UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-21496
----------
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
-------------------------------------------------------
(Address of principal executive offices) (Zip code)
W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
-------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 630-765-8000
--------------
Date of fiscal year end: November 30
-------------
Date of reporting period: May 31, 2012
--------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED
MAY 31, 2012
MACQUARIE/FIRST TRUST
GLOBAL INFRASTRUCTURE/
UTILITIES DIVIDEND &
INCOME FUND
MACQUARIE FOUR CORNERS CAPITAL MANAGEMENT FIRST TRUST
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND (MFD)
SEMI-ANNUAL REPORT
MAY 31, 2012
Shareholder Letter........................................................... 1
At A Glance.................................................................. 2
Portfolio Commentary......................................................... 3
Portfolio of Investments..................................................... 8
Statement of Assets and Liabilities.......................................... 13
Statement of Operations...................................................... 14
Statements of Changes in Net Assets.......................................... 15
Statement of Cash Flows...................................................... 16
Financial Highlights......................................................... 17
Notes to Financial Statements................................................ 18
Additional Information....................................................... 25
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and/or Macquarie Capital Investment Management LLC
("MCIM") and/or Four Corners Capital Management, LLC ("Four Corners") (MCIM and
Four Corners collectively, the "Sub-Advisors"), and their respective
representatives, taking into account the information currently available to
them. Forward-looking statements include all statements that do not relate
solely to current or historical fact. For example, forward-looking statements
include the use of words such as "anticipate," "estimate," "intend," "expect,"
"believe," "plan," "may," "should," "would" or other words that convey
uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
(the "Fund") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and/or Sub-Advisors and their respective representatives
only as of the date hereof. We undertake no obligation to publicly revise or
update these forward-looking statements to reflect events and circumstances that
arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that the Fund will achieve its investment objective. The
Fund is subject to market risk, which is the possibility that the market values
of securities owned by the Fund will decline and that the value of the Fund
shares may therefore be less than what you paid for them. Accordingly, you can
lose money by investing in the Fund. See "Risk Considerations" in the Notes to
Financial Statements for a discussion of certain other risks of investing in the
Fund.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
http://www.ftportfolios.com or speak with your financial advisor. Investment
returns, net asset value and common share price will fluctuate and Fund shares,
when sold, may be worth more or less than their original cost.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your investment. It
includes details about the Fund and presents data and analysis that provide
insight into the Fund's performance and investment approach.
By reading the portfolio commentary by the portfolio management team of the
Fund, you may obtain an understanding of how the market environment affected the
Fund's performance. The statistical information that follows may help you
understand the Fund's performance compared to that of relevant market
benchmarks.
It is important to keep in mind that the opinions expressed by personnel of MCIM
and Four Corners are just that: informed opinions. They should not be considered
to be promises or advice. The opinions, like the statistics, cover the period
through the date on the cover of this report. The risks of investing in the Fund
are spelled out in the prospectus, the statement of additional information, this
report and other Fund regulatory filings.
MCIM, FOUR CORNERS AND THE FUND ARE NOT DEPOSIT TAKING INSTITUTIONS FOR THE
PURPOSES OF THE BANKING ACT OF 1959 (COMMONWEALTH OF AUSTRALIA) AND THEIR
OBLIGATIONS DO NOT REPRESENT DEPOSITS OR OTHER LIABILITIES OF MACQUARIE BANK
LIMITED ABN 46 008 583 542. MACQUARIE BANK LIMITED DOES NOT GUARANTEE OR
OTHERWISE PROVIDE ASSURANCE IN RESPECT OF THE OBLIGATIONS OF MCIM, FOUR CORNERS
OR THE FUND.
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND (MFD)
SEMI-ANNUAL LETTER FROM THE CHAIRMAN AND CEO
MAY 31, 2012
Dear Shareholders:
I am pleased to present you with the semi-annual report for your investment in
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
(the "Fund").
The report you hold contains detailed information about your investment; a
portfolio commentary from the Fund's management team that provides a recap of
the period; a performance analysis and a market and Fund outlook. Additionally,
you will find the Fund's financial statements for the period this report covers.
I encourage you to read this document and discuss it with your financial
advisor. A successful investor is also typically a knowledgeable one, as we have
found to be the case at First Trust.
First Trust remains committed to being a long-term investor and investment
manager and to bringing you quality financial solutions regardless of market ups
and downs. We have always believed, as I have written previously, that there are
two ways to attain success in reaching your financial goals: staying invested in
quality products and having a long-term investment horizon. We are committed to
this approach in the products we manage or supervise and offer to investors.
As you know, First Trust offers a variety of products that we believe could fit
many financial plans to help investors seeking long-term investment success. We
encourage you to talk to your advisor about the other investments First Trust
offers that might also fit your financial goals and to discuss those goals with
your advisor regularly so that he or she can help keep you on track.
First Trust will continue to make available up-to-date information about your
investments so you and your financial advisor are current on any First Trust
investments you own. We value our relationship with you, and thank you for the
opportunity to assist you in achieving your financial goals. I look forward to
the remainder of 2012 and to the next edition of your Fund's report.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund and Chief Executive Officer of
First Trust Advisors L.P.
Page 1
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
"AT A GLANCE"
AS OF MAY 31, 2012 (UNAUDITED)
----------------------------------------------------------------------
FUND STATISTICS
----------------------------------------------------------------------
Symbol on New York Stock Exchange MFD
Common Share Price $13.80
Common Share Net Asset Value ("NAV") $14.39
Premium (Discount) to NAV (4.10)%
Net Assets Applicable to Common Shares $122,825,057
Current Quarterly Distribution per Common Share (1) $0.3500
Current Annualized Distribution per Common Share $1.4000
Current Distribution Rate on Closing Common Share Price (2) 10.14%
Current Distribution Rate on NAV (2) 9.73%
----------------------------------------------------------------------
----------------------------------------------------------------------
COMMON SHARE PRICE & NAV (WEEKLY CLOSING PRICE)
----------------------------------------------------------------------
Common Share Price NAV
5/11 15.89 17.06
15.71 16.92
15.47 16.58
15.38 16.53
6/11 15.28 16.35
16.13 17.23
15.87 16.88
15.53 16.47
15.96 16.97
7/11 15.36 16.57
14.09 15.36
13.79 15.14
13.61 14.71
8/11 13.47 14.78
13.79 14.97
13.47 14.43
13.93 14.84
13.03 14.01
9/11 13.53 14.45
13.59 14.72
14.61 15.49
14.68 15.50
10/11 15.01 15.99
14.60 15.35
14.82 15.51
14.10 14.71
11/11 13.55 13.97
14.39 15.08
14.27 15.05
13.89 14.76
14.45 15.17
12/11 14.21 15.27
14.70 15.22
14.51 15.24
14.83 15.46
1/12 15.43 15.74
15.50 16.05
15.90 15.93
16.17 16.19
2/12 15.60 16.00
15.89 16.03
16.01 15.85
16.04 16.13
16.15 15.99
3/12 16.00 16.10
16.00 15.82
15.94 15.66
15.76 15.89
4/12 15.77 16.15
15.48 15.80
15.58 15.77
14.90 15.01
14.23 14.62
5/12 13.80 14.36
----------------------------------------------------------------------
PERFORMANCE
----------------------------------------------------------------------
Average Annual Total Return
-------------------------------------
6 Months Ended 1 Year Ended 5 Years Ended Inception (3/25/2004)
5/31/2012 5/31/2012 5/31/2012 to 5/31/2012
Fund Performance (3)
NAV -0.48% -7.42% -3.55% 7.46%
Market Value 2.77% -4.48% -3.85% 6.33%
Index Performance
S&P 500 Utilities Total Return Index 4.14% 10.66% 1.06% 9.18%
---------------------------------------------------------------------------------------------------------------
-----------------------------------------------------
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
-----------------------------------------------------
Transurban Group 4.9%
Severn Trent plc 4.4
Spark Infrastructure Group 4.3
National Grid plc 4.0
Abertis Infraestructuras S.A. 3.3
Enterprise Products Partners, L.P. 3.1
Magellan Midstream Partners, L.P. 3.1
GDF Suez 3.0
El Paso Pipeline Partners, L.P. 2.7
Atlantia SpA 2.7
-----------------------------------------------------
Total 35.5%
=====
-----------------------------------------------------
% OF TOTAL
INDUSTRY CLASSIFICATION (4) INVESTMENTS
-----------------------------------------------------
Transportation Infrastructure 16.9%
Oil, Gas & Consumable Fuels 15.3
Electric Utilities 11.5
Multi-Utilities 10.8
Water Utilities 6.6
Road & Rail 2.5
Gas Utilities 2.2
Independent Power Producers & Energy Traders 2.2
Construction & Engineering 2.1
Diversified Consumer Services 0.9
-----------------------------------------------------
Total 71.0%
=====
-----------------------------------------------------
% OF TOTAL
COUNTRY INVESTMENTS
-----------------------------------------------------
United States (5) 46.6%
United Kingdom 13.6
Australia 13.2
Canada 6.1
France 6.0
Spain 5.2
Germany 4.1
Italy 2.7
Japan 1.4
Switzerland 1.1
-----------------------------------------------------
Total 100.0%
======
(1) Most recent distribution paid or declared through 5/31/2012. Subject to
change in the future.
(2) Distribution rates are calculated by annualizing the most recent
distribution paid or declared through the report date and then dividing by
Common Share price or NAV, as applicable, as of 5/31/2012. Subject to
change in the future.
(3) Total return is based on the combination of reinvested dividend, capital
gain and return of capital distributions, if any, at prices obtained by
the Dividend Reinvestment Plan, and changes in NAV per share for net asset
value returns and changes in Common Share price for market value returns.
Total returns do not reflect sales load and are not annualized for periods
less than one year. Past performance is not indicative of future results.
(4) Represents the industry classification breakdown for the Core Component of
the Fund's portfolio, which includes Common Stocks and Master Limited
Partnerships. It excludes the Senior Loan Component of the Fund's
portfolio, which industry classification is disclosed in the Portfolio of
Investments and makes up the remaining 29.0% of the Fund's portfolio.
(5) The percentage of United States securities includes 29.0% of Senior
Floating-Rate Loan Interests.
Page 2
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND (MFD)
SEMI-ANNUAL REPORT
MAY 31, 2012
SUB-ADVISORS
Macquarie Capital Investment Management LLC ("MCIM") and Four Corners Capital
Management, LLC ("Four Corners") are the sub-advisors of the Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund ("MFD" or the
"Fund"). Both MCIM and Four Corners operate within the Macquarie Funds Group
("MFG") and are wholly-owned, indirect subsidiaries of Macquarie Group Limited
("Macquarie").
The Fund's Core Component, which consists primarily of equity securities and
equity-like securities issued by infrastructure issuers, is managed by MCIM,
which started operations in 2004 with the launch of the Fund. MCIM and its
Australia-based affiliates manage approximately $2.6 billion of assets as of May
31, 2012, in MFG's Infrastructure Securities portfolios, which includes the
Fund.
The Fund's Senior Loan Component is managed by Four Corners. Four Corners was
founded in 2001 and became a wholly-owned subsidiary of Macquarie Group Limited
in 2008. Four Corners managed over $1.5 billion of assets as of May 31, 2012,
with an emphasis on Senior Loans. Four Corners is a subsidiary of Delaware Asset
Advisers ("Delaware"), a series of Delaware Management Business Trust, which is
also a wholly-owned subsidiary of Macquarie. Delaware managed over $170 billion
in assets across all major asset classes as of May 31, 2012.
MFG is Macquarie's funds management business. MFG is Australia's largest asset
manager and a top 40 asset manager globally, with over A$324 billion in assets
under management (as of March 31, 2012). MFG is a full-service asset manager,
offering a diverse range of products including securities investment management,
infrastructure and real estate asset management and fund and equity-based
structured products.
PORTFOLIO MANAGEMENT TEAM
Mr. Andrew Maple-Brown was the sole Portfolio Manager of MFD's Core Component as
of June 2010. Mr. Anthony Felton has become Co-Portfolio Manager with Mr.
Maple-Brown as of June 2012. They are supported by MFG's Infrastructure
Securities team, which is one of the largest and most experienced investment
teams specializing in the listed infrastructure sector.
MFD's current portfolio management team is as follows:
ANDREW MAPLE-BROWN
CO-PORTFOLIO MANAGER, MFD CORE COMPONENT
PORTFOLIO MANAGER, MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
Mr. Maple-Brown joined the MFG Infrastructure Securities investment team in
Sydney, Australia, in 2007 as a Portfolio Manager. He relocated to New York in
July 2009, and assumed direct responsibilities for the management of the team's
North America-based portfolios (including MFD) at that time. He transferred back
to Sydney in April 2012, and continued to have the same portfolio management
responsibilities.
Mr. Maple-Brown joined Macquarie in August 2001 in the Debt Markets area, where
his focus was primarily on infrastructure transactions, and particularly
public-private partnerships. Prior to Macquarie, Mr. Maple-Brown spent over four
years at Lend Lease in its Project Finance group. In his roles at Lend Lease and
Macquarie, Mr. Maple-Brown has had fifteen years of experience in financing and
investing in infrastructure and structured property transactions. Mr.
Maple-Brown has a Bachelor of Engineering (1st Class Hons, Mechanical) and a
Bachelor of Commerce from the University of Sydney, a Masters of Applied Finance
from Macquarie University and has received the Canadian Investment Manager
designation.
ANTHONY FELTON, CFA
CO-PORTFOLIO MANAGER, MFD CORE COMPONENT
PORTFOLIO MANAGER, MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
Mr. Felton joined Macquarie Group in February 2004 and the MFG Infrastructure
Securities team in June 2004. He was responsible for the analysis of European
stocks before becoming a Portfolio Manager. Prior to joining Macquarie, Mr.
Felton had broad-based financial market experience with Westpac Banking
Corporation in Sydney, and West LB and JP Morgan in London between 1999 and
2003. Mr. Felton holds a Bachelor of Commerce - University of NSW, and is a CFA
charterholder.
Page 3
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY - (CONTINUED)
--------------------------------------------------------------------------------
KEVIN P. LOOME, CFA
CO-PORTFOLIO MANAGER, MFD SENIOR LOAN COMPONENT
SENIOR VICE PRESIDENT, FOUR CORNERS CAPITAL MANAGEMENT, LLC
Mr. Loome is head of the High Yield fixed income team, responsible for portfolio
construction and strategic asset allocation of all high yield fixed-income
assets. Prior to joining Delaware Investments in August 2007 in his current
position, Mr. Loome spent 11 years at T. Rowe Price, starting as an analyst and
leaving the firm as a Portfolio Manager. He began his career with Morgan Stanley
as a corporate finance analyst in the New York and London offices. Mr. Loome
received his Bachelor's Degree in Commerce from the University of Virginia and
earned an MBA from the Tuck School of Business at Dartmouth.
ADAM H. BROWN, CFA
CO-PORTFOLIO MANAGER, MFD SENIOR LOAN COMPONENT
VICE PRESIDENT, FOUR CORNERS CAPITAL MANAGEMENT, LLC
Mr. Brown is a Portfolio Manager on the firm's taxable fixed income team, with
specific responsibilities for the bank loan portfolio. Prior to joining Delaware
Investments in April 2011 as part of the firm's integration of Macquarie and
Four Corners Capital Management, he spent more than nine years with Four
Corners, where he was a Co-Portfolio Manager on four collateralized loan
obligation ("CLO") funds and a senior research analyst supporting noninvestment
grade portfolios. Before that, Mr. Brown was with Wachovia Securities, where he
worked in the leveraged finance group arranging senior secured bank loans and
high yield bond financings for financial sponsors and corporate issuers. He
earned a Bachelor's Degree in Accounting from the University of Florida and an
MBA from the A.B. Freeman School of Business at Tulane University.
COMMENTARY
INVESTMENT OBJECTIVE
The investment objective of MFD is to seek a high level of current return
consisting of dividends, interest and other similar income while attempting to
preserve capital. The Fund seeks to achieve its investment objective by
investing predominantly in the securities of companies that are involved in the
management, ownership and/or operation of infrastructure and utility assets and
are expected to offer reasonably predictable income and attractive yields. The
Fund seeks to manage its investments and expenses so that a significant portion
of its distributions to the Fund's common shareholders will qualify as
tax-advantaged dividends, subject to the continued availability of favorable tax
treatment for such qualifying dividends.
Under normal market conditions, MFD seeks to invest more than 50% of the Fund's
total assets outside the United States, with these investments focusing on
developed economies. MCIM believes that international diversity has two major
benefits for investors:
1. It offers investors exposure to the fundamentals of different
economies, thereby affording an alternative to U.S.-domiciled
investments; and
2. By investing in carefully selected developed economies, MFD is
expected to provide investors with exposure to a much broader range
of infrastructure/utility businesses.
A typical profile of an infrastructure business would be one whose assets
provide essential public services which are difficult to replace, have a
strategic competitive advantage, demonstrate inelastic demand, and have low
sensitivity to cyclical volatility, courtesy of their essential nature and high
margins.
There can be no assurance that the Fund's investment objective will be achieved.
The Fund may not be appropriate for all investors.
MARKET RECAP
Global equities began the six months ended May 31, 2012 on a positive note,
continuing the strong run which saw global equities gain around 23% from their
low in early October to the end of March. Global equities reversed the positive
trend in April and May, pulling back sharply amidst increasing anxiety and
global risk aversion related to the European debt crisis and fears of a sharper
slowdown in Chinese growth than the authorities are targeting.
Page 4
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY - (CONTINUED)
--------------------------------------------------------------------------------
PERFORMANCE ANALYSIS - CORE COMPONENT
As shown on the performance table, MFD's net asset value ("NAV") total return1
for the period was -0.48%, trailing the 4.14% return of the S&P 500 Utilities
Total Return Index ("Index"). Although the Fund is not managed toward any
benchmark and invests in a global portfolio of infrastructure stocks in a range
of currencies and senior secured loans, we believe that this Index offers a
frame of reference.
In our view, there were four factors driving the Core Component's contribution
to the Fund's small negative NAV total return during the period:
o The strong performance of regulated utilities stocks, offset by the
weakness of integrated utilities stocks;
o The solid performance of water stocks, particularly in the U.K.;
o The mixed performance of transportation stocks, with good
performance from the airport sector, but weakness in some seaports
and toll road stocks; and
o The strength of the U.S. Dollar against major currencies such as the
Euro, the Australian Dollar, the British Pound and the Canadian
Dollar had a negative effect as the Fund had significant exposure to
these currencies.
These factors are discussed in further detail below.
Utilities
There was a strong contribution from regulated utilities, such as electricity
and gas distribution and transmission entities.
Electricity and gas distribution companies posted strong returns. Australian
regulated electricity distribution stocks, Spark Infrastructure and SP AusNet,
performed well due to their stable, defensive cash flows and high yield. Spark
also increased its dividend guidance. Tokyo Gas announced it had completed the
Chiba-Kashima transmission pipe after six years of construction, which will
enable growth in industrial gas volumes. Centrica in the United Kingdom
performed well, following its earnings reports which were in line with
expectations.
Electricity transmission companies also performed well due to their defensive
nature. National Grid in the U.K. outperformed due to a positive regulatory
decision, impacting returns for peers owning transmission businesses in the U.K.
The company also reported fiscal year 2012 earnings above consensus.
By contrast with the regulated utilities, the European integrated utilities were
generally weak as they were weighed down by macro concerns. GDF Suez in France
was down after management downgraded guidance for 2012 while it reported fourth
quarter earnings in line with expectations. There were also concerns about the
impact of the French election result on its regulated business in France. In
Germany, E.ON was weaker after announcing a softer outlook.
Water
The regulated U.K. water utilities such as Severn Trent and United Utilities
again outperformed. Each company reported solid full-year results, and Severn
Trent announced a special dividend. They also benefitted from their very
defensive 'safe haven' status when markets turned down late in the reporting
period, as well as from media speculation of a bid for Severn Trent.
Transportation Infrastructure
The transportation infrastructure sectors were mixed over the reporting period,
with airports performing well, while seaports and toll roads lagged.
In the airports sector, Australian Infrastructure Fund continued to benefit from
the sale of noncore assets to focus on airports. The sale 'proved' up the
valuation of those assets and has made the company a simpler investment
proposition. Sydney Airport posted strong returns, while Aeroports de Paris also
performed well. It reported first quarter results in line with expectations and
announced plans to acquire 38% of TAV, the leading airport operator in Turkey
and owner of Istanbul Ataturk Airport. In our view, the transaction should be
immediately accretive to earnings.
German seaport company Hamburger Hafen und Logistik was down despite announcing
strong fiscal year 2011 results and an 18% increase in its dividend. The market
was then disappointed with a slightly weaker first quarter earnings result and a
marginal downgrade to guidance for fiscal year 2012.
1 Total return is based on the combination of reinvested dividend, capital
gain and return of capital distributions, if any, at prices obtained by
the Dividend Reinvestment Plan and changes in NAV per share for net asset
value returns and changes in Common Share price for market value returns.
Total returns do not reflect sales load and are not annualized for periods
less than one year. Past performance is not indicative of future results.
Page 5
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY - (CONTINUED)
--------------------------------------------------------------------------------
Toll road stocks also underperformed this reporting period. Atlantia in Italy
and Abertis Infraestructuras were weak primarily due to macro concerns. In
addition, Atlantia did report lower traffic on its Italian roads, while S&P
downgraded Abertis' credit rating one notch. By contrast, Vinci in France and
Transurban in Australia outperformed.
Strong U.S. Dollar
As the Fund was not hedged for currency, the appreciation in the U.S. Dollar
detracted from the Fund's return during the period. The USD appreciated by 9%,
6%, 2% and 2% against the Euro, the Australian Dollar, the British Pound and the
Canadian Dollar, respectively2. Altogether, investments in these currencies
comprised around two-thirds of the Core Component of the Fund (as of May 31,
2012).
PORTFOLIO COMPOSITION
As of May 31, 2012, the Fund's Core Component was well diversified across 36
positions in global infrastructure stocks, representing 10 countries and 10
sectors.
During the six months ended May 31, 2012, the main increases in the Fund's
weightings were in Water Utilities, Road & Rail, and Oil, Gas & Consumables
Fuels, while the weightings in Electric Utilities, Transportation Infrastructure
and Multi-Utilities were reduced. Sector changes were driven by bottom-up stock
selection.
PERFORMANCE ANALYSIS - SENIOR LOAN COMPONENT
The Senior Loan Component is intended to help provide the Fund with a stable,
floating-rate income stream over the Fund's floating-rate leverage cost. As
floating-rate debt instruments whose interest rates are set at a credit spread
(the risk premium) over short-term interest rates, Senior Loans provide income
that tends to rise and fall as short-term rates fluctuate, with an approximate
60-to-90-day lag.
The Senior Loan Component of this Fund invests in infrastructure businesses and,
therefore, the loans tend to have significant asset collateral and loan ratings
generally higher than the S&P/LSTA Leveraged Loan Index ("Loan Index"). The
average rating in the Senior Loan Component is BB- vs. the average Loan Index
rating between B+ and BB-.
The Loan Index posted a solid 4.4% return for the six months ended May 31, 2012.
Lower-rated loans outperformed during that period, with BB-rated loans returning
3.4% and single B-rated loans increasing 6.0%. The Senior Loan Component
returned 3.6% during the six-month period noted above, which is slightly higher
than the BB-rated Loan Index returns.
Index returns were strong and relatively evenly dispersed from December 2011
through April 2012. Loan market strength was seemingly driven by positive
investor sentiment across the capital markets, extremely low default rates,
strong technical conditions, and an absence of outside shocks. This reversed in
May, however. With the macro picture darkening across the globe, the Loan Index
suffered its first monthly loss since November 2011, declining 0.7%.
Although May's grim backdrop took a toll on the loan market's technical picture,
loan market technicals were still positive during the period. Inflows to
daily-access loan mutual funds fell to $133 million in May from $557 million in
April. May's inflows included a $201 million outflow during the final week of
the month, the biggest net redemption in six months, as investors became more
risk averse. However, year-to-date inflows ended May at $1.9 billion and CLO
issuance continues to be another positive for demand, with $13.8 billion of CLO
issuance volume year-to-date through May.
We believe fundamentals continue to be strong. Among Loan Index issuers that
file publicly, first quarter 2012 Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA") grew 14% year over year, versus 10% EBITDA growth in
the fourth quarter 2011. Leveraged loan issuers now have put up eleven straight
quarters of solid performance since the recession ended in June 2009. Though
this report covers six months, we think it is important to note that solid cash
flow generation contributed to a Loan Index default rate of 1% for the
twelve-month period ended May 31, 2012.
While we believe bank loans are a good relative value investment given
conservative balance sheet management by the companies in the Fund's portfolio
and reduced default risk, spreads could widen because of European sovereign and
banking risks, causing further risk aversion.
PERFORMANCE RELATIVE TO THE INDEX
The Index is a broad barometer of the performance of utility stocks only (not
including a broad range of infrastructure sectors) solely in the U.S. By
comparison, the Fund is not managed toward any benchmark and invests in a global
portfolio of infrastructure stocks in a range of currencies and senior secured
loans.
2 Source: Bloomberg
Page 6
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY - (CONTINUED)
--------------------------------------------------------------------------------
The Fund underperformed the Index due to its exposure to the broad range of
infrastructure sectors in the Core Component, a number of which underperformed
the U.S. utilities. The stronger U.S. Dollar against most currencies also
detracted. The Fund's Senior Loan Component also underperformed the Index. The
leverage used in the Fund positively contributed to the Fund's performance
during the period.
DISTRIBUTIONS
During the six-month period covered by this report, the Fund announced two
regularly scheduled quarterly distributions totaling $0.70 per share. In
accordance with the Fund's level distribution policy, distributions are expected
to be comprised of net investment income, realized short-term capital gains and
non-taxable return of capital distributions (which generally are expected to
represent unrealized capital appreciation ) in order to sustain a stable level
of distributions to shareholders. Net long-term capital gain distributions, if
any, are expected to be made annually.
MARKET AND FUND OUTLOOK
In the last two months of the Fund's semi-annual period, global equity markets
have reversed some of the strong gains made in the previous six months. Market
anxiety was ignited by the unexpected outcome of the Greek election, which
served as a stark reminder to markets that Europe's debt problems are not able
to be quickly resolved. The weaker data in China stoked concerns that the engine
of global growth may be in the process of slowing more than expected and more
than the Chinese authorities would like.
The heightened negativity in global markets does not, however, translate into
the operational performance of infrastructure assets and the companies that own
them. Indeed, we continue to see companies in the portfolio performing largely
in line with expectations. We continue to identify what we believe are
attractive listed infrastructure opportunities and are looking for opportunities
to selectively increase our holding or introduce to the Fund's portfolio stocks
which we believe are oversold. We continue to remain very cautious and
selective, particularly with exposure to Europe due to its heightened risk
profile, regulatory risk and weak growth outlook.
As interest rates continue to decline around the world, reliable sources of
yield that are higher than inflation continue to be sought by investors. The
infrastructure sector has many companies with sustainable and growing yields
above the rate of inflation.
The Core Component of the Fund holds what we believe are high quality
income-generating stocks, diversified primarily across the Transportation,
Utilities and Pipelines sectors. The companies in the portfolio continue to
perform in line with our expectations, and we believe that the portfolio is well
positioned to benefit from several themes we have identified.
We believe that the Fund provides U.S. investors with an attractive vehicle to
access the broad global universe of listed infrastructure securities. We
continue to appreciate your investment in the Fund.
DISCLOSURES
The Fund's portfolio holdings are subject to change without notice. Any mention
of specific securities is not a recommendation or solicitation for any person to
buy, sell or hold any particular security. There is no assurance that the Fund
currently holds these securities.
The Loan Index is a daily total return index that uses LSTA/LPC Mark-to-Market
Pricing to calculate market value change. On a real-time basis, the Loan Index
tracks the current outstanding balance and spread over LIBOR for fully funded
term loans. The facilities included in the Loan Index represent a broad cross
section of leveraged loans syndicated in the United States, including
dollar-denominated loans to overseas issuers. (Information gathered from
Standard & Poor's LCD.)
This report may contain information obtained from third parties, including
ratings from credit ratings agencies such as Standard & Poor's. Reproduction and
distribution of third party content in any form is prohibited except with the
prior written permission of the related third party. Third party content
providers do not guarantee the accuracy, completeness, timeliness or
availability of any information, including ratings, and are not responsible for
any errors or omissions (negligent or otherwise), regardless of the cause, or
for the results obtained from the use of such content. THIRD PARTY CONTENT
PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.
THIRD PARTY CONTENT PROVIDERS shall not be liable for any direct, indirect,
incidental, exemplary, compensatory, punitive, special or consequential damages,
costs, expenses, legal fees, or losses (including lost income or profits and
opportunity costs) in connection with any use of THEIR CONTENT, INCLUDING
ratings. Credit ratings are statements of opinions and are not statements of
fact or recommendations to purchase, hold or sell securities. They do not
address the suitability of securities or the suitability of securities for
investment purposes, and should not be relied on as investment advice.
Page 7
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 2012 (UNAUDITED)
SHARES DESCRIPTION VALUE
------------ ------------------------------------------------------------------------------------------- -------------
COMMON STOCKS (a) - 79.4%
AUSTRALIA - 17.6%
511,855 Asciano Group ............................................................................. $ 2,263,632
764,045 Australian Infrastructure Fund ............................................................ 1,749,000
1,288,077 SP AusNet ................................................................................. 1,267,262
593,211 SP AusNet (Institutional Shares) (b)....................................................... 583,625
4,644,025 Spark Infrastructure Group (c)............................................................. 6,943,941
312,075 Sydney Airport ............................................................................ 881,577
1,442,904 Transurban Group .......................................................................... 7,955,307
-------------
21,644,344
-------------
CANADA - 8.2%
167,685 EnerCare, Inc.............................................................................. 1,493,636
204,003 Northland Power, Inc....................................................................... 3,519,711
91,033 Pembina Pipeline Corp...................................................................... 2,452,872
62,837 TransCanada Corp........................................................................... 2,575,292
-------------
10,041,511
-------------
FRANCE - 8.0%
20,823 Aeroports de Paris ........................................................................ 1,507,790
252,081 GDF Suez .................................................................................. 4,979,405
84,619 Vinci S.A.................................................................................. 3,380,135
-------------
9,867,330
-------------
GERMANY - 5.5%
146,046 E.On AG ................................................................................... 2,669,073
53,233 Fraport AG Frankfurt Airport Services Worldwide ........................................... 2,691,501
56,358 Hamburger Hafen Und Logistik AG ........................................................... 1,414,647
-------------
6,775,221
-------------
ITALY - 3.5%
351,136 Atlantia SpA............................................................................... 4,335,307
-------------
JAPAN - 1.9%
134,000 Osaka Gas Co., Ltd......................................................................... 524,988
45,000 West Japan Railway Co...................................................................... 1,765,888
-------------
2,290,876
-------------
SPAIN - 6.9%
419,648 Abertis Infraestructuras S.A............................................................... 5,342,050
198,168 Enagas S.A................................................................................. 3,094,805
-------------
8,436,855
-------------
SWITZERLAND - 1.4%
5,175 Flughafen Zuerich AG ...................................................................... 1,727,486
-------------
UNITED KINGDOM - 18.0%
548,933 Centrica plc .............................................................................. 2,617,552
657,750 National Grid plc ......................................................................... 6,589,157
103,032 Scottish and Southern Energy plc .......................................................... 2,100,814
268,990 Severn Trent plc .......................................................................... 7,134,649
366,859 United Utilities Group plc ................................................................ 3,714,669
-------------
22,156,841
-------------
Page 8 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
MAY 31, 2012 (UNAUDITED)
SHARES/
UNITS DESCRIPTION VALUE
------------ ------------------------------------------------------------------------------------------- -------------
COMMON STOCKS (a) - (CONTINUED)
UNITED STATES - 8.4%
53,900 NextEra Energy, Inc. ...................................................... $ 3,521,826
80,600 PG&E Corp. ................................................................ 3,522,220
36,700 Southern Co. .............................................................. 1,684,897
50,800 Williams Cos., Inc. ....................................................... 1,550,924
-------------
10,279,867
-------------
TOTAL COMMON STOCKS .......................................................... 97,555,638
(Cost $98,719,468) -------------
MASTER LIMITED PARTNERSHIPS (A) - 15.0%
UNITED STATES - 15.0%
134,790 El Paso Pipeline Partners, L.P. ........................................... 4,422,460
85,600 Enbridge Energy Partners, L.P. ............................................ 2,502,944
34,637 Energy Transfer Equity, L.P. .............................................. 1,258,362
104,977 Enterprise Products Partners, L.P. ........................................ 5,118,678
73,581 Magellan Midstream Partners, L.P. ......................................... 5,063,109
-------------
TOTAL MASTER LIMITED PARTNERSHIPS ............................................ 18,365,553
(Cost $15,789,945) -------------
PRINCIPAL RATINGS STATED
VALUE DESCRIPTION MOODY'S S&P RATE (e) MATURITY (f) VALUE
------------ ----------------------------------------------- --------------- ----------- ------------ -------------
SENIOR FLOATING-RATE LOAN INTERESTS - 38.6%
ALTERNATIVE CARRIERS - 3.5%
$ 1,396,474 Intelsat Jackson Holdings S.A.,
Term Loan B.................................. B1 BB- 5.25% 04/02/18 1,383,961
2,900,000 Level 3 Financing, Inc., Term
Loan B2...................................... Ba3 B+ 5.75% 09/01/18 2,872,566
-------------
4,256,527
-------------
CABLE & SATELLITE - 10.7%
2,977,399 Bresnan Broadband Holdings,
LLC, Term Loan B ............................ Ba3 BB+ 4.50% 12/14/17 2,920,323
3,000,000 Cequel Communications Holdings
I, LLC, Term Loan B.......................... Ba2 BB- 4.00% 02/14/19 2,922,000
899,368 Charter Communications
Operating, LLC,
Term Loan C ................................. Ba1 BB+ 3.72% 09/06/16 885,626
2,000,000 Charter Communications
Operating, LLC,
Term Loan D ................................. Ba1 BB+ 4.00% 05/15/19 1,970,840
1,964,806 Knology, Inc., Term Loan B .................... B1 B+ 4.00% 08/18/17 1,955,297
164,118 UPC Broadband Holdings B.V.,
Term Loan T ................................. Ba3 B+ 3.74% 12/31/16 161,861
See Notes to Financial Statements Page 9
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
MAY 31, 2012 (UNAUDITED)
PRINCIPAL RATINGS STATED
VALUE DESCRIPTION MOODY'S S&P RATE (e) MATURITY (f) VALUE
------------ ----------------------------------------------- --------------- ----------- ------------ -------------
SENIOR FLOATING-RATE LOAN INTERESTS - (CONTINUED)
CABLE & SATELLITE - (CONTINUED)
$ 2,324,144 UPC Broadband Holdings B.V.,
Term Loan X ................................. Ba3 B+ 3.74% 12/31/17 $ 2,262,159
-------------
13,078,106
-------------
ELECTRIC UTILITIES - 2.1%
2,672,097 GenOn Energy, Inc.,
Term Loan ................................... B1 B+ 6.00% 12/03/17 2,618,655
-------------
ENVIRONMENTAL & FACILITIES SERVICES - 1.5%
1,882,143 EnergySolutions, LLC, Term
Loan ........................................ Ba3 BB+ 6.25% 08/13/16 1,871,791
-------------
HEALTH CARE FACILITIES - 11.0%
3,334,575 CHS/Community Health Systems,
Inc., Extended Term Loan .................... Ba3 BB 3.97%-3.99% 01/25/17 3,258,414
3,497,027 HCA, Inc., Term Loan B-2 ...................... Ba3 BB 3.72% 03/31/17 3,394,074
469,758 HCA, Inc., Term Loan B-3 ...................... Ba3 BB 3.49% 05/01/18 455,163
2,970,000 IASIS Healthcare Corp.,
Term Loan B ................................. Ba3 B 5.00% 05/03/18 2,922,658
569,365 Prime Healthcare Services, Inc.,
Term Loan A.................................. B1 B- 6.00% 04/28/14 563,671
997,134 Prime Healthcare Services, Inc.,
Term Loan B ................................. B1 NR 7.50% 04/28/15 987,162
1,960,348 Vanguard Health Systems, Inc.,
Term Loan B.................................. Ba2 BB- 5.00% 01/29/16 1,951,252
-------------
13,532,394
-------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 6.5%
2,473,102 AES Corp., Term Loan B ......................... Ba1 BB+ 4.25% 06/01/18 2,443,128
1,477,519 Calpine Corp., Term Loan B1 .................... B1 BB- 4.50% 04/01/18 1,452,519
496,250 Calpine Corp., Term Loan B2 .................... B1 BB- 4.50% 04/01/18 487,854
1,593,247 Dynegy Power, LLC,
Term Loan B ................................. B2 B 9.25% 08/05/16 1,641,713
1,980,013 NRG Energy, Inc.,
Term Loan B ................................. Baa3 BB+ 4.00% 07/01/18 1,957,935
-------------
7,983,149
-------------
OIL & GAS STORAGE & TRANSPORTATION - 0.7%
900,000 Energy Transfer Equity, L.P.,
Term Loan B ................................. Ba2 BB- 3.75% 03/26/17 873,747
-------------
WIRELESS TELECOMMUNICATION SERVICES - 2.6%
3,291,750 Crown Castle Operating Co.,
Term Loan B.................................. Ba3 B+ 4.00% 01/31/19 3,242,374
-------------
TOTAL SENIOR FLOATING-RATE LOAN INTERESTS ............................................... 47,456,743
(Cost $47,840,218) -------------
Page 10 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
MAY 31, 2012 (UNAUDITED)
DESCRIPTION VALUE
------------------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS - 133.0% ................................................................ $ 163,377,934
(Cost $162,349,631) (g)
OUTSTANDING LOAN - (38.7%) ................................................................ (47,500,000)
NET OTHER ASSETS AND LIABILITIES - 5.7% ................................................... 6,947,123
-------------
NET ASSETS - 100.0% ....................................................................... $ 122,825,057
-------------
-----------------------------
(a) All of these securities are available to serve as collateral for the
outstanding loan.
(b) Security is fair valued in accordance with procedures adopted by the
Fund's Board of Trustees, and in accordance with the provisions of the
Investment Company Act of 1940, as amended.
(c) This security is restricted in the U.S. and cannot be offered for public
sale without first being registered under the Securities Act of 1933, as
amended. This security is not restricted on the Australian Exchange and
trades freely without any additional registration. As such, it does not
require the additional disclosure required of restricted securities.
(d) Ratings below Baa3 by Moody's Investors Service, Inc. or BBB- by Standard
& Poor's Ratings Group are considered to be below investment grade.
(e) Senior Loans in which the Fund invests pay interest at rates which are
periodically predetermined by reference to a base lending rate plus a
premium. These base lending rates are generally (i) the lending rate
offered by one or more major European banks, such as the London Inter-Bank
Offered Rate ("LIBOR"), (ii) the prime rate offered by one or more United
States banks or (iii) the certificate of deposit rate. Certain Senior
Loans are subject to a LIBOR floor that establishes a minimum base LIBOR
rate. The interest rate shown reflects the rate in effect at May 31, 2012.
(f) Senior Loans generally are subject to mandatory and/or optional
prepayment. As a result, the actual remaining maturity of Senior Loans may
be substantially less than the stated maturities shown.
(g) Aggregate cost for financial reporting purposes, which approximates the
aggregate cost for federal income tax purposes. As of May 31, 2012, the
aggregate gross unrealized appreciation for all securities in which there
was an excess of value over tax cost was $11,750,011 and the aggregate
gross unrealized depreciation for all securities in which there was an
excess of tax cost over value was $10,721,708.
NR Not Rated
See Notes to Financial Statements Page 11
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
MAY 31, 2012 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of May 31, 2012
is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
5/31/2012 PRICES INPUTS INPUTS
------------- ------------- ------------- -------------
Common Stocks:
Australia .................................... $ 21,644,344 $ 21,060,719 $ 583,625 $ --
Canada ....................................... 10,041,511 10,041,511 -- --
France ....................................... 9,867,330 9,867,330 -- --
Germany ...................................... 6,775,221 6,775,221 -- --
Italy ........................................ 4,335,307 4,335,307 -- --
Japan ........................................ 2,290,876 2,290,876 -- --
Spain ........................................ 8,436,855 8,436,855 -- --
Switzerland .................................. 1,727,486 1,727,486 -- --
United Kingdom................................ 22,156,841 22,156,841 -- --
United States................................. 10,279,867 10,279,867 -- --
------------- ------------- ------------- -------------
Total Common Stocks....................... 97,555,638 96,972,013 583,625 --
------------- ------------- ------------- -------------
Master Limited Partnerships*....................... 18,365,553 18,365,553 -- --
Senior Floating-Rate Loan Interests*............... 47,456,743 -- 47,456,743 --
------------- ------------- ------------- -------------
TOTAL INVESTMENTS.............................. $ 163,377,934 $ 115,337,566 $ 48,040,368 $ --
============= ============= ============= =============
* See the Portfolio of Investments for industry or country breakout.
All transfers in and out of the Levels during the period are assumed to be
transferred on the last day of the period at their current value. As of May 31,
2012, the Fund transferred common stocks valued at $70,383,377 from Level 2 to
Level 1 of the fair value hierarchy. The common stocks that transferred from
Level 2 to Level 1 did so as a result of foreign equities that were valued based
on fair valued prices using a factor provided by a pricing service due to the
change in value between the foreign markets close and the NYSE close on November
30, 2011 exceeding a certain threshold that are now being based on quoted
prices. See Note 2A - Portfolio Valuation in the Notes to Financial Statements.
Page 12 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2012 (UNAUDITED)
ASSETS:
Investments, at value
(Cost $162,349,631) ......................................................................... $163,377,934
Foreign currency (Cost $40,705) ............................................................... 39,413
Prepaid expenses .............................................................................. 18,580
Receivables:
Investment securities sold................................................................. 11,605,680
Dividends.................................................................................. 3,751,580
Interest................................................................................... 280,622
------------
Total Assets............................................................................. 179,073,809
------------
LIABILITIES:
Outstanding loan .............................................................................. 47,500,000
Payables:
Investment securities purchased............................................................ 7,438,009
Due to custodian........................................................................... 764,474
Investment advisory fees (includes Sub-Advisory fees of $274,115).......................... 456,859
Audit and tax fees......................................................................... 31,159
Interest and fees on loan.................................................................. 15,258
Administrative fees........................................................................ 13,505
Printing fees.............................................................................. 9,285
Legal fees................................................................................. 5,961
Transfer agent fees........................................................................ 5,442
Trustees' fees and expenses................................................................ 3,833
Financial reporting fees................................................................... 771
Other liabilities ............................................................................. 4,196
------------
Total Liabilities........................................................................ 56,248,752
------------
NET ASSETS .................................................................................... $122,825,057
============
NET ASSETS CONSIST OF:
Paid-in capital ............................................................................... $163,693,092
Par value ..................................................................................... 85,333
Accumulated net investment income (loss) ...................................................... 846,893
Accumulated net realized gain (loss) on investments and foreign currency transactions ......... (42,738,012)
Net unrealized appreciation (depreciation) on investments and foreign currency translation .... 937,751
------------
NET ASSETS .................................................................................... $122,825,057
============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) .......................... $ 14.39
============
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized).... 8,533,285
============
See Notes to Financial Statements Page 13
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $738,310)......................................... $ 5,945,183
Interest....................................................................................... 1,153,081
Other.......................................................................................... 49,402
------------
Total investment income..................................................................... 7,147,666
------------
EXPENSES:
Investment advisory fees (includes Sub-Advisory fees of $541,643).............................. 902,738
Interest and fees on outstanding loan.......................................................... 337,943
Administrative fees............................................................................ 80,760
Custodian fees................................................................................. 35,973
Printing fees.................................................................................. 31,383
Audit and tax fees............................................................................. 26,623
Transfer agent fees............................................................................ 18,115
Legal fees..................................................................................... 13,246
Trustees' fees and expenses.................................................................... 12,843
Financial reporting fees....................................................................... 4,625
Other.......................................................................................... 30,363
------------
Total expenses.............................................................................. 1,494,612
------------
NET INVESTMENT INCOME (LOSS)................................................................... 5,653,054
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................................................. (4,370,468)
Foreign currency transactions............................................................... (416,206)
------------
Net realized gain (loss)....................................................................... (4,786,674)
------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................................................. (982,785)
Foreign currency translation................................................................ (141,198)
------------
Net change in unrealized appreciation (depreciation)........................................... (1,123,983)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)........................................................ (5,910,657)
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................... $ (257,603)
============
Page 14 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR
5/31/2011 ENDED
(UNAUDITED) 11/30/2011
------------ ------------
OPERATIONS:
Net investment income (loss)....................................................... $ 5,653,054 $ 12,707,062
Net realized gain (loss)........................................................... (4,786,674) 6,108,172
Net change in unrealized appreciation (depreciation)............................... (1,123,983) (8,116,155)
------------ ------------
Net increase (decrease) in net assets resulting from operations.................... (257,603) 10,699,079
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.............................................................. (5,973,300) (12,337,270)
Net realized gain.................................................................. -- --
Return of capital.................................................................. -- --
------------ ------------
Total distributions to shareholders................................................ (5,973,300) (12,337,270)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from Common Shares reinvested............................................. -- --
Repurchase of Common Shares (a).................................................... -- (8,091,905)
------------ ------------
Net increase (decrease) in net assets resulting from capital transactions.......... -- (8,091,905)
------------ ------------
Total increase (decrease) in net assets............................................ (6,230,903) (9,730,096)
NET ASSETS:
Beginning of period................................................................ 129,055,960 138,786,056
------------ ------------
End of period...................................................................... $122,825,057 $129,055,960
============ ============
Accumulated net investment income (loss) at end of period.......................... $ 846,893 $ 1,167,139
============ ============
CAPITAL TRANSACTIONS WERE AS FOLLOWS:
Common Shares at beginning of period............................................... 8,533,285 9,077,963
Common Shares repurchased.......................................................... -- (544,678)
Common Shares issued as reinvestment under the Dividend Reinvestment Plan.......... -- --
------------ ------------
Common Shares at end of period..................................................... 8,533,285 8,533,285
============ ============
(a) On February 24, 2011, the Fund commenced a share repurchase program for
purposes of enhancing shareholder value and reducing the discount at which
the Fund's shares trade from their net asset value. The program originally
expired due to the completion of the earlier of the repurchase of 6% of
the Fund's then outstanding common shares (544,678) or August 23, 2011. On
July 19, 2011, the Fund's Board of Trustees authorized the continuation of
the Fund's share repurchase program until the earlier of the repurchase of
the remaining 275,649 shares of the original 6% (for the aggregate of
544,678) or February 23, 2012. The program expired on September 16, 2011,
as the full 6% of the original outstanding shares were repurchased in
full. For the year ended November 30, 2011, the Fund repurchased 544,678
of its shares at an average discount of 6.87% from net asset value per
share.
See Notes to Financial Statements Page 15
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations.................... $ (257,603)
Adjustments to reconcile net increase (decrease) in net assets resulting from
operations to net cash provided by operating activities:
Purchases of investments........................................................ (133,970,329)
Sales, maturities and paydowns of investments................................... 132,107,390
Return of capital received from investment in MLPs.............................. 474,136
Net amortization/accretion of premiums/discounts on investments................. (59,039)
Net realized gain/loss on investments........................................... 4,370,468
Net change in unrealized appreciation/depreciation on investments............... 982,785
CHANGES IN ASSETS AND LIABILITIES:
Decrease in interest receivable................................................. 14,296
Increase in dividends receivable ............................................... (2,258,959)
Increase in prepaid expenses.................................................... (10,395)
Increase in interest and fees on loan payable................................... 11,649
Increase in investment advisory fees payable.................................... 20,483
Decrease in audit and tax fees payable.......................................... (22,041)
Increase in legal fees payable.................................................. 2,457
Decrease in printing fees payable............................................... (8,217)
Increase in administrative fees payable......................................... 671
Increase in custodian fees payable.............................................. 738,871
Increase in transfer agent fees payable......................................... 2,171
Decrease in Trustees' fees and expenses payable................................. (2,620)
Increase in financial reporting fees payable.................................... 1
Decrease in other liabilities................................................... (146)
------------
CASH PROVIDED BY OPERATING ACTIVITIES.............................................. $ 2,136,029
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to Common Shareholders from net investment income.. (8,959,950)
------------
CASH USED IN FINANCING ACTIVITIES.................................................. (8,959,950)
------------
Decrease in cash and foreign currency (a).......................................... (6,823,921)
Cash and foreign currency at beginning of period................................... 6,863,334
------------
CASH AND FOREIGN CURRENCY AT END OF PERIOD......................................... $ 39,413
============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest and fees.................................. $ 326,294
============
-----------------------------
(a) Includes net change in unrealized appreciation (depreciation) on foreign
currency of $(1,838).
Page 16 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
5/31/2012 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 11/30/2011 11/30/2010 11/30/2009 11/30/2008 11/30/2007
----------- ---------- ---------- ---------- ---------- ----------
Net asset value, beginning of period.... $ 15.12 $ 15.29 $ 14.36 $ 11.43 $ 25.03 $ 25.99
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)............ 0.66 1.43 (a) 0.55 0.46 1.33 1.33
Net realized and unrealized gain (loss). (0.69) (0.27) 1.06 3.07 (13.23) 4.25
-------- -------- -------- -------- -------- --------
Total from investment operations........ (0.03) 1.16 1.61 3.53 (11.90) 5.58
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income................... (0.70) (1.40) (0.68) (0.11) (0.93) (2.11)
Net realized gain....................... -- -- -- -- (0.73) (4.43)
Return of capital....................... -- -- -- (0.49) (0.04) --
-------- -------- -------- -------- -------- --------
Total distributions..................... (0.70) (1.40) (0.68) (0.60) (1.70) (6.54)
-------- -------- -------- -------- -------- --------
Capital share repurchases............... -- 0.07 -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 14.39 $ 15.12 $ 15.29 $ 14.36 $ 11.43 $ 25.03
======== ======== ======== ======== ======== ========
Market value, end of period............. $ 13.80 $ 14.07 $ 13.82 $ 11.73 $ 8.60 $ 23.78
======== ======== ======== ======== ======== ========
TOTAL RETURN BASED ON NET ASSET
VALUE (b) (c) ....................... (0.48)% 8.49% 12.31% 33.75% (48.98)% 21.87%
======== ======== ======== ======== ======== ========
TOTAL RETURN BASED ON MARKET VALUE (b).. 2.77% 11.70% 24.27% 45.08% (59.56)% 25.75%
======== ======== ======== ======== ======== ========
--------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)... $122,825 $129,056 $138,786 $130,335 $103,780 $225,548
Ratio of total expenses to average
net assets .......................... 2.25% (d) 2.24% 2.36% 2.86% 3.72% 3.63%
Ratio of total expenses to average net
assets excluding interest expense.... 1.74% (d) 1.81% 1.77% 1.92% 1.80% 1.73%
Ratio of net investment income (loss) to
average net assets................... 8.50% (d) 8.92% 3.68% 3.76% 6.44% 4.65%
Portfolio turnover rate................. 79% 91% 87% 80% 23% 53%
INDEBTEDNESS:
Total loan outstanding (in 000's)....... $ 47,500 $ 47,500 $ 44,500 $ 35,900 $ 38,900 $ 84,000
Asset coverage per $1,000 of
indebtedness (e) .................... $ 3,586 $ 3,717 $ 4,119 $ 4,630 $ 3,668 $ 3,685
--------------------
(a) Per share amounts have been calculated using the average share method.
(b) Total return is based on the combination of reinvested dividend, capital
gain and return of capital distributions, if any, at prices obtained by
the Dividend Reinvestment Plan, and changes in net asset value per share
for net asset value returns and changes in Common Share price for market
value returns. Total returns do not reflect sales load and are not
annualized for periods less than one year. Past performance is not
indicative of future results.
(c) In 2008, the Fund received reimbursements from an investment sub-advisor
in the amount of $332,025. If this reimbursement was not received, the NAV
total return for the year ended November 30, 2008 would have been
(49.16)%.
(d) Annualized.
(e) Calculated by taking the Fund's total assets less the Fund's total
liabilities (not including the loan outstanding), and dividing by the
outstanding loan balance in 000's.
See Notes to Financial Statements Page 17
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
1. FUND DESCRIPTION
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
(the "Fund") is a non-diversified, closed-end management investment company
organized as a Massachusetts business trust on January 21, 2004 and is
registered with the Securities and Exchange Commission ("SEC") under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund trades
under the ticker symbol MFD on the New York Stock Exchange ("NYSE").
The Fund's investment objective is to seek a high level of current return
consisting of dividends, interest and other similar income while attempting to
preserve capital. In pursuit of this objective, the Fund seeks to manage its
investments and expenses so that a significant portion of its distributions to
the Fund's Common Shareholders will qualify as tax-advantaged dividends, subject
to the continued availability of favorable tax treatment for such qualifying
dividends. The Fund seeks to achieve its investment objective by investing in a
non-diversified portfolio of equity, debt, preferred or convertible securities
and other instruments (for instance, other instruments could include Australian
stapled securities) issued by U.S. and non-U.S. issuers that have as their
primary focus (in terms of income and/or assets) the management, ownership
and/or operation of infrastructure and utilities assets in a select group of
countries. There can be no assurance that the Fund will achieve its investment
objective. The Fund may not be appropriate for all investors.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
A. PORTFOLIO VALUATION:
The net asset value ("NAV") of the Common Shares of the Fund is determined daily
as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time,
on each day the NYSE is open for trading. If the NYSE closes early on a
valuation day, the NAV is determined as of that time. Domestic debt securities
and foreign securities are priced using data reflecting the earlier closing of
the principal markets for those securities. The NAV per Common Share is
calculated by dividing the value of all assets of the Fund (including accrued
interest and dividends), less all liabilities (including accrued expenses,
dividends declared but unpaid and any borrowings of the Fund) by the total
number of Common Shares outstanding.
The Fund's investments are valued daily in accordance with valuation procedures
adopted by the Fund's Board of Trustees, and in accordance with provisions of
the 1940 Act. The following securities, for which accurate and reliable market
quotations are readily available, will be valued as follows:
Common stocks and other securities listed on any national or foreign
exchange (excluding the NASDAQ National Market ("NASDAQ") and the London
Stock Exchange Alternative Investment Market ("AIM")) are valued at the
last sale price on the exchange on which they are principally traded. If
there are no transactions on the valuation day, the securities are valued
at the mean between the most recent bid and asked prices.
Securities listed on the NASDAQ or the AIM are valued at the official
closing price. If there is no official closing price on the valuation day,
the securities are valued at the mean between the most recent bid and
asked prices.
Securities traded in the over-the-counter market are valued at their
closing bid prices.
Short-term investments that mature in less than 60 days when purchased are
valued at amortized cost.
All market quotations used in valuing the Fund's securities will be obtained
from a third party pricing service. If no quotation is received from a pricing
service, attempts will be made to obtain one or more broker quotes for the
security. In the event the pricing service does not provide a valuation, broker
quotations are not readily available, or the valuations received are deemed
unreliable, the Fund's Board of Trustees has designated First Trust Advisors
L.P. ("First Trust") to use a fair value method to value the Fund's securities.
Additionally, if events occur after the close of the principal markets for
certain securities (e.g., domestic debt and foreign securities) that could
materially affect the Fund's NAV, First Trust will use a fair value method to
value the Fund's securities. The use of fair value pricing is governed by
valuation procedures adopted by the Fund's Board of Trustees, and in accordance
with the provisions of the 1940 Act. As a general principle, the fair value of a
security is the amount which the Fund might reasonably expect to receive for the
security upon its current sale. However, in light of the judgment involved in
fair valuations, there can be no assurance that a fair value assigned to a
particular security will be the amount which the Fund might be able to receive
upon its current sale. Fair valuation of common stocks and other equity
securities will be based on the consideration of all available information,
including, but not limited to, the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
Page 18
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might affect the
value of the security.
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign markets;
2) ADR trading of similar securities;
3) closed-end fund trading of similar securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the NYSE. Occasionally, events affecting the value of such securities may occur
between such times and the close of the NYSE that will not always be reflected
in the computation of the value of such securities. If events affecting the
value of such securities occur during such period, these securities will be
valued at their fair value according to procedures adopted by the Fund's Board
of Trustees (see above). For certain foreign equity securities, a third party
pricing service may be utilized to determine fair value. All securities and
other assets of the Fund initially expressed in foreign currencies will be
converted to U.S. dollars using exchange rates in effect at the time of
valuation.
The Senior Floating-Rate Loan interests ("Senior Loans")1 in which the Fund
invests are not listed on any securities exchange or board of trade. Senior
Loans are typically bought and sold by institutional investors in individually
negotiated private transactions that function in many respects like an
over-the-counter secondary market, although typically no formal market-makers
exist. This market, while having grown substantially since its inception,
generally has fewer trades and less liquidity than the secondary market for
other types of securities. Some Senior Loans have few or no trades, or trade
infrequently, and information regarding a specific Senior Loan may not be widely
available or may be incomplete. Accordingly, determinations of the value of
Senior Loans may be based on infrequent and dated information. Because there is
less reliable, objective data available, elements of judgment may play a greater
role in valuation of Senior Loans than for other types of securities. Typically,
Senior Loans are valued using information provided by a third party pricing
service. The third party pricing service primarily uses over-the-counter pricing
from dealer runs and broker quotes from indicative sheets to value the Senior
Loans. If the pricing service cannot or does not provide a valuation for a
particular Senior Loan or such valuation is deemed unreliable, First Trust may
value such Senior Loan at a fair value according to procedures adopted by the
Fund's Board of Trustees, and in accordance with the provisions of the 1940 Act.
Fair valuation of a Senior Loan is based on the consideration of all available
information, including, but not limited to, the following:
1) the fundamental business data relating to the issuer;
2) an evaluation of the forces which influence the market in which these
securities are purchased and sold;
3) the type, size and cost of the security;
4) the financial statements of the issuer;
5) the credit quality and cash flow of the issuer, based on the Sub-Advisor's
or external analysis;
6) the information as to any transactions in or offers for the security;
7) the price and extent of public trading in similar securities (or equity
securities) of the issuer/borrower, or comparable companies;
8) the coupon payments;
9) the quality, value and salability of collateral, if any, securing the
security;
10) the business prospects of the issuer, including any ability to obtain
money or resources from a parent or affiliate and an assessment of the
issuer's management;
11) the prospects for the issuer's industry, and multiples (of earnings and/or
cash flows) being paid for similar businesses in that industry;
12) issuer's competitive position within the industry;
13) issuer's ability to access additional liquidity through public and/or
private markets; and
14) other relevant factors.
The Fund is subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
1 The terms "security" and "securities" used throughout the Notes to
Financial Statements include Senior Loans.
Page 19
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices are
not current, or price quotations vary substantially either
over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable
inputs may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investments.
The inputs or methodology used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value the Fund's investments as of May 31, 2012, is
included with the Fund's Portfolio of Investments.
B. REPURCHASE AGREEMENTS:
The Fund may engage in repurchase agreement transactions. Under the terms of a
typical repurchase agreement, the Fund takes possession of an underlying debt
obligation subject to an obligation of the seller to repurchase, and the Fund to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Fund's holding period. This arrangement results in a fixed rate
of return that is not subject to market fluctuations during the Fund's holding
period. The value of the collateral is at all times at least equal to the total
amount of the repurchase obligation, including interest. In the event of
counterparty default, the Fund has the right to use the collateral to offset
losses incurred. There is potential loss to the Fund in the event the Fund is
delayed or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in value of the underlying
securities during the period in which the Fund seeks to assert its rights. The
Fund reviews the value of the collateral and the creditworthiness of those banks
and dealers with which the Fund enters into repurchase agreements to evaluate
potential risks. As of May 31, 2012, the Fund had no open repurchase agreements.
C. SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
daily on the accrual basis. Market premiums and discounts are amortized over the
expected life of each respective borrowing.
Distributions received from a Fund's investments in Master Limited Partnerships
("MLP") generally are comprised of return of capital from the MLP to the extent
of the cost basis of such MLP investments. Cumulative distributions received in
excess of the Fund's cost basis in an MLP generally are recorded as capital
gain. For the six months ended May 31, 2012, distributions of $474,136 received
from MLPs have been reclassified as return of capital. The cost basis of
applicable MLPs has been reduced accordingly.
Securities purchased or sold on a when-issued, delayed-delivery or forward
purchase commitment basis may have extended settlement periods. The value of the
security so purchased is subject to market fluctuations during this period. Due
to the nature of the Senior Loan market, the actual settlement date may not be
certain at the time of purchase or sale for some of the Senior Loans. Interest
income on such Senior Loans is not accrued until settlement date. The Fund
maintains liquid assets with a current value at least equal to the amount of its
when-issued, delayed-delivery or forward purchase commitments.
D. UNFUNDED LOAN COMMITMENTS:
The Fund may enter into certain credit agreements, all or a portion of which may
be unfunded. The Fund is obligated to fund these loan commitments at the
borrower's discretion. The Fund did not have unfunded delayed draw loan
commitments as of May 31, 2012.
E. FOREIGN CURRENCY:
The books and records of the Fund are maintained in U.S. dollars. Foreign
currencies, investments and other assets and liabilities are translated into
U.S. dollars at the exchange rates prevailing at the end of the period.
Purchases and sales of investment securities and items of income and expense are
translated on the respective dates of such transactions. Unrealized gains and
losses on assets and liabilities, other than investments in securities, which
result from changes in foreign currency exchange rates have been included in
"Net change in unrealized appreciation (depreciation) on foreign currency
translation" on the Statement of Operations. Unrealized gains and losses on
investments in securities which result from changes in foreign exchange rates
are included with fluctuations arising from changes in market price and are
shown in "Net change in unrealized appreciation (depreciation) on investments"
on the Statement of Operations. Net realized foreign currency gains and losses
include the effect of changes in exchange rates between trade date and
settlement date on investment security transactions, foreign currency
transactions and interest and dividends received. The portion of foreign
currency gains and losses related to fluctuation in exchange rates between the
initial purchase trade date and subsequent sale trade date is included in "Net
realized gain (loss) on foreign currency transactions" on the Statement of
Operations.
Page 20
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Level dividend distributions are declared and paid quarterly or as the Board of
Trustees may determine from time to time. If, for any quarterly distribution,
net investment company taxable income, if any (which term includes net
short-term capital gain), as determined as of the close of the Fund's taxable
year, is less than the amount of the distribution, the difference will generally
be a tax-free return of capital distributed from the Fund's assets.
Distributions of any net capital gains earned by the Fund are distributed at
least annually. Distributions will automatically be reinvested into additional
Common Shares pursuant to the Fund's Dividend Reinvestment Plan unless cash
distributions are elected by the shareholder.
Distributions from income and realized capital gains are determined in
accordance with income tax regulations, which may differ from U.S. GAAP. Certain
capital accounts in the financial statements are periodically adjusted for
permanent differences in order to reflect their tax character. These permanent
differences are primarily due to the varying treatment of income and gain/loss
on portfolio securities held by the Fund and have no impact on net assets or NAV
per share. Temporary differences, which arise from recognizing certain items of
income, expense and gain/loss in different periods for financial statement and
tax purposes, will reverse at some point in the future.
The tax character of distributions paid during the fiscal year ended November
30, 2011 was as follows:
Distributions paid from:
Ordinary income...................................... $ 12,337,270
Long-term capital gain............................... --
Return of capital.................................... --
As of November 30, 2011, the distributable earnings and net assets on a tax
basis were as follows:
Undistributed ordinary income........................ $ 2,093,763
Undistributed capital gains.......................... --
-------------
Total undistributed earnings......................... 2,093,763
Accumulated capital and other losses................. (34,539,078)
Net unrealized appreciation (depreciation)........... 709,500
-------------
Total accumulated earnings (losses).................. (31,735,815)
Other................................................ (2,986,650)
Paid-in capital...................................... 163,778,425
-------------
Net assets........................................... $ 129,055,960
=============
G. INCOME TAXES:
The Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, which includes distributing substantially all of its net
investment income and net realized gains to shareholders. Accordingly, no
provision has been made for federal or state income taxes. However, due to the
timing and amount of distributions, the Fund may be subject to an excise tax of
4% of the amount by which approximately 98.2% of the Fund's taxable income
exceeds the distributions from such taxable income for the calendar year.
Certain capital losses realized after October 31 may be deferred and treated as
occurring on the first day of the following fiscal year. For the fiscal year
ended November 30, 2011, the Fund elected to defer foreign currency losses of
$2,796 incurred between November 1, 2011 and November 30, 2011.
The Fund intends to utilize provisions of the federal income tax laws which
allow it to carry realized capital losses forward for eight years following the
year of the loss and offset such loss against any future realized capital gains.
The Fund is subject to certain limitations under U.S. tax rules on the use of
capital loss carryforwards and net unrealized built-in losses. These limitations
apply when there has been a 50% change in ownership. At November 30, 2011, the
Fund had a capital loss carryforward for federal income tax purposes of
$34,536,282, expiring as follows:
EXPIRATION DATE AMOUNT
November 30, 2017 $ 34,536,282
During the taxable year ended November 30, 2011, the Fund utilized capital loss
carryforwards in the amount of $3,429,394.
The Fund is subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. Taxable years ending 2008, 2009,
2010 and 2011 remain open to federal and state audit. As of May 31, 2012,
management has evaluated the application of these standards to the Fund and has
determined that no provision for income tax is required in the Fund's financial
statements for uncertain tax positions.
Page 21
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
H. EXPENSES:
The Fund will pay all expenses directly related to its operations.
I. ACCOUNTING PRONOUNCEMENT:
In May 2011, the Financial Accounting Standards Board ("FASB") issued ASU
2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs," modifying Topic 820, "Fair Value
Measurements and Disclosures." At the same time, the International Accounting
Standards Board ("IASB") issued International Financial Reporting Standard
("IFRS") 13, "Fair Value Measurement." The objective of the FASB and IASB is
convergence of their guidance on fair value measurements and disclosures.
Specifically, the ASU requires reporting entities to disclose (i) the amounts of
any transfers between Level 1 and Level 2, and the reasons for the transfers,
(ii) for Level 3 fair value measurements, quantitative information about
significant unobservable inputs used, (iii) a description of the valuation
processes used by the reporting entity, and (iv) a narrative description of the
sensitivity of the fair value measurement to changes in unobservable inputs if a
change in those inputs might result in a significantly higher or lower fair
value measurement. The effective date of the ASU is for interim and annual
periods beginning after December 15, 2011, and it is therefore not effective for
the current fiscal year. Management is currently evaluating the impact of the
updated standard on the Fund's financial statements.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Fund, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. First Trust is responsible for the ongoing monitoring of
the Fund's investment portfolio, managing the Fund's business affairs and
providing certain administrative services necessary for the management of the
Fund. For these investment management services, First Trust is entitled to a
quarterly fee calculated at an annual rate of 0.40% of the Fund's Total Assets
up to and including $250 million and 0.35% of the Fund's Total Assets over $250
million. Total Assets are generally defined as average daily total asset value
of the Fund minus the sum of the Fund's liabilities other than the principal
amount of borrowings. First Trust also provides fund reporting services to the
Fund for a flat annual fee in the amount of $9,250.
Macquarie Capital Investment Management LLC ("MCIM") and Four Corners Capital
Management, LLC ("Four Corners") serve as the Fund's sub-advisors and manage the
Fund's portfolio subject to First Trust's supervision. MCIM manages the Core
Component which consists primarily of equity securities and equity-like
securities issued by infrastructure issuers and, for its portfolio management
services, MCIM is entitled to a quarterly fee calculated at an annual rate of
0.60% for that portion of the Fund's Total Assets allocated to MCIM. If the
Fund's Total Assets are greater than $250 million, MCIM receives an annual
portfolio management fee of 0.65% for that portion of the Fund's Total Assets
over $250 million. In addition, to the extent that MCIM invests a portion of the
Core Component in unlisted securities ("Core Unlisted Instruments"), MCIM is
entitled to receive a supplemental fee of 0.60% of that portion of the Fund's
Total Assets invested in Core Unlisted Instruments. Four Corners manages the
Senior Loan Component and, for its portfolio management services, Four Corners
is entitled to a quarterly fee calculated at an annual rate of 0.60% for that
portion of the Fund's Total Assets allocated to Four Corners.
BNY Mellon Investment Servicing (US) Inc. serves as the Fund's Administrator,
Fund Accountant and Transfer Agent in accordance with certain fee arrangements.
The Bank of New York Mellon serves as the Fund's Custodian in accordance with
certain fee arrangements.
Effective January 23, 2012, James A. Bowen resigned from his position as the
President and Chief Executive Officer of the Fund. He will continue as a
Trustee, the Chairman of the Board of Trustees and a member of the Executive
Committee. The Board elected Mark R. Bradley to serve as the President and Chief
Executive Officer of the Fund and James M. Dykas to serve as the Treasurer,
Chief Financial Officer and Chief Accounting Officer of the Fund.
Effective January 1, 2012, each Trustee who is not an officer or employee of
First Trust, any sub-advisor or any of their affiliates ("Independent Trustees")
is paid a fixed annual retainer of $125,000 per year and an annual per fund fee
of $4,000 for each closed-end fund or other actively managed fund and $1,000 for
each index fund in the First Trust Fund Complex. The fixed annual retainer is
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Prior to January 1, 2012, each Independent Trustee received an annual
retainer of $10,000 per trust for the first 14 trusts of the First Trust Fund
Complex and an annual retainer of $7,500 per trust for each additional trust in
the First Trust Fund Complex. The annual retainer was allocated equally among
each of the trusts.
Additionally, the Lead Independent Trustee is paid $15,000 annually, the
Chairman of the Audit Committee is paid $10,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
is paid $5,000 annually to serve in such capacities, with such compensation
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Prior to January 1, 2012, the annual amounts paid were $10,000, $5,000
and $2,500, respectively. Trustees are reimbursed for travel and out-of-pocket
expenses in connection with all meetings. The Lead Independent Trustee and each
Committee chairman will serve two-year terms before rotating to serve as
chairman of another committee or as Lead Independent Trustee. The officers and
"Interested" Trustee receive no compensation from the funds for acting in such
capacities.
For the six months ended May 31, 2012, the Fund paid brokerage commissions to
Macquarie Capital (USA) Inc., an affiliate of MCIM and Four Corners, totaling
$14,499.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities, excluding
short-term investments, for the six months ended May 31, 2012 were $139,241,815
and $143,319,326, respectively.
Page 22
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
5. BORROWINGS
The Fund entered into a Committed Facility Agreement with BNP Paribas Prime
Brokerage Inc. (the "BNP Paribas Facility"), which provides for a committed
credit facility to be used as leverage for the Fund. The BNP Paribas Facility
provides for a secured, committed line of credit for the Fund, where Fund assets
are pledged against advances made to the Fund. Under the requirements of the
1940 Act, the Fund, immediately after any such borrowings, must have "asset
coverage" of at least 300% (33-1/3% of the Fund's total assets after
borrowings). The total amount of loans that may be outstanding at any one time
under the BNP Paribas Facility is $50,000,000. Absent certain events of default
or failure to maintain certain collateral requirements, BNP Paribas Prime
Brokerage Inc. ("BNP") may not terminate the BNP Paribas Facility except upon
180 calendar days' prior notice. The borrowing rate under the BNP Paribas
Facility is equal to 3-month LIBOR plus 80 basis points. In addition, the Fund
pays a commitment fee of 0.85% on the undrawn amount of the BNP Paribas
Facility.
For the six months ended May 31, 2012, the daily average amount outstanding
under the BNP Paribas Facility was $47,500,000. The high and low annual interest
rates during the six months ended May 31, 2012 were 1.38% and 1.27%,
respectively, and the weighted average interest rate was 1.31%. The interest
rate at May 31, 2012 was 1.27%.
6. INDEMNIFICATION
The Fund has a variety of indemnification obligations under contracts with its
service providers. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
7. RISK CONSIDERATIONS
Risks are inherent in all investing. The following summarizes some, but not all,
of the risks that should be considered for the Fund. For additional information
about the risks associated with investing in the Fund, please see the Fund's
prospectus and statement of additional information, as well as other Fund
regulatory filings.
INVESTMENT AND MARKET RISK: An investment in the Fund's Common Shares is subject
to investment risk, including the possible loss of the entire principal
invested. An investment in Common Shares represents an indirect investment in
the securities owned by the Fund. The value of these securities, like other
market investments, may move up or down, sometimes rapidly and unpredictably.
Common Shares at any point in time may be worth less than the original
investment, even after taking into account the reinvestment of Fund dividends
and distributions. Security prices can fluctuate for several reasons including
the general condition of the securities markets, or when political or economic
events affecting the issuers occur. When the Advisor or Sub-Advisor determines
that it is temporarily unable to follow the Fund's investment strategy or that
it is impractical to do so (such as when a market disruption event has occurred
and trading in the securities is extremely limited or absent), the Fund may take
temporary defensive positions.
INDUSTRY CONCENTRATION RISK: The Fund intends to invest up to 100% of its Total
Assets in the securities and instruments of infrastructure issuers. Given this
industry concentration, the Fund will be more susceptible to adverse economic or
regulatory occurrences affecting that industry than an investment company that
is not concentrated in a single industry. Infrastructure issuers, including
utilities and companies involved in infrastructure projects, may be subject to a
variety of factors that may adversely affect their business or operations,
including high interest costs in connection with capital construction programs,
high leverage, costs associated with environmental and other regulations, the
effects of economic slowdown, surplus capacity, increased competition from other
providers of services, uncertainties concerning the availability of fuel at
reasonable prices, the effects of energy conservation policies and other
factors.
LEVERAGE RISK: The use of leverage results in additional risks and can magnify
the effect of any losses. If the income and gains from the securities and
investments purchased with such proceeds do not cover the cost of leverage, the
Common Shares' return will be less than if leverage had not been used. The funds
borrowed pursuant to a leverage borrowing program constitute a substantial lien
and burden by reason of their prior claim against the income of the Fund and
against the net assets of the Fund in liquidation. The rights of lenders to
receive payments of interest on and repayments of principal on any borrowings
made by the Fund under a leverage borrowing program are senior to the rights of
holders of Common Shares upon liquidation. If the Fund is not in compliance with
certain credit facility provisions, the Fund may not be permitted to declare
dividends or other distributions, including dividends and distributions with
respect to Common Shares or purchase Common Shares. The use of leverage by the
Fund increases the likelihood of greater volatility of NAV and market price of
the Common Shares. Leverage also increases the risk that fluctuations in
interest rates on borrowings and short-term debt that the Fund may pay will
reduce the return to the Common Shareholders or will result in fluctuations in
the dividends paid on the Common Shares.
MLP RISK: An investment in MLP units involves risks which differ from an
investment in common stock of a corporation. Holders of MLP units have limited
control and voting rights on matters affecting the partnership. In addition,
there are certain tax risks associated with an investment in MLP units and
conflicts of interest exist between common unit holders and the general partner,
including those arising from incentive distribution payments.
NON-U.S. RISK: Investments in the securities and instruments of non-U.S. issuers
involve certain considerations and risks not ordinarily associated with
investments in securities and instruments of U.S. issuers. Non-U.S. companies
are not generally subject to uniform accounting, auditing and financial
standards and requirements comparable to those applicable to U.S. companies.
Non-U.S. securities exchanges, brokers and listed companies may be subject to
less government supervision and regulation than exists in the United States.
Dividend and interest income may be subject to withholding and other non-U.S.
taxes, which may adversely affect the net return on such investments. A related
risk is that there may be difficulty in obtaining or enforcing a court judgment
abroad.
Page 23
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
CURRENCY RISK: Currency risk is the risk that the value of a non-U.S.
investment, measured in U.S. dollars, will decrease because of unfavorable
changes in currency exchange rates. An increase in the strength of the U.S.
dollar relative to other currencies may cause the value of the Fund to decline.
Certain non-U.S. currencies may be particularly volatile, and non-U.S.
governments may intervene in the currency markets, causing a decline in value or
liquidity in the Fund's non-U.S. holdings whose value is tied to the affected
non-U.S. currency.
SENIOR LOAN RISK: In the event a borrower fails to pay scheduled interest or
principal payments on a Senior Loan held by the Fund, the Fund will experience a
reduction in its income and a decline in the value of the Senior Loan, which
will likely reduce dividends and lead to a decline in the net asset value of the
Fund's Common Shares. If the Fund acquires a Senior Loan from another Lender,
for example, by acquiring a participation, the Fund may also be subject to
credit risks with respect to that lender. Although Senior Loans may be secured
by specific collateral, the value of the collateral may not equal the Fund's
investment when the Senior Loan is acquired or may decline below the principal
amount of the Senior Loan subsequent to the Fund's investment. Also, to the
extent that collateral consists of stock of the borrower or its subsidiaries or
affiliates, the Fund bears the risk that the stock may decline in value, be
relatively illiquid, and/ or may lose all or substantially all of its value,
causing the Senior Loan to be under collateralized. Therefore, the liquidation
of the collateral underlying a Senior Loan may not satisfy the issuer's
obligation to the Fund in the event of non-payment of scheduled interest or
principal, and the collateral may not be readily liquidated.
HIGH-YIELD SECURITIES RISK: The Senior Loans in which the Fund invests are
generally considered to be "high-yield" securities. High yield securities or
"junk" bonds, the generic name for securities rated below "BBB-" by one or more
ratings agencies, should be considered speculative as their low ratings indicate
a quality of less than investment grade, and therefore carry an increased risk
of default as compared to investment grade issues. Because high-yield securities
are generally subordinated obligations and are perceived by investors to be
riskier than higher rated securities, their prices tend to fluctuate more than
higher rated securities and are affected by short-term credit developments to a
greater degree.
High-yield securities are subject to greater market fluctuations and risk of
loss than securities with higher investment ratings. A reduction in an issuer's
creditworthiness may result in the bankruptcy of an issuer or the default by an
issuer on the interest and principal payments. The market for high-yield
securities is smaller and less liquid than that for investment grade securities.
NON-DIVERSIFICATION RISK: The Fund is non-diversified under the 1940 Act, but is
still limited as to the percentage of its assets which may be invested in the
securities of any issuer by the diversification requirements imposed by the
Code. Because the Fund may invest a relatively high percentage of its assets in
a limited number of issuers, the Fund may be more susceptible to any single
economic, political or regulatory occurrence and to the financial conditions of
the issuers in which it invests.
INTEREST RATE RISK: The Fund's portfolio is also subject to interest rate risk.
Interest rate risk is the risk that fixed-income securities will decline in
value because of changes in market interest rates. Investments in debt
securities with long-term maturities may experience significant price declines
if long-term interest rates increase.
CREDIT RISK: The Senior Loans in which the Fund invests are also subject to
credit risk. Credit risk is the risk of nonpayment of scheduled contractual
repayments whether interest and/or principal payments or payments for services.
Credit risk also is the risk that one or more investments in the Fund's
portfolio will decline in price, or fail to pay interest or principal when due,
because the issuer of the security or contractual counterparty experiences a
decline in its financial status.
QUALIFIED DIVIDEND INCOME TAX RISK: There can be no assurance as to what portion
of the distributions paid to the Fund's Common Shareholders will consist of
tax-advantaged qualified dividend income. For taxable years beginning before
January 1, 2013, certain distributions designated by the Fund as derived from
qualified dividend income will be taxed in the hands of non-corporate Common
Shareholders at the rates applicable to long-term capital gains, provided
certain holding period and other requirements are satisfied by both the Fund and
the Common Shareholders. Additional requirements apply in determining whether
distributions by foreign issuers should be regarded as qualified dividend
income. Certain investment strategies of the Fund will limit the Fund's ability
to meet these requirements and consequently will limit the amount of qualified
dividend income received and distributed by the Fund. A change in the favorable
provisions of the federal tax laws with respect to qualified dividends may
result in a widespread reduction in announced dividends and may adversely impact
the valuation of the shares of dividend-paying companies.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events to the Fund through
the date the financial statements were issued, and has determined that there
were no subsequent events requiring recognition or disclosure in the financial
statements that have not already been disclosed.
Page 24
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
DIVIDEND REINVESTMENT PLAN
If your Common Shares are registered directly with the Fund or if you hold your
Common Shares with a brokerage firm that participates in the Fund's Dividend
Reinvestment Plan (the "Plan"), unless you elect, by written notice to the Fund,
to receive cash distributions, all dividends, including any capital gain
distributions, on your Common Shares will be automatically reinvested by BNY
Mellon Investment Servicing (US) Inc. (the "Plan Agent"), in additional Common
Shares under the Plan. If you elect to receive cash distributions, you will
receive all distributions in cash paid by check mailed directly to you by the
Plan Agent, as the dividend paying agent.
If you decide to participate in the Plan, the number of Common Shares you will
receive will be determined as follows:
(1) If Common Shares are trading at or above net asset value ("NAV") at
the time of valuation, the Fund will issue new shares at a price
equal to the greater of (i) NAV per Common Share on that date or
(ii) 95% of the market price on that date.
(2) If Common Shares are trading below NAV at the time of valuation, the
Plan Agent will receive the dividend or distribution in cash and
will purchase Common Shares in the open market, on the NYSE or
elsewhere, for the participants' accounts. It is possible that the
market price for the Common Shares may increase before the Plan
Agent has completed its purchases. Therefore, the average purchase
price per share paid by the Plan Agent may exceed the market price
at the time of valuation, resulting in the purchase of fewer shares
than if the dividend or distribution had been paid in Common Shares
issued by the Fund. The Plan Agent will use all dividends and
distributions received in cash to purchase Common Shares in the open
market within 30 days of the valuation date except where temporary
curtailment or suspension of purchases is necessary to comply with
federal securities laws. Interest will not be paid on any uninvested
cash payments.
You may elect to opt-out of or withdraw from the Plan at any time by giving
written notice to the Plan Agent, or by telephone at (866) 340-1104, in
accordance with such reasonable requirements as the Plan Agent and the Fund may
agree upon. If you withdraw or the Plan is terminated, you will receive a
certificate for each whole share in your account under the Plan, and you will
receive a cash payment for any fraction of a share in your account. If you wish,
the Plan Agent will sell your shares and send you the proceeds, minus brokerage
commissions.
The Plan Agent maintains all Common Shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
you may need for tax records. Common Shares in your account will be held by the
Plan Agent in non-certificated form. The Plan Agent will forward to each
participant any proxy solicitation material and will vote any shares so held
only in accordance with proxies returned to the Fund. Any proxy you receive will
include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions
in Common Shares. However, all participants will pay a pro rata share of
brokerage commissions incurred by the Plan Agent when it makes open market
purchases.
Automatically reinvesting dividends and distributions does not mean that you do
not have to pay income taxes due upon receiving dividends and distributions.
Capital gains and income are realized although cash is not received by you.
Consult your financial advisor for more information.
If you hold your Common Shares with a brokerage firm that does not participate
in the Plan, you will not be able to participate in the Plan and any dividend
reinvestment may be effected on different terms than those described above.
The Fund reserves the right to amend or terminate the Plan if in the judgment of
the Board of Trustees the change is warranted. There is no direct service charge
to participants in the Plan; however, the Fund reserves the right to amend the
Plan to include a service charge payable by the participants. Additional
information about the Plan may be obtained by writing BNY Mellon Investment
Servicing (US) Inc., 301 Bellevue Parkway, Wilmington, Delaware 19809.
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Fund uses to determine how
to vote proxies and information on how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
the Fund's website located at http://www.ftportfolios.com; and (3) on the
Securities and Exchange Commission's website at http://www.sec.gov.
Page 25
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES
DIVIDEND & INCOME FUND
MAY 31, 2012 (UNAUDITED)
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available (1) by calling (800) 988-5891; (2) on the Fund's website located
at http://www.ftportfolios.com; (3) on the SEC's website at http://www.sec.gov;
and (4) for review and copying at the SEC's Public Reference Room ("PRR") in
Washington, DC. Information regarding the operation of the PRR may be obtained
by calling (800) SEC-0330.
SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Joint Annual Meeting of Shareholders of the Common Shares of Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund, First Trust Energy
Income and Growth Fund, First Trust Enhanced Equity Income Fund, First
Trust/Aberdeen Global Opportunity Income Fund, First Trust Mortgage Income Fund,
First Trust Strategic High Income Fund II, First Trust/Aberdeen Emerging
Opportunity Fund, First Trust Specialty Finance and Financial Opportunities
Fund, First Trust Active Dividend Income Fund, First Trust High Income
Long/Short Fund and First Trust Energy Infrastructure Fund was held on April 18,
2012 (the "Annual Meeting"). At the Annual Meeting, Trustees Richard E. Erickson
and Thomas R. Kadlec were elected by the Common Shareholders of the
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund as
Class I Trustees for three-year terms expiring at the Fund's annual meeting of
shareholders in 2015. The number of votes cast in favor of Mr. Erickson was
7,510,453, the number of votes against was 194,107 and the number of abstentions
was 828,725. The number of votes cast in favor of Mr. Kadlec was 7,507,251, the
number of votes against was 197,309, and the number of abstentions was 828,725.
James A. Bowen, Niel B. Nielson and Robert F. Keith are the other current and
continuing Trustees.
Page 26
This Page Left Blank Intentionally.
This Page Left Blank Intentionally.
FIRST TRUST
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 E. Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISORS
Macquarie Capital Investment Management LLC
125 West 55th Street
New York, NY 10019
Four Corners Capital Management, LLC
2005 Market Street
Philadelphia, PA 19103
ADMINISTRATOR,
FUND ACCOUNTANT &
TRANSFER AGENT
BNY Mellon Investment Servicing (US) Inc.
301 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
The Bank of New York Mellon
1 Wall Street
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
[BLANK BACK COVER]
ITEM 2. CODE OF ETHICS.
Not applicable
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. INVESTMENTS.
(a) Schedule of Investments in securities of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a)(1) IDENTIFICATION OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS AND
DESCRIPTION OF ROLE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
Macquarie Capital Investment Management LLC ("MCIM") and Four Corners Capital
Management, LLC ("Four Corners") serve as the registrant's sub-advisers. MCIM
manages the Core Component of the registrant, while Four Corners manages the
Senior Loan Component of the registrant.
MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
Andrew Maple-Brown is a portfolio manager of funds in the MFG Global
Infrastructure Securities Strategy that are mainly domiciled in North America.
This includes the Fund. He became Co-Manager of the Fund on August 1, 2009 and
sole Portfolio Manager of the Fund on June 30, 2010. Mr. Maple-Brown relocated
back to Sydney in April 2012 and was joined by Anthony Felton as Co-Portfolio
Manager of the Fund on June 29, 2012. Anthony Felton joined Macquarie Group in
February 2004 and the MFG Infrastructure Securities team in June 2004. He was
responsible for the analysis of European stocks before becoming a Portfolio
Manager. He became the Portfolio Manager with Andrew Maple-Brown for the Fund as
of June 29, 2012.
Length of
---------
Name Title Service Business Experience Past 5 Years
---- ----- ------- --------------------------------
Andrew Maple-Brown Sole Portfolio Manager of the 15 years Mr. Maple-Brown joined the MFG Infrastructure
Fund as of June 30, 2010. Securities* investment team in 2007 as a Portfolio
Joined by Anthony Felton as Manager. He transferred to the New York office in
Co-Portfolio Manager as of June 2009, before returning to Sydney in 2012. During his
29, 2012 tenure in either Sydney or New York, Mr. Maple-Brown
has been responsible for managing almost all of the
Global Infrastructure Macquarie Capital Investment
Management LLC Securities accounts. He joined the
investment team in 2007 in Sydney, Australia, where he
was previously a portfolio manager for the Australian
and Asian domiciled portfolios in the Strategy.
Andrew joined Macquarie Group in 2001 in the Debt
Markets division, where his focus was primarily on
infrastructure transactions, particularly
public-private partnerships (PPP).
Anthony Felton Co-Portfolio Manager as of 13 years Mr. Felton joined Macquarie Group in February 2004 and
June 29, 2012 the MFG Infrastructure Securities* team in June 2004.
He was responsible for the analysis of European stocks
before becoming a Portfolio Manager. He has also been
involved in the development of the Infrastructure
Securities business through new fund development of
reporting and control tools across the funds. Prior
to joining Macquarie, Mr. Felton had broad based
financial market experience with Westpac Banking
Corporation in Sydney, and West LB and JPMorgan in
London between 1999 and 2005. Mr. Felton has been
awarded the Chartered Financial Analyst (CFA)
designation.
* MFG Infrastructure Securities is the marketing name of a separate asset
management business unit that is part of Macquarie Funds Group ("MFG") and is
within Macquarie Group Limited. MFG Infrastructure Securities includes Macquarie
Capital Investment Management (Australia) Limited ("MCIMAL") and Macquarie
Capital Investment Management LLC ("MCIML").
(a)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
AND POTENTIAL CONFLICTS OF INTEREST
INFORMATION PROVIDED AS OF MAY 31, 2012
OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Total Assets in
Total No. of Accounts Accounts where
Name of Portfolio No. of where Advisory Fee Advisory Fee is
Manager or Accounts is Based on Based on
Team Member Type of Accounts Managed* Total Assets Performance Performance
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Andrew Maple-Brown Registered Investment 3 $772.8M 0 $0
Companies:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Pooled Investment 4 $593.0M 0 $0
Vehicles:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Accounts: 4 $366.9M 0 $0
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Anthony Felton Registered Investment 0 0 0 $0
Companies:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Pooled Investment 4 $339.5 M 0 $0
Vehicles:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Accounts: 0 0 0 $0
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
* Core Component MFD: $112.3M
Senior Loan Component MFD: $ 47.5M
POTENTIAL CONFLICTS OF INTERESTS
MCIM has policies and procedures in place that govern the manner in which
allocations of trades will be handled should MCIM effect purchases or sales of
the same security for different clients. These procedures address circumstances
in which separate purchase or sale orders for the same security are placed for
two or more clients, and additionally when purchase or sale orders for the same
security are aggregated. MCIM policies detail specific conditions that must be
met when aggregating purchase or sale orders for the same security for two or
more clients. The Portfolio Manager is responsible for allocating investment
opportunities and aggregating orders consistently with the procedures and
monthly review by the Chief Compliance Officer of MCIM (or designee) is
required.
(a)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
INFORMATION PROVIDED AS OF MAY 31, 2012
Compensation consists of three components: (1) fixed remuneration in the form of
a base salary, (ii) variable (at risk) performance pay in the form of an annual
profit share allocation and (iii) a long term incentive in the form of stock
(applies to Director level employees only). Fixed remuneration takes into
consideration the role of individuals and market conditions. Remuneration is
reviewed on a yearly basis in March/April and takes effect from July 1st of that
year.
Aggregate staff profit share is linked to Macquarie Group's profitability and
return on ordinary equity, with the allocation of individual profit share being
based on factors including contribution to profit, use of capital, funding and
risk. Macquarie Group operates profit share retention arrangements for employees
meeting certain pay thresholds, to ensure an appropriate balance between short
and longer-term incentives. Retained profit share is invested in the Macquarie
Employee Retained Equity Plan ("MEREP") to further align employee and
shareholder interests as well as enhance Macquarie Group's ability to attract
and retain high caliber talent.
Compensation consists of a base salary amount plus discretionary profit share.
The base salary is fixed a year in advance, while the discretionary profit share
varies according to the performance of the individual, the division and
Macquarie Group. Discretionary profit share is allocated annually. Compensation
is not directly based on the pre-or post-tax performance of the Fund over a
certain period. However, performance of the Fund may be one factor taken into
account in determining compensation. Compensation is not directly based on the
value of assets held in the Fund's portfolio. However the value of assets may be
one factor taken into account in determining compensation.
If the Portfolio Manager's or the Management Team's bonus is over a certain
amount, a portion of that bonus may be deferred and may be paid out in the
future in up to four equal installments.
(a)(4) DISCLOSURE OF SECURITIES OWNERSHIP
THE INFORMATION BELOW IS AS OF MAY 31, 2012
----------------------------------- --------------------------------
Name Dollar ($) Range of Fund Shares
Beneficially Owned
----------------------------------- --------------------------------
Andrew Maple-Brown $0
----------------------------------- --------------------------------
Anthony Felton $0
----------------------------------- --------------------------------
FOUR CORNERS CAPITAL MANAGEMENT, LLC:
(a)(1) IDENTIFICATION OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS AND
DESCRIPTION OF ROLE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
INFORMATION PROVIDED AS OF MAY 31, 2012
Four Corners manages portfolios comprised principally of U.S. dollar
denominated, floating-rate, senior secured, commercial and industrial loans and
other debt instruments that may include high yield bonds, structured products,
and/or credit derivatives. The co-portfolio managers are supported in their
portfolio management activities by the investment staff, including a team of
credit analysts. The credit analysts are assigned loans within specific
industries and report to the Head of Credit Research.
Adam H. Brown
Co-Portfolio Manager, Senior Loan Component
Vice President, Portfolio Manager, Four Corners Capital Management, LLC
Mr. Brown is a portfolio manager on Four Corners' taxable fixed-income team,
with specific responsibilities for the bank loan portfolio. Mr. Brown previously
worked with Wachovia Securities, where he worked in the leveraged finance group
arranging senior secured bank loans and high-yield bond financings for financial
sponsors and corporate issuers. Mr. Brown has been part of the Four Corners team
for nine years and over the past year has had a dual role with Four Corners'
affiliated investment adviser, Delaware Investments. Since 2007, Mr. Brown has
co-managed the Four Corners' collateralized loan obligations and bank loan
portfolios with Bob Bernstein and Drew Sweeney. Mr. Brown earned a bachelor's
degree from the University of Florida and an MBA from the A.B. Freeman School of
Business at Tulane University. Mr. Brown is also a Chartered Financial Analyst.
Kevin P. Loome
Co-Portfolio Manager, Senior Loan Component
Senior Vice President, Senior Portfolio Manager, Head of High Yield Investments,
Four Corners Capital Management, LLC
Mr. Loome is the head of the high-yield fixed-income team at Four Corners,
responsible for portfolio construction and strategic asset allocation of all
high-yield fixed income assets. Prior to joining Delaware Investments, Four
Corners' affiliated investment adviser, in August 2007 in his current position,
Mr. Loome spent 11 years at T. Rowe Price, starting as an analyst and leaving
the firm as a portfolio manager. Mr. Loome began his career with Morgan Stanley
as a corporate finance analyst in the New York and London offices. Mr. Loome
received his bachelor's degree in commerce from the University of Virginia and
earned an MBA from the Tuck School of Business at Dartmouth.
(a)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS OR MANAGEMENT TEAM MEMBER
AND POTENTIAL CONFLICTS OF INTEREST
INFORMATION PROVIDED AS OF MAY 31, 2012(1).
# of Accounts Total Assets
Managed for for which
Total which Advisory Advisory
# of Fee is Fee is
Name of Portfolio Manager Accounts Total Based on Based on
or Team Member Type of Accounts Managed Assets Performance Performance
------------------------------ ----------------------------------- -------------- ------------ ---------------- -------------
$103.41
1. Adam H. Brown Registered Investment Companies: 1 million 0 $0
--------------------------------
Other Pooled Investment Vehicles: 0 $0 0 $0
---------------------------------
$1.04
Other Accounts1: 10 billion 0 $0
----------------
$17.18
2. Kevin P. Loome Registered Investment Companies: 17 billion 0 $0
--------------------------------
Other Pooled Investment Vehicles: 0 $ 0 0 $0
---------------------------------
$2.88
Other Accounts(1): 14 billion 0 $0
------------------
1 The chart lists certain information about types of other accounts for
which each portfolio manager is primarily responsible as of May 31, 2012.
Any accounts managed in a personal capacity appear under "Other Accounts"
along with the other accounts managed on a professional basis. The
personal account information is current as of June 30, 2012.
POTENTIAL CONFLICTS OF INTERESTS
Four Corners has a fiduciary duty to provide unbiased advice and to disclose any
material conflicts of interest to its clients, as mandated under the Investment
Advisers Act of 1940. Furthermore, it is Four Corners' goal to act in good faith
and to treat all client accounts in a fair and equitable manner over time,
regardless of the client's strategy, fee arrangements, or the influence of a
client or client's beneficiaries.
Four Corners employs various controls to assist in the disclosure and management
of potential conflicts of interest and maintains policies (including Four
Corners' Code of Ethics and a trade allocation policy) that are designed to
mitigate any such conflicts. In instances where unique requirements or
restrictions are required due to the identification of different conflicts, Four
Corners will typically establish additional policies and controls or develop
alternate processing requirements to assist in the mitigation of these
conflicts.
(a)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGERS OR MANAGEMENT TEAM MEMBERS
PORTFOLIO MANAGER COMPENSATION
Information provided as of May 31, 2012.
Each named portfolio manager receives a fixed base salary in recognition of
their contributions. Each named portfolio manager is also eligible to receive an
annual cash bonus which is fully discretionary and based on quantitative and
qualitative factors. Portfolio managers may be awarded incentive unit awards and
may participate in benefit plans and programs available generally to all
employees.
Base Salaries are determined by a comparison to industry data prepared by third
parties to ensure that portfolio manager salaries are in line with salaries paid
at peer investment advisory firms. Each portfolio manager's bonus is determined
based on quantitative and qualitative factors. The portfolio managers and the
management team have no direct incentive to take undue risks when individual
fund performance is lagging.
(a)(4) DISCLOSURE OF SECURITIES OWNERSHIP
Information provided as of May 31, 2012.
Dollar Range of Fund
Shares Beneficially
Name Owned
Adam H. Brown
$ 0
Kevin P. Loome $ 0
(b) Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not Applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the "1940
Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days
of the filing date of the report that includes the disclosure required by
this paragraph, based on their evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's second fiscal quarter
of the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund
-------------------------------------------------------------------
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date July 19, 2012
-------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date July 19, 2012
-------------------------
By (Signature and Title)* /s/ James M. Dykas
------------------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
Date July 19, 2012
-------------------------
* Print the name and title of each signing officer under his or her signature.