WHEATON, Ill.--(BUSINESS WIRE)--The Board of Trustees of First Trust Dynamic Europe Equity Income Fund (the “Fund”) (NYSE: FDEU) has approved a managed distribution policy for the Fund (the “Plan”) in reliance on exemptive relief received from the Securities and Exchange Commission which permits the Fund to make periodic distributions of long-term capital gains more frequently than otherwise permitted with respect to its common shares subject to certain conditions. Under the Plan, the Fund currently intends to pay a monthly distribution in the amount of $0.121 per share, which represents the current earnings forecast of the Fund. However, the distribution amount per share could increase or decrease in the future as a result of a change in actual or forecasted earnings. A change in the distribution amount per share must be approved by the Fund’s Board of Trustees. A portion of this monthly distribution may include realized capital gains. This may result in a reduction of the long-term capital gain distribution necessary at year end by distributing realized capital gains throughout the year. The annual distribution rate is independent of the Fund’s performance during any particular period but is expected to correlate with the Fund’s performance over time. Accordingly, you should not draw any conclusions about the Fund’s investment performance from the amount of any distribution or from the terms of the Plan. The Fund anticipates declaring its first regularly scheduled monthly distribution pursuant to the Plan in the second half of September 2017.
In addition to paying regular monthly distributions, in connection with the Fund’s initial public offering, the Fund implemented a quarterly special distribution program pursuant to which, during the two-year period following its initial public offering on September 24, 2015, the Fund agreed to pay quarterly special distributions in cash to common shareholders if certain conditions were met. The quarterly special distribution, if any, was defined to equal 50% of the amount by which the net asset value (“NAV”) of the Fund as of the quarterly special distribution measurement date exceeded the NAV of the Fund as of the most recent prior quarterly special distribution measurement date for which a quarterly special distribution was paid. During the two-year period, the Fund declared one quarterly special distribution in the amount of $0.235 per share payable on July 17, 2017. The final quarterly special distribution measurement date will be September 15, 2017, and the quarterly special distribution program will expire pursuant to its terms thereafter.
The Fund is a non-diversified, closed-end management investment company. The Fund’s investment objective is to provide a high level of current income with a secondary focus on capital appreciation. The Fund pursues its investment objective by investing at least 80% of its managed assets in a portfolio of equity securities of European companies of any market capitalization, including, but not limited to, common and preferred stock that pay dividends, depositary receipts and real estate investment trusts. The Fund seeks to focus its equity investments on income-producing securities and utilizes a dynamic currency hedging process, which includes, at the discretion of the portfolio managers, the use of forward foreign currency exchange contracts to hedge a portion of the Fund’s currency exposure. To generate additional income, the Fund writes (or sells) call options on portfolio equity securities and certain broad-based securities indices in an amount up to 40% of the value of its managed assets.
First Trust Advisors L.P., the Fund’s investment advisor, along with its affiliate, First Trust Portfolios L.P., are privately-held companies which provide a variety of investment services, including asset management and financial advisory services, with collective assets under management or supervision of approximately $109 billion as of August 31, 2017 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts.
Henderson Global Investors (North America) Inc. (“Henderson”) serves as the Fund’s investment sub-advisor. Henderson is an indirect, wholly-owned subsidiary of Janus Henderson Group plc (“Janus Henderson Group”, d/b/a Janus Henderson Investors). Janus Henderson Investors is headquartered in London and is a global investment management firm that provides a full spectrum of investment products and services to clients around the world. Janus Henderson Investors was formed as a result of a “merger of equals” on May 30, 2017, in which Henderson Group plc and Janus Capital Group Inc. combined their operations to form a new active management firm that - together - builds on the strengths and capabilities of their respective organizations. Henderson Investment Management Limited, a registered investment advisor and an indirect, wholly-owned subsidiary of Janus Henderson Group, serves as the Fund’s sub-sub-advisor responsible for certain investment decisions of the Fund. With offices in 27 cities with more than 2,000 employees, Janus Henderson Investors managed approximately $344.9 billion in assets as of June 30, 2017.
Past performance is no assurance of future results. Investment return and market value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost.
Principal Risk Factors: The Fund is subject to risks, including the fact that it is a non-diversified closed-end management investment company. Because the Fund will invest primarily in securities of non-U.S. issuers, which are generally denominated in non-U.S. currencies, there are risks not typically associated with investing in securities of U.S. issuers. Non-U.S. issuers are subject to higher volatility than securities of U.S. issuers. An investor may lose money if the local currency of a non-U.S. market depreciates against the U.S. dollar. Investments in securities of issuers located in emerging market countries are considered speculative and there is a heightened risk of investing in emerging markets securities. The Fund will engage in practices and strategies that will result in exposure to fluctuations in foreign exchange rates, thus subjecting it to foreign currency risk. The Fund’s use of derivatives may result in losses greater than if they had not been used, may require the Fund to sell or purchase portfolio securities at inopportune times, may limit the amount of appreciation the Fund can realize on an investment, or may cause the Fund to hold a security that it might otherwise sell. Use of leverage can result in additional risk and cost, and can magnify the effect of any losses.
The risks of investing in the Fund are spelled out in the shareholder reports and other regulatory filings.
Certain statements made in this press release are forward-looking statements. Actual results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. These include, without limitation, the ability of the Fund’s performance over time to support a specified monthly distribution amount and the timing and amounts of distributions declared by the Fund from time to time. None of First Trust, Henderson or the Fund undertakes any responsibility to update publicly or revise any forward-looking statements.
The Fund’s daily closing New York Stock Exchange price and net asset value per share as well as other information can be found at www.ftportfolios.com or by calling 1-800-988-5891.