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
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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: November 30, 2012
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
ANNUAL REPORT
FOR THE YEAR ENDED
NOVEMBER 30, 2012
MACQUARIE/FIRST TRUST
Global Infrastructure/
Utilities Dividend &
Income Fund
FOUR CORNERS
MACQUARIE CAPITAL MANAGEMENT FIRST TRUST
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TABLE OF CONTENTS
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/
UTILITIES DIVIDEND & INCOME FUND (MFD)
ANNUAL REPORT
NOVEMBER 30, 2012
Shareholder Letter.......................................................... 1
At A Glance................................................................. 2
Portfolio Commentary........................................................ 3
Portfolio of Investments.................................................... 8
Statement of Assets and Liabilities......................................... 13
Statement of Operations..................................................... 14
Statements of Changes in Net Assets......................................... 15
Statement of Cash Flows..................................................... 16
Financial Highlights........................................................ 17
Notes to Financial Statements............................................... 18
Report of Independent Registered Public Accounting Firm..................... 25
Additional Information...................................................... 26
Board of Trustees and Officers.............................................. 30
Privacy Policy.............................................................. 32
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements within the meaning of
the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended. Forward-looking statements include statements regarding the goals,
beliefs, plans or current expectations of First Trust Advisors L.P. ("First
Trust" or the "Advisor") and/or Macquarie Capital Investment Management LLC
("MCIM") and/or Four Corners Capital Management, LLC ("Four Corners") (MCIM and
Four Corners collectively, the "Sub-Advisors"), and their respective
representatives, taking into account the information currently available to
them. Forward-looking statements include all statements that do not relate
solely to current or historical fact. For example, forward-looking statements
include the use of words such as "anticipate," "estimate," "intend," "expect,"
"believe," "plan," "may," "should," "would" or other words that convey
uncertainty of future events or outcomes.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
(the "Fund") to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. When
evaluating the information included in this report, you are cautioned not to
place undue reliance on these forward-looking statements, which reflect the
judgment of the Advisor and/or Sub-Advisors and their respective representatives
only as of the date hereof. We undertake no obligation to publicly revise or
update these forward-looking statements to reflect events and circumstances that
arise after the date hereof.
PERFORMANCE AND RISK DISCLOSURE
There is no assurance that the Fund will achieve its investment objective. The
Fund is subject to market risk, which is the possibility that the market values
of securities owned by the Fund will decline and that the value of the Fund
shares may therefore be less than what you paid for them. Accordingly, you can
lose money by investing in the Fund. See "Risk Considerations" in the Notes to
Financial Statements for a discussion of certain other risks of investing in the
Fund.
Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. For the most recent month-end performance figures, please visit
http://www.ftportfolios.com or speak with your financial advisor. Investment
returns, net asset value and common share price will fluctuate and Fund shares,
when sold, may be worth more or less than their original cost.
HOW TO READ THIS REPORT
This report contains information that may help you evaluate your. 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.
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SHAREHOLDER LETTER
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/
UTILITIES DIVIDEND & INCOME FUND (MFD)
ANNUAL LETTER FROM THE CHAIRMAN AND CEO
NOVEMBER 30, 2012
Dear Shareholders:
I am pleased to present you with the annual report for your investment in
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income
Fund (the "Fund").
The report you hold contains detailed information about your investment; a
portfolio commentary from the Fund's management team that provides a recap of
the period; a performance analysis and a market and Fund outlook. Additionally,
you will find the Fund's financial statements for the period this report covers.
I encourage you to read this document and discuss it with your financial
advisor. A successful investor is also typically a knowledgeable one, as we have
found to be the case at First Trust.
First Trust remains committed to being a long-term investor and investment
manager and to bringing you quality financial solutions regardless of market ups
and downs. We have always believed, as I have written previously, that there are
two ways to attain success in reaching your financial goals: staying invested in
quality products and having a long-term investment horizon. We are committed to
this approach in the products we manage or supervise and offer to investors.
As you know, First Trust offers a variety of products that we believe could fit
many financial plans to help investors seeking long-term investment success. We
encourage you to talk to your advisor about the other investments First Trust
offers that might also fit your financial goals and to discuss those goals with
your advisor regularly so that he or she can help keep you on track.
First Trust will continue to make available up-to-date information about your
investments so you and your financial advisor are current on any First Trust
investments you own. We value our relationship with you, and thank you for the
opportunity to assist you in achieving your financial goals. I look forward to
the New Year and to the next edition of your Fund's report.
Sincerely,
/s/ James A. Bowen
James A. Bowen
Chairman of the Board of Trustees of Macquarie/First Trust Global
Infrastructure/Utilities Dividend & Income Fund and
Chief Executive Officer of First Trust Advisors L.P.
Page 1
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
"AT A GLANCE"
AS OF NOVEMBER 30, 2012 (UNAUDITED)
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FUND STATISTICS
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Symbol on New York Stock Exchange MFD
Common Share Price $14.84
Common Share Net Asset Value ("NAV") $15.91
Premium (Discount) to NAV (6.73)%
Net Assets Applicable to Common Shares $135,749,139
Current Quarterly Distribution per Common Share (1) $0.3500
Current Annualized Distribution per Common Share $1.4000
Current Distribution Rate on Closing Common Share Price (2) 9.43%
Current Distribution Rate on NAV (2) 8.80%
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COMMON SHARE PRICE & NAV (WEEKLY CLOSING PRICE)
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Common Share Price NAV
11/11 $13.82 $15.29
14.39 15.08
14.27 15.05
13.89 14.76
14.45 15.17
12/11 14.21 15.27
14.70 15.22
14.51 15.24
14.83 15.46
1/12 15.43 15.74
15.50 16.05
15.90 15.93
16.17 16.19
2/12 15.60 16.00
15.89 16.03
16.01 15.85
16.04 16.13
3/12 16.15 15.99
16.00 16.10
16.00 15.82
15.94 15.66
15.76 15.89
4/12 15.77 16.15
15.48 15.80
15.58 15.77
14.90 15.01
5/12 14.23 14.62
13.60 14.20
13.89 14.58
14.30 14.76
6/12 14.67 14.77
14.73 15.34
15.27 15.16
15.40 15.43
15.45 15.54
7/12 15.62 15.74
15.56 15.82
15.90 15.75
15.80 16.10
8/12 15.39 15.81
15.81 15.83
15.81 16.16
16.08 16.53
16.08 16.47
9/12 15.82 16.20
16.00 16.50
15.67 16.26
15.64 16.35
10/12 15.54 16.20
15.48 16.12
14.96 15.76
14.08 15.53
14.92 15.75
11/12 14.84 15.91
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PERFORMANCE
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Average Annual Total Return
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Inception
1 Year Ended 5 Years Ended (3/25/04)
11/30/2012 11/30/2012 to 11/30/2012
Fund Performance (3)
NAV 15.35% -0.83% 8.84%
Market Value 15.62% -1.20% 7.40%
Index Performance
S&P 500 Utilities Total Return Index 4.65% 0.40% 8.68%
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% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
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Transurban Group 6.0%
National Grid plc 5.3
Severn Trent plc 3.6
Magellan Midstream Partners, L.P. 3.4
Abertis Infraestructuras S.A. 3.0
El Paso Pipeline Partners, L.P. 2.8
Vinci S.A. 2.7
Scottish and Southern Energy plc 2.6
Fraport AG Frankfurt Airport Services Worldwide 2.5
GDF Suez 2.4
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Total 34.3%
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% OF TOTAL
INDUSTRY CLASSIFICATION (4) INVESTMENTS
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Transportation Infrastructure 18.0%
Oil, Gas & Consumable Fuels 17.0
Multi-Utilities 11.1
Electric Utilities 9.2
Water Utilities 5.7
Construction & Engineering 2.7
Road & Rail 2.6
Media 2.1
Independent Power Producers & Energy Traders 2.1
Gas Utilities 2.1
Diversified Consumer Services 0.8
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Total 73.4%
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% OF TOTAL
COUNTRY INVESTMENTS
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United States (5) 46.1%
United Kingdom 15.6
Australia 10.8
France 7.3
Canada 6.0
Spain 5.5
Germany 3.2
Italy 2.4
Japan 2.0
Switzerland 1.1
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Total 100.0%
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(1) Most recent distribution paid or declared through 11/30/2012.
Subject to change in the future.
(2) Distribution rates are calculated by annualizing the most recent
distribution paid or declared through the report date and then
dividing by Common Share price or NAV, as applicable, as of
11/30/2012. Subject to change in the future.
(3) Total return is based on the combination of reinvested dividend,
capital gain and return of capital distributions, if any, at
prices obtained by the Dividend Reinvestment Plan, and changes in
NAV per share for NAV returns and changes in Common Share price
for market value returns. Total returns do not reflect sales load
and are not annualized for periods less than one year. Past
performance is not indicative of future results.
(4) Represents the industry classification breakdown for the Core
Component of the Fund's portfolio, which includes Common Stocks
and Master Limited Partnerships. It excludes the Senior Loan
Component of the Fund's portfolio, which industry classification
is disclosed in the Portfolio of Investments and makes up the
remaining 26.6% of the Fund's portfolio.
(5) The percentage of United States securities includes 26.6% of
Senior Floating-Rate Loan Interests.
Page 2
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PORTFOLIO COMMENTARY
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/
UTILITIES DIVIDEND & INCOME FUND (MFD)
ANNUAL REPORT
NOVEMBER 30, 2012
SUB-ADVISORS
Macquarie Capital Investment Management LLC ("MCIM") and Four Corners Capital
Management, LLC ("Four Corners") are the sub-advisors of the Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund ("MFD" or the
"Fund"). Both MCIM and Four Corners operate within the Macquarie Funds Group
("MFG") and are wholly-owned, indirect subsidiaries of Macquarie Group Limited
("Macquarie").
The Fund's Core Component, which consists primarily of equity securities and
equity-like securities issued by infrastructure issuers, is managed by MCIM,
which started operations in 2004 with the launch of the Fund. MCIM and its
Australia-based affiliates manage approximately $2.7 billion of assets as of
November 30, 2012, in MFG's Infrastructure Securities portfolios, which includes
the Fund.
The Fund's Senior Loan Component is managed by Four Corners. Four Corners was
founded in 2001 and became a wholly-owned subsidiary of Macquarie in 2008. Four
Corners managed over $1.5 billion of assets as of November 30, 2012, with an
emphasis on Senior Loans. Four Corners is a subsidiary of Delaware Asset
Advisers ("Delaware"), a series of Delaware Management Business Trust, which is
also a wholly-owned subsidiary of Macquarie. Delaware managed over $170 billion
in assets across all major asset classes as of November 30, 2012.
MFG is Macquarie's funds management business. MFG is Australia's largest asset
manager and a top 40 asset manager globally, with USD $350 billion in assets
under management (as at September 30, 2012). MFG is a full-service asset
manager, offering a diverse range of products including securities investment
management, infrastructure and real estate asset management and fund and
equity-based structured products.
PORTFOLIO MANAGEMENT TEAM
Mr. Jonathon Ong has replaced Mr. Andrew Maple-Brown as the Co-Portfolio Manager
with Mr. Anthony Felton of MFD's Core Component as of November 2012. Mr. Anthony
Felton became Co-Portfolio Manager as of June 2012. They are supported by
Macquarie Funds Group's Infrastructure Securities team, which is one of the
largest and most experienced investment teams specializing in the listed
infrastructure sector.
MFD's current portfolio management team is as follows:
ANTHONY FELTON, CFA
CO- PORTFOLIO MANAGER, MFD CORE COMPONENT
PORTFOLIO MANAGER, MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
Mr. Felton joined Macquarie Group in February 2004 and the MFG Infrastructure
Securities team in June 2004. He was responsible for the analysis of European
stocks before becoming a Portfolio Manager. Mr. Felton has significant
experience in the analysis of both regulated infrastructure companies, such as
water and electricity/gas transmission/distribution and utilities, as well as
user demand infrastructure companies such as airports, toll roads and seaports.
Prior to joining Macquarie, Mr. Felton had broad-based financial market
experience with Westpac Banking Corporation in Sydney, and West LB and JP Morgan
in London between 1999 and 2003. Mr. Felton holds a Bachelor of Commerce -
University of New South Wales, and is a CFA charter holder.
JONATHON ONG, CFA
CO- PORTFOLIO MANAGER, MFD CORE COMPONENT
PORTFOLIO MANAGER, MACQUARIE CAPITAL INVESTMENT MANAGEMENT LLC
Mr. Ong joined the MFG Infrastructure Securities team in Sydney as a Portfolio
Manager in January 2008. He has been a member of the team's Investment Committee
since then. He has 16 years of investment experience including 10 years as a
Portfolio Manager. Prior to joining Macquarie, Mr. Ong held analyst and PM roles
at Credit Suisse Asset Management ("CSAM"), where he worked for 8 years in
Sydney and Tokyo. His portfolio management and analytical responsibilities were
primarily focused on infrastructure and related stocks. Prior to CSAM, he spent
3 years as an Asia-Pacific telecom analyst for Bankers Trust, having started his
career as a sell-side analyst in Hong Kong for Kim Eng Securities. Mr. Ong
earned a Bachelor of Science degree from the University of Melbourne and a
Bachelor of Business (Banking and Finance) from Monash University. Mr. Ong is a
CFA charter holder.
Page 3
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PORTFOLIO COMMENTARY - (CONTINUED)
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KEVIN P. LOOME, CFA
CO-PORTFOLIO MANAGER, MFD SENIOR LOAN COMPONENT
SENIOR VICE PRESIDENT, FOUR CORNERS CAPITAL MANAGEMENT, LLC
Kevin P. Loome is head of the High Yield fixed income team, responsible for
portfolio construction and strategic asset allocation of all high yield
fixed-income assets. Prior to joining Delaware Investments in August 2007 in his
current position, Mr. Loome spent 11 years at T. Rowe Price, starting as an
analyst and leaving the firm as a portfolio manager. He began his career with
Morgan Stanley as a corporate finance analyst in the New York and London
offices. Mr. Loome received his bachelor's degree in commerce from the
University of Virginia and earned an MBA from the Tuck School of Business at
Dartmouth.
ADAM H. BROWN, CFA
CO-PORTFOLIO MANAGER, MFD SENIOR LOAN COMPONENT
VICE PRESIDENT, FOUR CORNERS CAPITAL MANAGEMENT, LLC
Adam H. Brown is a portfolio manager on the firm's taxable fixed-income team,
with specific responsibilities for the bank loan portfolio. Prior to joining
Delaware Investments in April 2011 as part of the firm's integration of
Macquarie Four Corners Capital Management, he spent more than nine years with
Four Corners, where he was a co-portfolio manager on four collateralized loan
obligation (CLO) funds and a senior research analyst supporting noninvestment
grade portfolios. Before that, Mr. Brown was with Wachovia Securities, where he
worked in the leveraged finance group arranging senior secured bank loans and
high yield bond financings for financial sponsors and corporate issuers. He
earned a bachelor's degree in accounting from the University of Florida and an
MBA from the A.B. Freeman School of Business at Tulane University.
COMMENTARY
INVESTMENT OBJECTIVE
The investment objective of 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.
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.
A typical profile of an infrastructure business would be one whose assets
provide essential public services which are difficult to replace, have a
strategic competitive advantage, demonstrate inelastic demand, and have low
sensitivity to cyclical volatility, courtesy of their essential nature and high
margins.
There can be no assurance that the Fund's investment objective will be achieved.
The Fund may not be appropriate for all investors.
MARKET RECAP
Global equities began the reporting period on a positive note, continuing the
strong run in which they gained around 23% from their low in early October 2011
to the end of March 2012. Global equities then pulled back sharply amidst
increasing anxiety and global risk aversion related to the European debt crisis,
before recovering to post solid gains in the September quarter. Much of that
quarter was characterized by improved investor sentiment due to expectations of
further coordinated policy action, despite the generally sluggish economic data
and poor business and credit conditions in most of the major developed and
emerging economies.
There were several key announcements by central banks in September. After
committing to do whatever was needed to defend the Euro at the end of July, the
European Central Bank (ECB) announced its Outright Monetary Transactions ("OMT")
plan, in which it will engage in unlimited secondary market bond purchases out
to three-year maturities. With economic growth well below the economy's long-run
sustainable growth rate, the U.S. Federal Reserve announced that it would
commence open-ended quantitative easing (QE3) with the purchase of $40 billion
worth of mortgage-backed securities per month that will continue until the
outlook for the labor market improves substantially. The Fed also extended its
low interest rate guidance into mid-2015 and indicated that it will do more if
needed.
Page 4
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PORTFOLIO COMMENTARY - (CONTINUED)
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The Fund's fiscal year ended on a positive note as the appetite for risk assets
steadily improved on the back of confidence that the U.S. fiscal cliff will be
resolved and better than expected economic data, after earlier market concerns
about the extent of slower growth.
PERFORMANCE ANALYSIS - CORE COMPONENT
As shown on the performance table, MFD's Net Asset Value ("NAV") total return(1)
for the period was 15.35%, ahead of the 4.65% return of the S&P 500 Utilities
Total Return Index ("Utilities 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 Utilities
Index offers a frame of reference.
In our view, there were a number of factors driving the Core Component's
contribution to the Fund's large positive NAV total return during the period:
o The strong performance of regulated utilities stocks;
o The solid performance of transportation stocks, with good performance from
the Toll Roads and Airport sectors, but weakness in the Seaports sector;
and
o The positive performance of energy pipeline stocks, particularly in the
U.S. and Canada.
These factors are discussed in further detail below.
Utilities
Regulated utilities businesses such as Electricity and Gas Distribution and
Transmission entities strongly outperformed the broader infrastructure sector
over the year. They continued to benefit from their defensive nature in the
volatile market.
Electricity and gas distribution companies posted strong returns, led by
Australian regulated electricity distribution stocks, Spark Infrastructure and
SP AusNet. They both benefited from their stable, defensive cash flows and high
yield. In Japan, Tokyo Gas performed well. It completed the Chiba-Kashima
transmission pipe after six years of construction, which should enable growth in
industrial gas volumes. The company also reported strong results and upgraded
its guidance. Centrica in the United Kingdom performed well, having reported
interim results that were slightly above expectations and maintained full year
guidance.
Electricity transmission companies also performed well due to their defensive
nature. National Grid in the United Kingdom was up after making significant
progress in reaching a new agreement with the electricity and gas markets
regulator in the UK. The company also reported results above expectations.
Transportation Infrastructure
The Transportation Infrastructure sectors outperformed during the period, led by
several European Toll Roads stocks in southern Europe, despite weakness in the
first half of the year. Italy's Atlantia was up strongly on improved macro
sentiment, and declining sovereign bond yields. It reported first half results
largely in line with expectations and then third quarter traffic data showed
some improvement from the first half of the year. Transurban in Australia
reported sound results and better than expected revenue growth. Spain's Abertis
Infraestructuras acquired OHL Brazil's nine toll road concessions in Brazil -
3226km in all - making it one of the world's largest toll road owners. Vinci in
France reported FY 2011 earnings up 7%, in line with expectations. Later in the
period, Vinci pulled back a little on concerns relating to adverse tax policy
changes and austerity measures in France.
Airport stocks posted strong returns, led by Australian Infrastructure Fund. It
entered into a Memorandum of Understanding with Australia's Future Fund for the
sale of all of its assets at an implied premium of around 22% to the share
price. Sydney Airport and Zurich Airport both posted solid returns, driven by
solid passenger volume growth. Zurich Airport also reported strong retail
spending by passengers.
By contrast, Seaport stocks detracted from returns. In Germany, Hamburger Hafen
und Logistik faced several headwinds - global growth concerns and an unfavorable
announcement from an Administrative Court in Germany relating to the dredging of
the Elbe River, which is likely to push back the date when the shipping channel
may enable larger vessels to access the port. The company lowered earnings
guidance for FY12. Australian Seaport and rail operator Asciano underperformed
due principally to market concerns over the outlook for coal export demand in
its rail business.
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1 Total return is based on the combination of reinvested dividend, capital
gain and return of capital distributions, if any, at prices obtained by the
Dividend Reinvestment Plan and changes in NAV per share for NAV returns and
changes in Common Share price for market value returns. Total returns do not
reflect sales load and are not annualized for periods less than one year.
Past performance is not indicative of future results.
Page 5
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PORTFOLIO COMMENTARY - (CONTINUED)
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Pipelines
Pipeline stocks in Canada and the U.S. contributed strongly to the Fund's
positive return. The sector benefitted from a combination of factors including
demand for its attractive yield, merger and acquisition activity, and the
continued expansion of shale gas and oil production which requires new pipeline
and associated energy infrastructure in order to deliver the increasing supply
to the market. The strong performance was led by U.S. Master Limited
Partnerships (MLPs). Magellan Midstream Partners LP enhanced its portfolio of
assets with a number of crude oil growth projects that drove earnings and
distribution growth beyond expectations throughout the year. Enterprise Products
Partners LP also benefitted from its asset footprint, announcing new pipeline
and midstream projects that provide visibility to its long-term growth
prospects. Other notable performers that benefitted from the general thematic
include El Paso Pipeline Partners LP, TransCanada Corp and Williams Companies
Inc.
The U.S. Dollar
As the Fund was not hedged for currency, the fluctuation in the U.S. Dollar
slightly detracted from the Fund's return during the period. The USD appreciated
by 4% against the Euro, which comprised around 24% of the Core Component of the
Fund (at period-end). The negative contribution was almost entirely offset by
the depreciation of the U.S Dollar by 2% each against the British Pound and the
Canadian Dollar.(2) Investments in these two currencies comprised around 28% of
the Core Component of the Fund (at period-end).
PORTFOLIO COMPOSITION
As of November 30, 2012, the Fund's Core Component was well diversified across
37 positions in global infrastructure stocks, representing 10 countries and 11
sectors. During the period, the main increases in the Fund's weightings were in
Oil Gas & Consumables Fuels, Media, and Water Utilities, while the weightings in
Electric Utilities and Multi-Utilities were reduced. Sector changes were driven
by bottom-up stock selection.
PERFORMANCE ANALYSIS - SENIOR LOAN COMPONENT
The Senior Loan Component is intended to help provide the Fund with a stable,
floating-rate income stream over the Fund's floating-rate leverage cost. As
floating-rate debt instruments whose interest rates are set at a credit spread
(the risk premium) over short-term interest rates, Senior Loans provide income
that tends to rise and fall as short-term rates fluctuate, with an approximate
60- to 90-day lag.
The Senior Loan Component of the Fund invests in infrastructure businesses.
Therefore, the loans tend to have significant asset collateral and loan ratings
generally higher than the S&P/LSTA Leveraged Loan Index ("Loan Index"). The
average rating in the Senior Loan Component is BB- vs. the average Loan Index
rating between B+ and BB-.
The Loan Index posted a strong 9.4% return for the twelve months ended November
30, 2012. Lower-rated loans outperformed during that period, with BB-rated loans
returning 6.7% and single B-rated loans increasing 9.8%. The Senior Loan
Component returned 8.4% during the twelve-month period noted above, which is 170
basis points higher than the BB-rated loan returns.
Loan market strength over the past year was seemingly driven by positive
investor sentiment across the capital markets, extremely low default rates,
strong technical conditions, and an absence of outside shocks. Loan market
inflows have been driven by resurgence in the issuance of CLOs. CLO volume
reached a post-2007 high for the month of November, as 16 managers raised $8.3
billion of new money, which brought the year-to-date total to $45.8 billion.
Retail inflows to daily-access loan mutual funds were positive each of the past
five months. Investors put $1.8 billion of new money to work in loan funds in
November, which brought year-to-date inflows to approximately $6.6 billon. This
is the largest monthly increase since May 2011 and is up from $1.6 billion in
October.
Fundamentals remain generally strong, but growth appears to be slowing.
Year-over-year earnings before interest taxes depreciation and amortization
growth among Loan Index issuers that file publicly slowed to 9% in the third
quarter, from 12% in the second quarter, according to data from S&P Capital IQ.
The latest reading is the lowest since the first quarter of 2010. The Loan Index
default rate is currently 1.28% by amount outstanding and 1.36% by number of
issuers.(3)
PERFORMANCE RELATIVE TO THE INDEX
The Utilities Index is a broad barometer of the performance of utility stocks
only (not including a broad range of infrastructure sectors) solely in the U.S.
By comparison, the Fund is not managed toward any benchmark and invests in a
global portfolio of infrastructure stocks in a range of currencies and senior
secured loans.
--------------
2 Source: Bloomberg
3 Source: S&P Capital IQ Leveraged Commentary and Data
Page 6
--------------------------------------------------------------------------------
PORTFOLIO COMMENTARY - (CONTINUED)
--------------------------------------------------------------------------------
The Fund outperformed the Utilities Index due to its exposure to the broad range
of infrastructure sectors in the Core Component, a number of which outperformed
the U.S. utilities. The Fund's Senior Loan Component also outperformed the Loan
Index.
One of the factors impacting the return of the Fund relative to its benchmarks
was the Fund's use of financial leverage through the use of bank borrowings. The
Fund uses leverage because we believe that, over time, leverage provides
opportunities for additional income and total return for common shareholders.
However, the use of leverage can also expose common shareholders to additional
volatility. For example, as the prices of securities held by the Fund decline,
the negative impact of valuation changes on Common Share NAV and common
shareholder total return is magnified by the use of leverage. Conversely,
leverage may enhance Common Share returns during periods when the prices of
securities held by the Fund generally are rising. Leverage had a positive impact
on the performance of the Fund over this reporting period.
DISTRIBUTIONS
During the twelve-month period covered by this report, the Fund announced four
regularly scheduled quarterly distributions totaling $1.40 per share. In
accordance with the Fund's level distribution policy, distributions are expected
to be comprised of net investment income, realized short-term capital gains and
non-taxable return of capital distributions (which generally are expected to
represent unrealized capital appreciation) in order to sustain a stable level of
distributions to shareholders. Net long-term capital gain distributions, if any,
are expected to be made annually.
MARKET AND FUND OUTLOOK
While the recession in Europe remains mild overall, southern Europe remains
particularly reliant on support from policymakers for a sustainable solution to
the European sovereign debt crisis. The portfolio retains a cautious stance in
relation to Europe, with little exposure to southern European economic growth in
particular.
The companies in the portfolio continue to perform largely in line with
expectations, their balance sheets are in good shape, and financing is
available, demonstrating the resilience of infrastructure in a weaker economic
environment.
As interest rates remain very low around the world, reliable sources of yield
continue to be sought by investors. We believe the infrastructure sector is well
positioned in this environment. There are many infrastructure companies with
both sustainable dividends and the potential for dividend growth.
We do not believe equity markets have yet priced the generally positive impact
of relatively low bond yields on infrastructure valuations.
We continue to identify what we believe are attractive listed infrastructure
opportunities and are looking for opportunities to selectively increase our
holding or introduce to the portfolio stocks which we believe are oversold.
The Core Component of the Fund holds what we believe are high quality
income-generating stocks, diversified primarily across the Transportation,
Utilities and Pipelines sectors. We believe that the portfolio is well
positioned to benefit from the several themes we have identified.
We believe that the Fund provides U.S. investors with an attractive vehicle to
access the broad global universe of listed infrastructure securities. We
continue to appreciate your investment in the Fund.
Page 7
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 2012
SHARES DESCRIPTION VALUE
----------- ------------------------------------------------------------------------------- ---------------
COMMON STOCKS - 81.5%
AUSTRALIA - 14.2%
599,316 Asciano Group (a) ............................................................. $ 2,720,696
667,695 Australian Infrastructure Fund (a) ............................................ 2,194,945
992,918 Spark Infrastructure Group (a) (b) ............................................ 1,694,205
525,572 Sydney Airport (a) ............................................................ 1,947,132
1,649,654 Transurban Group (a) .......................................................... 10,691,026
---------------
19,248,004
---------------
CANADA - 7.8%
167,685 EnerCare, Inc. (a) ............................................................ 1,472,002
195,571 Northland Power, Inc. (a) ..................................................... 3,697,411
91,033 Pembina Pipeline Corp. (a) .................................................... 2,577,901
62,837 TransCanada Corp. (a) ......................................................... 2,908,588
---------------
10,655,902
---------------
FRANCE - 9.5%
504 Aeroports de Paris (a) ........................................................ 38,889
122,105 Eutelsat Communications S.A. (a) .............................................. 3,777,123
191,876 GDF Suez (a) .................................................................. 4,315,844
107,426 Vinci S.A. (a) ................................................................ 4,739,731
---------------
12,871,587
---------------
GERMANY - 4.1%
80,711 Fraport AG Frankfurt Airport Services Worldwide (a) ........................... 4,476,364
51,539 Hamburger Hafen Und Logistik AG (a) ........................................... 1,162,947
---------------
5,639,311
---------------
ITALY - 3.1%
245,021 Atlantia SpA (a) .............................................................. 4,184,008
---------------
JAPAN - 2.7%
451,000 Osaka Gas Co., Ltd. (a) ....................................................... 1,772,597
46,100 West Japan Railway Co. (a) .................................................... 1,842,658
---------------
3,615,255
---------------
SPAIN - 7.1%
361,364 Abertis Infraestructuras S.A. (a) ............................................. 5,280,104
91,625 Enagas S.A. (a) ............................................................... 1,875,017
54,751 Red Electrica Corp. S.A. (a) .................................................. 2,537,069
---------------
9,692,190
---------------
SWITZERLAND - 1.5%
4,535 Flughafen Zuerich AG (a) ...................................................... 2,003,974
---------------
UNITED KINGDOM - 20.4%
680,654 Centrica plc (a) .............................................................. 3,553,978
829,793 National Grid plc (a) ......................................................... 9,372,660
200,719 Scottish and Southern Energy plc (a) .......................................... 4,582,551
249,626 Severn Trent plc (a) .......................................................... 6,459,016
335,853 United Utilities Group plc (a) ................................................ 3,667,069
---------------
27,635,274
---------------
Page 8 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
NOVEMBER 30, 2012
SHARES/
UNITS DESCRIPTION VALUE
----------- ------------------------------------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
UNITED STATES - 11.1%
58,500 Duke Energy Corp.............................................................. 3,733,470
61,200 PG&E Corp. (a) ............................................................... 2,506,140
84,700 Southern Co. (a) ............................................................. 3,688,685
80,700 Spectra Energy Corp. (a) ..................................................... 2,255,565
89,600 Williams Cos., Inc. (a) ...................................................... 2,942,464
--------------
15,126,324
--------------
TOTAL COMMON STOCKS .......................................................... 110,671,829
(Cost $103,804,976) --------------
MASTER LIMITED PARTNERSHIPS - 14.4%
UNITED STATES - 14.4%
133,412 El Paso Pipeline Partners, L.P. (a) .......................................... 4,980,270
94,500 Enbridge Energy Partners, L.P. (a) ........................................... 2,742,390
34,637 Energy Transfer Equity, L.P. (a) ............................................. 1,574,944
81,777 Enterprise Products Partners, L.P. (a) ....................................... 4,238,502
135,262 Magellan Midstream Partners, L.P. (a) ........................................ 6,016,454
--------------
TOTAL MASTER LIMITED PARTNERSHIPS ............................................ 19,552,560
(Cost $14,733,558) --------------
RATINGS (c)
PRINCIPAL MOODY'S S&P STATED
VALUE DESCRIPTION (UNAUDITED) RATE (d) MATURITY (e) VALUE
----------- --------------------------------- ----------------- ------------- ------------ --------------
SENIOR FLOATING-RATE LOAN INTERESTS - 34.7%
ALTERNATIVE CARRIERS - 3.2%
$ 1,392,947 Intelsat Jackson Holdings S.A.,
Term Loan B .................. B1 BB- 4.50% 04/02/18 $ 1,396,429
2,900,000 Level 3 Financing, Inc.,
Term Loan B .................. Ba3 B+ 4.75% 08/01/19 2,914,500
--------------
4,310,929
--------------
CABLE & SATELLITE - 8.1%
2,962,324 Bresnan Broadband Holdings,
LLC, Term Loan B ............. Ba3 BB+ 4.50% 12/14/17 2,969,197
2,985,000 Cequel Communications
Holdings I, LLC, Term
Loan B ....................... Ba2 BB- 4.00% 02/14/19 2,992,462
894,768 Charter Communications Operating,
LLC, Term Loan C ............. Ba1 BB+ 3.46% 09/06/16 898,400
1,990,000 Charter Communications Operating,
LLC, Term Loan D ............. Ba1 BB+ 4.00% 05/15/19 2,004,428
164,118 UPC Broadband Holdings B.V.,
Term Loan T .................. Ba3 BB- 3.71% 12/31/16 163,263
1,324,144 UPC Broadband Holdings B.V.,
Term Loan X .................. Ba3 B+ 3.71% 12/31/17 1,318,463
598,500 Wide Open West Finance, LLC,
Term Loan .................... B1 B 6.25% 07/17/18 604,898
--------------
10,951,111
--------------
See Notes to Financial Statements Page 9
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
NOVEMBER 30, 2012
RATINGS (c)
PRINCIPAL MOODY'S S&P STATED
VALUE DESCRIPTION (UNAUDITED) RATE (d) MATURITY (e) VALUE
----------- --------------------------------- ----------------- ------------- ------------ --------------
SENIOR FLOATING-RATE LOAN INTERESTS - (CONTINUED)
ELECTRIC UTILITIES - 1.2%
$ 1,661,078 GenOn Energy, Inc.,
Term Loan .................... B1 B+ 6.50% 09/20/17 $ 1,667,307
--------------
ENVIRONMENTAL & FACILITIES SERVICES - 1.3%
1,882,143 EnergySolutions, LLC,
Term Loan .................... B2 BB- 6.25% 08/13/16 1,806,067
--------------
HEALTH CARE FACILITIES - 9.0%
3,334,575 CHS/Community Health Systems,
Inc., Extended Term Loan ..... Ba3 BB 3.86%-3.92% 01/25/17 3,355,416
3,497,027 HCA, Inc., Term Loan B-2 ........ Ba3 BB 3.61% 03/31/17 3,498,495
469,758 HCA, Inc., Term Loan B-3 ........ Ba3 BB 3.46% 05/01/18 470,026
2,955,000 IASIS Healthcare Corp.,
Term Loan B .................. Ba3 B 5.00% 05/03/18 2,959,610
1,950,559 Vanguard Health Systems, Inc.,
Term Loan B .................. Ba2 BB- 5.00% 01/29/16 1,963,237
--------------
12,246,784
--------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 6.0%
1,925,308 AES Corp., Term Loan B .......... Ba1 BB+ 4.25% 06/01/18 1,941,673
1,470,057 Calpine Corp., Term Loan B1 ..... B1 BB- 4.50% 04/01/18 1,479,097
493,750 Calpine Corp., Term Loan B2 ..... B1 BB- 4.50% 04/01/18 496,787
1,221,319 Dynegy, Inc., Term Loan B ....... B2 B 9.25% 08/05/16 1,271,394
997,500 EquiPower Resources Holdings,
LLC, Term Loan B ............. Ba3 BB 5.50% 12/21/18 1,000,622
1,970,038 NRG Energy, Inc.,
Term Loan B .................. Baa3 BB+ 4.00% 07/01/18 1,987,689
--------------
8,177,262
--------------
OIL & GAS DRILLING - 0.6%
750,000 Offshore Group Investment
Limited ...................... B3 B- 6.25% 10/25/17 738,750
--------------
OIL & GAS STORAGE & TRANSPORTATION - 0.7%
900,000 Energy Transfer Equity, L.P.,
Term Loan B .................. Ba2 BB 3.75% 03/26/17 903,861
--------------
WIRELESS TELECOMMUNICATION SERVICES - 4.6%
3,275,250 Crown Castle Operating Co.,
Term Loan B .................. Ba2 B+ 4.00% 01/31/19 3,291,626
997,500 Windstream Corp., Term
Loan B-3 ..................... Baa3 BB+ 4.00% 08/08/19 999,745
2,000,000 Zayo Group LLC,
Term Loan .................... B1 B 5.25% 07/02/19 2,012,220
--------------
6,303,591
--------------
TOTAL SENIOR FLOATING-RATE LOAN INTERESTS 47,105,662
(Cost $46,761,176) --------------
Page 10 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
NOVEMBER 30, 2012
DESCRIPTION VALUE
------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS - 130.6% ................................................... $ 177,330,051
(Cost $165,299,710) (f)
OUTSTANDING LOAN - (35.0%) ................................................... (47,500,000)
NET OTHER ASSETS AND LIABILITIES - 4.4% ...................................... 5,919,088
--------------
NET ASSETS - 100.0% .......................................................... $ 135,749,139
==============
-------------------
(a) All or a portion of this security serves as collateral on the
outstanding loan.
(b) This security is restricted in the U.S. and cannot be offered for
public sale without first being registered under the Securities
Act of 1933, as amended. This security is not restricted on the
Australian Exchange and trades freely without any additional
registration. As such, it does not require the additional
disclosure required of restricted securities.
(c) Ratings below Baa3 by Moody's Investors Service, Inc. or BBB- by
Standard & Poor's Ratings Group are considered to be below
investment grade.
(d) 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. Certain
Senior Loans are subject to a LIBOR floor that establishes a
minimum LIBOR rate. The interest rate shown reflects the rate in
effect at November 30, 2012.
(e) 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.
(f) Aggregate cost for federal income tax purposes is $165,590,742. As
of November 30, 2012, the aggregate gross unrealized appreciation
for all securities in which there was an excess of value over tax
cost was $16,968,624 and the aggregate gross unrealized
depreciation for all securities in which there was an excess of
tax cost over value was $5,229,315.
See Notes to Financial Statements Page 11
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
NOVEMBER 30, 2012
VALUATION INPUTS
A summary of the inputs used to value the Fund's investments as of November 30,
2012 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
INVESTMENTS 11/30/2012 PRICES INPUTS INPUTS
----------------------------------------------- ------------ ------------ ------------ ------------
Common Stocks*................................. $ 110,671,829 $ 110,671,829 $ -- $ --
Master Limited Partnerships*................... 19,552,560 19,552,560 -- --
Senior Floating-Rate Loan Interests*........... 47,105,662 -- 47,105,662 --
------------- ------------- ------------ ------------
TOTAL INVESTMENTS.............................. $ 177,330,051 $ 130,224,389 $ 47,105,662 $ --
============= ============= ============ ============
*See Portfolio of Investments for industry or country breakout.
All transfers in and out of the Levels during the period are assumed to be
transferred on the last day of the period at their current value. As of November
30, 2012, the Fund transferred common stocks valued at $50,788,862 from Level 2
to Level 1 of the fair value hierarchy. The common stocks that transferred from
Level 2 to Level 1 did so as a result of foreign equities that are now being
valued based on quoted prices that were previously fair valued using a factor
provided by a pricing service due to the change in value between the foreign
markets' close and the New York Stock Exchange close on November 30, 2011
exceeding a certain threshold. See Note 2A - Portfolio Valuation in the Notes to
Financial Statements.
Page 12 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2012
ASSETS:
Investments, at value
(Cost $165,299,710)........................................................................ $ 177,330,051
Cash........................................................................................... 7,396,293
Foreign currency (Cost $137,732)............................................................... 137,785
Prepaid expenses .............................................................................. 6,894
Receivables:
Investment securities sold................................................................. 2,719,688
Dividends.................................................................................. 1,756,708
Interest................................................................................... 239,296
--------------
Total Assets............................................................................. 189,586,715
--------------
LIABILITIES:
Outstanding loan............................................................................... 47,500,000
Payables:
Distributions to Common Shareholders....................................................... 2,986,650
Investment securities purchased............................................................ 2,764,690
Investment advisory fees (includes Sub-Advisory fees of $276,074).......................... 460,123
Audit and tax fees......................................................................... 54,200
Printing fees.............................................................................. 18,380
Custodian fees............................................................................. 13,622
Administrative fees........................................................................ 13,372
Legal fees................................................................................. 5,890
Transfer agent fees........................................................................ 5,883
Trustees' fees and expenses................................................................ 3,749
Interest and fees on loan.................................................................. 3,049
Financial reporting fees................................................................... 771
Other liabilities.............................................................................. 7,197
--------------
Total Liabilities........................................................................ 53,837,576
--------------
NET ASSETS .................................................................................... $ 135,749,139
==============
NET ASSETS CONSIST OF:
Paid-in capital ............................................................................... $ 162,955,663
Par value ..................................................................................... 85,333
Accumulated net investment income (loss) ...................................................... (476,926)
Accumulated net realized gain (loss) on investments and foreign currency
transactions............................................................................... (38,882,972)
Net unrealized appreciation (depreciation) on investments and foreign
currency translation ...................................................................... 12,068,041
--------------
NET ASSETS .................................................................................... $ 135,749,139
==============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share) .......................... $ 15.91
==============
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized).... 8,533,285
==============
See Notes to Financial Statements Page 13
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 2012
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $1,170,920)....................................... $ 10,362,835
Interest....................................................................................... 2,340,579
Other.......................................................................................... 110,243
--------------
Total investment income..................................................................... 12,813,657
--------------
EXPENSES:
Investment advisory fees (includes Sub-Advisory fees of $1,085,983)............................ 1,809,972
Interest and fees on outstanding loan.......................................................... 625,914
Administrative fees............................................................................ 161,947
Custodian fees................................................................................. 119,550
Printing fees.................................................................................. 60,016
Audit and tax fees............................................................................. 54,865
Transfer agent fees............................................................................ 38,191
Legal fees..................................................................................... 30,875
Trustees' fees and expenses.................................................................... 24,055
Financial reporting fees....................................................................... 9,250
Other.......................................................................................... 61,411
--------------
Total expenses.............................................................................. 2,996,046
--------------
NET INVESTMENT INCOME (LOSS)................................................................... 9,817,611
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................................................. (707,764)
Foreign currency transactions............................................................... (476,376)
--------------
Net realized gain (loss)....................................................................... (1,184,140)
--------------
Net change in unrealized appreciation (depreciation) on:
Investments................................................................................. 10,019,253
Foreign currency translation................................................................ (12,946)
--------------
Net change in unrealized appreciation (depreciation)........................................... 10,006,307
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)........................................................ 8,822,167
--------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................ $ 18,639,778
==============
Page 14 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR YEAR
ENDED ENDED
11/30/2012 11/30/2011
------------ ------------
OPERATIONS:
Net investment income (loss)....................................................... $ 9,817,611 $ 12,707,062
Net realized gain (loss)........................................................... (1,184,140) 6,108,172
Net change in unrealized appreciation (depreciation)............................... 10,006,307 (8,116,155)
------------ ------------
Net increase (decrease) in net assets resulting from operations.................... 18,639,778 10,699,079
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.............................................................. (11,212,484) (12,337,270)
Net realized gain.................................................................. -- --
Return of capital.................................................................. (734,115) --
------------ ------------
Total distributions to shareholders................................................ (11,946,599) (12,337,270)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from Common Shares reinvested............................................. -- --
Repurchase of Common Shares (a).................................................... -- (8,091,905)
------------ ------------
Net increase (decrease) in net assets resulting from capital transactions.......... -- (8,091,905)
------------ ------------
Total increase (decrease) in net assets............................................ 6,693,179 (9,730,096)
NET ASSETS:
Beginning of period................................................................ 129,055,960 138,786,056
------------ ------------
End of period...................................................................... $135,749,139 $129,055,960
============= ============
Accumulated net investment income (loss) at end of period.......................... $ (476,926) $ 1,167,139
============ ============
CAPITAL TRANSACTIONS WERE AS FOLLOWS:
Common Shares at beginning of period............................................... 8,533,285 9,077,963
Common Shares repurchased.......................................................... -- (544,678)
Common Shares issued as reinvestment under the Dividend Reinvestment Plan.......... -- --
------------ ------------
Common Shares at end of period..................................................... 8,533,285 8,533,285
============ ============
------------------------------------------------
(a) On February 24, 2011, the Fund commenced a share repurchase program for
purposes of enhancing shareholder value and reducing the discount at which
the Fund's shares trade from their net asset value. The program originally
expired subject to the earlier of the repurchase of 6% of its outstanding
common shares (544,678) or August 23, 2011. On July 19, 2011, the Fund's
Board of Trustees authorized the continuation of the Fund's share repurchase
program until the earlier of the repurchase of an additional 275,649 shares
(for the aggregate of 544,678) or February 23, 2012. The program expired on
September 16, 2011. For the year ended November 30, 2011, the Fund
repurchased 544,678 of its shares at an average discount of 6.87% from net
asset value per share.
See Notes to Financial Statements Page 15
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED NOVEMBER 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net increase (decrease) in net assets resulting from operations...... $ 18,639,778
Adjustments to reconcile net increase (decrease) in net assets resulting
from operations to net cash provided by operating activities:
Purchases of investments........................................... (251,455,384)
Sales, maturities and paydowns of investments...................... 254,010,276
Return of capital received from investment in MLPs................. 1,046,113
Net amortization/accretion of premiums/discounts on investments.... (123,549)
Net realized gain/loss on investments.............................. 707,764
Net change in unrealized appreciation/depreciation on investments.. (10,019,253)
CHANGES IN ASSETS AND LIABILITIES:
Decrease in interest receivable.................................... 55,622
Increase in dividends receivable (a)............................... (264,087)
Decrease in prepaid expenses....................................... 1,291
Decrease in interest and fees on loan payable...................... (560)
Increase in investment advisory fees payable....................... 23,747
Increase in audit and tax fees payable............................. 1,000
Increase in legal fees payable..................................... 2,386
Increase in printing fees payable.................................. 878
Increase in administrative fees payable............................ 538
Decrease in custodian fees payable................................. (11,981)
Increase in transfer agent fees payable............................ 2,612
Decrease in Trustees' fees and expenses payable.................... (2,704)
Increase in financial reporting fees payable....................... 1
Increase in other liabilities payable.............................. 2,855
---------------
CASH PROVIDED BY OPERATING ACTIVITIES................................. $ 12,617,343
---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to Common Shareholders from net investment income.... (11,212,484)
Return on capital distributions.................................... (734,115)
---------------
CASH USED IN FINANCING ACTIVITIES..................................... (11,946,599)
---------------
Increase in cash and foreign currency................................. 670,744
Cash and foreign currency at beginning of period...................... 6,863,334
---------------
CASH AND FOREIGN CURRENCY AT END OF PERIOD............................ $ 7,534,078
===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest and fees..................... $ 626,474
===============
------------------------------------------------
(a) Includes net change in unrealized appreciation (depreciation) on
foreign currency of $(12,946).
Page 16 See Notes to Financial Statements
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
11/30/2012 11/30/2011 11/30/2010 11/30/2009 11/30/2008
------------ ------------ ---------- ---------- -----------
Net asset value, beginning of period $ 15.12 $ 15.29 $ 14.36 $ 11.43 $ 25.03
---------- ----------- ---------- ---------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .................. 1.15 1.43 (a) 0.55 0.46 1.33
Net realized and unrealized gain (loss) ....... 1.04 (0.27) 1.06 3.07 (13.23)
---------- ----------- ---------- ---------- -----------
Total from investment operations .............. 2.19 1.16 1.61 3.53 (11.90)
---------- ----------- ---------- ---------- -----------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income ......................... (1.31) (1.40) (0.68) (0.11) (0.93)
Net realized gain ............................. -- -- -- -- (0.73)
Return of capital ............................. (0.09) -- -- (0.49) (0.04)
---------- ----------- ---------- ---------- -----------
Total from distributions ...................... (1.40) (1.40) (0.68) (0.60) (1.70)
---------- ----------- ---------- ---------- -----------
Capital share repurchases ..................... -- 0.07 -- -- --
---------- ----------- ---------- ---------- -----------
Net asset value, end of period ................ $ 15.91 $ 15.12 $ 15.29 $ 14.36 $ 11.43
========== =========== ========== ========== ===========
Market value, end of period ................... $ 14.84 $ 14.07 $ 13.82 $ 11.73 $ 8.60
========== =========== ========== ========== ===========
TOTAL RETURN BASED ON NET ASSET VALUE (b)(c)... 15.35% 8.49% 12.31% 33.75% (48.98)%
========== =========== ========== ========== ===========
TOTAL RETURN BASED ON MARKET VALUE (b) ........ 15.62% 11.70% 24.27% 45.08% (59.56)%
========== =========== ========== ========== ===========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ......... $ 135,749 $ 129,056 $ 138,786 $ 130,335 $ 103,780
Ratio of total expenses to average net assets 2.24% 2.24% 2.36% 2.86% 3.72%
Ratio of total expenses to average net assets
excluding interest expense ................. 1.78% 1.81% 1.77% 1.92% 1.80%
Ratio of net investment income (loss) to
average net assets ......................... 7.35% 8.92% 3.68% 3.76% 6.44%
Portfolio turnover rate ....................... 144% 91% 87% 80% 23%
INDEBTEDNESS:
Total loan outstanding (in 000's) ............. $ 47,500 $ 47,500 $ 44,500 $ 35,900 $ 38,900
Asset coverage per $1,000 of indebtedness (d).. $ 3,858 $ 3,717 $ 4,119 $ 4,630 $ 3,668
--------------------
(a) Per share amounts have been calculated using the average share method.
(b) Total return is based on the combination of reinvested dividend, capital
gain and return of capital distributions, if any, at prices obtained by
the Dividend Reinvestment Plan, and changes in net asset value per share
for net asset value returns and changes in Common Share price for market
value returns. Total returns do not reflect sales load and are not
annualized for periods less than one year. Past performance is not
indicative of future results.
(c) In 2008, the Fund received reimbursements from 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)%.
(d) Calculated by taking the Fund's total assets less the Fund's total
liabilities (not including the loan outstanding), and dividing by the
outstanding loan balance in 000's.
See Notes to Financial Statements Page 17
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NOTES TO FINANCIAL STATEMENTS
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012
1. FUND DESCRIPTION
Macquarie/First Trust Global Infrastructure/Utilities Dividend & Income Fund
(the "Fund") is a non-diversified, closed-end management investment company
organized as a Massachusetts business trust on January 21, 2004 and is
registered with the Securities and Exchange Commission ("SEC") under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Fund trades
under the ticker symbol MFD on the New York Stock Exchange ("NYSE").
The Fund's investment objective is to seek a high level of current return
consisting of dividends, interest and other similar income while attempting to
preserve capital. In pursuit of this objective, the Fund seeks to manage its
investments and expenses so that a significant portion of its distributions to
the Fund's Common Shareholders will qualify as tax-advantaged dividends, subject
to the continued availability of favorable tax treatment for such qualifying
dividends. The Fund seeks to achieve its investment objective by investing in a
non-diversified portfolio of equity, debt, preferred or convertible securities
and other instruments (for instance, other instruments could include 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 objective. The Fund may not be appropriate for all
investors.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America ("U.S. GAAP") requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
A. PORTFOLIO VALUATION:
The net asset value ("NAV") of the Common Shares of the Fund is determined daily
as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time,
on each day the NYSE is open for trading. If the NYSE closes early on a
valuation day, the NAV is determined as of that time. Domestic debt securities
and foreign securities are priced using data reflecting the earlier closing of
the principal markets for those securities. The NAV per Common Share is
calculated by dividing the value of all assets of the Fund (including accrued
interest and dividends), less all liabilities (including accrued expenses,
dividends declared but unpaid and any borrowings of the Fund) by the total
number of Common Shares outstanding.
The Fund's investments are valued daily in accordance with valuation procedures
adopted by the Fund's Board of Trustees, and in accordance with provisions of
the 1940 Act. The Fund's securities will be valued as follows:
Common stocks and other equity securities listed on any national or
foreign exchange (excluding the NASDAQ(R) Stock Market LLC ("NASDAQ") and
the London Stock Exchange Alternative Investment Market ("AIM")) are
valued at the last price on the exchange on which they are principally
traded or, for NASDAQ and AIM securities, the official closing price.
Securities traded on more than one securities exchange are valued at the
last sale price or official closing price, as applicable, at the close of
the securities exchange representing the principal market for such
securities.
Securities traded in the over-the-counter market are valued at their
closing bid prices.
Short-term investments that mature in less than 60 days when purchased are
valued at amortized cost.
All market quotations used in valuing the Fund's securities will be obtained
from a third party pricing service. If no quotation is received from a pricing
service, attempts will be made to obtain one or more broker quotes for the
security. In the event the pricing service does not provide a valuation, broker
quotations are not readily available, or the valuations received are deemed
unreliable, the Fund's Board of Trustees has designated First Trust Advisors
L.P. ("First Trust") to use a fair value method to value the Fund's securities.
Additionally, if events occur after the close of the principal markets for
certain securities (e.g., domestic debt and foreign securities) that could
materially affect the Fund's NAV, First Trust will use a fair value method to
value the Fund's securities. The use of fair value pricing is governed by
valuation procedures adopted by the Fund's Board of Trustees, and in accordance
with the provisions of the 1940 Act. As a general principle, the fair value of a
security is the amount which the Fund might reasonably expect to receive for the
security upon its current sale. In light of the judgment involved in fair
valuations, there can be no assurance that a fair value assigned to a particular
security will be the amount which the Fund might be able to receive upon its
current sale. Fair valuation of common stocks and other equity securities will
be based on the consideration of all available information, including, but not
limited to the following:
1) the type of security;
2) the size of the holding;
3) the initial cost of the security;
4) transactions in comparable securities;
5) price quotes from dealers and/or pricing services;
6) relationships among various securities;
7) information obtained by contacting the issuer, analysts, or the
appropriate stock exchange;
8) an analysis of the issuer's financial statements; and
9) the existence of merger proposals or tender offers that might
affect the value of the security.
Page 18
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012
If the securities in question are foreign securities, the following additional
information may be considered:
1) the value of similar foreign securities traded on other foreign markets;
2) ADR trading of similar securities;
3) closed-end fund trading of similar securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.
Foreign securities traded outside the United States are generally valued as of
the time their trading is complete, which is usually different from the close of
the NYSE. Occasionally, events affecting the value of such securities may occur
between such times and the close of the NYSE that will not always be reflected
in the computation of the value of such securities. If events affecting the
value of such securities occur during such period, these securities will be
valued at their fair value according to procedures adopted by the Fund's Board
of Trustees (see above). For certain foreign equity securities a third party
pricing service may be utilized to determine fair value. All securities and
other assets of the Fund initially expressed in foreign currencies will be
converted to U.S. dollars using exchange rates in effect at the time of
valuation.
The Senior Floating-Rate Loan interests ("Senior Loans")(1) in which the Fund
invests are not listed on any securities exchange or board of trade. Senior
Loans are typically bought and sold by institutional investors in individually
negotiated private transactions that function in many respects like an
over-the-counter secondary market, although typically no formal market-makers
exist. This market, while having grown substantially since its inception,
generally has fewer trades and less liquidity than the secondary market for
other types of securities. Some Senior Loans have few or no trades, or trade
infrequently, and information regarding a specific Senior Loan may not be widely
available or may be incomplete. Accordingly, determinations of the value of
Senior Loans may be based on infrequent and dated information. Because there is
less reliable, objective data available, elements of judgment may play a greater
role in valuation of Senior Loans than for other types of securities. Typically,
Senior Loans are valued using information provided by a third party pricing
service. The third party pricing service primarily uses over-the-counter pricing
from dealer runs and broker quotes from indicative sheets to value the Senior
Loans. If the pricing service cannot or does not provide a valuation for a
particular Senior Loan or such valuation is deemed unreliable, First Trust may
value such Senior Loan at a fair value according to procedures adopted by the
Fund's Board of Trustees, and in accordance with the provisions of the 1940 Act.
Fair valuation of a Senior Loan is based on the consideration of all available
information, including, but not limited to the following:
1) the fundamental business data relating to the issuer;
2) an evaluation of the forces which influence the market in which these
securities are purchased and sold;
3) the type, size and cost of the security;
4) the financial statements of the issuer;
5) the credit quality and cash flow of the issuer, based on the
Sub-Advisor's or external analysis;
6) the information as to any transactions in or offers for the security;
7) the price and extent of public trading in similar securities (or
equity securities) of the issuer/borrower, or comparable companies;
8) the coupon payments;
9) the quality, value and salability of collateral, if any, securing the
security;
10) the business prospects of the issuer, including any ability to obtain
money or resources from a parent or affiliate and an assessment of
the issuer's management;
11) the prospects for the issuer's industry, and multiples (of earnings
and/or cash flows) being paid for similar businesses in that
industry;
12) issuer's competitive position within the industry;
13) issuer's ability to access additional liquidity through public and/or
private markets; and
14) other relevant factors.
The Fund is subject to fair value accounting standards that define fair value,
establish the framework for measuring fair value and provide a three-level
hierarchy for fair valuation based upon the inputs to the valuation as of the
measurement date. The three levels of the fair value hierarchy are as follows:
o Level 1 - Level 1 inputs are quoted prices in active markets for
identical investments. An active market is a market in which
transactions for the investment occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar investments in active markets.
o Quoted prices for identical or similar investments in markets
that are non-active. A non-active market is a market where
there are few transactions for the investment, the prices
are not current, or price quotations vary substantially
either over time or among market makers, or in which little
information is released publicly.
o Inputs other than quoted prices that are observable for the
investment (for example, interest rates and yield curves
observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default
rates).
o Inputs that are derived principally from or corroborated by
observable market data by correlation or other means.
--------------
1 The terms "security" and "securities" used throughout the Notes to Financial
Statements include Senior Loans.
Page 19
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012
o Level 3 - Level 3 inputs are unobservable inputs. Unobservable inputs
may reflect the reporting entity's own assumptions about the
assumptions that market participants would use in pricing the
investment.
The inputs or methodology used for valuing investments are not necessarily an
indication of the risk associated with investing in those investments. A summary
of the inputs used to value the Fund's investments as of November 30, 2012, is
included with the Fund's Portfolio of Investments.
B. SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
daily on the accrual basis. Market premiums and discounts are amortized over the
expected life of each respective borrowing.
For the year ended November 30, 2012, distributions of $1,046,113 received from
Master Limited Partnerships ("MLPs") have been reclassified as return of
capital. The cost basis of applicable MLPs has been reduced accordingly.
Securities purchased or sold on a when-issued, delayed-delivery or forward
purchase commitment basis may have extended settlement periods. The value of the
security so purchased is subject to market fluctuations during this period. Due
to the nature of the Senior Loan market, the actual settlement date may not be
certain at the time of purchase or sale for some of the Senior Loans. Interest
income on such Senior Loans is not accrued until settlement date. The Fund
maintains liquid assets with a current value at least equal to the amount of its
when-issued, delayed-delivery or forward purchase commitments.
C. UNFUNDED LOAN COMMITMENTS:
The Fund may enter into certain credit agreements, all or a portion of which may
be unfunded. The Fund is obligated to fund these loan commitments at the
borrower's discretion. The Fund did not have unfunded delayed draw loan
commitments as of November 30, 2012.
D. 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 investments 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.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Level dividend distributions are declared and paid quarterly or as the Board of
Trustees may determine from time to time. If, for any quarterly distribution,
net investment company taxable income, if any (which term includes net
short-term capital gain), as determined as of the close of the Fund's taxable
year, is less than the amount of the distribution, the difference will generally
be a tax-free return of capital distributed from the Fund's assets.
Distributions of any net capital gains earned by the Fund are distributed at
least annually. Distributions will automatically be reinvested into additional
Common Shares pursuant to the Fund's Dividend Reinvestment Plan unless cash
distributions are elected by the shareholder.
Distributions from income and realized capital gains are determined in
accordance with income tax regulations, which may differ from U.S. GAAP. Certain
capital accounts in the financial statements are periodically adjusted for
permanent differences in order to reflect their tax character. These permanent
differences are primarily due to the varying treatment of income and gain/loss
on portfolio securities held by the Fund and have no impact on net assets or NAV
per share. Temporary differences, which arise from recognizing certain items of
income, expense and gain/loss in different periods for financial statement and
tax purposes, will reverse at some point in the future. Permanent differences
incurred during the tax year ended November 30, 2012, primarily as a result of
book/tax treatment of the Fund's various investments, have been reclassified at
year end to reflect a decrease in accumulated net investment income (loss) of
$249,192, an increase in accumulated net realized gain (loss) on investments and
foreign currency transactions of $252,506 and a decrease to paid-in capital of
$3,314. Net assets were not affected by this reclassification.
Page 20
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012
The tax character of distributions paid during the fiscal years ended November
30, 2012 and November 30, 2011 was as follows:
Distributions paid from: 2012 2011
Ordinary income................................... $ 11,212,484 $ 12,337,270
Long-term capital gain............................ -- --
Return of capital................................. 734,115 --
As of November 30, 2012, the distributable earnings and net assets on a tax
basis were as follows:
Undistributed ordinary income..................... $ --
Undistributed capital gains....................... --
-------------
Total undistributed earnings...................... --
Accumulated capital and other losses.............. (36,082,216)
Net unrealized appreciation (depreciation)........ 11,777,009
-------------
Total accumulated earnings (losses)............... (24,305,207)
Other ............................................ (2,986,650)
Paid-in capital................................... 163,040,996
-------------
Net assets........................................ $ 135,749,139
=============
F. INCOME TAXES:
The Fund intends to continue to qualify as a regulated investment company by
complying with the requirements under Subchapter M of the Internal Revenue Code
of 1986, as amended, which includes distributing substantially all of its net
investment income and net realized gains to shareholders. Accordingly, no
provision has been made for federal or state income taxes. However, due to the
timing and amount of distributions, the Fund may be subject to an excise tax of
4% of the amount by which approximately 98% of the Fund's taxable income exceeds
the distributions from such taxable income for the calendar year.
Under the Regulated Investment Company Modernization Act of 2010 (the "Act"),
net capital losses arising in taxable years after December 22, 2010, may be
carried forward indefinitely, and their character is retained as short-term
and/or long-term losses. Previously, net capital losses were carried forward
eight years and treated as short-term losses. As a transition rule, the Act
requires that post-enactment net capital losses be used before pre-enactment net
capital losses. At November 30, 2012, the Fund had capital loss carryforward for
federal income tax purposes of $35,890,793 expiring as follows:
EXPIRATION DATE AMOUNT
December 31, 2017 $ 34,520,118
Non-expiring 1,370,675
The Fund is subject to certain limitations under the 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.
Certain losses realized during the current fiscal year may be deferred and
treated as occurring on the first day of the following fiscal year for federal
income tax purposes. For the fiscal year ended November 30, 2012, the Fund
incurred and elected to defer net realized capital losses of $191,423 incurred
between November 1, 2012 and November 30, 2012.
The Fund is subject to accounting standards that establish a minimum threshold
for recognizing, and a system for measuring, the benefits of a tax position
taken or expected to be taken in a tax return. Taxable years ended 2009, 2010,
2011 and 2012 remain open to federal and state audit. As of November 30, 2012,
management has evaluated the application of these standards to the Fund and has
determined that no provision for income tax is required in the Fund's financial
statements for uncertain tax positions.
G. EXPENSES:
The Fund pays all expenses directly related to its operations.
H. ACCOUNTING PRONOUNCEMENT:
In May 2011, the Financial Accounting Standards Board ("FASB") issued ASU
2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure
Requirements in U.S. GAAP and IFRSs," modifying Topic 820, "Fair Value
Measurements and Disclosures." At the same time, the International Accounting
Standards Board ("IASB") issued International Financial Reporting Standard
("IFRS") 13, "Fair Value Measurement." The objective of the FASB and IASB is
convergence of their guidance on fair value measurements and disclosures.
Specifically, the ASU requires reporting entities to disclose (i) the amounts of
any transfers between Level 1 and Level 2, and the reasons for the transfers,
(ii) for Level 3 fair value measurements, quantitative information about
significant unobservable inputs used, (iii) a description of the valuation
processes used by the reporting entity, and (iv) a narrative description of the
sensitivity of the fair value measurement to changes
Page 21
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012
in unobservable inputs if a change in those inputs might result in a
significantly higher or lower fair value measurement. The effective date of the
ASU is for interim and annual periods beginning after December 15, 2011, and it
is therefore not effective for the current fiscal year. Management is in the
process of assessing the impact of the updated standards on the Fund's financial
statements, if any.
3. INVESTMENT ADVISORY FEE, AFFILIATED TRANSACTIONS AND OTHER FEE ARRANGEMENTS
First Trust, the investment advisor to the Fund, is a limited partnership with
one limited partner, Grace Partners of DuPage L.P., and one general partner, The
Charger Corporation. The Charger Corporation is an Illinois corporation
controlled by James A. Bowen, Chief Executive Officer of First Trust. First
Trust is responsible for the ongoing monitoring of the Fund's investment
portfolio, managing the Fund's business affairs and providing certain
administrative services necessary for the management of the Fund. For these
investment management services, First Trust is entitled to a quarterly fee
calculated at an annual rate of 0.40% of the Fund's Total Assets up to and
including $250 million and 0.35% of the Fund's Total Assets over $250 million.
Total Assets are generally defined as average daily total asset value of the
Fund minus the sum of the Fund's liabilities other than the principal amount of
borrowings. First Trust also provides fund reporting services to the Fund for a
flat annual fee in the amount of $9,250.
Macquarie Capital Investment Management LLC ("MCIM") and Four Corners Capital
Management, LLC ("Four Corners") serve as the Fund's sub-advisors and manage the
Fund's portfolio subject to First Trust's supervision. MCIM manages the Core
Component which consists primarily of equity securities and equity-like
securities issued by infrastructure issuers and, for its portfolio management
services, MCIM is entitled to a quarterly fee calculated at an annual rate of
0.60% for that portion of the Fund's Total Assets allocated to MCIM. If the
Fund's Total Assets are greater than $250 million, MCIM receives an annual
portfolio management fee of 0.65% for that portion of the Fund's Total Assets
over $250 million. Four Corners manages the Senior Loan Component and, for its
portfolio management services, Four Corners is entitled to a quarterly fee
calculated at an annual rate of 0.60% for that portion of the Fund's Total
Assets allocated to Four Corners.
BNY Mellon Investment Servicing (US) Inc. serves as the Fund's Administrator,
Fund Accountant and Transfer Agent in accordance with certain fee arrangements.
The Bank of New York Mellon serves as the Fund's Custodian in accordance with
certain fee arrangements.
Effective January 23, 2012, James A. Bowen resigned from his position as the
President and Chief Executive Officer of the Fund. He will continue as a
Trustee, the Chairman of the Board of Trustees and a member of the Executive
Committee. The Board elected Mark R. Bradley to serve as the President and Chief
Executive Officer of the Fund and James M. Dykas to serve as the Treasurer,
Chief Financial Officer and Chief Accounting Officer of the Fund.
Effective January 1, 2012, each Trustee who is not an officer or employee of
First Trust, any sub-advisor or any of their affiliates ("Independent Trustees")
is paid a fixed annual retainer of $125,000 per year and an annual per fund fee
of $4,000 for each closed-end fund or other actively managed fund and $1,000 for
each index fund in the First Trust Fund Complex. The fixed annual retainer is
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Prior to January 1, 2012, each Independent Trustee received an annual
retainer of $10,000 per trust for the first 14 trusts of the First Trust Fund
Complex and an annual retainer of $7,500 per trust for each additional trust in
the First Trust Fund Complex. The annual retainer was allocated equally among
each of the trusts.
Additionally, the Lead Independent Trustee is paid $15,000 annually, the
Chairman of the Audit Committee is paid $10,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
is paid $5,000 annually to serve in such capacities, with such compensation
allocated pro rata among each fund in the First Trust Fund Complex based on net
assets. Prior to January 1, 2012, the annual amounts paid were $10,000, $5,000
and $2,500, respectively. Trustees are reimbursed for travel and out-of-pocket
expenses in connection with all meetings. The Lead Independent Trustee and each
Committee chairman will serve two-year terms until December 31, 2013 before
rotating to serve as chairman of another committee or as Lead Independent
Trustee. After December 31, 2013, the Lead Independent Trustee and Committee
chairmen will rotate every three years. The officers and "Interested" Trustee
receive no compensation from the funds for acting in such capacities.
For the year ended November 30, 2012, the Fund paid brokerage commissions to
Macquarie Capital (USA) Inc., an affiliate of MCIM and Four Corners, totaling
$27,420.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investments, excluding short-term
investments, for the year ended November 30, 2012, were $252,053,551 and
$256,336,220 respectively.
5. BORROWINGS
The Fund entered into a Committed Facility Agreement with BNP Paribas Prime
Brokerage Inc. (the "BNP Paribas Facility"), which provides for a committed
credit facility to be used as leverage for the Fund. The BNP Paribas Facility
provides for a secured, committed, line of credit for the Fund, where Fund
assets are pledged against advances made to the Fund. Under the requirements of
the 1940 Act, the Fund, immediately after any such borrowings, must have "asset
coverage" of at least 300% (33-1/3% of the Fund's total assets after
borrowings). The total amount of loans that may be outstanding at any one time
under the BNP Paribas Facility is $50,000,000. Absent certain events of default
or failure to maintain certain collateral requirements, BNP Paribas Prime
Brokerage Inc. ("BNP") may not terminate the BNP Paribas Facility except under
180 calendar days' prior notice. The interest rate under the BNP Paribas
Facility is equal to 3-month LIBOR plus 80 basis points. In addition, the Fund
pays a commitment fee of 0.85% on the undrawn amount of the BNP Paribas
Facility.
Page 22
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012
For the year ended November 30, 2012, the daily average amount outstanding under
the BNP Paribas Facility was $47,500,000. The high and low annual interest rates
during the year ended November 30, 2012 were 1.38% and 1.11%, respectively, and
the weighted average interest rate was 1.25%. The interest rate at November 30,
2012 was 1.11%.
6. INDEMNIFICATION
The Fund has a variety of indemnification obligations under contracts with its
service providers. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
7. RISK CONSIDERATIONS
Risks are inherent in all investing. The following summarizes some, but not all,
of the risks that should be considered for the Fund. For additional information
about the risks associated with investing in the Fund, please see the Fund's
prospectus and statement of additional information, as well as other Fund
regulatory filings.
INVESTMENT AND MARKET RISK: An investment in the Fund's Common Shares is subject
to investment risk, including the possible loss of the entire principal
invested. An investment in Common Shares represents an indirect investment in
the securities owned by the Fund. The value of these securities, like other
market investments, may move up or down, sometimes rapidly and unpredictably.
Common Shares at any point in time may be worth less than the original
investment, even after taking into account the reinvestment of Fund dividends
and distributions. Security prices can fluctuate for several reasons including
the general condition of the securities markets, or when political or economic
events affecting the issuers occur. When the Advisor or Sub-Advisor determines
that it is temporarily unable to follow the Fund's investment strategy or that
it is impractical to do so (such as when a market disruption event has occurred
and trading in the securities is extremely limited or absent), the Fund may take
temporary defensive positions.
INDUSTRY CONCENTRATION RISK: The Fund intends to invest up to 100% of its Total
Assets in the securities and instruments of infrastructure issuers. Given this
industry concentration, the Fund will be more susceptible to adverse economic or
regulatory occurrences affecting that industry than an investment company that
is not concentrated in a single industry. Infrastructure issuers, including
utilities and companies involved in infrastructure projects, may be subject to a
variety of factors that may adversely affect their business or operations,
including high interest costs in connection with capital construction programs,
high leverage, costs associated with environmental and other regulations, the
effects of economic slowdown, surplus capacity, increased competition from other
providers of services, uncertainties concerning the availability of fuel at
reasonable prices, the effects of energy conservation policies and other
factors.
LEVERAGE RISK: The use of leverage results in additional risks and can magnify
the effect of any losses. If the income and gains from the securities and
investments purchased with such proceeds do not cover the cost of leverage, the
Common Shares' return will be less than if leverage had not been used. The funds
borrowed pursuant to a leverage borrowing program constitute a substantial lien
and burden by reason of their prior claim against the income of the Fund and
against the net assets of the Fund in liquidation. The rights of lenders to
receive payments of interest on and repayments of principal on any borrowings
made by the Fund under a leverage borrowing program are senior to the rights of
holders of Common Shares upon liquidation. If the Fund is not in compliance with
certain credit facility provisions, the Fund may not be permitted to declare
dividends or other distributions, including dividends and distributions with
respect to Common Shares or purchase Common Shares. The use of leverage by the
Fund increases the likelihood of greater volatility of NAV and market price of
the Common Shares. Leverage also increases the risk that fluctuations in
interest rates on borrowings and short-term debt that the Fund may pay will
reduce the return to the Common Shareholders or will result in fluctuations in
the dividends paid on the Common Shares.
MLP RISK: An investment in MLP units involves risks which differ from an
investment in common stock of a corporation. Holders of MLP units have limited
control and voting rights on matters affecting the partnership. In addition,
there are certain tax risks associated with an investment in MLP units and
conflicts of interest exist between common unit holders and the general partner,
including those arising from incentive distribution payments.
NON-U.S. RISK: The Fund may invest a portion of its assets in the equity
securities of issuers domiciled in jurisdictions other than the U.S. 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: The value of securities denominated or quoted in foreign
currencies may be adversely affected by fluctuations in the relative currency
exchange rates and by exchange control regulations. The Fund's investment
performance may be negatively affected by a devaluation of a currency in which
the Fund's investments are denominated or quoted. Further, the Fund's investment
performance may be significantly affected, either positively or negatively, by
currency exchange rates because the U.S. dollar value of securities denominated
or quoted in another currency will increase or decrease in response to changes
in the value of such currency in relation to the U.S. dollar. While certain of
the Fund's non-U.S. dollar-denominated securities may be hedged into U.S.
dollars, hedging may not alleviate all currency risks.
Page 23
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NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012
SENIOR LOAN RISK: In the event a borrower fails to pay scheduled interest or
principal payments on a Senior Loan held by the Fund, the Fund will experience a
reduction in its income and a decline in the value of the Senior Loan, which
will likely reduce dividends and lead to a decline in the net asset value of the
Fund's Common Shares. If the Fund acquires a Senior Loan from another Lender,
for example, by acquiring a participation, the Fund may also be subject to
credit risks with respect to that lender. Although Senior Loans may be secured
by specific collateral, the value of the collateral may not equal the Fund's
investment when the Senior Loan is acquired or may decline below the principal
amount of the Senior Loan subsequent to the Fund's investment. Also, to the
extent that collateral consists of stock of the borrower or its subsidiaries or
affiliates, the Fund bears the risk that the stock may decline in value, be
relatively illiquid, and/ or may lose all or substantially all of its value,
causing the Senior Loan to be under collateralized. Therefore, the liquidation
of the collateral underlying a Senior Loan may not satisfy the issuer's
obligation to the Fund in the event of non-payment of scheduled interest or
principal, and the collateral may not be readily liquidated.
HIGH-YIELD SECURITIES RISK: The Senior Loans in which the Fund invests are
generally considered to be "high-yield" securities. High-yield securities or
"junk" bonds, the generic name for securities rated below "BBB-" by one or more
ratings agencies, should be considered speculative as their low ratings indicate
a quality of less than investment grade, and therefore carry an increased risk
of default as compared to investment grade issues. Because high-yield securities
are generally subordinated obligations and are perceived by investors to be
riskier than higher rated securities, their prices tend to fluctuate more than
higher rated securities and are affected by short-term credit developments to a
greater degree.
High-yield securities are subject to greater market fluctuations and risk of
loss than securities with higher investment ratings. A reduction in an issuer's
creditworthiness may result in the bankruptcy of an issuer or the default by an
issuer on the interest and principal payments. The market for high-yield
securities is smaller and less liquid than that for investment grade securities.
NON-DIVERSIFICATION RISK: The Fund is a non-diversified investment company under
the 1940 Act and will not be treated as a regulated investment company under the
Internal Revenue Code. Accordingly, there are no regulatory requirements under
the 1940 Act or the Internal Revenue Code on the minimum number or size of
securities held by the Fund.
INTEREST RATE RISK: The Fund's portfolio is also subject to interest rate risk.
Interest rate risk is the risk that fixed-income securities will decline in
value because of changes in market interest rates. Investments in debt
securities with long-term maturities may experience significant price declines
if long-term interest rates increase.
CREDIT RISK: The Senior Loans in which the Fund invests are also subject to
credit risk. Credit risk is the risk of nonpayment of scheduled contractual
repayments whether interest and/or principal payments or payments for services.
Credit risk also is the risk that one or more investments in the Fund's
portfolio will decline in price, or fail to pay interest or principal when due,
because the issuer of the security or contractual counterparty experiences a
decline in its financial status.
QUALIFIED DIVIDEND INCOME TAX RISK: There can be no assurance as to what portion
of the distributions paid to the Fund's Common Shareholders will consist of
tax-advantaged qualified dividend income. Certain distributions designated by
the Fund as derived from qualified dividend income will be taxed in the hands of
non-corporate Common Shareholders at the rates applicable to long-term capital
gains, provided certain holding period and other requirements are satisfied by
both the Fund and the Common Shareholders. Additional requirements apply in
determining whether distributions by foreign issuers should be regarded as
qualified dividend income. Certain investment strategies of the Fund will limit
the Fund's ability to meet these requirements and consequently will limit the
amount of qualified dividend income received and distributed by the Fund. A
change in the favorable provisions of the federal tax laws with respect to
qualified dividends may result in a widespread reduction in announced dividends
and may adversely impact the valuation of the shares of dividend-paying
companies.
8. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events to the Fund through
the date the financial statements were issued, and has determined that there
were no subsequent events requiring recognition or disclosure in the financial
statements that have not already been disclosed.
Page 24
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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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, 2012
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 each of the five years in the
period then ended. 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, 2012 by correspondence with the Fund's
custodian, agent banks, and brokers; where replies were not received, we
performed other auditing procedures. 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, 2012, 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 each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
January 28, 2013
Page 25
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ADDITIONAL INFORMATION
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012 (UNAUDITED)
DIVIDEND REINVESTMENT PLAN
If your Common Shares are registered directly with the Fund or if you hold your
Common Shares with a brokerage firm that participates in the Fund's Dividend
Reinvestment Plan (the "Plan"), unless you elect, by written notice to the Fund,
to receive cash distributions, all dividends, including any capital gain
distributions, on your Common Shares will be automatically reinvested by BNY
Mellon Investment Servicing (US) Inc. (the "Plan Agent"), in additional Common
Shares under the Plan. If you elect to receive cash distributions, you will
receive all distributions in cash paid by check mailed directly to you by the
Plan Agent, as the dividend paying agent.
If you decide to participate in the Plan, the number of Common Shares you will
receive will be determined as follows:
(1) If Common Shares are trading at or above net asset value ("NAV") at
the time of valuation, the Fund will issue new shares at a price
equal to the greater of (i) NAV per Common Share on that date or
(ii) 95% of the market price on that date.
(2) If Common Shares are trading below NAV at the time of valuation, the
Plan Agent will receive the dividend or distribution in cash and
will purchase Common Shares in the open market, on the NYSE or
elsewhere, for the participants' accounts. It is possible that the
market price for the Common Shares may increase before the Plan
Agent has completed its purchases. Therefore, the average purchase
price per share paid by the Plan Agent may exceed the market price
at the time of valuation, resulting in the purchase of fewer shares
than if the dividend or distribution had been paid in Common Shares
issued by the Fund. The Plan Agent will use all dividends and
distributions received in cash to purchase Common Shares in the open
market within 30 days of the valuation date except where temporary
curtailment or suspension of purchases is necessary to comply with
federal securities laws. Interest will not be paid on any uninvested
cash payments.
You may elect to opt-out of or withdraw from the Plan at any time by giving
written notice to the Plan Agent, or by telephone at (866) 340-1104, in
accordance with such reasonable requirements as the Plan Agent and the Fund may
agree upon. If you withdraw or the Plan is terminated, you will receive a
certificate for each whole share in your account under the Plan, and you will
receive a cash payment for any fraction of a share in your account. If you wish,
the Plan Agent will sell your shares and send you the proceeds, minus brokerage
commissions.
The Plan Agent maintains all Common Shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
you may need for tax records. Common Shares in your account will be held by the
Plan Agent in non-certificated form. The Plan Agent will forward to each
participant any proxy solicitation material and will vote any shares so held
only in accordance with proxies returned to the Fund. Any proxy you receive will
include all Common Shares you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions
in Common Shares. However, all participants will pay a pro rata share of
brokerage commissions incurred by the Plan Agent when it makes open market
purchases.
Automatically reinvesting dividends and distributions does not mean that you do
not have to pay income taxes due upon receiving dividends and distributions.
Capital gains and income are realized although cash is not received by you.
Consult your financial advisor for more information.
If you hold your Common Shares with a brokerage firm that does not participate
in the Plan, you will not be able to participate in the Plan and any dividend
reinvestment may be effected on different terms than those described above.
The Fund reserves the right to amend or terminate the Plan if in the judgment of
the Board of Trustees the change is warranted. There is no direct service charge
to participants in the Plan; however, the Fund reserves the right to amend the
Plan to include a service charge payable by the participants. Additional
information about the Plan may be obtained by writing BNY Mellon Investment
Servicing (US) Inc., 301 Bellevue Parkway, Wilmington, Delaware 19809.
--------------------------------------------------------------------------------
PROXY VOTING POLICIES AND PROCEDURES
A description of the policies and procedures that the Fund uses to determine how
to vote proxies and information on how the Fund voted proxies relating to
portfolio securities during the most recent 12-month period ended June 30 is
available (1) without charge, upon request, by calling (800) 988-5891; (2) on
the Fund's website located at http://www.ftportfolios.com; and (3) on the
Securities and Exchange Commission's website at http://www.sec.gov.
Page 26
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ADDITIONAL INFORMATION - (CONTINUED)
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012 (UNAUDITED)
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available (1) by calling (800) 988-5891; (2) on the Fund's website located
at http://www.ftportfolios.com; (3) on the SEC's website at http://www.sec.gov;
and (4) for review and copying at the SEC's Public Reference Room ("PRR") in
Washington, DC. Information regarding the operation of the PRR may be obtained
by calling (800) SEC-0330.
NYSE CERTIFICATION INFORMATION
In accordance with Section 303A-12 of the New York Stock Exchange ("NYSE")
Listed Company Manual, the Fund's President has certified to the NYSE that, as
of May 31, 2012, 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, N-CSRS 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, 2012, 5.11% qualified for the corporate dividends received
deduction available to corporate shareholders.
The Fund hereby designates as qualified dividend income 62.37% of the ordinary
income distributions for the year ended November 30, 2012.
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 $1.15 (representing a
total of $9,837,204). The total amount of taxes paid to such countries is $0.14
per share (representing a total of $1,157,169) for the year ended November 30,
2012.
SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The Joint Annual Meeting of Shareholders of the Common Shares of Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund, First Trust Energy
Income and Growth Fund, First Trust Enhanced Equity Income Fund, First
Trust/Aberdeen Global Opportunity Income Fund, First Trust Mortgage Income Fund,
First Trust Strategic High Income Fund II, First Trust/Aberdeen Emerging
Opportunity Fund, First Trust Specialty Finance and Financial Opportunities
Fund, First Trust Active Dividend Income Fund, First Trust High Income
Long/Short Fund and First Trust Energy Infrastructure Fund was held on April 18,
2012. 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 2015.
The number of votes cast in favor of Mr. Erickson was 7,510,453, the number of
votes against was 194,107 and the number of abstentions was 828,725. The number
of votes cast in favor of Mr. Kadlec was 7,507,251, the number of votes against
was 197,309, and the number of abstentions was 828,725. James A. Bowen, Niel B.
Nielson and Robert F. Keith are the other current and continuing Trustees.
BOARD CONSIDERATIONS REGARDING APPROVAL OF CONTINUATION OF INVESTMENT
MANAGEMENT AGREEMENT AND SUB-ADVISORY AGREEMENTS
The Board of Trustees of Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund (the "Fund"), including the Independent Trustees,
approved the continuation of the Investment Management Agreement (the "Advisory
Agreement") between the Fund and First Trust Advisors L.P. (the "Advisor"), the
Investment Sub-Advisory Agreement (the "Macquarie Sub-Advisory Agreement") among
the Fund, the Advisor and Macquarie Capital Investment Management LLC
("Macquarie") and the Investment Sub-Advisory Agreement (the "Four Corners
Sub-Advisory Agreement" and together with the Macquarie Sub-Advisory Agreement,
the "Sub-Advisory Agreements") among the Fund, the Advisor and Four Corners
Capital Management, LLC ("Four Corners"), at a meeting held on June 10-11, 2012.
Macquarie and Four Corners are each referred to herein as a "Sub-Advisor" and
collectively as the "Sub-Advisors." The Sub-Advisory Agreements are referred to
herein together with the Advisory Agreement as the "Agreements." The Board
determined that the continuation of the Agreements is in the best interests of
the Fund in light of the extent and nature of the services provided and such
other matters as the Board considered to be relevant in the exercise of its
reasonable business judgment.
To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements, the
Independent Trustees received a separate report from the Advisor and each of the
Sub-Advisors in advance of the Board meeting responding to a request for
information from counsel to the Independent Trustees. The reports,
Page 27
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ADDITIONAL INFORMATION - (CONTINUED)
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012 (UNAUDITED)
among other things, outlined the services provided by the Advisor and the
Sub-Advisors (including the relevant personnel responsible for these services
and their experience); the advisory and sub-advisory fees for the Fund as
compared to fees charged to other clients of the Advisor and the Sub-Advisors
and as compared to fees charged by investment advisors and sub-advisors to
comparable funds; expenses of the Fund as compared to expense ratios of
comparable funds; the nature of expenses incurred in providing services to the
Fund and the potential for economies of scale, if any; financial data on the
Advisor and the Sub-Advisors; any fall-out benefits to the Advisor and the
Sub-Advisors; and information on the Advisor's and the Sub-Advisors' compliance
programs. Following receipt of this information, counsel to the Independent
Trustees posed follow-up questions, and the Independent Trustees and their
counsel then met separately to discuss the information provided by the Advisor
and the Sub-Advisors, including the supplemental responses. The Board applied
its business judgment to determine whether the arrangements between the Fund and
the Advisor and among the Fund, the Advisor and each Sub-Advisor are reasonable
business arrangements from the Fund's perspective as well as from the
perspective of shareholders. The Board considered that shareholders chose to
invest or remain invested in the Fund knowing that the Advisor and the
Sub-Advisors manage the Fund. The Board also considered that the Agreements were
approved by shareholders of the Fund at a meeting held in December 2010.
In reviewing the Agreements, the Board considered the nature, extent and quality
of services provided by the Advisor and the Sub-Advisors under the Agreements.
The Board considered the Advisor's statements regarding the incremental benefits
associated with the Fund's advisor/sub-advisor management structure. With
respect to the Advisory Agreement, the Board considered that the Advisor is
responsible for the overall management and administration of the Fund and
reviewed the services provided by the Advisor to the Fund, including the
oversight of the Sub-Advisors. The Board noted the compliance program that had
been developed by the Advisor and considered that it includes a robust program
for monitoring the Sub-Advisors' compliance with the 1940 Act and the Fund's
investment objective and policies. With respect to the Sub-Advisory Agreements,
the Board reviewed the materials provided by Macquarie and Four Corners and
considered the services that each Sub-Advisor provides to the Fund, including
each Sub-Advisor's day-to-day management of the portion of the Fund's assets
allocated to it. In light of the information presented and the considerations
made, the Board concluded that the nature, extent and quality of services
provided to the Fund by the Advisor and the Sub-Advisors under the Agreements
have been and are expected to remain satisfactory and that each Sub-Advisor,
under the oversight of the Advisor, has managed the Fund consistent with its
investment objective and policies.
The Board considered the advisory and sub-advisory fees paid under the
Agreements. The Board considered the advisory fees charged by the Advisor to
similar funds and other non-fund clients, noting that the Advisor does not
provide advisory services to other funds with investment objectives and policies
similar to the Fund's, but does provide services to certain separately managed
accounts with investment objectives and policies similar to the Fund's. The
Board noted that the Fund's advisory fee rate is different than the advisory fee
rate charged to the separately managed accounts, as well as the Advisor's
statement that the nature of the services provided to the separately managed
accounts is not comparable to those provided to the Fund. The Board considered
the sub-advisory fees and how they relate to the Fund's overall advisory fee
structure. The Board also considered information provided by the Sub-Advisors as
to the fees they charge to other clients, noting that Four Corners does not
charge a lower fee to any other client for which it provides comparable services
and that Macquarie provides advisory services to a similar closed-end fund and a
similar open-end fund at higher fee rates than are charged to the Fund. In
addition, the Board received data prepared by Lipper Inc. ("Lipper"), an
independent source, showing the advisory fees and expense ratios of the Fund as
compared to the advisory fees and expense ratios of a peer group selected by
Lipper and similar data for a separate peer group selected by the Advisor. The
Board noted that the Lipper and Advisor peer groups did not include any
overlapping peer funds. The Board discussed with representatives of the Advisor
the limitations in creating a relevant peer group for the Fund, including that
(i) the Fund is unique in its composition, which makes assembling peers with
similar strategies and asset mix difficult; (ii) peer funds may use different
types of leverage which have different costs associated with them or may use no
leverage; (iii) most peer funds do not employ an advisor/sub-advisor management
structure; and (iv) many of the peer funds are larger than the Fund, which
causes the Fund's fixed expenses to be higher on a percentage basis as compared
to the larger peer funds. The Board took these limitations into account in
considering the peer data. In reviewing the peer data, the Board noted that the
Fund's contractual advisory fee was above the median of both the Lipper and
Advisor peer groups.
The Board also considered performance information for the Fund, noting that the
performance information included the Fund's quarterly performance report, which
is part of the process that the Board has established for monitoring the Fund's
performance and portfolio risk on an ongoing basis. The Board determined that
this process continues to be effective for reviewing the Fund's performance. In
addition to the Board's ongoing review of performance, the Board also received
data prepared by Lipper comparing the Fund's performance to the Lipper peer
group, as well as to a larger peer universe and to a blended benchmark. In
reviewing the Fund's performance as compared to the performance of the Lipper
peer group and Lipper peer universe, the Board took into account the limitations
described above with respect to creating a relevant peer group for the Fund. The
Board also considered the Fund's dividend yield as of March 30, 2012 and an
analysis prepared by the Advisor on the continued benefits provided by the
Fund's leverage. In addition, the Board compared the Fund's premium/discount
over the past eight quarters to the average and median premium/discount of the
Advisor peer group over the same period, noting that the Fund's premium/discount
was generally indicative of the asset class and market events.
On the basis of all the information provided on the fees, expenses and
performance of the Fund, the Board concluded that the advisory and sub-advisory
fees were reasonable and appropriate in light of the nature, extent and quality
of services provided by the Advisor and Sub-Advisors under the Agreements.
Page 28
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ADDITIONAL INFORMATION - (CONTINUED)
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MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012 (UNAUDITED)
The Board noted that the Advisor has continued to invest in personnel and
infrastructure and considered whether fee levels reflect any economies of scale
for the benefit of shareholders. The Board noted the Advisor's statement that
economies of scale in providing services to the Fund are not available at
current asset levels. The Board determined that due to the Fund's closed-end
structure, the potential for realization of economies of scale as Fund assets
grow was not a material factor to be considered. The Board also considered the
costs of the services provided and profits realized by the Advisor from serving
as investment advisor to the Fund for the twelve months ended December 31, 2011,
as set forth in the materials provided to the Board. The Board noted the
inherent limitations in the profitability analysis, and considered that the
Advisor estimated that it provided services to the Fund at a loss in 2011. In
addition, the Board considered fall-out benefits described by the Advisor that
may be realized from its relationship with the Fund, including the Advisor's
compensation for fund reporting services pursuant to a separate Fund Reporting
Services Agreement.
The Board considered that Macquarie's investment services expenses are generally
fixed. The Board considered Macquarie's statement that no economies of scale
were realized in 2011 in providing services to the Fund. The Board considered
that the sub-advisory fee rate was negotiated at arm's length between the
Advisor and Macquarie, an unaffiliated third party. The Board also considered
data provided by Macquarie as to its profitability with respect to the Fund. The
Board noted the inherent limitations in the profitability analysis and concluded
that the profitability analysis for the Advisor was more relevant, although the
profitability to Macquarie of the Macquarie Sub-Advisory Agreement appeared to
be not excessive in light of the services provided to the Fund. The Board
considered the fall-out benefits realized by Macquarie from its relationship
with the Fund, including soft-dollar arrangements, and considered a summary of
such arrangements.
The Board considered that Four Corners' investment services expenses are both
fixed and variable. The Board considered that the sub-advisory fee rate was
negotiated at arm's length between the Advisor and Four Corners, an unaffiliated
third party. The Board noted that Four Corners did not provide information with
respect to the profitability of the Four Corners Sub-Advisory Agreement to Four
Corners, but considered that the profitability analysis for the Advisor was more
relevant. The Board noted that Four Corners does not maintain any soft-dollar
arrangements and that Four Corners did not indicate any material fall-out
benefits from its relationship to the Fund.
Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, unanimously determined that the terms
of the Agreements continue to be fair and reasonable and that the continuation
of the Agreements is in the best interests of the Fund. No single factor was
determinative in the Board's analysis.
Page 29
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012 (UNAUDITED)
NUMBER OF
PORTFOLIOS IN
THE FIRST TRUST OTHER
NAME, ADDRESS, TERM OF OFFICE FUND COMPLEX TRUSTEESHIPS OR
DATE OF BIRTH AND AND LENGTH OF PRINCIPAL OCCUPATIONS OVERSEEN BY DIRECTORSHIPS
POSITION WITH THE FUND SERVICE (2) DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------
Richard E. Erickson, Trustee o Three-Year Term Physician; President, Wheaton Orthopedics; 98 None
c/o First Trust Advisors L.P. Co-Owner and Co-Director (January 1996
120 East Liberty Drive, o Since Fund to May 2007), Sports Med Center for
Suite 400 Inception Fitness; Limited Partner, Gundersen Real
Wheaton, IL 60187 Estate Limited Partnership; Member,
D.O.B.: 04/51 Sportsmed LLC
Thomas R. Kadlec, Trustee o Three-Year Term President (March 2010 to Present), Senior 98 Director of ADM
c/o First Trust Advisors L.P. Vice President and Chief Financial Officer Investor Services,
120 East Liberty Drive, o Since Fund (May 2007 to March 2010), Vice President Inc. and ADM
Suite 400 Inception and Chief Financial Officer (1990 to May Investor Services
Wheaton, IL 60187 2007), ADM Investor Services, Inc. (Futures International
D.O.B.: 11/57 Commission Merchant)
Robert F. Keith, Trustee o Three-Year Term President (2003 to Present), Hibs 98 Director of Trust
c/o First Trust Advisors L.P. Enterprises (Financial and Management Company of
120 East Liberty Drive, o Since 2006 Consulting) llinois
Suite 400
Wheaton, IL 60187
D.O.B.: 11/56
Niel B. Nielson, Trustee o Three-Year Term President and Chief Executive Officer (June 98 Director of
c/o First Trust Advisors L.P. 2012 to Present), Dew Learning LLC Covenant
120 East Liberty Drive, o Since Fund (Educational Products and Services); President Transport Inc.
Suite 400 Inception (June 2002 to June 2012), Covenant College
Wheaton, IL 60187
D.O.B.: 03/54
------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
James A. Bowen(1), Trustee and o Three-Year Term Chief Executive Officer (December 2010 98 None
Chairman of the Board to Present), President (until December
120 East Liberty Drive, o Since Fund 2010), First Trust Advisors L.P. and First
Suite 400 Inception Trust Portfolios L.P.; Chairman of the
Wheaton, IL 60187 Board of Directors, BondWave LLC
D.O.B.: 09/55 (Software Development Company/
Investment Advisor) and Stonebridge
Advisors LLC (Investment Advisor)
-------------------
(1) Mr. Bowen is deemed an "interested person" of the Fund due to his position
as CEO of First Trust Advisors L.P., investment advisor of the Fund.
(2) Currently, Robert F. Keith, as a Class I Trustee, is serving as a trustee
until the Fund's 2014 annual meeting of shareholders. Richard E. Erickson
and Thomas R. Kadlec, as Class II Trustees, are serving as trustees until
the Fund's 2015 annual meeting of shareholders. James A. Bowen and Niel B.
Nielson, as Class III Trustees, are serving as trustees until the Fund's
2013 annual meeting of shareholders.
Page 30
--------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS - (CONTINUED)
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012 (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(3)
-----------------------------------------------------------------------------------------------------------------------------------
Mark R. Bradley President and Chief o Indefinite Term Chief Operating Officer (December 2010 to Present)
120 E. Liberty Drive, Executive Officer and Chief Financial Officer, First Trust Advisors
Suite 400 o President and Chief L.P. and First Trust Portfolios L.P.; Chief
Wheaton, IL 60187 Executive Officer Financial Officer, BondWave LLC (Software Development
D.O.B.: 11/57 Since January 2012 Company/Investment Advisor) and Stonebridge
Advisors LLC (Investment Advisor)
o Treasurer, Chief
Financial Officer and
Chief Accounting Officer
From Fund Inception to
January 2012
James M. Dykas Treasurer, Chief Financial o Indefinite Term Controller (January 2011 to Present), Senior Vice
120 E. Liberty Drive, Officer and Chief Accounting President (April 2007 to January 2011), Vice
Suite 400 Officer o Treasurer, Chief President (January 2005 to April 2007), First Trust
Wheaton, IL 60187 Financial Officer and Advisors L.P. and First Trust Portfolios L.P.
D.O.B.: 01/66 Chief Accounting
Officer Since
January 2012
o Assistant Treasurer from
2006 to January 2012
W. Scott Jardine Secretary and Chief Legal o Indefinite Term General Counsel, First Trust Advisors L.P., First
120 E. Liberty Drive, Officer Trust Portfolios L.P. and BondWave LLC
Suite 400 o Since Fund Inception (Software Development Company/Investment
Wheaton, IL 60187 Advisor); Secretary of Stonebridge Advisors LLC
D.O.B.: 05/60 (Investment Advisor)
Daniel J. Lindquist Vice President o Indefinite Term Senior Vice President (September 2005 to
120 E. Liberty Drive, Present), First Trust Advisors L.P. and First Trust
Suite 400 o Since December 2005 Portfolios L.P. Wheaton, IL 60187
D.O.B.: 02/70
Kristi A. Maher Assistant Secretary and o Indefinite Term Deputy General Counsel (May 2007 to Present),
120 E. Liberty Drive, Chief Compliance Officer First Trust Advisors L.P.and First Trust Portfolios
Suite 400 o Assistant Secretary L.P.
Wheaton, IL 60187 Since Fund Inception
D.O.B.: 12/66
o Chief Compliance
Officer Since January
2011
-------------------
(3) Officers of the Fund have an indefinite term. The term "officer" means the
president, vice president, secretary, treasurer, controller or any other
officer who performs a policy making function.
Page 31
--------------------------------------------------------------------------------
PRIVACY POLICY
--------------------------------------------------------------------------------
MACQUARIE/FIRST TRUST GLOBAL INFRASTRUCTURE/UTILITIES DIVIDEND & INCOME FUND
NOVEMBER 30, 2012 (UNAUDITED)
PRIVACY POLICY
First Trust values our relationship with you and considers 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 collect nonpublic personal information about you from the following sources:
o Information we receive from you or your broker-dealer, investment
advisor or financial representative through interviews, applications,
agreements or other forms;
o Information about your transactions with us, our affiliates or others;
o Information we receive from your inquiries by mail, e-mail or
telephone; and
o 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. In addition to using
this information to verify your identity (as required by law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:
o 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.
o 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 within First Trust.
PRIVACY ONLINE
We allow third-party companies, including AddThis (a social media sharing
service), to collect certain anonymous information when you visit our website.
These companies may use non-personally identifiable information during your
visits to this and other websites in order to provide advertisements about goods
and services likely to be of greater interest to you. These companies typically
use a cookie, third party web beacon or pixel tags, to collect this information.
To learn more about this behavioral advertising practice, you can visit
www.networkadvertising.org.
CONFIDENTIALITY AND SECURITY
With regard to our internal security procedures, First Trust restricts access to
your nonpublic personal information to those First Trust employees 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 go to www.ftportfolios.com, or contact us at (800)
621-1675 (First Trust Portfolios) or (800) 222-6822 (First Trust Advisors).
Page 32
FIRST TRUST
INVESTMENT ADVISOR
First Trust Advisors L.P.
120 E. Liberty Drive, Suite 400
Wheaton, IL 60187
INVESTMENT SUB-ADVISORS
Macquarie Capital Investment Management LLC
125 West 55th Street
New York, NY 10019
Four Corners Capital Management, LLC
2005 Market Street
Philadelphia, PA 19103
ADMINISTRATOR,
FUND ACCOUNTANT &
TRANSFER AGENT
BNY Mellon Investment Servicing (US) Inc.
301 Bellevue Parkway
Wilmington, DE 19809
CUSTODIAN
The Bank of New York Mellon
101 Barclay Street, 20th Floor
New York, NY 10286
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606
LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603
[BLANK BACK COVER]
ITEM 2. CODE OF ETHICS.
(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.
(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
$48,000 for the fiscal year ended November 30, 2011 and $49,000 for the fiscal
year ended November 30, 2012.
(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, 2011 and $0 for the
fiscal year ended November 30, 2012.
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, 2011 and $0 for
the fiscal year ended November 30, 2012.
(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 $5,200
for the fiscal year ended November 30, 2011 and $0 for the fiscal year ended
November 30, 2012. The fees paid in 2011 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, 2011 and $0 for the fiscal year ended November
30, 2012.
(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, 2011 and $0 for the fiscal year ended
November 30, 2012.
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, 2011 and $0
for the fiscal year ended November 30, 2012.
(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, 2011, were $5,200 for the registrant and $6,200 for the
registrant's investment adviser, and for the fiscal year ended November 30,
2012, were $0 for the registrant and $4,120 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 included below.
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 NOVEMBER 30, 2012
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
Anthony Felton and Jonathon Ong are the 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
---- ----- ------- --------------------------------
Anthony Felton Fund Co-Portfolio Manager as of 14 years Mr. Felton joined Macquarie Group in February 2004
June 29, 2012 and the MFG Infrastructure Securities team in June
2004. He was responsible for the analysis of European
stocks before becoming a Portfolio Manager. Mr.
Felton has significant experience in the analysis of
both regulated infrastructure companies, such as water
and electricity/gas transmission/distribution and
utilities as well as user demand infrastructure
companies such as airports, toll roads and seaports.
Prior to joining Macquarie, Mr. Felton had broad based
financial market experience with Westpac Banking
Corporation in Sydney, and West LB and JP Morgan in
London between 1999 and 2003. Mr. Felton holds a
Bachelor of Commerce - University of NSW, and is a CFA
charter holder.
Jonathon Ong Fund Co-Portfolio Manager as of 19 years Mr. Ong joined the MFG Infrastructure Securities team
November 9, 2012. in Sydney as a Portfolio Manager in January 2008. He
has been a member of the team's Investment Committee
since then. He has 16 years of investment experience
including 10 years as a Portfolio Manager. Prior to
joining Macquarie, Mr. Ong held analyst and PM roles
at Credit Suisse Asset Management, where he worked for
8 years in Sydney and Tokyo. His portfolio management
and analytical responsibilities were primarily
focused on infrastructure and related stocks. Prior to
CSAM, he spent 3 years as an Asia-Pacific telecom
analyst for Bankers Trust, having started his career
as a sell-side analyst in Hong Kong for Kim Eng
Securities. Mr Ong earned a Bachelor of Science degree
from the University of Melbourne and a Bachelor of
Business (Banking and Finance) from Monash University.
Mr Ong is a CFA charter holder.
(A)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
AND POTENTIAL CONFLICTS OF INTEREST
INFORMATION PROVIDED AS OF NOVEMBER 30, 2012
OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Total Assets in
Total No. of Accounts Accounts where
Name of Portfolio No. of where Advisory Fee Advisory Fee is
Manager or Accounts is Based on Based on
Team Member Type of Accounts Managed Total Assets Performance Performance
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Anthony Felton Registered Investment 0 0 0 $0
Companies:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Pooled Investment 2 $137.0M 0 $0
Vehicles:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Accounts: 0 0 0 $0
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Jonathon Ong Registered Investment 1 $405.0M 0 $0
Companies:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Pooled Investment 4 $513.4M 0 $0
Vehicles:
---------------------- ------------------------ ------------ ---------------- --------------------- -----------------
Other Accounts: 4 $432.5M 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 Manager is responsible for allocating investment
opportunities and aggregating orders consistently with the procedures and
monthly review by the Chief Compliance Officer of MCIM (or designee) is
required.
(A)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
INFORMATION PROVIDED AS OF NOVEMBER 30, 2012
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 stock (applies to Director
level employees only). Fixed remuneration takes into consideration the role of
individuals and market conditions. Remuneration is reviewed on a yearly basis in
March/April and takes effect from July 1st of that year.
Aggregate staff profit share is linked to Macquarie Group's profitability and
return on ordinary equity, with the allocation of individual profit share being
based on factors including contribution to profit, use of capital, funding and
risk. Macquarie Group operates profit share retention arrangements for employees
meeting certain pay thresholds, to ensure an appropriate balance between short
and longer-term incentives. Retained profit share is invested in the Macquarie
Employee Retained Equity Plan (MEREP) to further align employee and shareholder
interests as well as enhance Macquarie Group's ability to attract and retain
high caliber talent.
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 March 31st . As part of
the annual remuneration review cycle, Directors are entitled to receive an
allocation of stock based on their performance over the year. Macquarie 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
registrant over a certain period. However, performance of the registrant may be
one factor taken into account in determining compensation.
In order to assist in retaining its high performance employees, Macquarie will
retain a portion of allocated profit share. Retained profit share from 2009
onward will be delivered as Macquarie equity awards through the Macquarie Group
Employee Retained Equity Plan ("MEREP"). For any profit share allocation greater
than $A50,000, 25 percent of the excess above $A50,000 will be retained in
MEREP. More generous retention arrangements apply to employees who have been
eligible for seven or more profit share allocations, where the minimum threshold
for retention is $A200,000. In these cases, for allocations up to $A200,000,
there will be no retention. The retention will be 25 percent of the excess above
$A200,000.
(A)(4) DISCLOSURE OF SECURITIES OWNERSHIP
THE INFORMATION BELOW IS AS OF NOVEMBER 30, 2012
----------------------------------- --------------------------------
Name Dollar ($) Range of Fund Shares
Beneficially Owned
----------------------------------- --------------------------------
Anthony Felton $0
----------------------------------- --------------------------------
Jonathan Ong $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 NOVEMBER 30, 2012
Adam H. Brown
Co-Portfolio Manager, Senior Loan Component
Vice President, Portfolio Manager, Four Corners Capital Management, LLC
Mr. Brown is a portfolio manager on Four Corners' taxable fixed-income team,
with specific responsibilities for the bank loan portfolio. Mr. Brown previously
worked with Wachovia Securities, where he worked in the leveraged finance group
arranging senior secured bank loans and high-yield bond financings for financial
sponsors and corporate issuers. Mr. Brown has been part of the Four Corners team
for nine years and over the past year has had a dual role with Four Corners'
affiliated investment adviser, Delaware Investments. Since 2007, Mr. Brown has
co-managed the Four Corners' collateralized loan obligations and bank loan
portfolios with Bob Bernstein and Drew Sweeney. Mr. Brown earned a bachelor's
degree from the University of Florida and an MBA from the A.B. Freeman School of
Business at Tulane University. Mr. Brown is also a Chartered Financial Analyst.
Kevin P. Loome
Co-Portfolio Manager, Senior Loan Component, 8/2007- 12/2012
Senior Vice President, Senior Portfolio Manager, Head of High Yield Investments,
Four Corners Capital Management, LLC
From August 2007 through December 2012, Mr. Loome was the head of the high-yield
fixed-income team at Four Corners, responsible for portfolio construction and
strategic asset allocation of all high-yield fixed income assets. Prior to
joining Delaware Investments, Four Corners' affiliated investment adviser, in
August 2007, Mr. Loome spent 11 years at T. Rowe Price, starting as an analyst
and leaving the firm as a portfolio manager. Mr. Loome began his career with
Morgan Stanley as a corporate finance analyst in the New York and London
offices. Mr. Loome received his bachelor's degree in commerce from the
University of Virginia and earned an MBA from the Tuck School of Business at
Dartmouth.
(A)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS OR MANAGEMENT TEAM MEMBER
AND POTENTIAL CONFLICTS OF INTEREST
INFORMATION PROVIDED AS OF NOVEMBER 30, 2012.
--------------------------- ------------------------------------- ------------- ------------- ---------------- ----------------
# of Accounts Total Assets
Total Managed for for which
Name of Portfolio # of which Advisory Advisory Fee is
Manager or Accounts Total Fee is Based on Based on
Team Member Type of Accounts Managed Assets Performance Performance
--------------------------- ------------------------------------- ------------- ------------- ---------------- ----------------
1. Adam H. Brown Registered Investment Companies: 1 $124.90 M 0 $ 0
Other Pooled Investment Vehicles: 0 $0 0 $0
Other Accounts: 10 $1.08 B 3 $692.35 M
--------------------------- ------------------------------------- ------------- ------------- ---------------- ----------------
2. Kevin P. Loome Registered Investment Companies: 17 $18.8 B 0 $ 0
Other Pooled Investment Vehicles: 0 $ 0 0 $ 0
Other Accounts: 14 $2.5 B 0 $ 0
--------------------------- ------------------------------------- ------------- ------------- ---------------- ----------------
POTENTIAL CONFLICTS OF INTERESTS
Four Corners has a fiduciary duty to provide unbiased advice and to disclose any
material conflicts of interest to its clients, as mandated under the Investment
Advisers Act of 1940. Furthermore, it is Four Corners' goal to act in good faith
and to treat all client accounts in a fair and equitable manner over time,
regardless of the client's strategy, fee arrangements, or the influence of a
client or client's beneficiaries.
Four Corners employs various controls to assist in the disclosure and management
of potential conflicts of interest and maintains policies (including Four
Corners' Code of Ethics and a trade allocation policy) that are designed to
mitigate any such conflicts. In instances where unique requirements or
restrictions are required due to the identification of different conflicts, Four
Corners will typically establish additional policies and controls or develop
alternate processing requirements to assist in the mitigation of these
conflicts.
(A)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGERS OR MANAGEMENT TEAM MEMBERS
PORTFOLIO MANAGER COMPENSATION
Information provided as of November 30, 2012.
Each named portfolio manager receives a fixed base salary in recognition of
their contributions. Each named portfolio manager is also eligible to receive an
annual cash bonus which is fully discretionary and based on quantitative and
qualitative factors. Portfolio managers may be awarded incentive unit awards and
may participate in benefit plans and programs available generally to all
employees.
Base Salaries are determined by a comparison to industry data prepared by third
parties to ensure that portfolio manager salaries are in line with salaries paid
at peer investment advisory firms. Each portfolio manager's bonus is determined
based on quantitative and qualitative factors. The portfolio managers and the
management team have no direct incentive to take undue risks when individual
fund performance is lagging.
Each portfolio manager is eligible to receive an annual cash bonus, which is
based on quantitative and qualitative factors. There is one pool for bonus
payments for the fixed income department. The amount of the pool for bonus
payments is determined by assets managed (including investment companies,
insurance product-related accounts and other separate accounts), management fees
and related expenses (including fund waiver expenses) for registered investment
companies, pooled vehicles, and managed separate accounts. Generally, 60%-75% of
the bonus is quantitatively determined. For more senior portfolio managers, a
higher percentage of the bonus is quantitatively determined. For investment
companies, each manager is compensated according to the Fund's Lipper or
Morningstar peer group percentile ranking on a one-year, three-year, and
five-year basis, with longer-term performance more heavily weighted. For managed
separate accounts the portfolio managers are compensated according to the
composite percentile ranking against the BNY Mellon, eVestment Alliance, and
Callan Associates databases (or similar sources of relative performance data) on
a one-year, three-year and five-year basis, with longer term performance more
heavily weighted. There is no objective award for a fund that falls below the
50th percentile, but incentives reach maximum potential at the top 25th-30th
percentile. There is a sliding scale for investment companies that are ranked
above the 50th percentile. The remaining 25%-40% portion of the bonus is
discretionary as determined by Delaware Investments and takes into account
subjective factors.
For new and recently transitioned portfolio managers, the compensation may be
weighted more heavily towards a portfolio manager's actual contribution and
ability to influence performance, rather than longer-term performance.
Management intends to move the compensation structure towards longer-term
performance for these portfolio managers over time.
Portfolio managers may be awarded incentive units awards ("Awards") relating to
the underlying shares of common stock of Delaware Management Holdings, Inc.
issuable pursuant to the terms of the Delaware Investments Incentive Unit Plan
(the "Plan") adopted on November 30, 2010. Awards are no longer granted under
the Delaware Investments U.S. Inc., Incentive Compensation Plan, which was
established in 2001.
The Plan was adopted in order to: assist the Manager in attracting, retaining,
and rewarding key employees of the company; enable such employees to acquire or
increase an equity interest in the company in order to align the interest of
such employees and the Manager; and provide such employees with incentives to
expend their maximum efforts. Subject to the terms of the Plan and applicable
award agreements, Awards typically vest in 25% increments on a four-year
schedule, and shares of common stock underlying the Awards are issued after
vesting. The fair market value of the shares of Delaware Management Holdings,
Inc., is normally determined as of each March 31, June 30, September 30 and
December 31 by an independent appraiser. Generally, a stockholder may put shares
back to the company during the put period communicated in connection with the
applicable valuation.
(A)(4) DISCLOSURE OF SECURITIES OWNERSHIP
Information provided as of November 30, 2012
----------------------------------- --------------------------------
Name Dollar Range of Fund Shares
Beneficially Owned
----------------------------------- --------------------------------
Adam H. Brown $0
Kevin P. Loome $0
----------------------------------- --------------------------------
(B) Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
The Fund's share repurchase program ended on 2/23/12, but all the shares were
repurchased by 9/16/11.
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)(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
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By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date January 28, 2013
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Mark R. Bradley
------------------------------------------------
Mark R. Bradley, President and
Chief Executive Officer
(principal executive officer)
Date January 28, 2013
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By (Signature and Title)* /s/ James M. Dykas
------------------------------------------------
James M. Dykas, Treasurer,
Chief Financial Officer and
Chief Accounting Officer
(principal financial officer)
Date January 28, 2013
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* Print the name and title of each signing officer under his or her signature.