fees paid to First Trust (and by First Trust to Stonebridge) for investment advisory and </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">management services are higher than if the Fund did not use leverage because the fees paid are calculated based on managed assets. </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">Therefore, First Trust and Stonebridge have a financial incentive to leverage the Fund.</span></div> <div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--PreferredHybridPreferredAndDebtSecuritiesRiskMember_zTCfbpWY5eKj" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Preferred/Hybrid Preferred and Debt Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  An investment in preferred/hybrid preferred and debt securities is subject to </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">certain risks, including:</span></div> <div> <div style="clear: both; margin-top: 3pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Issuer Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. The value of these securities may decline for a number of reasons which directly relate to the issuer, such as </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">management performance, leverage and reduced demand for the issuer’s goods and services. Additionally, an issuer may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">default on its obligation to make distributions or repay principal.</span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Interest Rate Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Interest rate risk is the risk that fixed rate securities will decline in value because of changes in market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">interest rates. When market interest rates rise, the market value of fixed rate securities generally will fall. Market value </span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div style="clear: both"> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> <span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_6"></span> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="line-height: 11pt; margin-left: 36pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">generally falls further for fixed rate securities with longer duration. During periods of rising interest rates, the average life of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">certain types of securities may be extended because of slower than expected prepayments. This may lock in a below-market </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">yield, increase the security’s duration and further reduce the value of the security. Investments in fixed rate securities with </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">long-term maturities may experience significant price declines if long-term interest rates increase.</span></div> <div> <div style="clear: both; margin-top: 3.5pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Floating Rate and Fixed-to-Floating Rate Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The market value of floating rate and fixed-to-floating rate securities may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag between the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rise in interest rates and the interest rate reset. Securities with a floating or variable interest rate component can be less </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">sensitive to interest rate changes than securities with fixed interest rates. A secondary risk associated with declining interest </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rates is the risk that income earned by the Fund on floating rate and fixed-to-floating rate securities may decline due to lower </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">coupon payments on floating rate securities.</span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3.5pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Prepayment Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Prepayment risk is the risk that the issuer of a debt security will repay principal prior to the scheduled </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">maturity date. During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">earlier than scheduled, forcing the Fund to reinvest the proceeds from such prepayment in lower yielding securities, which </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may result in a decline in the Fund’s income and distributions to common shareholders.</span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3.5pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Reinvestment Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the Fund invests the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">proceeds from matured, traded or called securities at market interest rates that are below the Fund portfolio’s current earnings </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">rate.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11pt"> </span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div> <div style="clear: both; margin-top: 3pt; position: relative; width: 100%"> <div style="float: left; line-height: 11pt; margin-left: 24pt; text-align: left; width: 3.5pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">•</span></div> <div style="float: left; line-height: 11pt; margin-left: 8.5pt; text-align: left; width: 499pt"><span style="font: italic 10pt Times New Roman; color: #000000">Subordination Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Preferred securities are typically subordinated to bonds and other debt instruments in a company’s </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">capital structure, in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">credit risk than those debt instruments.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt; line-height: 11pt"> </span></div> </div> <div style="clear: both; position: relative"> </div> </div> <div style="margin-top: 8pt"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">In addition, preferred and hybrid preferred securities are subject to certain other risks, including deferral and omission risk, limited </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">voting rights risk and special redemption rights risk.</span></div> <div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--ReverseRepurchaseAgreementsRiskMember_zQJtKzoGjNAj" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Reverse Repurchase Agreements Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. The Fund’s use of reverse repurchase agreements may involve leverage risk. There is also the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">risk that the market value of the securities acquired with the proceeds of the reverse repurchase agreement may decline below the price </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">of the securities that the Fund has sold but remains obligated to repurchase. In addition, there is a risk that the market value of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities retained by the Fund may decline. Reverse repurchase agreements also involve the risk that the purchaser fails to return the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">securities as agreed upon, files for bankruptcy or becomes insolvent. The Fund may be restricted from taking normal portfolio actions </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">during such time, could be subject to loss to the extent that the proceeds of the agreement are less than the value of securities subject </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">to the agreement and may experience adverse tax consequences.</span></div> <div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--RisksOfConcentrationInTheFinancialsSectorMember_z66r3EwTQG8c" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Risks of Concentration in the Financials Sector</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">. Because the Fund invests 25% or more of its managed assets in the financials </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">sector, it will be more susceptible to adverse economic or regulatory occurrences affecting this sector, such as changes in interest rates, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">loan concentration and competition. The Fund may emphasize its investments in certain industries such as the banking and insurance </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">industries and therefore may make the Fund more economically vulnerable in the event of a downturn in those industries. Financial </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">companies are subject to extensive governmental regulation and intervention, which may adversely affect the scope of their activities, </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">the prices they can charge, the amount and types of capital they must maintain and, potentially, their size. Governmental regulation </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">may change frequently and may have significant adverse consequences for financial companies, including effects not intended by such </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">regulation. The impact of more stringent capital requirements, or recent or future regulation in various countries, on any individual </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial company or on financial companies as a whole cannot be predicted. Certain risks may impact the value of investments in </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial companies more severely than those of investments in other issuers, including the risks associated with companies that </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">operate with substantial financial leverage. Financial companies may also be adversely affected by volatility in interest rates, loan </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">losses and other customer defaults, decreases in the availability of money or asset valuations, credit rating downgrades and adverse </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">conditions in other related markets. Insurance companies in particular may be subject to severe price competition and/or rate </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">regulation, which may have an adverse impact on their profitability. Financial companies are also a target for cyber attacks and may </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">experience technology malfunctions and disruptions as a result.</span></div> <div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--SmallerCompaniesRiskMember_zB9xkoUscWhi" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Smaller Companies Risk.</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt"> Small and/or mid capitalization companies may be more vulnerable to adverse general market or economic </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">developments, and their securities may be less liquid and may experience greater price volatility than larger, more established </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">companies as a result of several factors, including limited trading volumes, fewer products or financial resources, management </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market risk than </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">larger, more established companies.</span></div> <div id="xdx_895_ecef--RiskTextBlock_hcef--RiskAxis__custom--TrustPreferredSecuritiesRiskMember_zSr7xMPP19kb" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Trust Preferred Securities Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  The risks associated with trust preferred securities typically include the financial condition of the </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial institution that creates the trust, as the trust typically has no business operations other than holding the subordinated debt </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">issued by the financial institution and issuing the trust preferred securities and common stock backed by the subordinated debt. If a </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">financial institution is financially unsound and defaults on interest payments to the trust, the trust will not be able to make payments to </span></div> <div style="clear: both"> </div> <div style="float: left; margin-bottom: 5pt; width: 100%"> </div> <hr style="border-style: none; margin: 40pt 0.25pt 0.25pt; clear: both"/> <span id="xx_b8bb5b63-7fdb-4491-b055-435434246e75_AI-AddILBsforsemi-14_7"></span> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="clear: both"> </div> <div style="line-height: 11.5pt; text-align: left"><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">holders of the trust preferred securities such as the Fund. The issuer of trust preferred securities is generally able to defer or skip </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">payments for up to five years without being in default and certain enhanced trust preferred securities may have longer interest payment </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">deferral periods.</span></div> <div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--ValuationRiskMember_zrQtTCi15JNk" style="margin-top: 8pt"><span style="font: bold 10pt Times New Roman; color: #000000">Valuation Risk</span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">.  Unlike publicly traded common stock which trades on national exchanges, there is no central place or exchange for </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">certain preferred securities and debt securities trading. Preferred securities and debt securities generally trade on an “over-the- </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">counter” market which may be anywhere in the world where the buyer and seller can settle on a price. Due to the lack of centralized </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">information and trading, the valuation of certain preferred securities and debt securities may carry more risk than that of common </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">stock. Uncertainties in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of </span><span style="color: #000000; font-family: Times New Roman; font-size: 10pt">valuation models and processes may lead to inaccurate asset pricing.</span><span style="color: #000000; font-family: Times New Roman; font-size: 1pt"> </span></div>