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Friday, May 10, 2024

First Trust Transforms 4 CEFs Into 1 ETF

Reported by Neil Anderson, Managing Editor

The team at a $226-billion-AUMS (as of March 28), Midwestern fund firm has wrapped up a four-fund merger, creating an ETF with more than $1 billion in AUM alum.

Ryan O. Issakainen
First Trust Portfolios L.P.
Senior Vice President, ETF Strategist
On Monday, the folks at First Trust Advisors L.P. [profile] confirmed the close of the merger of four of their closed-end funds. That morning, before the market opened, the First Trust Energy Income and Growth Fund (FEN), the First Trust MLP and Energy Income Fund (FEI), the First Trust New Opportunities MLP & Energy Fund (FPL), and the First Trust Energy Infrastructure Fund (FIF) merged into the newly created FT Energy Income Partners Enhanced Income ETF (EIPI on the NYSE Arca). (FIF transformed into EIPI, and FEI, FEN, and FPL merged into EIPI.)

The four CEFs' boards appoved the merger in October 2023. The funds' shareholders approved the merger in February 2024. And the First Trust team revealed the merger timing plan last month.

The new EIPI had $1.095 billion in AUM as of yesterday. It is actively managed, non-diversified, and comes with an expense ratio of 110 basis points.

Wheaton, Illinois-based First Advisors serves as EIPI's investment advisor, and Wesetport, Connecticut-based Energy Income Partners, LLC serves as subadvisor (just as the duo did for the four CEFs). The new ETF's PM team includes: James Murchie, co-founder, CEO, co-portfolio manager, and principal of Energy Income Partners; Eva Pao, co-founder, co-PM, and principal of Energy Income Partners; and John Tysseland, co-PM and principal of Energy Income Partners. All three were on the PM teams for the predecessor CEFs.

FEN's inception date was June 24, 2004. As of March 28, 2024, about a month before the multi-fund merger, FEN had about $404 million in AUM.

FIF's inception date was September 27, 2011. As of February 29, 2024, about two months before the merger, FEN had about $342 million in AUM.

FEI's inception date was November 27, 2012. As of March 28, 2024, FEI had about $544 million in AUM.

FPL's inception date was March 26, 2014. As of March 28, 2024, FPL had about $230 million in AUM.

EIPI's other service providers include: the Bank of New York Mellon as administrator, custodian, fund accounting agent, and transfer agent; Chapman and Cutler LLP as counsel; Deloitte & Touche LLP as independent accounting firm; and First Trust Portfolios, L.P. as distributor. 

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