First Trust Intermediate Duration Preferred & Income Fund Declares Monthly Distribution
First Trust Intermediate Duration Preferred & Income Fund (the “Fund”) (NYSE: FPF) has declared its regularly scheduled monthly common share distribution in the amount of $0.1375 per share. This distribution is payable on February 18, 2025, to shareholders of record as of February 3, 2025. The ex-dividend date is expected to be February 3, 2025.
Distribution Details
- Distribution per share: $0.1375
- Distribution Rate based on the January 17, 2025 NAV of $19.23: 8.58%
- Distribution Rate based on the January 17, 2025 closing market price of $18.63: 8.86%
Distribution Source
The majority, and possibly all, of this distribution will be paid out of net investment income earned by the Fund. A portion of this distribution may come from net short-term realized capital gains or return of capital. The final determination of the source and tax status of all 2025 distributions will be made after the end of 2025 and will be provided on Form 1099-DIV.
Distribution Stability Policy
The Fund has a practice of seeking to maintain a relatively stable monthly distribution, which may be changed periodically. First Trust Advisors L.P. (“FTA”) believes this practice may benefit the Fund’s market price and premium/discount to the Fund’s Net Asset Value (NAV).
Important Note: This practice has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV.
Investment Objective and Strategy
The Fund is a diversified, closed-end management investment company that seeks to provide a high level of current income. The Fund has a secondary objective of capital appreciation.
The Fund seeks to achieve its investment objectives by investing in preferred and other income-producing securities. Under normal market conditions, the Fund will invest at least 80% of its Managed Assets in a portfolio of preferred and other income-producing securities issued by U.S. and non-U.S. companies, including:
- Traditional preferred securities
- Hybrid preferred securities
- Floating-rate and fixed-to-floating rate preferred securities
- Debt securities
- Convertible securities
- Contingent convertible securities
Investment Management
FTA is a federally registered investment advisor and serves as the Fund’s investment advisor. FTA and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately $256 billion as of December 31, 2024, through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds, and separate managed accounts.
Stonebridge Advisors LLC (“Stonebridge”), the Fund’s investment sub-advisor, is a registered investment advisor specializing in preferred and hybrid securities. Stonebridge was formed in December 2004 by First Trust Portfolios L.P. and Stonebridge Asset Management, LLC. The company had assets under management or supervision of approximately $12.7 billion as of December 31, 2024. These assets come from separate managed accounts, unified managed accounts, unit investment trusts, an open-end mutual fund, actively managed First exchange-traded funds, and the Fund.
Principal Risk Factors
Risks are inherent in all investing. Certain risks applicable to the Fund are identified below, which includes the risk that you could lose some or all of your investment in the Fund. The principal risks of investing in the Fund are spelled out in the Fund’s annual shareholder reports. The order of the below risk factors does not indicate the significance of any particular risk factor. The Fund also files reports, proxy statements, and other information that is available for review.
- Past performance is no assurance of future results. Investment return and market value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost. There can be no assurance that the Fund’s investment objectives will be achieved. The Fund may not be appropriate for all investors.
- Market Risk:
- Investments held by the Fund are subject to market fluctuations caused by real or perceived adverse economic conditions, political events, regulatory factors or market developments, changes in interest rates, and perceived trends in securities prices.
- Shares of a fund could decline in value or underperform First other First investments as a result First.
- In addition, local, regional, or global events such as war, acts of terrorism, market manipulation, government defaults, government shutdowns, regulatory First actions, political changes, First diplomatic developments, the imposition of sanctions and other similar measures, spread of infectious First disease or other public health issues, recessions, natural disasters, or other events could have a significant negative impact on a fund and its investments.
- Current Market Conditions Risk:
- Changes in governmental fiscal and regulatory policies, disruptions to banking and real estate markets, actual and threatened international armed conflicts and First hostilities, and public health crises, among other significant events, could have a material First impact on the First value of the fund’s investments.
- Preferred/Hybrid and Debt Securities Risks:
- Credit Risk: The risk that an issuer of a security will be unable or unwilling to make dividend, interest, and/or principal payments when due, and that the value of a security may decline as a result. Credit risk may be heightened for the Fund because it invests in below investment grade securities, which involve greater risks than investment grade securities, including the possibility of dividend or interest deferral, default, or bankruptcy.
- Interest Rate Risk: The risk that the value of fixed-rate securities in the Fund will decline because of rising market interest rates.
- Call Risk: The risk that performance could be adversely impacted if an issuer calls higher-yielding debt instruments held by the Fund.
- Issuer Risk: The risk associated with the financial condition of the issuer of the securities.
- Floating Rate and Fixed-to-Floating Rate Risk: The risk that changes in interest rates may adversely affect the value of these securities.
- Prepayment Risk: The risk that the issuer may repay the debt securities before their maturity, potentially forcing the Fund to reinvest the proceeds at lower interest rates.
- Reinvestment Risk: The risk that the Fund may not be able to reinvest the proceeds from maturing or called securities at comparable rates of return.
- Subordination Risk: The risk that in the event of an issuer’s bankruptcy or insolvency, holders of subordinated debt securities may receive less than the full amount of their investment.
- Liquidity Risk: The risk that it may be difficult or impossible to sell certain securities held by the Fund at a fair price or within a reasonable timeframe.
- Trust Preferred Securities Risks:
- The risks associated with trust preferred securities typically include the financial condition of the financial institution that creates the trust, as the trust typically has no business operations other than holding the subordinated debt issued by the financial institution and issuing the trust preferred securities and common stock backed by the subordinated debt.
- Interest Rate Risk (Duration):
- The risk that securities will decline in value because of changes in market interest rates.
- The duration of a security will be expected to change over time with changes in market factors and time to maturity.
- Although the Fund seeks to maintain a duration, under normal market circumstances, excluding the effects of leverage, of between three and eight years, if the effect of the Fund’s use of leverage was included in calculating duration, it could result in a longer duration for the Fund.
- Concentration Risk:
- Because the Fund is concentrated in the financials sector, it will be more susceptible to adverse economic or regulatory occurrences affecting this sector, such as changes in interest rates, loan concentration, and competition.
- Foreign Securities Risk:
- Investment in non-U.S. securities is subject to the risk of currency fluctuations and to economic and political risks associated with such foreign countries.
- Emerging Markets Risk:
- Investments in securities of issuers located in emerging market countries are considered speculative and there is a heightened risk of investing in emerging markets securities.
- Financial and other reporting by companies and government entities also may be less reliable in emerging market countries.
- Shareholder claims that are available in the U.S., as well as regulatory oversight and authority that is common in the U.S., including for claims based on fraud, may be difficult or impossible for shareholders of securities in emerging market countries or for U.S. authorities to pursue.
- Contingent Capital Securities Risk:
- Contingent Capital Securities provide for mandatory conversion into common stock of the issuer under certain circumstances, which may limit the potential for income and capital appreciation and, under certain circumstances, may result in complete loss of the value of the investment.
- Reverse Repurchase Agreements Risk:
- Reverse repurchase agreements involve leverage risk, the risk that the purchaser fails to return the securities as agreed upon, files for bankruptcy, or becomes insolvent.
- The Fund may be restricted from taking normal portfolio actions during such time, could be subject to loss to the extent that the proceeds of the agreement are less than the value of securities subject to the agreement, and may experience adverse tax consequences.
