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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-21496
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Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
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(Exact name of registrant as specified in charter)
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
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(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
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(Name and address of agent for service)
Registrant's telephone number, including area code: 630-765-8000
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Date of fiscal year end: November 30
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Date of reporting period: August 31, 2010
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Form N-Q is to be used by management investment companies, other than small
business investment companies registered on Form N-5 (Sections 239.24 and 274.5
of this chapter), to file reports with the Commission, not later than 60 days
after the close of the first and third fiscal quarters, pursuant to rule 30b1-5
under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may
use the information provided on Form N-Q in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-Q 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 the
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.
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ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule(s) of Investments is attached herewith.
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a)
AUGUST 31, 2010 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
COMMON STOCKS - 82.9%
AUSTRALIA - 22.9%
1,420,371 Asciano Group (b) (c) .............................. $ 2,116,711
2,081,357 Australian Infrastructure Fund (b) ................. 3,370,257
1,477,724 Intoll Group (b) ................................... 1,939,235
1,087,918 MAp Group (b) ...................................... 2,865,055
5,126,251 SP AusNet (b) ...................................... 3,648,673
7,892,474 Spark Infrastructure Group (b) (d) ................. 8,180,581
1,698,535 Transurban Group (b) ............................... 7,359,503
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29,480,015
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CANADA - 3.3%
54,216 Enbridge, Inc. (b) ................................. 2,697,200
42,654 TransCanada Corp. (b) .............................. 1,520,010
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4,217,210
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FRANCE - 10.5%
25,081 Aeroports de Paris (b) ............................. 1,769,728
84,270 Electricte de France (b) ........................... 3,356,447
169,828 GDF Suez (b) ....................................... 5,258,769
72,988 Vinci S.A. (b) ..................................... 3,202,607
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13,587,551
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GERMANY - 4.3%
92,370 E.On AG (b) ........................................ 2,599,227
86,223 Hamburger Hafen Und Logistik AG (b) ................ 3,016,292
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5,615,519
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ITALY - 7.7%
424,075 Atlantia SpA (b) ................................... 7,991,273
467,217 Terna SpA (b) ...................................... 1,878,377
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9,869,650
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JAPAN - 1.3%
351,000 Tokyo Gas Co. Ltd. ................................. 1,637,805
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SPAIN - 9.4%
368,077 Abertis Infraestructuras S.A. (b) .................. 6,101,104
51,916 Enagas S.A. (b) .................................... 917,778
123,097 Red Electrica Corp. S.A. (b) ....................... 5,072,948
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12,091,830
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SWITZERLAND - 1.3%
5,220 Flughafen Zuerich AG (b) ........................... 1,735,287
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UNITED KINGDOM - 12.2%
804,092 National Grid plc (b) .............................. 6,770,235
108,886 Scottish and Southern Energy plc (b) ............... 1,912,068
355,019 Severn Trent plc (b) ............................... 7,050,941
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15,733,244
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See Notes to Quarterly Portfolio of Investments
Page 1
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
AUGUST 31, 2010 (UNAUDITED)
SHARES DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
COMMON STOCKS - (CONTINUED)
UNITED STATES - 10.0%
74,200 American Electric Power Co., Inc. .................. $ 2,627,422
46,900 FirstEnergy Corp. (b) .............................. 1,713,257
14,735 ITC Holdings Corp. (b) ............................. 854,041
93,900 PG&E Corp. (b) ..................................... 4,390,764
44,088 SemGroup Corp., Class A (b) (c) .................... 881,760
117,300 Spectra Energy Corp. (b) ........................... 2,385,882
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12,853,126
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TOTAL COMMON STOCKS
(Cost $106,821,729) ................................ 106,821,237
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SHARES/
UNITS DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
MASTER LIMITED PARTNERSHIPS - 7.7%
UNITED STATES - 7.7%
88,716 Energy Transfer Partners, L.P. (b) ........ 4,053,434
57,977 Enterprise Products Partners, L.P. (b) .... 2,143,410
78,181 Magellan Midstream Partners, L.P. (b) ..... 3,788,651
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TOTAL MASTER LIMITED PARTNERSHIPS
(Cost $7,671,148) ......................... 9,985,495
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CANADIAN INCOME TRUSTS - 7.4%
327,110 Consumers' Waterheater Income Fund (b) .... 1,463,230
299,997 Northland Power Income Fund (b) ........... 4,208,707
206,949 Pembina Pipeline Income Fund (b) .......... 3,803,817
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TOTAL CANADIAN INCOME TRUSTS
(Cost $7,330,789) ......................... 9,475,754
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RATINGS (e)
PRINCIPAL -------------- STATED
VALUE DESCRIPTION MOODY'S S&P RATE (f) MATURITY (g) VALUE
---------- ------------------------------------------- ------- ---- ------------ ------------ -----------
SENIOR FLOATING-RATE LOAN INTERESTS - 31.9%
CABLE & SATELLITE - 3.8%
$1,484,810 Charter Communications Operating,
LLC, Incremental Term Loan B-2 ......... Ba2 BB+ 7.25% 03/06/14 1,516,569
498,747 Charter Communications Operating,
LLC, Term Loan C ....................... Ba2 BB+ 3.79% 09/06/16 477,016
498,750 CSC Holdings, Inc.,
Term Loan B-3, Extended
Maturity ............................... Baa3 BBB- 2.02% 03/29/16 484,055
1,484,496 CSC Holdings, Inc.,
Term Loan B-2, Extended
Maturity ............................... Baa3 BBB- 2.02% 03/29/16 1,453,973
675,856 UPC Broadband Holdings B.V.,
Term Loan T ............................ Ba3 B+ 4.25% 12/31/16 648,822
See Notes to Quarterly Portfolio of Investments
Page 2
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
AUGUST 31, 2010 (UNAUDITED)
RATINGS (e)
PRINCIPAL -------------- STATED
VALUE DESCRIPTION MOODY'S S&P RATE (f) MATURITY (g) VALUE
---------- ------------------------------------------- ------- ---- ------------ ------------ -----------
SENIOR FLOATING-RATE LOAN INTERESTS - (CONTINUED)
CABLE & SATELLITE - (CONTINUED)
$ 324,144 UPC Broadband Holdings B.V.,
Term Loan X ............................ Ba3 B+ 4.25% 12/31/17 $ 309,557
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4,889,992
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ELECTRIC UTILITIES - 7.8%
2,024,119 Astoria Generating Co.,
Acquisitions, LLC, Term Loan B ......... B1 BB- 2.29% 02/23/12 1,961,709
1,689,787 Calpine Corp.,
First Priority Term Loan ............... B1 B+ 3.42% 03/29/14 1,612,574
319,848 Covanta Energy Corp.,
Synthetic Letter of Credit ............. Ba1 BB 2.03% 02/09/14 300,857
628,576 Covanta Energy Corp.,
Term Loan .............................. Ba1 BB 1.94% - 2.06% 02/09/14 591,255
1,000,000 Mirant North America, LLC,
Revolving Credit Facility .............. Ba2 BB 0.38% 01/03/12 946,667
814,333 Mirant North America, LLC,
Term Loan .............................. Ba2 BB 2.01% 01/03/13 804,765
775 NRG Energy, Inc., Synthetic
Letter of Credit ....................... Baa3 BB+ 2.03% 02/01/13 756
2,024,500 NRG Energy, Inc., Synthetic
Letter of Credit ....................... Baa3 BB+ 3.78% 08/31/15 1,978,442
110,740 NRG Energy, Inc., Term Loan ............... Baa3 BB+ 2.28% 02/01/13 108,058
416,445 NRG Energy, Inc., Term Loan ............... Baa3 BB+ 3.78% 08/31/15 409,414
939,795 Riverside Energy Center, LLC,
Term Loan .............................. Ba3 BB- 4.73% 06/24/11 932,747
99,979 Rocky Mountain Energy Center, LLC,
Letter of Credit ....................... Ba3 BB- 4.73% 06/24/11 99,229
315,724 Rocky Mountain Energy Center, LLC,
Term Loan .............................. Ba3 BB- 4.73% 06/24/11 313,356
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10,059,829
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ENVIRONMENTAL & FACILITIES SERVICES - 1.5%
2,000,000 EnergySolutions, LLC
Term Loan .............................. Ba2 BB+ 6.25% 08/13/16 1,963,750
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GAS UTILITIES - 0.6%
809,626 Atlas Pipeline Partners, L.P.,
Term Loan .............................. B1 B 7.75% 07/27/14 805,228
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HEALTH CARE FACILITIES - 4.1%
469,758 HCA Inc., Term Loan B ..................... Ba3 BB 2.78% 11/18/13 452,140
1,626,573 HCA Inc., Term Loan B-2 ................... Ba3 BB 3.78% 03/31/17 1,574,472
792,815 Health Management
Associates Inc., Term Loan B ........... B1 BB- 2.28% 02/28/14 741,462
945,840 Lifepoint Hospitals Inc.,
Term Loan B ............................ Ba1 BB 1.95% 04/15/12 919,356
1,673,948 Select Medical Corp.,
Term Loan B-1 .......................... Ba2 BB- 4.09% 08/22/14 1,630,007
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5,317,437
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See Notes to Quarterly Portfolio of Investments
Page 3
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
AUGUST 31, 2010 (UNAUDITED)
RATINGS (e)
PRINCIPAL -------------- STATED
VALUE DESCRIPTION MOODY'S S&P RATE (f) MATURITY (g) VALUE
---------- ------------------------------------------- ------- ---- ------------ ------------ -----------
SENIOR FLOATING-RATE LOAN INTERESTS - (CONTINUED)
HEALTH CARE SERVICES - 1.4%
$ 95,851 CHS/Community Health
Systems, Inc.,
Delayed Draw Term Loan ................. Ba3 BB 2.55% 07/25/14 $ 90,372
1,868,234 CHS/Community Health
Systems, Inc., Term Loan ............... Ba3 BB 2.51% - 2.55% 07/25/14 1,761,438
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1,851,810
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INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 4.5%
787,748 Bicent Power, LLC,
Term Loan First Lien ................... B1 BB- 2.54% 06/30/14 682,715
63,395 Coleto Creek Power, L.P.,
Synthetic Letter of Credit ............. B1 B+ 3.28% 06/28/13 56,707
801,512 Coleto Creek Power, L.P.,
Term Loan, First Lien .................. B1 B+ 3.01% - 3.28% 06/28/13 716,952
1,462,837 Dynegy Holdings Inc.,
Synthetic Letter of Credit ............. Ba3 B+ 4.02% 04/02/13 1,437,847
37,068 Dynegy Holdings Inc.,
Term Loan B ............................ Ba3 B+ 4.02% 04/02/13 36,435
933,333 Longview Power, LLC,
Delayed Draw Term Loan ................. B2 BB- 2.81% 02/28/14 786,333
266,667 Longview Power, LLC,
Synthetic Letter of Credit ............. B2 BB- 2.81% 02/28/14 224,667
800,000 Longview Power, LLC,
Term Loan B ............................ B2 BB- 2.81% 02/28/14 674,000
1,492,327 Texas Competitive Electric
Holdings Co., LLC,
Initial Term Loan B3 ................... B1 B+ 3.79% - 4.03% 10/10/14 1,124,842
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5,740,498
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MANAGED HEALTH CARE - 3.7%
701,521 IASIS Healthcare Corp.,
Delayed Draw Term Loan ................. Ba2 B+ 2.26% 03/15/14 662,938
190,890 IASIS Healthcare Corp.,
Synthetic Letter of Credit ............. Ba2 B+ 2.26% 03/15/14 180,391
2,026,931 IASIS Healthcare Corp.,
Term Loan .............................. Ba2 B+ 2.26% 03/15/14 1,915,450
1,995,000 Vanguard Health Systems Inc.,
Term Loan B ............................ Ba2 BB- 5.00% 01/29/16 1,971,539
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4,730,318
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MULTI-UTILITIES - 1.5%
2,000,000 KGEN, LLC, Synthetic
Letter of Credit ....................... B1 BB- 2.31% 02/08/14 1,880,000
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OIL & GAS EQUIPMENT & SERVICES - 0.1%
74,660 Targa Rosources, Inc., Term Loan .......... Ba3 B+ 5.75% 07/05/16 74,361
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See Notes to Quarterly Portfolio of Investments
Page 4
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
AUGUST 31, 2010 (UNAUDITED)
RATINGS (e)
PRINCIPAL -------------- STATED
VALUE DESCRIPTION MOODY'S S&P RATE (f) MATURITY (g) VALUE
---------- ------------------------------------------- ------- ---- ------------ ------------ ------------
SENIOR FLOATING-RATE LOAN INTERESTS - (CONTINUED)
OIL & GAS EXPLORATION & PRODUCTION - 0.6%
$ 376,170 SemCrude, L.P., Prefunded Synthetic
Letter of Credit ....................... NR NR 8.18% 11/30/12 $ 374,054
19,799 SemCrude, L.P., Prefunded Synthetic
Letter of Credit (OID) ................. NR NR 8.50% 11/30/12 19,687
369,052 SemCrude, L.P., Term Loan,
Second Lien (h) ........................ NR NR 9.00% 11/30/16 371,205
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764,946
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OIL & GAS STORAGE & TRANSPORTATION - 1.5%
1,000,000 Energy Transfer Equity, L.P.,
Term Loan B ............................ Ba2 BB- 2.02% 11/01/12 978,750
1,000,000 Enterprise GP Holdings, L.P.
Term Loan B ............................ Ba2 BB- 2.78% 11/08/14 980,000
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1,958,750
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WIRELESS TELECOMMUNICATION SERVICES - 0.8%
1,054,905 Windstream Corp.,
Term Loan B2 ........................... Baa3 BB+ 3.02% - 3.28% 12/17/15 1,047,182
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TOTAL SENIOR FLOATING-RATE LOAN INTERESTS
(Cost $42,417,903) ........................ 41,084,101
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TOTAL INVESTMENTS - 129.9%
(Cost $164,241,569) (i) ................... 167,366,587
OUTSTANDING LOAN - (34.5)% ................ (44,500,000)
NET OTHER ASSETS AND LIABILITIES - 4.6% ... 5,932,752
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NET ASSETS - 100.0% ....................... $128,799,339
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(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 1E - Restricted Securities in the Notes
to Quarterly Portfolio of Investments).
(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) Interest for the period commencing on November 30, 2009 and ending on
December 31, 2011 shall be payable, at the Borrowers' option, (i) in cash
at a rate per annum equal to 9% ("Cash Interest") or (ii) in
Payment-in-Kind interest at a rate per annum equal to 11%, and, commencing
January 1, 2012, shall be payable as Cash Interest.
(i) Aggregate cost for financial reporting purposes, which approximates the
aggregate cost for federal income tax purposes. As of August 31, 2010, the
aggregate gross unrealized appreciation for all securities in which there
was an excess of value over tax cost was $10,483,045 and the aggregate
gross unrealized depreciation for all securities in which there was an
excess of tax cost over value was $7,358,027.
NR Not Rated.
See Notes to Quarterly Portfolio of Investments
Page 5
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
AUGUST 31, 2010 (UNAUDITED)
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of August 31,
2010 is as follows (see Note 1A - Portfolio Valuation in the Notes to Quarterly
Portfolio of Investments):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
8/31/2010 PRICES INPUTS INPUTS
------------ ------------ ----------- ------------
Common Stocks * .......................... $106,821,237 $106,821,237 $ -- $ --
Master Limited Partnerships * ............ 9,985,495 9,985,495 -- --
Canadian Income Trusts ................... 9,475,754 9,475,754 -- --
Senior Floating-Rate Loan Interests * .... 41,084,101 -- 39,204,101 1,880,000
------------ ------------ ----------- ----------
TOTAL INVESTMENTS ........................ $167,366,587 $126,282,486 $39,204,101 $1,880,000
============ ============ =========== ==========
* See the Portfolio of Investments for country or industry breakout.
The following table presents the activity of the Fund's investments measured at
fair value on a recurring basis using significant unobservable inputs (Level 3)
for the period presented.
BALANCE BALANCE
AS OF TRANSFERS AS OF
INVESTMENTS AT FAIR VALUE USING NOVEMBER 30, IN (OUT) AUGUST 31,
SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) 2009 OF LEVEL 3 2010
----------------------------------------- ------------ ---------- ----------
Senior Floating-Rate Loan Interests ..... $-- $1,880,000 $1,880,000
--- ---------- ----------
TOTAL INVESTMENTS ....................... $-- $1,880,000 $1,880,000
=== ========== ==========
% OF TOTAL
INDUSTRY CLASSIFICATION (1) INVESTMENTS
--------------------------- -----------
Transportation Infrastructure 21.6%
Electric Utilities 19.0
Oil, Gas & Consumable Fuels 12.7
Multi-Utilities 9.8
Water Utilities 4.2
Independent Power Producers & Energy Traders 2.5
Construction & Engineering 1.9
Gas Utilities 1.6
Road & Rail 1.3
Diversified Consumer Services 0.9
----
Total 75.5%
====
(1) 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 classifications are
disclosed in the Portfolio of Investments and makes up the remaining 24.5%
of the Fund's portfolio.
See Notes to Quarterly Portfolio of Investments
Page 6
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
AUGUST 31, 2010 (UNAUDITED)
1. VALUATION AND INVESTMENT PRACTICES
A. PORTFOLIO VALUATION:
The net asset value ("NAV") of the Common Shares of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund (the "Fund") is determined daily
as of the close of regular trading on the New York Stock Exchange ("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 according
to 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 Investment Company Act of 1940, as amended (the "1940
Act").
Portfolio securities listed on any exchange other than the NASDAQ National
Market ("NASDAQ") or 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 listed 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 or 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.
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 Floating-Rate Loan interests ("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 since its inception,
generally has fewer trades and less liquidity than the secondary market for
other types of securities. Some Senior Loans have few or no trades, or trade
infrequently, and information regarding a specific Senior Loan may not be widely
available or may be incomplete. Accordingly, determinations of the value of
Senior Loans may be based on infrequent and dated information. Because there is
less reliable, objective data available, elements of judgment may play a greater
role in valuation of Senior Loans than for other types of securities. Typically,
Senior Loans are valued using information provided by a third party pricing
service. 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:
Page 7
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
AUGUST 31, 2010 (UNAUDITED)
- 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 August 31, 2010 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 a 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 risk of 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 August 31, 2010, the Fund had no open repurchase
agreements.
C. SECURITIES TRANSACTIONS:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
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.
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. As of August 31, 2010, 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. The Fund had unfunded delayed draw loan commitments of
approximately $946,700 as of August 31, 2010. The Fund is obligated to fund
these loan commitments at the borrower's discretion.
Page 8
NOTES TO QUARTERLY PORTFOLIO OF INVESTMENTS - (CONTINUED)
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
AUGUST 31, 2010 (UNAUDITED)
E. 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 August 31, 2010 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 1A) and are not expressed as a
discount to the carrying value of a comparable unrestricted security.
ACQUISITION % OF
SECURITY DATE SHARES PRICE CARRYING COST VALUE NET ASSETS
-------- ----------- --------- ----- ------------- ---------- ----------
Spark Infrastructure Group 12/14/05 7,892,474 $1.04 $8,958,774 $8,180,581 6.35%
========== ========== ====
2. SUBSEQUENT EVENT
On October 12, 2010, First Trust announced that James A. Bowen, its President,
acquired 100% of the voting stock of The Charger Corporation, the general
partner of First Trust (the "Transaction"). First Trust is a limited partnership
with one limited partner and one general partner (The Charger Corporation). The
Transaction is not expected to impact the day-to-day operations of the Fund. The
consummation of the Transaction is deemed to be an "assignment" (as defined in
the 1940 Act) of the Fund's investment management agreement and investment
sub-advisory agreements and resulted in the automatic termination of the
agreements.
The Board of Trustees of the Fund has approved an interim investment management
agreement with First Trust and interim investment sub-advisory agreements, which
were entered into effective upon the closing of the Transaction and will be in
effect for a maximum period of 150 days. A new investment management agreement
with First Trust and new investment sub-advisory agreements have been approved
by the Board of Trustees of the Fund and will be submitted to shareholders of
the Fund as of the record date (September 30, 2010) for approval and will take
effect upon such shareholder approval. A special shareholder meeting of the Fund
to vote on a proposal to approve the new investment management and the new
investment sub-advisory agreements is expected to be held on December 6, 2010.
Page 9
ITEM 2. 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 last
fiscal quarter that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 3. EXHIBITS.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 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 October 20, 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 October 20, 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 October 20, 2010
* Print the name and title of each signing officer under his or her signature.