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: November 30, 2009
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. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
(GRAPHIC)
ANNUAL REPORT
FOR THE YEAR ENDED
NOVEMBER 30, 2009
MACQUARIE/FIRST TRUST
GLOBAL INFRASTRUCTURE/
UTILITIES DIVIDEND &
INCOME FUND
(FOUR CORNERS
(MACQUARIE LOGO) CAPITAL MANAGEMENT LOGO) (FIRST TRUST LOGO)
TABLE OF CONTENTS
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
(MFD)
ANNUAL REPORT
NOVEMBER 30, 2009
Shareholder Letter ........................................................ 1
At A Glance ............................................................... 2
Portfolio Commentary ...................................................... 3
Portfolio of Investments .................................................. 9
Statement of Assets and Liabilities ....................................... 14
Statement of Operations ................................................... 15
Statements of Changes in Net Assets ....................................... 16
Statement of Cash Flows ................................................... 17
Financial Highlights ...................................................... 18
Notes to Financial Statements ............................................. 19
Report of Independent Registered Public Accounting Firm ................... 26
Additional Information .................................................... 27
Board of Trustees and Officers ............................................ 29
Privacy Policy ............................................................ 33
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 ("Macquarie" or "MCIM") and/or Four Corners Capital Management, LLC ("Four
Corners") 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 the Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income
Fund (the "Fund" or "MFD") 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 First Trust and/or MCIM and/or Four Corners 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 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)
ANNUAL REPORT
NOVEMBER 30, 2009
Dear Shareholders:
The year 2009 was more positive for the U.S. and global markets, which eased the
minds of economists and investors alike. Many economists believe that the
recession that began in December 2007 ended in March 2009. In fact, the Dow
Jones Industrial Average's total return from March 9 (the statistical end of the
bear market) to November 30, 2009, was 61.59%. Of course, no one can guarantee
that this trend will continue, but the economy has continued to rise and most
investors have found it easier to open their financial statements since March.
First Trust Advisors L.P. ("First Trust") has always believed that in order to
be successful in reaching your financial goals, you should be invested for the
long term. A long-term investor understands that the market, from a historical
perspective, has always experienced ups and downs. But history has shown that
the patient investor is typically rewarded over the long term. We have always
believed that staying invested in quality products and having a long-term
perspective can help investors reach their financial goals.
The report you hold contains detailed information about your investment in
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
(the "Fund"). It contains a portfolio commentary from the Fund's portfolio
management team that provides a market recap for the period, a performance
analysis and a market and Fund outlook. Additionally, the report provides the
Fund's financial statements for the period covered by the report. I encourage
you to read this document and discuss it with your financial advisor.
Since its inception, First Trust has been through many types of markets. We
remain committed to bringing you quality investment solutions regardless of the
inevitable volatility the market experiences. We offer a variety of products
that can fit many financial plans to help those investors seeking long-term
investment success. As well, we are committed to making available up-to-date
information about your investments so you and your financial advisor have
current information on your portfolio.
We continue to value our relationship with you, and we thank you for the
opportunity to assist you in achieving your financial goals.
Sincerely,
/s/ James A. Bowen
James A. Bowen
President of Macquarie/First Trust
Global Infrastructure/Utilities
Dividend & Income Fund
Page 1
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
"AT A GLANCE"
AS OF NOVEMBER 30, 2009 (UNAUDITED)
FUND STATISTICS
Symbol on New York Stock Exchange MFD
Common Share Price $ 11.73
Common Share Net Asset Value ("NAV") $ 14.36
Premium (Discount) to NAV (18.31)%
Net Assets Applicable to Common Shares $130,334,502
Current Quarterly Distribution per Common Share (1) $ 0.1500
Current Annualized Distribution per Common Share $ 0.6000
Current Distribution Rate on Closing Common Share Price (2) 5.12%
Current Distribution Rate on NAV (2) 4.18%
COMMON SHARE PRICE & NAV (WEEKLY CLOSING PRICE)
(PERFORMANCE GRAPH)
Market NAV
------ -----
11/30/08 8.6 11.42
12/5/08 8.12 10.7
12/12/08 8.89 11.09
12/19/08 9.03 11.46
12/26/08 9.28 11.39
1/2/09 10.41 12.11
1/9/09 10.7 11.95
1/16/09 9.96 11.52
1/23/09 10.05 11.13
1/30/09 10.56 11.09
2/6/09 11.82 11.51
2/13/09 9.57 11.16
2/20/09 8.4 10.56
2/27/09 8.16 10.18
3/6/09 6.7 9.22
3/13/09 6.7 9.36
3/20/09 7.55 10.22
3/27/09 7.95 10.26
4/3/09 8.17 10.39
4/9/09 8.24 10.67
4/17/09 8.52 10.8
4/24/09 8.46 10.89
5/1/09 9 11.28
5/8/09 9.47 11.83
5/15/09 8.97 11.52
5/22/09 9.32 11.89
5/29/09 9.75 12.26
6/5/09 10.22 12.21
6/12/09 10.4 12.51
6/19/09 10.01 12.23
6/26/09 10.13 12.33
7/2/09 9.96 12.21
7/10/09 9.7 11.93
7/17/09 10.21 12.58
7/24/09 10.61 12.92
7/31/09 10.58 13.07
8/7/09 10.78 13.01
8/14/09 10.76 13.02
8/21/09 10.67 13.01
8/28/09 10.7 13.17
9/4/09 10.72 13.12
9/11/09 11.12 13.57
9/18/09 11.72 13.88
9/25/09 11.52 13.64
10/2/09 11.41 13.52
10/9/09 11.9 13.96
10/16/09 11.86 14.1
10/23/09 11.93 14.18
10/30/09 11.15 13.63
11/6/09 11.45 13.99
11/13/09 11.72 14.36
11/20/09 11.58 14.21
11/27/09 11.65 14.25
11/30/09 11.73 14.36
PERFORMANCE
Average Annual Total Return
-------------------------------------
1 Year Ended 5 Years Ended Inception (3/25/2004)
11/30/2009 11/30/2009 to 11/30/2009
------------ ------------- ---------------------
Fund Performance
NAV (3) 33.75% 3.61% 7.21%
Market Value (4) 45.08% 1.63% 2.63%
Index Performance
S&P 500 Utilities Total Return Index 3.79% 5.45% 7.71%
% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
--------------- -----------
Spark Infrastructure Group 4.9%
Red Electrica Corp. SA 4.2
Transurban Group 4.2
SP AusNet 4.0
Enagas SA 3.7
Northeast Utilities 3.6
Severn Trent plc 3.3
Atlantia SPA 3.2
Pembina Pipeline Income Fund 3.2
Enterprise Products Partners, L.P. 3.1
----
Total 37.4%
====
% OF TOTAL
COUNTRY INVESTMENTS
------- -----------
United States(6) 34.7%
Australia 15.4
Spain 9.9
Canada 9.9
Italy 8.7
Germany 6.3
United Kingdom 6.0
France 5.0
Japan 2.1
New Zealand 1.0
Switzerland 1.0
-----
Total 100.0%
=====
% OF TOTAL
INDUSTRY CLASSIFICATION(5) INVESTMENTS
-------------------------- -----------
Transportation Infrastructure 21.5%
Electric Utilities 21.3
Gas Utilities 18.1
Water Utilities 7.4
Multi-Utilities 4.9
Power Generation 2.6
Construction & Engineering 2.0
Energy Equipment & Services 1.6
Diversified Consumer Services 0.9
----
Total 80.3%
====
(1) Most recent distribution paid or declared through 11/30/2009. 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 11/30/2009. Subject to
change in the future.
(3) Total return based on NAV is the combination of reinvested dividend
distributions and reinvested capital gain distributions, if any, at prices
obtained by the Dividend Reinvestment Plan and changes in NAV per share and
does not reflect sales load. Past performance is not indicative of future
results.
(4) Total return based on market value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan and changes in Common
Share Price. Past performance is not indicative of future results.
(5) Represents the industry classification breakdown for the Core Component of
the Fund's portfolio, which includes Common Stock, Master Limited
Partnerships and Canadian Income Trust securities. 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 19.7%
of the Fund's portfolio.
(6) The percentage of United States securities includes 19.7% of Senior
Floating-Rate Loan interests.
Page 2
PORTFOLIO COMMENTARY
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 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 $2.0 billion of assets as of
November 30, 2009, in MFG's Global 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, indirect subsidiary of Macquarie in
2008. Four Corners managed over $2.3 billion of assets as of November 30, 2009,
with an emphasis on Senior Loans.
Macquarie Group is a global provider of banking, financial, advisory, investment
and funds management services. Macquarie Funds Group, with over $69.5 billion in
funds under management (as of November 30, 2009) is the global investment
management business of Macquarie. Macquarie Funds Group offers a diverse range
of products including managed funds, funds-based structured products, hedge
funds and fund of funds.
PORTFOLIO MANAGEMENT TEAM
As noted in MFD's Semi-Annual Report for the period ended May 31, 2009 (the
"2009 Semi-Annual Report"), there was a change in one of the Co-Portfolio
Managers of MFD's Core Component that took effect on August 1, 2009.
Justin Lannen returned in August 2009 to Sydney, Australia where he remains a
Portfolio Manager on the MFG investment team and has assumed direct
responsibilities for the management of the team's Australia- and Asia-based
portfolios. As a result of the relocation, he relinquished Co-Portfolio Manager
responsibilities for MFD on July 31, 2009.
Coincident with Mr. Lannen relocating back to Sydney, Andrew Maple-Brown,
previously Portfolio Manager on the MFG investment team in Sydney, relocated to
New York effective August 1, 2009. MCIM appointed Mr. Maple-Brown as
Co-Portfolio Manager of MFD as of August 1, 2009 to succeed Mr. Lannen. Mr.
Maple-Brown, along with Mr. Fitch and Mr. Lannen, serves on the team's
Investment Committee.
MFD's investment objective, philosophy, and portfolio construction process
remain as they have been since the Fund's inception. Furthermore, Mr. Fitch, who
is the investment team's Chief Investment Officer, remains as Co-Portfolio
Manager of the Fund as he has since the Fund's inception.
JON FITCH
CO-PORTFOLIO MANAGER, MFD CORE COMPONENT
SENIOR PORTFOLIO MANAGER, MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
Mr. Fitch has been active in the analysis of infrastructure and utilities stocks
since 1997 and has over 21 years of business experience encompassing business
management, equity analysis, strategic consulting and banking. In addition to
MFD, Mr. Fitch is also the portfolio manager of 14 other funds (including
another U.S. closed-end fund) that invest in global infrastructure securities
with similar investment objectives. From 1997 to 2000, Mr. Fitch led the equity
research coverage of the infrastructure and utilities sector in Australia for
Macquarie Securities Limited ("MSL"), a wholly-owned subsidiary of Macquarie
Group. From 2001 to 2003, Mr. Fitch was located in Hong Kong, where he was
responsible for establishing a Hong Kong-based equity research team and research
coverage for a number of Asian infrastructure and utility companies. Mr. Fitch
returned to Australia in mid-2003, where he was responsible for coverage of
Australian utilities and energy stocks for MSL. In February 2004, Mr. Fitch was
named Chief Investment Officer of the Fund's investment team. Mr. Fitch has a
Bachelor of Commerce in Marketing from the University of New South Wales, a
Masters of Business in Accounting and Finance from the University of Technology
Sydney and a Graduate Diploma in Applied Finance and Investment from the
Securities Institute of Australia. Mr. Fitch is also a Fellow of the Financial
Services Institute of Australasia.
ANDREW MAPLE-BROWN
CO-PORTFOLIO MANAGER, MFD CORE COMPONENT (EFFECTIVE AUGUST 1, 2009)
PORTFOLIO MANAGER, MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
Mr. Maple-Brown joined the MFG investment team in 2007 as a Portfolio Manager
with direct responsibilities for the management of the team's Australia and Asia
based portfolios. These funds have the same investment objective, philosophy,
and portfolio construction process as MFD, subject to minor differences due to
local compliance regulations. In August
Page 3
PORTFOLIO COMMENTARY - (CONTINUED)
2009, Mr. Maple-Brown relocated to New York and assumed direct responsibilities
for the management of the team's North America based portfolios (including MFD).
Mr. Maple-Brown joined Macquarie Group 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 Debt Markets, Mr. Maple-Brown has had in excess of ten years
experience in financing 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 and a Masters of Applied
Finance from Macquarie University.
ROBERT I. BERNSTEIN, CFA
CO-PORTFOLIO MANAGER
CHIEF INVESTMENT OFFICER, FOUR CORNERS CAPITAL MANAGEMENT, LLC
Mr. Bernstein is responsible for managing Four Corners' investment activities.
He has over 18 years of experience in leveraged finance including senior secured
loans, high-yield bonds and private equity investments. Prior to joining Four
Corners, Mr. Bernstein was a partner of The Yucaipa Companies, a Los
Angeles-based private equity firm, where he completed M&A transactions and
leveraged financings valued in excess of $4 billion. Previously, Mr. Bernstein
was a Vice President in Bankers Trust's leveraged finance group, where he
arranged senior loan and high-yield bond financings for financial sponsors and
corporate issuers. Mr. Bernstein also worked in GE Capital's restructuring
group, where he focused primarily on asset-based loans to distressed borrowers.
Mr. Bernstein received an MBA in Finance from the University of Chicago and a
BBA in Finance magna cum laude from Hofstra University. He holds a Chartered
Financial Analyst designation. Mr. Bernstein also served as an infantry officer
in the U.S. Marine Corps.
DREW R. SWEENEY
CO-PORTFOLIO MANAGER
SENIOR VICE PRESIDENT, FOUR CORNERS CAPITAL MANAGEMENT, LLC
Mr. Sweeney's responsibilities include co-portfolio management of the Four
Corners' retail funds as well as coverage of the media and entertainment, cable
and satellite industries. Mr. Sweeny was designated Co-Portoflio Manager of the
Fund upon the announcement of resignation of Michael P. McAdams from Four
Corners on February 6, 2009. Mr. Sweeney has 15 years of investment experience
including 11 years in senior secured loans and high-yield bonds. Mr. Sweeney
joined Four Corners in 2005 from American Express Asset Management Group, Inc.
where he was primarily responsible for managing investments of senior secured
loans and high-yield bonds in the gaming, lodging, leisure, homebuilding, and
building product sectors. Prior to joining American Express, Mr. Sweeney worked
at Four Corners and ING Capital Advisors LLC managing investments of senior
secured loans in the media sector. Previously, Mr. Sweeney was an Associate at
First Union Securities in the Financial Sponsors and Diversified Industries
Groups. Mr. Sweeney received an MBA from the Kenan-Flagler Business School at
the University of North Carolina at Chapel Hill and a BS from Rutgers
University.
COMMENTARY
INVESTMENT OBJECTIVE
The investment objective of the Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund ("MFD" or the "Fund") 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. These investments focus 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.
Page 4
PORTFOLIO COMMENTARY - (CONTINUED)
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
The performance of the Fund for the fiscal year ended November 30, 2009 was set
against the backdrop of global equity and credit markets rallying strongly from
early March 2009 through the end of the period. At the same time, investors'
cash was allocated back into equities as investor sentiment and credit markets
improved markedly, with credit spreads narrowing significantly. Despite some
earlier market concerns, credit remained available to finance and/or refinance
good quality infrastructure assets throughout the period. Given the lower base
rates, the all-in cost of debt typically was little changed from prior periods.
The global equity market rally was led by the more cyclical sectors of the
equity market, including those that had been most oversold (most notably
financials) and some of the lower quality, higher risk stocks. Listed
infrastructure securities participated strongly in the market recovery, with
those that had been most oversold in 2008 typically recovering most strongly.
PERFORMANCE ANALYSIS - CORE COMPONENT
As shown on the performance table of this report, MFD's Net Asset Value ("NAV")
total return for the period was positive and outperformed 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 addition to listed infrastructure securities participating strongly in the
market recovery, there were two additional factors driving the Core Component's
positive contribution to the Fund's positive NAV total return during the period:
- The Fund's top three industry exposures as of November 30, 2009 were
also the Fund's top industry contributors to performance for the
period: transportation infrastructure, gas utilities and electric
utilities.
- The fall of the U.S. dollar against several major currencies benefited
the Fund because the Fund is not currency hedged and has a large
majority of its investments outside the U.S.
These factors are discussed in further detail below.
REBOUND IN TRANSPORTATION INFRASTRUCTURE
In late 2008 and early 2009, the market focused on the mostly gloomy economic
outlook and weaker toll road, air traffic and seaport volume data, and
overlooked the historical general resilience of these assets through economic
cycles. While there was some reduction in the usage of these user demand assets,
infrastructure remained far less cyclical than many other sectors in the market.
We believe that, around their lows, the prices of some of these infrastructure
stocks assumed a too severe downturn and only an anemic recovery. Thus, many of
these stocks appeared to be oversold by the end of 2008.
Starting at the end of 2008, we began to progressively unwind the Fund's more
defensive tilt towards "regulated/contracted" infrastructure industries (e.g.,
gas, utilities, electric utilities and water utilities), which had been
instituted during the 2008 market crisis, through selective investments in "user
demand" transportation infrastructure sub-industries (e.g., airports, seaports
and toll roads) that ranked attractively in our infrastructure investment
universe and that we believed had more than fully priced in the economic
downturn.
As a result, MFD was well positioned to participate in the 2009 market rally
that started in March 2009 and was led (among listed infrastructure securities)
in large part by the oversold transportation infrastructure stocks, particularly
in the toll roads and airports sub-industries.
Toll roads generally experienced positive trends in both traffic volumes and
share prices; the airport sub-industry continued to show improvement at both the
industry-wide and stock-specific levels; and seaports benefited from improved
sentiment about the economic outlook and thus expected container volume growth.
Page 5
PORTFOLIO COMMENTARY - (CONTINUED)
In the 2009 Semi-Annual Report, we highlighted Atlantia SpA as an example of
both our investment process and the market dislocation and subsequent recovery
during that period among transportation infrastructure stocks. As of the period
end on November 30, 2009, the stock was the Fund's eighth largest position and
was the top stock contributor to NAV return for the period.
Atlantia SpA Share Price(1)
[ATLANTIC GRAPHIC OMITTED]
Chart provided by Macquarie Capital Investment Management LLC
CONSISTENCY OF GAS & ELECTRIC UTILITIES
Throughout the period, the Fund benefited from the positive contribution of its
exposure to pipeline companies within the gas utilities industry, which includes
holdings in U.S.-listed Master Limited Partnerships ("MLPs").
MLPs that own pipeline and associated energy infrastructure assets are a portion
of the Fund's investment in the gas utilities industry. Most of these holdings
outperformed both the broader infrastructure sector and the pipeline
sub-industry over the period.
Company announcements in the pipeline sub-industry throughout the period
continued to reflect sound operational performance and a favorable outlook. We
continue to believe that the pipeline stocks held by the Fund have conservative
management, limited exposure to volume and commodity price risk and offer
defensive and predictable cash flows, attractive yields and good growth
prospects.
The Fund's electric utilities holdings were led by strong contributions from
several European and Australian utilities
CONTINUED WEAKNESS OF THE U.S. DOLLAR
As the Fund is not hedged for currency, an overlaying contributor to the Fund's
positive return was the decline of the U.S. dollar during the period. Currencies
have the potential to be exposed to short-term volatility, and the Fund was
adversely affected in prior periods by the strength of the U.S. dollar. However,
we believe that investors in a global equity portfolio may benefit over time
from the diversification to their overall portfolios provided by foreign
currency exposure.
When compared against the U.S. dollar over the period, the Australian Dollar
appreciated by 40%, the Canadian Dollar by 17%, the Euro by 18% and the British
Pound by 7%(2). These four currencies represented approximately 61.3% of the
Fund's core component positions at the end of the period.
----------
(1) Source: Bloomberg L.P. Example shown for illustrative purposes only.
(2) Source: Bloomberg L.P.
Page 6
PORTFOLIO COMMENTARY - (CONTINUED)
PORTFOLIO COMPOSITION
As of November 30, 2009, the Fund's Core Component held positions in 35 global
infrastructure stocks, representing 11 countries and 9 infrastructure
industries.
During the period, the Fund's weightings in gas utilities, multi-utilities and
power generation were reduced and the weighting in transportation infrastructure
was increased to unwind the defensive tilt that was discussed earlier.
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 from
which to pay dividends. 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 fiscal year ended November 30, 2009 was an extraordinary period for the
Senior Loan market. The S&P/LSTA Leveraged Loan Index (the "Index") had a return
of 42.95% during the period. After the worst year in Senior Loan market history
in 2008, the Senior Loan market has followed with the best performance in its
history in 2009. The positive technical conditions that existed in 2009 drove
strong performance at the same time as default rates were hitting record highs
and recovery rates were hitting record lows - a stark reversal from the
technical sell-off that drove 2008's negative returns.
Demand for Senior Loans was broad-based in 2009, with investors seeking to take
advantage of the low prices/wide spreads at which these securities were trading.
The Index began 2009 at an average price of 62%, which provided a lot of cushion
for investors to absorb credit losses and still earn strong returns. As a
result, the market saw inflows of nearly $3 billion into U.S. open-end Senior
Loan funds after 2008's outflows of over $4 billion(i). Likewise, supply was
weak during most of the year. Since spreads were so wide, most companies were
unable to issue new loans on terms that were affordable to them, which resulted
in very little new issuance. Additionally, there was a lot of new issue activity
in the high yield bond and equity markets, and some of the proceeds from those
markets were used to prepay bank loans, reducing the outstanding pool of bank
loans by over 6% year-to-date(ii). In summary, a combination of limited, if any,
forced selling, increased demand, and reduced supply has created the strong
technical conditions which have driven the year's dramatic rally.
Notwithstanding the market's dramatic year-to-date returns, it is important to
note that the run up has occurred from historically low levels, and the market
still offers good value at current levels compared to historical levels.
Additionally, the loan asset class continues to benefit from very low duration.
While this has obviously resulted in lower yields as rates have declined, we
believe it appeals to investors who are looking for credit spread with little
duration risk. Consequently, while we remain very cautious about fundamental
economic conditions and absolute leverage levels, we continue to believe that
there will be ongoing demand for well structured Senior Loans, which should add
to relative stability for the asset class compared to 2008's volatility.
PERFORMANCE RELATIVE TO THE INDEX
The S&P 500 U.S. Utilities Total Return Index is a broad barometer of the
performance of utility stocks (not including all infrastructure industries)
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.
The Fund outperformed the Index due to (1) its underweight position in electric
utilities, (2) the underweight to the weaker U.S. dollar, and (3) stock
selection and overweight positions relative to the Index in gas utilities and
transportation infrastructure securities, due to the focus of the Fund on these
types of assets, which are not represented in the Index. The Fund's Senior Loan
Component also contributed to this outperformance.
----------
(i) Standard & Poor's Leveraged Commentary & Data. LEVERAGED LENDING QUARTERLY
COMMENTARY 4Q08
(ii) Standard & Poor's Leveraged Commentary & Data. LEVERAGED LENDING QUARTERLY
REVIEW 3Q09
Page 7
PORTFOLIO COMMENTARY - (CONTINUED)
DISTRIBUTIONS
During the fiscal year covered by this report, the Fund announced four regularly
scheduled quarterly distributions totaling $0.60 per share. The reduced
distributions relative to previous Fund years were primarily due to the effect
of the decline in global equity markets and some of the changes in the
portfolio's composition outlined above. The decreases have allowed the Fund to
preserve its capital, and have helped the Fund to be positioned for the
long-term valuation opportunities in global infrastructure securities that were
created, in our view, by the equity market dislocation.
The character of the distributions made during the year are determined in
accordance with accounting principles generally accepted in the United States of
America ("US"), which may differ from classifications reported under US Internal
Revenue Code regulations. Due to the fact that the Fund liquidated a substantial
portion of its MLP interests during fiscal 2009 and the fact that the
computation and the timing of net realized gains and losses differ related to
MLPs for the financial statements and tax purposes, the Fund has reported a
tax-basis re-characterization of $0.49 per share from ordinary income to the
return of capital for the fiscal year ending November 30, 2009.
MARKET AND FUND OUTLOOK
While a global economic recovery is underway, it is tentative in many countries
and still reliant on fiscal and monetary stimulus measures. Central banks across
the world have generally maintained very low interest rates.
As expected, infrastructure earnings have been more resilient and current
valuations for listed infrastructure stocks do not appear stretched based on our
earnings forecasts. Recent takeover proposals at a significant premium to market
price lend support to the view that there is significant long-term value
inherent in listed infrastructure assets.
Many of the Fund's holdings continue to deliver sound operational profitability,
in keeping with their essential service nature and ability to generally
withstand weak economic conditions. Among the user demand transportation
infrastructure sub-industries, toll roads have, as expected, been the first to
benefit from improving economic conditions and market sentiment, both in share
prices and the traffic and revenue results of the underlying assets. Airports
are already generally experiencing improving passenger volumes, and the market
is looking for further confirmation of that trend. While Seaports have yet to
see any material increase in container volumes, we believe they will benefit as
the expected recovery continues in 2010 and the value inherent in these
strategic assets is recognized.
After the severe dislocation and liquidity-driven share price movements, global
equity markets are returning to more normal (and fundamentally driven) behavior.
We are pleased with the Fund's strong positive return for the fiscal year
covered by this report, and we believe the Fund is well positioned to further
benefit in 2010 as equity markets and the listed infrastructure space are
expected to normalize.
We believe that MFD 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.
Page 8
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a)
NOVEMBER 30, 2009
SHARES DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
COMMON STOCKS - 81.6%
AUSTRALIA - 19.0%
1,670,747 Asciano Group (b) (c) .............................. $ 2,532,548
753,780 Australian Infrastructure Fund ..................... 1,194,372
8,206,452 SP AusNet (b) ...................................... 6,464,023
6,660,386 Spark Infrastructure Group (b) (d) ................. 7,838,835
1,340,640 Transurban Group (b) ............................... 6,704,307
------------
24,734,085
------------
CANADA - 3.9%
58,300 Enbridge, Inc. (b) ................................. 2,486,340
82,000 TransCanada Corp. (b) .............................. 2,651,753
------------
5,138,093
------------
FRANCE - 6.2%
60,509 Aeroports de Paris (b) ............................. 4,847,225
58,708 Vinci S.A. (b) ..................................... 3,246,227
------------
8,093,452
------------
GERMANY - 7.8%
98,718 E.On AG (b) ........................................ 3,904,370
51,331 Fraport AG (b) ..................................... 2,541,963
95,218 Hamburger Hafen Und Logistik AG (b) ................ 3,695,885
------------
10,142,218
------------
ITALY - 10.7%
197,174 Atlantia SpA (b) ................................... 5,092,334
624,695 Enel SpA (b) ....................................... 3,737,965
341,068 Snam Rete Gas SpA (b) .............................. 1,711,793
825,192 Terna SpA (b) ...................................... 3,429,110
------------
13,971,202
------------
JAPAN - 2.6%
25,377 East Japan Railway Co. ............................. 1,790,834
382,155 Tokyo Gas Co. Ltd. ................................. 1,573,891
------------
3,364,725
------------
NEW ZEALAND - 1.2%
1,157,591 Auckland International Airport, Ltd. (b) ........... 1,532,047
------------
SPAIN - 12.2%
139,533 Albertis Infraestructuras S.A. (b) ................. 3,179,386
277,267 Enagas S.A. (b) .................................... 6,001,387
123,718 Red Electrica Corp. S.A. (b) ....................... 6,761,968
------------
15,942,741
------------
SWITZERLAND - 1.2%
5,483 Flughafen Zuerich AG (b) ........................... 1,522,980
------------
UNITED KINGDOM - 7.4%
532,274 Pennon Group plc (b) ............................... 4,355,422
308,500 Severn Trent plc (b) ............................... 5,328,860
------------
9,684,282
------------
See Notes to Financial Statements
Page 9
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
NOVEMBER 30, 2009
SHARES DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
COMMON STOCKS - (CONTINUED)
UNITED STATES - 9.4%
101,600 American Water Works Co. (b) ....................... $ 2,259,584
91,791 ITC Holdings Corp. (b) ............................. 4,081,946
242,629 Northeast Utilities ................................ 5,849,785
------------
12,191,315
------------
TOTAL COMMON STOCKS
(Cost $102,705,032) ................................ 106,317,140
------------
SHARES/
UNITS DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
MASTER LIMITED PARTNERSHIPS - 9.1%
UNITED STATES - 9.1%
73,816 Energy Transfer Partners, L.P. (b) ................. 3,195,495
168,850 Enterprise Products Partners, L.P. (b) ............. 5,030,041
89,881 Magellan Midstream Partners, L.P. (b) .............. 3,694,109
------------
TOTAL MASTER LIMITED PARTNERSHIPS
(Cost $9,646,405) .................................. 11,919,645
------------
CANADIAN INCOME TRUSTS - 8.3%
378,110 Consumers' Waterheater Income Fund (b) ............. 1,375,727
404,097 Northland Power Income Fund (b) .................... 4,207,908
321,849 Pembina Pipeline Income Fund (b) ................... 5,068,344
9,300 Pembina Pipeline Income Fund (b) (d) ............... 146,453
------------
TOTAL CANADIAN INCOME TRUSTS
(Cost $9,555,447) .................................. 10,798,432
------------
RATINGS (e)
PRINCIPAL MOODY'S S&P STATED
VALUE DESCRIPTION (UNAUDITED) RATE (f) MATURITY (g) VALUE
---------- ------------------------------------ ------------- ------------ ------------ -----------
SENIOR FLOATING-RATE LOAN INTERESTS - 24.3%
CABLE & SATELLITE - 3.0%
$1,496,203 Charter Communications Operating,
LLC, Incremental Term Loan ...... Ba2 D 7.25% 03/06/14 1,511,165
1,496,124 CSC Holdings, Inc.,
Term Loan, Extended Maturity .... Baa3 BBB- 2.05% - 2.19% 03/29/16 1,422,564
324,144 UPC Broadband Holding B.V.,
Term Loan N ..................... Ba3 B+ 1.99% 12/31/14 298,618
675,856 UPC Broadband Holding B.V.,
Term Loan T ..................... Ba3 B+ 3.74% 12/31/16 642,401
-----------
3,874,748
-----------
See Notes to Financial Statements
Page 10
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
NOVEMBER 30, 2009
RATINGS (e)
PRINCIPAL MOODY'S S&P STATED
VALUE DESCRIPTION (UNAUDITED) RATE (f) MATURITY (g) VALUE
---------- ------------------------------------ ------------- ------------ ------------ -----------
SENIOR FLOATING-RATE LOAN INTERESTS - (CONTINUED)
ELECTRIC UTILITIES - 5.0%
$1,467,766 Astoria Generating Co.,
Acquisitions, LLC, Term Loan B .. B1 BB- 2.04% - 2.05% 02/23/12 $ 1,394,378
997,462 Calpine Corp.,
First Priority Term Loan ........ B2 B+ 3.17% 03/29/14 909,187
319,848 Covanta Energy Corp.,
Synthetic Letter of Credit ...... Ba1 BB 1.79% 02/09/14 296,819
633,449 Covanta Energy Corp.,
Term Loan B ..................... Ba1 BB 1.75% 02/09/14 587,841
996,785 Mirant North America, LLC,
Term Loan ....................... Ba2 BB 1.98% 01/03/13 927,010
2,025,275 NRG Energy, Inc., Synthetic
Letter of Credit ................ Baa3 BB+ 2.03% 02/01/13 1,853,337
647,854 NRG Energy, Inc., Term Loan B ...... Baa3 BB+ 1.98% - 2.03% 02/01/13 592,854
-----------
6,561,426
-----------
ENVIRONMENTAL & FACILITIES SERVICES - 1.5%
18,020 EnergySolutions, LLC,
Synthetic Letter of Credit ...... Ba2 NR (h) 3.99% 06/07/13 17,389
1,641,509 EnergySolutions, LLC,
Synthetic Letter of Credit,
Add-On .......................... Ba2 NR (h) 3.99% 08/09/13 1,584,057
121,316 EnergySolutions, LLC,
Term Loan (Duratek) ............. Ba2 NR (h) 4.05% 06/07/13 118,283
227,755 EnergySolutions, LLC,
Term Loan (EnergySolutions) ..... Ba2 NR (h) 4.05% 06/07/13 222,061
-----------
1,941,790
-----------
GAS UTILITIES - 0.6%
832,005 Atlas Pipeline Partners, L.P.,
Term Loan ....................... B1 B 6.75% 07/27/14 808,085
-----------
HEALTH CARE FACILITIES - 3.1%
1,882,437 HCA Inc., Term Loan B .............. Ba3 BB 2.53% 11/18/13 1,747,372
799,368 Health Management
Associates Inc., Term Loan B .... B1 BB- 2.03% 02/28/14 724,228
945,840 Lifepoint Hospitals Inc.,
Term Loan B ..................... Ba1 BB 1.89% 04/15/12 902,489
673,948 Select Medical Corp.,
Term Loan B-1 ................... Ba2 B+ 4.02% 08/22/14 654,853
-----------
4,028,942
-----------
HEALTH CARE SERVICES - 1.0%
71,494 CHS/Community Health
Systems, Inc.,
Delayed Draw Term Loan .......... Ba3 BB 2.51% 07/25/14 65,328
1,401,423 CHS/Community Health
Systems, Inc.,
Term Loan ....................... Ba3 BB 2.48% - 2.51% 07/25/14 1,280,550
-----------
1,345,878
-----------
See Notes to Financial Statements
Page 11
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
NOVEMBER 30, 2009
RATINGS (e)
PRINCIPAL MOODY'S S&P STATED
VALUE DESCRIPTION (UNAUDITED) RATE (f) MATURITY (g) VALUE
---------- ------------------------------------ ------------- ------------ ------------ -----------
SENIOR FLOATING-RATE LOAN INTERESTS - (CONTINUED)
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 3.3%
$ 823,458 Bicent Power, LLC,
Term Loan First Lien ............ B1 BB- 2.29% 06/30/14 $ 749,347
63,395 Coleto Creek Power, L.P.,
Synthetic Letter of Credit ...... B1 B+ 3.03% 06/28/13 57,583
856,383 Coleto Creek Power, L.P.,
Term Loan First Lien ............ B1 B+ 2.99% - 3.03% 06/28/13 777,880
1,000,000 Dynegy Holdings Inc.,
Synthetic Letter of Credit ...... Ba2 BB- 3.99% 04/02/13 944,167
933,333 Longview Power, LLC,
Delayed Draw Term Loan .......... Ba3 BB 2.56% 02/28/14 840,000
266,667 Longview Power, LLC,
Synthetic Letter of Credit ...... Ba3 BB 2.56% 02/28/14 240,000
800,000 Longview Power, LLC,
Term Loan B ..................... Ba3 BB 2.56% 02/28/14 720,000
-----------
4,328,977
-----------
MANAGED HEALTH CARE - 2.5%
706,890 IASIS Healthcare Corp.,
Delayed Draw Term Loan .......... Ba2 B+ 2.23% 03/15/14 651,854
190,890 IASIS Healthcare Corp.,
Synthetic Letter of Credit ...... Ba2 B+ 2.24% 03/15/14 176,028
2,042,644 IASIS Healthcare Corp.,
Term Loan ....................... Ba2 B+ 2.23% 03/15/14 1,883,610
498,750 Vanguard Health Systems, Inc.
Term Loan B ..................... Ba3 B+ 2.48% 09/23/11 482,846
-----------
3,194,338
-----------
MULTI-UTILITIES - 1.4%
2,000,000 KGEN, LLC, Synthetic
Letter of Credit ................ B1 BB 2.06% 02/08/14 1,820,000
-----------
OIL & GAS EQUIPMENT & SERVICES - 0.2%
97,236 Targa Resources, Inc.,
Synthetic Letter of Credit ...... Ba3 B+ 2.28% 10/31/12 94,145
126,990 Targa Resources, Inc., Term Loan ... Ba3 B+ 2.23% 10/31/12 122,954
-----------
217,099
-----------
OIL & GAS EXPLORATION & PRODUCTION - 1.2%
2,205,937 SemCrude, L.P., Term Loan (c) (i) .. NR NR 5.75% 03/16/11 1,536,803
-----------
OIL & GAS STORAGE & TRANSPORTATION - 0.7%
1,000,000 Energy Transfer Equity, L.P.,
Term Loan B ..................... Ba2 NR 1.99% 11/01/12 973,125
-----------
WIRELESS TELECOMMUNICATION SERVICES - 0.8%
1,062,877 Windstream Corp.,
Term Loan B2 .................... Baa3 BBB- 3.04% 12/17/15 1,016,945
-----------
TOTAL SENIOR FLOATING-RATE LOAN INTERESTS
(Cost $33,867,562) ................. 31,648,156
-----------
See Notes to Financial Statements
Page 12
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
NOVEMBER 30, 2009
DESCRIPTION VALUE
---------------------------------------------------- ------------
TOTAL INVESTMENTS - 123.3%
(Cost $155,774,446) (j) ......................... $160,683,373
OUTSTANDING LOAN - (27.5)% ......................... (35,900,000)
NET OTHER ASSETS AND LIABILITIES - 4.2% ............ 5,551,129
------------
NET ASSETS - 100.0% ................................ $130,334,502
============
----------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) All or a portion of this security is available to serve as collateral on
the outstanding loan.
(c) Non-income producing security.
(d) This security is restricted and cannot be offered for public sale without
first being registered under the Securities Act of 1933, as amended. Prior
to registration, restricted securities may only be resold in transactions
exempt from registration (See Note 2F - Restricted Securities in the Notes
to Financial Statements).
(e) Ratings below Baa3 by Moody's Investors Service, Inc. or BBB- by Standard &
Poor's Ratings Group are considered to be below investment grade.
(f) Senior Loans in which the Fund invests generally 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.
(g) 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.
(h) This Senior Loan Interest was privately-rated upon issuance. The rating
agency does not provide ongoing surveillance on the rating.
(i) This borrower filed for protection in federal bankruptcy court on July 22,
2008.
(j) Aggregate cost for federal income tax purposes is $158,004,302. As of
November 30, 2009, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$13,085,896 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$10,406,825.
NR Not Rated
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of November 30,
2009 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
11/30/2009 PRICES INPUTS INPUTS
------------ ------------ ----------- ---------------
Common Stocks * ........................ $106,317,140 $106,317,140 $ -- $--
Master Limited Partnerships * .......... 11,919,645 11,919,645 -- --
Canadian Income Trusts ................. 10,798,432 10,798,432 -- --
Senior Floating-Rate Loan Interests * .. 31,648,156 -- 31,648,156 --
------------ ------------ ----------- ---
Total Investments ...................... $160,683,373 $129,035,217 $31,648,156 $--
============ ============ =========== ===
* See the Portfolio of Investments for country or industry breakout.
See Notes to Financial Statements
Page 13
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2009
ASSETS:
Investments, at value
(Cost $155,774,446) ................................................................. $160,683,373
Cash ................................................................................... 6,038,389
Prepaid expenses ....................................................................... 99,231
Receivables:
Investment securities sold ....................................................... 1,399,965
Dividends ........................................................................ 1,330,562
Interest ......................................................................... 132,626
------------
Total Assets .................................................................. 169,684,146
------------
LIABILITIES:
Outstanding loan ....................................................................... 35,900,000
Payables:
Investment securities purchased .................................................. 1,518,703
Distributions to common shareholders ............................................. 1,361,695
Investment advisory fees (includes Sub-Advisory fees of $241,266) ................ 402,109
Audit and tax fees ............................................................... 61,200
Printing fees .................................................................... 33,437
Custodian fees ................................................................... 24,024
Legal fees ....................................................................... 15,041
Administrative fees .............................................................. 12,880
Interest and fees on loan ........................................................ 7,875
Trustees' fees and expenses ...................................................... 6,711
Transfer agent fees .............................................................. 2,738
Other liabilities ...................................................................... 3,231
------------
Total Liabilities ............................................................. 39,349,644
------------
NET ASSETS ............................................................................. $130,334,502
============
NET ASSETS CONSIST OF:
Paid-in capital ........................................................................ $168,468,234
Par value .............................................................................. 90,780
Net unrealized appreciation (depreciation) on investments and foreign currency
translation ......................................................................... 5,054,584
Accumulated net investment income (loss) ............................................... (1,301,293)
Accumulated net realized gain (loss) on investments and foreign currency transactions .. (41,977,803)
------------
NET ASSETS ............................................................................. $130,334,502
============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) ................... $ 14.36
============
Number of Common Shares outstanding (unlimited number of Common Shares has been
authorized) ......................................................................... 9,077,963
============
See Notes to Financial Statements
Page 14
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 2009
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $599,247) ........... $ 5,991,084
Interest ......................................................... 1,268,159
Other ............................................................ 29,609
------------
Total investment income .................................... 7,288,852
------------
EXPENSES:
Investment advisory fees (includes Sub-Advisory fees of
$856,102) ..................................................... 1,426,837
Interest and fees on loan ........................................ 1,039,465
Administrative fees .............................................. 135,549
Custodian fees ................................................... 127,030
Legal fees ....................................................... 119,501
Printing fees .................................................... 92,672
Audit and tax fees ............................................... 55,163
Trustees' fees and expenses ...................................... 38,514
Transfer agent fees .............................................. 34,808
Other ............................................................ 79,266
------------
Total expenses ............................................. 3,148,805
------------
NET INVESTMENT INCOME (LOSS) ..................................... 4,140,047
------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments ................................................... (20,091,640)
Foreign currency transactions ................................. (173,885)
------------
Net realized gain (loss) ......................................... (20,265,525)
------------
Net change in unrealized appreciation (depreciation) on:
Investments ................................................... 48,002,163
Foreign currency translation .................................. 124,686
------------
Net change in unrealized appreciation (depreciation) ............. 48,126,849
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) .......................... 27,861,324
------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .. $ 32,001,371
============
See Notes to Financial Statements
Page 15
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
11/30/2009 11/30/2008
------------ -------------
OPERATIONS:
Net investment income .............................................. $ 4,140,047 $ 12,005,157
Net realized gain (loss) ........................................... (20,265,525) (21,195,703)
Net change in unrealized appreciation (depreciation) ............... 48,126,849 (99,048,223)
Net increase from payment by the investment sub-advisor ............ -- 332,025
------------ -------------
Net increase (decrease) in net assets resulting from operations .... 32,001,371 (107,906,744)
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .............................................. (957,151) (8,393,486)
Net realized gain .................................................. -- (6,620,847)
Return of capital .................................................. (4,489,627) (376,201)
------------ -------------
Total distributions to shareholders ................................ (5,446,778) (15,390,534)
------------ -------------
CAPITAL TRANSACTIONS:
Proceeds from Common Shares reinvested ............................. -- 1,529,028
------------ -------------
Net increase (decrease) in net assets resulting from capital
transactions .................................................... -- 1,529,028
------------ -------------
Total increase (decrease) in net assets ............................ 26,554,593 (121,768,250)
NET ASSETS:
Beginning of period ................................................ 103,779,909 225,548,159
------------ -------------
End of period ...................................................... $130,334,502 $ 103,779,909
============ =============
Accumulated net investment income (loss) at end of period .......... $ (1,301,293) $ (1,332,247)
============ =============
CAPITAL TRANSACTIONS WERE AS FOLLOWS:
Common Shares at beginning of period ............................... 9,077,963 9,010,915
Common Shares issued as reinvestment under the Dividend Reinvestment
Plan ............................................................ -- 67,048
------------ -------------
Common Shares at end of period ..................................... 9,077,963 9,077,963
============ =============
See Notes to Financial Statements
Page 16
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED NOVEMBER 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations ... $ 32,001,371
Adjustments to reconcile net increase (decrease) in net assets
resulting from operations to net cash provided by operating
activities:
Purchases of investments ....................................... (112,320,504)
Sales, maturities and paydowns of investments .................. 116,872,496
Proceeds from sale of short term rights ........................ 25,775
Return of capital received from investment in MLPs ............. 909,027
Net amortization/accretion of premiums/discount on
investments ................................................. (253,456)
Net realized gain/loss on investments .......................... 20,091,640
Net change in unrealized appreciation (depreciation) on
investments ................................................. (48,002,163)
CHANGES IN ASSETS AND LIABILITIES:
Increase in dividends receivable (a) ........................... (91,482)
Decrease in interest receivable ................................ 103,910
Increase in prepaid expenses ................................... (88,862)
Decrease in interest and fees on loan payable .................. (191,303)
Decrease in investment advisory fees payable ................... (74,136)
Decrease in legal fees payable ................................. (10,140)
Increase in printing fees payable .............................. 3,486
Decrease in transfer agent fees payable ........................ (9)
Increase in administrative fees payable ........................ 793
Increase in custodian fees payable ............................. 5,223
Decrease in Trustees' fees and expenses payable ................ (668)
Increase in accrued expenses and other liabilities ............. 576
-------------
CASH PROVIDED BY OPERATING ACTIVITIES ............................. $ 8,981,574
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to Common Shareholders from net investment income ... (717,901)
Distributions to Common Shareholders from net realized gain ....... (3,858,134)
Return of capital distributions ................................... (3,367,182)
Issuances of loan ................................................. 35,900,000
Repayments of loan ................................................ (38,900,000)
-------------
CASH USED IN FINANCING ACTIVITIES ................................. (10,943,217)
------------
Decrease in cash .................................................. (1,961,643)
Cash at beginning of period ....................................... 8,000,032
------------
CASH AT END OF PERIOD ............................................. $ 6,038,389
============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest and fees ................. $ 1,319,534
============
----------
(a) Includes net change in unrealized appreciation (depreciation) on foreign
currency of $124,686.
See Notes to Financial Statements
Page 17
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR SIX MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
11/30/2009 11/30/2008 11/30/2007 11/30/2006(a) 5/31/2006 5/31/2005
---------- ---------- ---------- ------------- --------- ---------
Net asset value, beginning of period ......... $ 11.43 $ 25.03 $ 25.99 $ 24.04 $ 23.43 $ 19.24
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................ 0.46 1.33 1.33 0.90 1.61 1.23
Net realized and unrealized gain (loss) ...... 3.07 (13.23) 4.25 3.39 1.28 4.65
-------- -------- -------- -------- -------- --------
Total from investment operations ............. 3.53 (11.90) 5.58 4.29 2.89 5.88
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income ........................ (0.11) (0.93) (2.11) (0.66) (1.65) (1.69)
Net realized gain ............................ -- (0.73) (4.43) (1.68) (0.63) --
Return of capital ............................ (0.49) (0.04) -- -- -- --
-------- -------- -------- -------- -------- --------
Total distributions .......................... (0.60) (1.70) (6.54) (2.34) (2.28) (1.69)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ............... $ 14.36 $ 11.43 $ 25.03 $ 25.99 $ 24.04 $ 23.43
======== ======== ======== ======== ======== ========
Market value, end of period .................. $ 11.73 $ 8.60 $ 23.78 $ 23.93 $ 21.04 $ 20.87
======== ======== ======== ======== ======== ========
TOTAL RETURN BASED ON NET ASSET
VALUE (b) (c) (d) ......................... 33.75% (48.98)% 21.87% 18.22% 13.50% 32.15%
======== ======== ======== ======== ======== ========
TOTAL RETURN BASED ON MARKET
VALUE (c) (e) ............................. 45.08% (59.56)% 25.75% 24.37% 11.52% 27.96%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Net assets, end of period (in 000's) ......... $130,335 $103,780 $225,548 $233,379 $215,861 $210,388
Ratio of total expenses to average net
assets .................................... 2.86% 3.72% 3.63% 3.97%(f) 3.59% 2.78%
Ratio of total expenses to average net assets,
excluding interest expense and fees ....... 1.92% 1.80% 1.73% 1.73%(f) 1.79% 1.78%
Ratio of net investment income to average
net assets ................................ 3.76% 6.44% 4.65% 6.94%(f) 6.73% 5.65%
Portfolio turnover rate ...................... 80% 23% 53% 14% 60% 43%
DEBT:
Loan outstanding (in 000's) .................. $ 35,900 $ 38,900 $ 84,000 $ 83,500 $ 83,000 $ 75,000
Asset coverage per $1,000 of indebtedness
(g) ....................................... $ 4,630 $ 3,668 $ 3,685 $ 3,795 $ 3,601 $ 3,805
----------
(a) The Fund's fiscal year end was changed from May 31 to November 30.
(b) Total return based on net asset value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan, and changes in net
asset value per share and does not reflect sales load.
(c) Total return is not annualized for periods less than one year.
(d) In 2008, the Fund received reimbursements from the 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)%.
(e) Total return based on market value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan, and changes in Common
Share Price.
(f) Annualized.
(g) 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 18
NOTES TO FINANCIAL STATEMENTS
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009
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 primary 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 Canadian income trusts and 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 objectives. 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 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. 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 at market value or, in the absence of
market value with respect to any portfolio securities, at fair value in
accordance with valuation procedures adopted by the Fund's Board of Trustees. A
majority of the Fund's assets are valued using market information supplied by
third parties. In the event that market quotations are not readily available,
the pricing service does not provide a valuation for a particular asset, or the
valuations 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 and other investments. Additionally, if events occur after
the close of the principal markets for particular securities (e.g., domestic
debt and foreign securities), but before the Fund values its assets, that could
materially affect NAV, First Trust may use a fair value method to value the
Fund's securities and other investments. The use of fair value pricing by the
Fund is governed by valuation procedures adopted by the Fund's Board of
Trustees, and in accordance with the provisions of the 1940 Act.
Portfolio securities listed on any exchange other than the NASDAQ National
Market ("NASDAQ") and the London Stock Exchange Alternative Investment Market
("AIM") are valued at the last sale price on the business day as of which such
value is being determined. If there has been no sale on such day, or no official
closing price in the case of securities traded on the NASDAQ or the AIM, the
securities are valued at the mean of the most recent bid and asked prices on
such day. Securities listed on the NASDAQ or the AIM are valued at the official
closing price on the business day as of which such value is being determined.
Portfolio securities traded on more than one securities exchange are valued at
the last sale price on the business day as of which such value is being
determined at the close of the exchange representing the principal market for
such securities. Portfolio securities traded in the over-the-counter market, but
excluding securities traded on the NASDAQ and the AIM, are valued at the closing
bid prices. Short-term investments that mature in less than 60 days when
purchased are valued at amortized cost.
Page 19
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009
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 materially
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. 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 Loans 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 in the past several years, 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. 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.
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:
- Level 1 - Level 1 inputs are quoted prices in active markets for
identical securities. An active market is a market in which
transactions for the security occur with sufficient
frequency and volume to provide pricing information on an
ongoing basis.
- Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
- Quoted prices for similar securities in active markets.
- Quoted prices for identical or similar securities in
markets that are non-active. A non-active market is a
market where there are few transactions for the
security, 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.
- Inputs other than quoted prices that are observable for
the security (for example, interest rates and yield
curves observable at commonly quoted intervals,
volatilities, prepayment speeds, loss severities,
credit risks, and default rates).
- Inputs that are derived principally from or
corroborated by observable market data by correlation
or other means.
- Level 3 - Level 3 inputs are unobservable inputs. Unobservable inputs
reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing
the security.
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. A summary
of the inputs used to value the Fund's investments as of November 30, 2009 is
included with the Fund's Portfolio of Investments.
B. REPURCHASE AGREEMENTS:
The Fund engages 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 the value of the
underlying securities during the period while 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 November 30, 2009, the Fund had no open
repurchase agreements.
Page 20
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009
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
on the accrual basis. Market premiums and discounts are amortized over the
expected life of each respective borrowing.
Distributions received from the 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 dividend income.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date; interest income on such securities
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 or
delayed-delivery purchase commitments. At November 30, 2009, the Fund had no
when-issued or delayed-delivery purchase commitments.
D. UNFUNDED LOAN COMMITMENTS:
The Fund may enter into certain credit agreements, all or a portion of which may
be unfunded. As of November 30, 2009, the Fund had no unfunded loan commitments.
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.
F. RESTRICTED SECURITIES:
The Fund invests in restricted securities, which are securities that cannot be
offered for public sale without first being registered under the Securities Act
of 1933, as amended. Prior to registration, restricted securities may only be
resold in transactions exempt from registration. The Fund held restricted
securities at November 30, 2009 as shown in the following table. The Fund does
not have the right to demand that such securities be registered. These
securities are valued using market quotations according to the valuation
procedures as stated in the Portfolio Valuation footnote (Note 2A) and are not
expressed as a discount to the carrying value of a comparable unrestricted
security.
ACQUISITION SHARES/ % OF
SECURITY DATE UNITS PRICE CARRYING COST VALUE NET ASSETS
-------- ----------- --------- ------ ------------- ---------- ----------
Pembina Pipeline Income Fund 4/30/09 9,300 $15.75 $ 101,759 $ 146,453 0.11%
Spark Infrastructure Group 12/14/05 6,660,386 1.18 7,847,752 7,838,835 6.02
---------- ---------- ----
$7,949,511 $7,985,288 6.13%
========== ========== ====
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income of the Fund are declared and paid quarterly
or as the Board of Trustees may determine from time to time. On December 11,
2006, the Fund's Board of Trustees adopted a level distribution plan for the
Fund. If, for any quarterly distribution, net investment company taxable income,
if any (which term includes net short-term capital gain) 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.
Page 21
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009
Distributions from income and capital gains are determined in accordance with
income tax regulations, which may differ from accounting principles generally
accepted in the United States of America. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund, timing differences and differing characterization of distributions
made by the Fund. Permanent differences incurred during the fiscal year ended
November 30, 2009, resulting in book and tax accounting differences, have been
reclassified at year end to reflect a decrease in accumulated net investment
income (loss) of $3,151,942, an increase in accumulated net realized gain (loss)
on investments of $2,775,741 and an increase to paid-in capital of $376,201. Net
assets were not affected by this reclassification.
The tax character of distributions paid during the fiscal year ended November
30, 2009 and November 30, 2008 was as follows:
Distributions paid from:
2009 2008
---------- ----------
Ordinary Income ......... $ 957,151 $8,503,887
Long-Term Capital Gain .. -- 6,510,446
Return of Capital ....... 4,489,627 376,201
As of November 30, 2009, the components of distributable earnings on a tax basis
were as follows:
Undistributed Ordinary Income ............... $ --
Net Unrealized Appreciation (Depreciation) .. 2,824,728
Accumulated Capital and Other Losses ........ (39,659,733)
H. 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.
Current laws, 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, 2009, the Fund intends to elect to defer net
realized capital losses of $3,403,327 and foreign currency losses of $64,319
incurred between November 1, 2009 through November 30, 2009.
The Fund intends to utilize provisions of the federal income tax laws, which
allows 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, 2009, the
Fund had a capital loss carryforward for federal income tax purposes of
$36,192,087 expiring on November 30, 2017.
The Fund is subject to tax 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
2009, 2008, 2007 and 2006 remain open to federal and state audit. As of November
30, 2009, 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 provisions.
I. EXPENSES:
The Fund pays all expenses directly related to its operations.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust is a limited partnership with one limited partner, Grace Partners of
DuPage L.P., and one general partner, The Charger Corporation. First Trust
serves as investment advisor to the Fund pursuant to an Investment Management
Agreement. 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
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 assets (including the principal amount of any
borrowings) minus the Fund's accrued liabilities (excluding the principal amount
of any borrowings or indebtedness incurred).
Page 22
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009
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.
PNC Global Investment Servicing (U.S.) Inc., an indirect, majority-owned
subsidiary of The PNC Financial Services Group, Inc., serves as the Fund's
Administrator, Fund Accountant and Transfer Agent in accordance with certain fee
arrangements. PFPC Trust Company, also an indirect, majority-owned subsidiary of
The PNC Financial Services Group, Inc., serves as the Fund's Custodian in
accordance with certain fee arrangements.
Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustee") is paid 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 subsequent trust in the First Trust
Fund Complex. The annual retainer is allocated equally among each of the trusts.
No additional meeting fees are paid in connection with board or committee
meetings.
Additionally, the Lead Independent Trustee is paid $10,000 annually, and the
Chairman of the Audit Committee is paid $5,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
is paid $2,500 annually to serve in such capacities with such compensation paid
by the trusts in First Trust Fund Complex and allocated equally among those
trusts. Trustees are also reimbursed by the trusts in the First Trust Fund
Complex 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 ending December 31, 2009, before rotating to serve as chairman of another
committee or as Lead Independent Trustee. The officers and "Interested" Trustee
receive no compensation from the trusts for serving in such capacities.
For the year ended November 30, 2009, the Fund paid brokerage commissions to
Macquarie Capital (USA) Inc., an affiliate of MCIM and Four Corners, totaling
$4,217.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities, excluding
short-term investments, for the year ended November 30, 2009, were $112,186,446,
and $116,224,875, respectively.
5. REVOLVING CREDIT AND SECURITY AGREEMENT
On May 12, 2009, 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 proceeds of
the first borrowing under the BNP Paribas Facility were used to repay all
amounts outstanding under the Revolving Credit and Security Agreement dated as
of May 24, 2004 with CRC Funding LLC, as conduit lender, Citibank, N.A., as
Secondary Lender and Citibank North America, Inc., as Agent (the "Terminated
Facility"). 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 $40,000,000. The
BNP Paribas Facility required an up front payment from the Fund equal to
$200,000, which will be amortized over a one year period. Absent certain events
of default or failure to maintain certain collateral requirements, BNP Paribas
Prime Brokerage Inc. may not terminate the BNP Paribas Facility except upon 180
calendar days prior notice. The interest rate under the facility will be equal
to the 3-month LIBOR plus 145 basis points. In addition, under the BNP Paribas
Facility the Fund pays a commitment fee of 0.85% on the undrawn amount of the
BNP Paribas Facility.
For the year ended November 30, 2009, the daily average amount outstanding under
the Terminated Facility and the BNP Paribas Facility was $32,646,575. The high
and low annual interest rates during the year ended November 30, 2009 were 3.49%
and 0.60%, respectively, and the weighted average interest rate was 1.74%. The
interest rate at November 30, 2009 was 1.71%.
Page 23
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009
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 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-advisors 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. 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.
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.
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. The Fund does not currently intend to reduce
or hedge its exposure to non-U.S. currencies other than in connection with the
Fund's exposure to dividends received or receivable in non-U.S. currencies and
to hedge forward commitments.
Page 24
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009
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 market 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. 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
undercollateralized. 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.
LOWER GRADE DEBT INSTRUMENTS: The Senior Loans in which the Fund invests are
generally lower grade. These lower grade debt instruments may become the subject
of bankruptcy proceedings or otherwise subsequently default as to the repayment
of principal and/or payment of interest or be downgraded to ratings in the lower
rating categories. Lower grade debt instruments tend to be less liquid than
higher grade debt instruments.
NON-DIVERSIFICATION RISK: Because the Fund is non-diversified, it is only
limited as to the percentage of its assets which may be invested in the
securities of any one issuer by the diversification requirements imposed by the
Internal Revenue Code of 1986, as amended. 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 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.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Fund through
January 26, 2010, the date the financial statements were issued, and has
determined that there were no subsequent events requiring recognition or
disclosure in the financial statements.
Page 25
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF MACQUARIE/FIRST TRUST GLOBAL
INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND:
We have audited the accompanying statement of assets and liabilities of
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
(the "Fund"), including the portfolio of investments, as of November 30, 2009,
and the related statements of operations and cash flows for the year then ended,
the statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2009 by correspondence with the Fund's
custodian, agent banks and brokers. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund as
of November 30, 2009, the results of its operations and its cash flows for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented, in
conformity with accounting principles generally accepted in the United States of
America.
(DELOITTE & TOUCHE LLP)
Chicago, Illinois
January 26, 2010
Page 26
ADDITIONAL INFORMATION
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009 (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 PNC
Global Investment Servicing (U.S.) 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 (800) 331-1710 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 PNC Global Investment
Servicing (U.S.) 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 located at http://www.sec.gov.
Page 27
ADDITIONAL INFORMATION - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009 (UNAUDITED)
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Form N-Qs 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.
NYSE CERTIFICATION INFORMATION
In accordance with Section 303A-12 of the NYSE Listed Company Manual, the Fund's
President has certified to the NYSE that, as of June 16, 2009, he was not aware
of any violation by the Fund of NYSE corporate governance listing standards. In
addition, the Fund's reports to the SEC on Forms N-CSR and N-Q contain
certifications by the Fund's principal executive officer and principal financial
officer that relate to the Fund's public disclosure in such reports and are
required by Rule 30a-2 under the 1940 Act.
TAX INFORMATION
Of the ordinary income distributions made by the Fund during the year ended
November 30, 2009, 9.81% qualified for the corporate dividends received
deduction available to corporate shareholders.
The Fund hereby designates as qualified dividend income 100% of the ordinary
income distributions for the year ended November 30, 2009.
Since the Fund met the requirements of Section 853 of the Code, the Fund hereby
elects to pass through to its shareholders credits for foreign taxes paid. The
total per share amount of income received by the Fund from sources within
foreign countries and possessions of the United States is $0.71 (representing a
total of $6,402,283). The total amount of taxes paid to such countries is $0.06
per share (representing a total of $581,318) for the year ended November 30,
2009.
SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Joint Annual Meeting of Shareholders of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund, Energy Income and Growth Fund,
First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global Opportunity
Income Fund, First Trust/FIDAC Mortgage Income Fund, First Trust Strategic High
Income Fund, First Trust Strategic High Income Fund II, First Trust
Tax-Advantaged Preferred Income Fund, First Trust Specialty Finance and
Financial Opportunities Fund and First Trust Active Dividend Income Fund was
held on April 16, 2009. 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 II
Trustees for three-year terms expiring at the Fund's annual meeting of
shareholders in 2012. The number of votes cast in favor of both Dr. Erickson and
Mr. Kadlec was 7,733,095, the number of votes against was 618,420 and the number
of abstentions was 726,448. James A. Bowen, Robert F. Keith and Niel B. Nielson
are the current and continuing Trustees.
Page 28
BOARD OF TRUSTEES AND OFFICERS
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009 (UNAUDITED)
NUMBER OF
NAME, ADDRESS, PORTFOLIOS IN OTHER
DATE OF BIRTH THE FIRST TRUST TRUSTEESHIPS OR
AND POSITION WITH TERM OF OFFICE AND PRINCIPAL OCCUPATIONS FUND COMPLEX DIRECTORSHIPS
THE FUND LENGTH OF SERVICE(1) DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
----------------------------- ---------------------- -------------------------- ------------------- ------------------------
INDEPENDENT TRUSTEES
Richard E. Erickson, Trustee - Three Year Term Physician; President, 61 None
c/o First Trust Advisors L.P. - Since Fund Inception Wheaton Orthopedics;
120 E. Liberty Drive, Co-owner and Co-
Suite 400 Director (January 1996
Wheaton, IL 60187 to May 2007), Sports
D.O.B.: 04/51 Med Center for Fitness;
Limited Partner,
Gundersen Real Estate
Partnership; Limited
Partner, Sportsmed LLC
Thomas R. Kadlec, Trustee - Three Year Term Senior Vice President and 61 Director of ADM
c/o First Trust Advisors L.P. - Since Fund Inception Chief Financial Officer Investor Services, Inc.
120 E. Liberty Drive, (May 2007 to Present), and ADM Investor
Suite 400 Vice President and Chief Services International
Wheaton, IL 60187 Financial Officer (1990 to
D.O.B.: 11/57 May 2007), ADM
Investor Services, Inc.
(Futures Commission
Merchant)
Robert F. Keith, Trustee - Three Year Term President (2003 to 61 None
c/o First Trust Advisors L.P. - Since June 2006 Present), Hibs Enterprises
120 E. Liberty Drive, (Financial and
Suite 400 Management Consulting)
Wheaton, IL 60187
D.O.B.: 11/56
Niel B. Nielson, Trustee - Three Year Term President (June 2002 to 61 Director of Covenant
c/o First Trust Advisors L.P. - Since Fund Inception Present), Covenant Transport Inc.
120 E. Liberty Drive, College
Suite 400
Wheaton, IL 60187
D.O.B.: 03/54
----------
(1) Currently, Robert F. Keith is serving as a trustee until the Fund's 2011
annual meeting of shareholders. Richard E. Erickson and Thomas R. Kadlec
are each serving as trustees until the Fund's 2012 annual meeting of
shareholders. James A. Bowen and Niel B. Nielson are each serving as
trustees until the Fund's 2010 annual meeting. Officers of the Fund have an
indefinite term.
Page 29
BOARD OF TRUSTEES AND OFFICERS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009 (UNAUDITED)
NUMBER OF
NAME, ADDRESS, PORTFOLIOS IN OTHER
DATE OF BIRTH THE FIRST TRUST TRUSTEESHIPS OR
AND POSITION WITH TERM OF OFFICE AND PRINCIPAL OCCUPATIONS FUND COMPLEX DIRECTORSHIPS
THE FUND LENGTH OF SERVICE(1) DURING PAST 5 YEARS OVERSEEN BY TRUSTEE HELD BY TRUSTEE
----------------------------- ---------------------- -------------------------- ------------------- ------------------------
INTERESTED TRUSTEE
James A. Bowen(2), Trustee, - Three Year President, First Trust 61 Trustee of Wheaton
President, Chairman of the Trustee Term and Advisors L.P. and First College
Board and CEO Indefinite Trust Portfolios L.P.;
120 E. Liberty Drive, Officer Term Chairman of the Board
Suite 400 - Since Fund Inception of Directors, BondWave
Wheaton, IL 60187 LLC (Software
D.O.B.: 09/55 Development
Company/Investment
Advisor) and
Stonebridge Advisors
LLC (Investment
Advisor)
NAME, ADDRESS POSITION AND OFFICES TERM OF OFFICE AND PRINCIPAL OCCUPATIONS
AND DATE OF BIRTH WITH FUND LENGTH OF SERVICE DURING PAST 5 YEARS
---------------------- -------------------- ------------------ ------------------------------------
OFFICERS WHO ARE NOT TRUSTEES(3)
Mark R. Bradley Treasurer, - Indefinite Term Chief Financial Officer, First Trust
120 E. Liberty Drive, Controller, Chief - Since Fund Advisors L.P. and First Trust
Suite 400 Financial Officer Inception Portfolios L.P.; Chief Financial
Wheaton, IL 60187 and Chief Officer, BondWave LLC (Software
D.O.B.: 11/57 Accounting Officer Development Company/Investment
Advisor) and Stonebridge
Advisors LLC (Investment
Advisor)
Erin E. Chapman Assistant Secretary - Indefinite Term Assistant General Counsel (October
120 E. Liberty Drive, - Since June 2009 2007 to Present), Associate Counsel
Suite 400 (March 2006 to October 2007), First
Wheaton, IL 60187 Trust Advisors L.P. and First Trust
D.O.B.: 08/76 Portfolios L.P.; Associate Attorney
(November 2003 to March 2006),
Doyle & Bolotin, Ltd.
----------
(1) Currently, Robert F. Keith is serving as a trustee until the Fund's 2011
annual meeting of shareholders. Richard E. Erickson and Thomas R. Kadlec
are each serving as trustees until the Fund's 2012 annual meeting of
shareholders. James A. Bowen and Niel B. Nielson are each serving as
trustees until the Fund's 2010 annual meeting. Officers of the Fund have an
indefinite term.
(2) Mr. Bowen is deemed an "interested person" of the Fund due to his position
as President of First Trust Advisors L.P., investment advisor of the Fund.
(3) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 30
BOARD OF TRUSTEES AND OFFICERS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009 (UNAUDITED)
NAME, ADDRESS POSITION AND OFFICES TERM OF OFFICE AND PRINCIPAL OCCUPATIONS
AND DATE OF BIRTH WITH FUND LENGTH OF SERVICE DURING PAST 5 YEARS
---------------------- -------------------- ------------------ ------------------------------------
OFFICERS WHO ARE NOT TRUSTEES(3) - (CONTINUED)
James M. Dykas Assistant Treasurer - Indefinite Term Senior Vice President (April 2007 to
120 E. Liberty Drive, - Since December Present), Vice President (January
Suite 400 2005 2005 to April 2007), First Trust
Wheaton, IL 60187 Advisors L.P. and First Trust
D.O.B.: 01/66 Portfolios L.P.
Christopher R. Fallow Assistant Vice - Indefinite Term Assistant Vice President (August
120 E. Liberty Drive, President - Since December 2006 to Present), Associate (January
Suite 400 2006 2005 to August 2006), First Trust
Wheaton, IL 60187 Advisors L.P. and First Trust
D.O.B.: 04/79 Portfolios L.P.
W. Scott Jardine Secretary and Chief - Indefinite Term General Counsel, First Trust Advisors
120 E. Liberty Drive, Compliance Officer - Since Fund L.P., First Trust Portfolios L.P.
Suite 400 Inception and BondWave LLC (Software
Wheaton, IL 60187 Development Company/Investment
D.O.B.: 05/60 Advisor); Secretary of Stonebridge
Advisors LLC (Investment Advisor)
Daniel J. Lindquist Vice President - Indefinite Term Senior Vice President (September
120 E. Liberty Drive, - Since December 2005 to Present), Vice President
Suite 400 2005 (April 2004 to September 2005), First
Wheaton, IL 60187 Trust Advisors L.P. and First Trust
D.O.B.: 02/70 Portfolios L.P.
----------
(3) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 31
BOARD OF TRUSTEES AND OFFICERS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009 (UNAUDITED)
NAME, ADDRESS POSITION AND OFFICES TERM OF OFFICE AND PRINCIPAL OCCUPATIONS
AND DATE OF BIRTH WITH FUND LENGTH OF SERVICE DURING PAST 5 YEARS
---------------------- -------------------- ------------------ ------------------------------------
OFFICERS WHO ARE NOT TRUSTEES(3) - (CONTINUED)
Coleen D. Lynch Assistant Vice - Indefinite Term Assistant Vice President (January
120 E. Liberty Drive, President - Since July 2008 2008 to Present), First Trust Advisors
Suite 400 L.P. and First Trust Portfolios L.P.;
Wheaton, IL 60187 Vice President (May 1998 to January
D.O.B.: 07/58 2008), Van Kampen Asset
Management and Morgan Stanley
Investment Management
Kristi A. Maher Assistant Secretary - Indefinite Term Deputy General Counsel (May 2007
120 E. Liberty Drive, and Deputy Chief - Assistant to Present), Assistant General
Suite 400 Compliance Officer Secretary since Counsel (March 2004 to May 2007),
Wheaton, IL 60187 July 2004 First Trust Advisors L.P. and First
D.O.B.: 12/66 - Deputy Chief Trust Portfolios L.P.
Compliance
Officer since
November 2009
----------
(3) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.
Page 32
PRIVACY POLICY
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2009 (UNAUDITED)
PRIVACY POLICY
The open-end and closed-end funds advised by First Trust Advisors L.P. (each a
"Fund") consider your privacy an important priority in maintaining our
relationship. We are committed to protecting the security and confidentiality of
your personal information.
SOURCES OF INFORMATION
We may collect nonpublic personal information about you from the following
sources:
- Information we receive from you or your broker-dealer, investment
advisor or financial representative through interviews, applications,
agreements or other forms;
- Information about your transactions with us, our affiliates or others;
- Information we receive from your inquiries by mail, e-mail or
telephone; and
- Information we collect on our website through the use of "cookies."
For example, we may identify the pages on our website that your
browser requests or visits.
INFORMATION COLLECTED
The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. The permitted uses
include the disclosure of such information to unaffiliated companies for the
following reasons:
- In order to provide you with products and services and to effect
transactions that you request or authorize, we may disclose your
personal information as described above to unaffiliated financial
service providers and other companies that perform administrative or
other services on our behalf, such as transfer agents, custodians and
trustees, or that assist us in the distribution of investor materials
such as trustees, banks, financial representatives and printers.
- We may release information we have about you if you direct us to do
so, if we are compelled by law to do so, or in other legally limited
circumstances (for example to protect your account from fraud).
In addition, in order to alert you to our other financial products and services,
we may share your personal information with affiliates of the Fund. Please note,
however, that the California Financial Information Privacy Act contains an "opt
out" mechanism that California consumers may use to prevent us from sharing
nonpublic personal information with affiliates.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, the Fund restricts access to
your nonpublic personal information to those individuals who need to know that
information to provide products or services to you. We maintain physical,
electronic and procedural safeguards to protect your nonpublic personal
information.
POLICY UPDATES AND INQUIRIES
As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time; however, if we do change
it, we will tell you promptly.
For questions about our policy, or for additional copies of this notice, please
contact us at (800) 621-1675.
Page 33
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(FIRST TRUST LOGO)
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
555 South Flower Street, Suite 3300
Los Angeles, CA 90071
ADMINISTRATOR, FUND ACCOUNTANT & TRANSFER AGENT
PNC Global Investment Servicing (U.S.) Inc.
301 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
PFPC Trust Company
8800 Tinicom Boulevard
Philadelphia, PA 19153
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
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.
(c) During the period covered by this report, the code of ethics that
applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, and that
relates to any element of the code of ethics description was amended
to name W. Scott Jardine as the Compliance Coordinator for the
implementation and administration of the aforementioned code. The
amended code of ethics is provided as an exhibit pursuant to Item
12(a)(1).
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or
more of the items set forth in paragraph (b) of this item's
instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the Registrant's board of
trustees has determined that Thomas R. Kadlec and Robert F. Keith are qualified
to serve as audit committee financial experts serving on its audit committee and
that each of them is "independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees (Registrant) -- The aggregate fees billed for each of the
last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years were $0
for the fiscal year ended November 30, 2008 and $48,000 for the fiscal year
ended November 30, 2009.
(b) Audit-Related Fees (Registrant) -- The aggregate fees billed in each of
the last two fiscal years for assurance and related services by the principal
accountant that are reasonably related to the performance of the audit of the
registrant's financial statements and are not reported under paragraph (a)
of this Item were $0 for the fiscal year ended November 30, 2008 and $0 for the
fiscal year ended November 30, 2009.
Audit-Related Fees (Investment Adviser) -- The aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under paragraph
(a) of this Item were $0 for the fiscal year ended November 30, 2008 and $0 for
the fiscal year ended November 30, 2009.
(c) Tax Fees (Registrant) -- The aggregate fees billed in each of the last
two fiscal years for professional services rendered by the principal accountant
for tax compliance, tax advice, and tax planning to the registrant were $4,250
for the fiscal year ended November 30, 2008 and $5,200 for the fiscal year ended
November 30, 2009. These fees were for tax consultation.
Tax Fees (Investment Adviser) -- The aggregate fees billed in each of the
last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning to the registrant's
adviser were $0 for the fiscal year ended November 30, 2008 and $0 for the
fiscal year ended November 30, 2009.
(d) All Other Fees (Registrant) -- The aggregate fees billed in each of the
last two fiscal years for products and services provided by the principal
accountant to the registrant, other than the services reported in paragraphs (a)
through (c) of this Item were $0 for the fiscal year ended November 30, 2008 and
$0 for the fiscal year ended November 30, 2009.
All Other Fees (Investment Adviser) -- The aggregate fees billed in each of
the last two fiscal years for products and services provided by the principal
accountant to the registrant's investment adviser, other than the services
reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year
ended November 30, 2008 and $0 for the fiscal year ended November 30, 2009.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
Pursuant to its charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Audit Committee (the "Committee") is responsible for the
pre-approval of all audit services and permitted non-audit services (including
the fees and terms thereof) to be performed for the registrant by its
independent auditors. The Chairman of the Committee is authorized to give such
pre-approvals on behalf of the Committee up to $25,000 and report any such
pre-approval to the full Committee.
The Committee is also responsible for the pre-approval of the independent
auditor's engagements for non-audit services with the registrant's adviser (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the registrant, if the engagement relates
directly to the operations and financial reporting of the registrant, subject to
the DE MINIMIS exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditor has provided non-audit services to
the registrant's adviser (other than any sub-adviser whose role is primarily
portfolio management and is sub-contracted with or overseen by another
investment adviser) and any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-
approved pursuant to its policies, the Committee will consider whether the
provision of such non-audit services is compatible with the auditor's
independence.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) for the registrant and the registrant's investment adviser of
this Item that were approved by the audit committee pursuant to the
pre-approval exceptions included in paragraph (c)(7)(i)(c) or paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:
(b) 0%
(c) 0%
(d) 0%
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year that were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees was less than fifty
percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant for the fiscal year
ended November 30, 2008, were $4,250 for the registrant and $12,143 for the
registrant's investment adviser, and for the fiscal year ended November 30,
2009, were $5,200 for the registrant and $36,000 for the registrant's investment
adviser.
(h) The registrant's audit committee of its Board of Trustees has
determined that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal accountant's
independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) The Registrant has a separately designated audit committee consisting
of all the independent directors of the Registrant. The members of the
audit committee are: Thomas R. Kadlec, Niel B. Nielson, Richard E.
Erickson and Robert F. Keith.
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.
The Proxy Voting Policies are attached herewith.
FIRST TRUST ADVISORS L.P.
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND &
INCOME FUND
PROXY VOTING GUIDELINES
First Trust Advisors L.P. ("FIRST TRUST") serves as investment adviser
providing discretionary investment advisory services for Macquarie/First Trust
Global Infrastructure/Utilities Dividend & Income Fund (the "FUND"). Macquarie
Capital Investment Management LLC ("MCIM") serves as sub-adviser for the portion
of the Fund's investment portfolio invested, or to be invested, in equity
securities as well as other securities and instruments issued by U.S. and
non-U.S. issuers that manage, own and/or operate infrastructure and utility
assets in a select group of countries (the "CORE COMPONENT"). Four Corners
Capital Management, LLC serves as sub-adviser for the portion of the Fund's
investment portfolio invested, or to be invested, in U.S. dollar denominated
senior secured floating-rate loans issued by U.S. and non-U.S. issuers that
manage, own and/or operate infrastructure and utility assets (the "SENIOR LOAN
COMPONENT"). As part of these services, First Trust has full responsibility for
proxy voting and related duties with respect to the Senior Loan Component and
the Core Component. In fulfilling these duties, First Trust and the Fund have
adopted the following policies and procedures:
1. It is First Trust's policy to seek to ensure that proxies for securities
held by the Fund are voted consistently and solely in the best economic
interests of the Fund.
2. First Trust shall be responsible for the oversight of the Fund's proxy
voting process and shall assign a senior member of its staff to be responsible
for this oversight.
3. First Trust has engaged the services of Institutional Shareholder
Services, Inc. ("ISS") to make recommendations to First Trust on the voting of
proxies related to securities held by the Fund. ISS provides voting
recommendations based on established guidelines and practices. First Trust has
adopted these ISS Proxy Voting Guidelines.
4. With respect to proxies received for the Core Component, First Trust
shall review the ISS recommendations and forward such recommendations to MCIM
for review. First Trust generally will vote the proxies in accordance with ISS
recommendations. MCIM may request that First Trust not vote in accordance with
the ISS guidelines and First Trust may review and follow such request, unless
First Trust determines that it is unable to follow such request. With respect to
proxies received for the Senior Loan Component, First Trust shall review the ISS
recommendations and generally will vote the proxies in accordance with ISS
recommendations. Notwithstanding the foregoing, First Trust may not vote in
accordance with the ISS recommendations if First Trust believes that the
specific ISS recommendation is not in the best interests of the Fund.
5. If First Trust manages the assets or pension fund of a company and any
of First Trust's clients hold any securities in that company, First Trust will
vote proxies relating to such company's securities in accordance with the ISS
recommendations to avoid any conflict of interest. In addition, if First Trust
has actual knowledge of any other type of material conflict of interest between
itself and the Fund with respect to the voting of a proxy, First Trust shall
vote the applicable proxy in accordance with the ISS recommendations to avoid
such conflict of interest.
6. If the Fund requests First Trust to follow specific voting guidelines or
additional guidelines, First Trust shall review the request and follow such
guidelines, unless First Trust determines that it is unable to follow such
guidelines. In such case, First Trust shall inform the Fund that it is not able
to follow the Fund's request.
7. First Trust may have clients in addition to the Fund which have provided
First Trust with discretionary authority to vote proxies on their behalf. In
such cases, First Trust shall follow the same policies and procedures.
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
INFORMATION PROVIDED AS OF FEBRUARY 4, 2010
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
Jon Fitch and Andrew Maple-Brown are co-portfolio managers responsible for the
day-to-day management of the Core Component of the registrant.
Length of
Name Title Service Business Experience Past 5 Years
---- ------------------------- --------- ---------------------------------------------------
1. Jon Fitch Co-Portfolio Manager 14 years Jon has been CIO and Head of MFG Infrastructure
Securities* and a portfolio manager of the
registrant since the registrant's inception in
2004. He is also the portfolio manager of 14 other
funds in the MFG Global Infrastructure Securities
Strategy. Jon joined Macquarie in 1995 and is based
in Sydney, Australia.
2. Andrew Maple-Brown Fund Co-Portfolio Manager 8 years Andrew has been a New York-based portfolio manager
as of August 1, 2009 of the registrant and other North American
domiciled portfolios in the MFG Global
Infrastructure Securities Strategy ("Strategy")
since August 1, 2009. 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).
* 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 ("MCIM").
(A)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
AND POTENTIAL CONFLICTS OF INTEREST
INFORMATION PROVIDED AS OF NOVEMBER 30, 2009
OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
No. of Total Assets
Accounts in Accounts
Total where where
Name of Portfolio No. of Advisory Fee Advisory Fee
Manager or Accounts is Based on is Based on
Team Member Type of Accounts Managed Total Assets Performance Performance
----------------- --------------------------------- -------- ------------ ------------ ------------
1. John Fitch Registered Investment Companies: 1 $400.1M 0 $0
Other Pooled Investment Vehicles: 10 $1417.6M 3 $668.1M
Other Accounts: 3 $105M 0 $0
2. Andrew Maple-Brown Registered Investment Companies: 1 $400.1M 0 $0
Other Pooled Investment Vehicles: 2 $87.7M 0 $0
No. of Total Assets
Accounts in Accounts
Total where where
Name of Portfolio No. of Advisory Fee Advisory Fee
Manager or Accounts is Based on is Based on
Team Member Type of Accounts Managed Total Assets Performance Performance
----------------- --------------------------------- -------- ------------ ------------ ------------
Other Accounts: 3 $105M 0 $0
The Advisory fees for these accounts where the advisory fee is based on
performance include a base management fee and a performance fee over a
specified hurdle rate.
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 Managers are responsible for allocating investment
opportunities and aggregating orders consistently with the procedures and
monthly review by the Chief Compliance Officer of MCIM is required.
(A)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
INFORMATION PROVIDED AS OF FEBRUARY 4, 2010
Compensation consists of fixed remuneration in the form of a base salary,
variable (at risk) performance pay in the form of an annual profit share
allocation and a long term incentive in the form of options (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 1 July of that year. The discretionary profit
sharing pool is allocated to business areas based primarily on relative
contribution to profits taking into account capital usage, and then to
individuals with the business areas. Allocations to individuals are based on
their performance contribution over the year to 31 March. As part of the annual
remuneration review cycle, Directors are entitled to receive an allocation of
options based on their performance over the year. The Group uses shares to
provide a long term equity incentive for senior staff and ensures significant
alignment with shareholder interests over the long term. 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.
(A)(4) DISCLOSURE OF SECURITIES OWNERSHIP
THE INFORMATION BELOW IS AS OF NOVEMBER 30, 2009
Dollar ($) Range
of Fund Shares
NAME Beneficially Owned
------------------ ------------------
John Fitch $0
Andrew Maple-Brown $0
FOUR CORNERS CAPITAL MANAGEMENT, LLC:
(A)(1) IDENTIFICATION OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS AND
DESCRIPTION OF ROLE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
INFORMATION PROVIDED AS OF FEBRUARY 4, 2010
Four Corners manages multiple portfolios comprised principally of U.S. dollar
denominated, floating-rate, senior secured, commercial and industrial loans and
notes, loan-based swaps, and other debt instruments, and may manage portfolios
that include high yield bonds and/or credit derivatives. Robert I. Bernstein,
Managing Director and Chief Investment Officer of Four Corners, and Drew R.
Sweeney, Senior Vice President of Four Corners, are co-portfolio managers.
The co-portfolio managers are supported in their portfolio management activities
by the Four Corners investment staff. Four Corners' investment analysts are
assigned loans within specific industries and report to the Chief Investment
Officer. Mr. Bernstein has been Managing Director and Chief Investment Officer
of Four Corners since 2001. Mr. Sweeney has been Senior Vice President of Four
Corners since 2005. Prior to that, Mr. Sweeney was a Vice President and Analyst
at American Express Asset Management Group.
(A)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
AND POTENTIAL CONFLICTS OF INTEREST
OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
INFORMATION PROVIDED AS OF NOVEMBER 30, 2009
# of Accounts
Managed Total Assets
for which for which
Total Advisory Advisory Fee
Name of Portfolio # of Fee is Based on
Manager or Accounts Total Assets is Based on Performance
Team Member Type of Accounts Managed ($millions) Performance ($millions)
---------------------- --------------------------------- -------- ------------ ------------- ------------
1. Robert I. Bernstein Registered Investment Companies: 2 $586.6M 0 $0
Other Pooled Investment Vehicles: 3 $798.9M 4 $798.9M
Other Accounts: 9 $842.4M 0 $0
2. Drew R. Sweeney Registered Investment Companies: 2 $586.6M 0 $0
Other Pooled Investment Vehicles: 0 $0 0 $0
Other Accounts: 1 $48.6M 0 $0
POTENTIAL CONFLICTS OF INTERESTS
In general, Four Corners seeks to allocate the purchase and sale of corporate
loans to clients in a fair and equitable manner to quickly and prudently create
a well-constructed, fully invested portfolio of corporate loans. Since Four
Corners' clients have varying investment restrictions, and because of the
constraining mechanics of the corporate loan market, allocation of trades
through methods such as pro-rata allocation are not feasible. Therefore, the
allocation of corporate loan purchases and sales to various
accounts is generally based on factors such as the client's investment
restrictions and objectives, including expected liquidity and/or third party
credit ratings, the client's acceptance or rejection of prospective investments,
if applicable, and the relative percentage of invested assets of a client's
portfolio, among others. Assets may be disproportionately allocated to accounts
during their initial investment (ramp up) period, notwithstanding that other
accounts may also have assets available for investment. Such disproportionate
allocation to accounts during the ramp-up process may have a detrimental effect
on other accounts. Subject to the foregoing, whenever Four Corners' clients have
available funds for investment, investments suitable and appropriate for each
will be allocated in a manner Four Corners believes to be equitable to each,
although such allocation may result in a delay in one or more client accounts
being fully invested that would not occur if an allocation to other client
accounts were not made. Moreover, it is possible that due to differing
investment objectives or for other reasons, Four Corners and its affiliates may
purchase securities or loans of an issuer for one client and at approximately
the same time recommend selling or sell the same or similar types of securities
or loans for another client. For these and other reasons, not all portfolios
will participate in the gains or losses experienced by other portfolios with
similar investment objectives.
(A)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
INFORMATION PROVIDED AS OF FEBRUARY 4, 2009
Portfolio Manager and Management Team compensation is typically comprised of a
base salary and a bonus. There are no pre-determined formulas to determine base
salaries or bonus amounts. Bonuses for all employees, including the Portfolio
Managers, are discretionary. In addition, the Portfolio Managers have stock
options of Macquarie Group Limited. These options are in varying amounts and are
subject to certain vesting and other provisions of the Macquarie option plan.
Finally, the Portfolio Managers are Members of the entity recently purchased by
Macquarie Group Limited, and there are certain payments associated with that
purchase which will be paid over time. A portion of those payments is based on
achieving certain revenue targets.
The Portfolio Managers' salaries are set at certain levels and may be raised at
the discretion of Macquarie Group Limited. Bonuses are entirely discretionary,
and are likely to be related to, among other things, business unit profitability
and personal performance. Compensation is determined without regard to the
performance of any one particular fund. The Portfolio Managers have no direct
incentive to take undue risks when individual fund performance is lagging.
(A)(4) DISCLOSURE OF SECURITIES OWNERSHIP
THE INFORMATION BELOW IS AS OF NOVEMBER 30, 2009
Name of Portfolio Dollar ($) Range
Manager or of Fund Shares
Team Member Beneficially Owned
------------------- ------------------
Robert I. Bernstein $0
Drew R. Sweeney $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) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(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/ James A. Bowen
------------------------------------------------------
James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date January 25, 2010
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/ James A. Bowen
------------------------------------------------------
James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)
Date January 25, 2010
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------------
Mark R. Bradley, Treasurer, Controller, Chief
Financial Officer and Chief Accounting Officer
(principal financial officer)
Date January 25, 2010
* Print the name and title of each signing officer under his or her
signature.