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0001567569
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0001567569
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FPF:CyberSecurityRiskMember
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FPF:IlliquidAndRestrictedSecuritiesRiskMember
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FPF:InflationRiskMember
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0001567569
FPF:InterestRateAndDurationRiskMember
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FPF:InterestRateSwapsRiskMember
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FPF:ManagementRiskAndRelianceOnKeyPersonnelMember
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FPF:MarketDiscountFromNetAssetValueMember
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FPF:MarketRiskMember
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FPF:PreferredHybridPreferredAndDebtSecuritiesRiskMember
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2023-10-31
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2023-10-31
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FPF:ValuationRiskMember
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2023-10-31
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N-2
0001567569
N-CSR/A
First Trust Intermediate Duration Preferred & Income Fund
2023-10-31
The
Registrant is filing this amendment to its Form N-CSR for the period ended October 31, 2023, to amend Item 4(g) October 31 2023 registrant
fee from $0 to $21,211.
Common Shares outstanding (unlimited number of Common Shares has been authorized)
60847827
16.77
14.23
<div id="xdx_80B_ecef--InvestmentObjectivesAndPracticesTextBlock_zw940Rs0scNh" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 15pt; text-align: center; text-transform: none">Investment
Objectives</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 3pt; text-align: left; text-transform: none">The
Fund’s primary investment objective is to seek a high level of current income. The Fund has a secondary objective of capital appreciation.</div>
<div style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 15pt; text-align: center; text-transform: none">Principal
Investment Policies</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 3pt; text-align: left; text-transform: none">In
pursuit of its investment objectives, under normal market conditions:</div>
<div style="text-align: left">
<table cellpadding="3" cellspacing="0" style="border-collapse: collapse; empty-cells: show; margin-left: 4.44%; margin-top: 2pt; width: 95.56%">
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">The
Fund invests 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. These securities include traditional preferred securities, hybrid preferred securities and debt securities, floating rate and
fixed-to-floating rate preferred securities, debt securities, convertible securities and contingent convertible securities. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">The
Fund also invests at least 25% of its managed assets in the group of industries that are part of the financials sector as classified under
the Global Industry Classification Standards, developed by MSCI, Inc. and S&P Dow Jones Indices. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">The
Fund seeks to invest in a portfolio of securities that has an average weighted investment grade credit quality. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">The
Fund may invest up to 20% of its managed assets in common stocks, which represent residual ownership interest in issuers and include rights
or warrants to purchase common stocks. The Fund may invest in common stocks of companies of any market capitalization. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">The
Fund may invest up to 20% of its managed assets in debt securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities
or by a non-U.S. Government or its agencies or instrumentalities. The Fund may invest up to 20% of its managed assets in municipal securities,
which include debt obligations of states, territories or possessions of the United States and the District of Columbia and their political
subdivisions, agencies and instrumentalities. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">The
Fund may invest up to 25% of its managed assets in securities that, at the time of investment, are illiquid. The Fund also may invest,
without limit, in restricted securities. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">The
Fund seeks to maintain a weighted average effective duration of between three and eight years, excluding the effects of leverage. However,
under certain market conditions, the Fund’s duration may be longer than eight years or shorter than three years. </td></tr>
</table> </div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">To
the extent the Fund enters into derivatives transactions, it will do so pursuant to Rule 18f-4 under the 1940 Act. Rule 18f-4 requires
the Fund to implement certain policies and procedures designed to manage its derivatives risks, dependent upon the Fund’s level
of exposure to derivative instruments.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
Fund may utilize leverage through the issuance preferred shares of beneficial interest and/or through borrowings and/or the issuance of
notes. The Fund is also permitted to use other portfolio techniques, including the use of reverse repurchase agreements, that have the
economic effect of leverage. The Fund’s effective leverage varies from time to time, based upon market conditions and variations
in the value of the portfolio’s holdings, but will not exceed 40% of the Fund’s managed assets.</div>
<div style="font: italic bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Fundamental
Investment Policies</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
Fund, as a fundamental policy, may not:</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">1.
Issue senior securities, as defined in the Investment Company Act of 1940, as amended, other than (i) preferred shares which immediately
after issuance will have asset coverage of at least 200%, (ii) indebtedness which immediately after issuance will have asset coverage
of at least 300%, or (iii) the borrowings permitted by investment restriction (2) set forth below;</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">2.
Borrow money, except as permitted by the Investment Company Act of 1940, as amended, the rules thereunder and interpretations thereof
or pursuant to a Securities and Exchange Commission (“SEC”) exemptive order;</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">3.
Act as underwriter of another issuer’s securities, except to the extent that the Fund may be deemed to be an underwriter within
the meaning of the Securities Act of 1933, as amended, in connection with the purchase and sale of portfolio securities;</div> <div style="width: 100%">
</div> <div style="clear: both; font-size: 12pt; height: 0pt"> </div> <hr style="margin-bottom: 0pt"/>
<span id="xx_b275651e-ab09-4954-81c3-6fd2cd12a5e5_2"> </span>
<div style="width: 100%">
</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">4.
Purchase or sell real estate, but this shall not prevent the Fund from investing in securities of companies that deal in real estate or
are engaged in the real estate business, including real estate investment trusts, and securities secured by real estate or interests therein
and the Fund may hold and sell real estate or mortgages on real estate acquired through default, liquidation, or other distributions of
an interest in real estate as a result of the Fund’s ownership of such securities;</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">5.
Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not
prevent the Fund from purchasing or selling options, futures contracts, derivative instruments or from investing in securities or other
instruments backed by physical commodities);</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">6.
Make loans of funds or other assets, other than by entering into repurchase agreements, lending portfolio securities and through the purchase
of securities in accordance with its investment objectives, policies and limitations; or</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">7.
Concentrate (invest 25% or more of total assets) the Fund’s investments in any particular industry, except that the Fund will concentrate
its assets in the group of industries that are part of the financials sector; provided, however, that such limitation shall not apply
to obligations issued or guaranteed by the United States government or by its agencies or instrumentalities.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
Fund does not currently intend to apply for exemptive relief from the Securities and Exchange Commission with respect to fundamental investment
policy number two listed above.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
Fund may incur borrowings and/or issue series of notes or other senior securities in an amount up to 33-1/3% of its total assets (including
the amount borrowed) less all liabilities other than borrowings.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
Fund’s investment objectives are considered fundamental and may not be changed without the approval of the holders of a “majority
of the outstanding voting securities” of the Fund, which includes common shares of beneficial interest and preferred shares of beneficial
interest (“Preferred Shares”), if any, voting together as a single class, and the holders of the outstanding Preferred Shares,
if any, voting as a single class. The remainder of the Fund’s investment policies other than the Fund’s fundamental investment
restrictions listed above, including its investment strategy, are considered non-fundamental and may be changed by the Board of Trustees
of the Fund without the approval of the holders of a “majority of the outstanding voting securities,” provided that the holders
of the voting securities of the Fund receive at least 60 days prior written notice of any change. When used with respect to particular
shares of the Fund, a “majority of the outstanding voting securities” means (i) 67% or more of the shares present at a meeting,
if the holders of more than 50% of the shares are present or represented by proxy, or (ii) more than 50% of the shares, whichever is less.</div>
<div id="xdx_80D_ecef--RiskFactorsTableTextBlock_z68TjqQHy818" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 15pt; text-align: center; text-transform: none">Principal
Risks</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 3pt; text-align: left; text-transform: none">The
Fund is a closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund
is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance
that the Fund will achieve its investment objectives. The following discussion summarizes the principal risks associated with investing
in the Fund, which includes the risk that you could lose some or all of your investment in the Fund. The Fund is subject to the
informational requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940 and, in accordance therewith,
files reports, proxy statements and other information that is available for review.</div>
<div id="xdx_896_ecef--RiskTextBlock_hcef--RiskAxis__custom--ContingentConvertibleSecuritiesRiskMember_zTRF3IcLGMQ9" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Contingent
Convertible Securities Risk.<span style="font-weight: normal"> CoCos are hybrid securities most commonly issued by banking institutions
that present risks similar to debt securities and convertible securities. CoCos are distinct in that they are intended to either convert
into equity or have their principal written down upon the occurrence of certain “triggers.” When an issuer’s capital
ratio falls below a specified trigger level, or in a regulator’s discretion depending on the regulator’s judgment about the
issuer’s solvency prospects, a CoCo may be written down, written off or converted into an equity security. Due to the contingent
write-down, write-off and conversion feature, CoCos may have substantially greater risk than other securities in times of financial stress.
If the trigger level is breached, the issuer’s decision to write down, write off or convert a CoCo may be outside its control, and
the Fund may suffer a complete loss on an investment in CoCos with no chance of recovery even if the issuer remains in existence. CoCos
are usually issued in the form of subordinated debt instruments to provide the appropriate regulatory capital treatment. If an issuer
liquidates, dissolves or winds-up before a conversion to equity has occurred, the rights and claims of the holders of the CoCos (such
as the Fund) against the issuer generally rank junior to the claims of holders of unsubordinated obligations of the issuer. In addition,
if the CoCos are converted into the issuer’s underlying equity securities after a conversion event (i.e., a “trigger”),
each holder will be further subordinated. CoCos also may have no stated maturity and have fully discretionary coupons. This means coupon
payments can be canceled at the issuer’s discretion or at the request of the relevant regulatory authority in order to help the
bank absorb losses, without causing a default. In general, the value of CoCos is unpredictable and is influenced by many factors including,
without limitation: the creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; supply and
demand for CoCos; general market conditions and available liquidity; and economic, financial and political events that affect the issuer,
its particular market or the financial markets in general.</span></div>
<div id="xdx_8AC_zxGKjd464fx4" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div> <div style="width: 100%"> </div>
<div style="margin-top: 8pt; width: 100%">
</div> <div style="clear: both; font-size: 12pt; height: 0pt"> </div> <hr style="margin-bottom: 0pt"/>
<div style="width: 100%"> <span id="xx_b275651e-ab09-4954-81c3-6fd2cd12a5e5_3"> </span>
<div style="width: 100%">
</div>
<div style="margin-top: 13pt; width: 100%">
<div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAgencyRiskMember_zGKYtMqpXLFj" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Credit
Agency Risk<span style="font-weight: normal">. Credit ratings are determined by credit rating agencies and are only the opinions
of such entities. Ratings assigned by a rating agency are not absolute standards of credit quality and do not evaluate market risk or
the liquidity of securities. Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings
may adversely affect the credit ratings of securities held by the Fund or such credit rating agency’s ability to evaluate creditworthiness
and, as a result, may adversely affect those securities’ perceived or actual credit risk.</span></div>
<div id="xdx_8AD_zl5RdUDsHJLd" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAndBelowInvestmentGradeSecuritiesRiskMember_z8JdsBqzl7Z6" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Credit
and Below-Investment Grade Securities Risk<span style="font-weight: normal">. Credit risk is the risk that the issuer or other obligated
party of a debt security in the Fund’s portfolio will fail to pay, or it is perceived that it will fail to pay, dividends or interest
and/or repay principal when due. Below-investment grade instruments, including instruments that are not rated but judged to be of comparable
quality, are commonly referred to as high-yield securities or “junk” bonds and are considered speculative with respect to
the issuer’s capacity to pay dividends or interest and repay principal and are more susceptible to default or decline in market
value than investment grade securities due to adverse economic and business developments. High-yield securities are often unsecured and
subordinated to other creditors of the issuer. The market values for high-yield securities tend to be very volatile, and these securities
are generally less liquid than investment grade securities. For these reasons, an investment in the Fund is subject to the following specific
risks: (i) increased price sensitivity to changing interest rates and to a deteriorating economic environment; (ii) greater risk of loss
due to default or declining credit quality; (iii) adverse company specific events more likely to render the issuer unable to make dividend,
interest and/or principal payments; (iv) negative perception of the high-yield market which may depress the price and liquidity of high-yield
securities; (v) volatility; and (vi) liquidity.</span></div>
<div id="xdx_8A5_zoUXLsY5QLEc" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--CurrentMarketConditionsRiskMember_zVtbDmqb9rtc" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Current
Market Conditions Risk.<span style="font-weight: normal"> Current market conditions risk is the risk that a particular investment, or
shares of the Fund in general, may fall in value due to current market conditions. As a means to fight inflation, which remains at elevated
levels, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal
Reserve has announced that it intends to reverse previously implemented quantitative easing. U.S. regulators have proposed several changes
to market and issuer regulations which would directly impact the Fund, and any regulatory changes could adversely impact the Fund’s
ability to achieve its investment strategies or make certain investments. Recent and potential future bank failures could result in disruption
to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which
may also heighten market volatility and reduce liquidity. The ongoing adversarial political climate in the United States, as well as political
and diplomatic events both domestic and abroad, have and may continue to have an adverse impact the U.S. regulatory landscape, markets
and investor behavior, which could have a negative impact on the Fund’s investments and operations. Other unexpected political,
regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial
markets and the broader economy. For example, in February 2022, Russia invaded Ukraine which has caused and could continue to cause significant
market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting
from those hostilities have and could continue to have a significant impact on certain Fund investments as well as Fund performance and
liquidity. The economies of the United States and its trading partners, as well as the financial markets generally, may be adversely impacted
by trade disputes and other matters. For example, the United States has imposed trade barriers and restrictions on China. In addition,
the Chinese government is engaged in a longstanding dispute with Taiwan, continually threatening an invasion. If the political climate
between the United States and China does not improve or continues to deteriorate, if China were to attempt invading Taiwan, or if other
geopolitical conflicts develop or worsen, economies, markets and individual securities may be adversely affected, and the value of the
Fund’s assets may go down. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by
governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets,
negatively impacting global growth prospects. While vaccines have been developed, there is no guarantee that vaccines will be effective
against emerging future variants of the disease. As this global pandemic illustrated, such events may affect certain geographic regions,
countries, sectors and industries more significantly than others. Advancements in technology may also adversely impact markets and the
overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced development and increased regulation
of artificial intelligence. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s
portfolio investments and could result in disruptions in the trading markets.</span></div>
<div id="xdx_8A3_zl8sp2mbWxe4" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--CyberSecurityRiskMember_zGgRmC6zQEng" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Cyber
Security Risk.<span style="font-weight: normal"> The Fund is susceptible to potential operational risks through breaches in cyber security.
A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information,
suffer data corruption or lose operational capacity. Such events could cause the Fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized
access to the Fund’s digital information systems through “hacking” or malicious software coding, but may also result
from outside attacks such as denial-of-service attacks through efforts to make network services unavailable to intended users. In addition,
cyber security breaches of the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or Sub-Advisor,
as applicable, or issuers in which the Fund invests, can also subject the Fund to many of the same risks associated with direct cyber
security breaches. The Fund has established risk management systems designed to reduce the risks associated with cyber security. However,
there is no guarantee that such efforts will succeed, especially because the Fund does not directly control the cyber</span></div> </div>
<div style="width: 100%">
</div> </div>
<div style="clear: both; font-size: 12pt; height: 0pt"> </div> <hr style="margin-bottom: 0pt"/>
<div style="width: 100%"> <span id="xx_b275651e-ab09-4954-81c3-6fd2cd12a5e5_4"> </span>
<div style="width: 100%">
</div>
<div style="margin-top: 13pt; width: 100%">
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">security
systems of issuers or third party service providers. Substantial costs may be incurred by the Fund in order to resolve or prevent cyber
incidents in the future.</div>
<div id="xdx_8A1_zu3oeICONf4b" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"> </div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--IlliquidAndRestrictedSecuritiesRiskMember_z0SOTqgkApIg" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Illiquid
and Restricted Securities Risk<span style="font-weight: normal">. The Fund may invest in securities that are restricted and/or illiquid
securities. Restricted securities are securities that cannot be offered for public resale unless registered under the applicable
securities laws or that have a contractual restriction that prohibits or limits their resale. Restricted securities may be illiquid
as they generally are not listed on an exchange and may have no active trading market. Investments in restricted securities could have
the effect of increasing the amount of the Fund’s assets invested in illiquid securities if qualified institutional buyers are unwilling
to purchase these securities. Illiquid and restricted securities may be difficult to dispose of at a fair price at the times when the
Fund believes it is desirable to do so. The market price of illiquid and restricted securities generally is more volatile than that of
more liquid securities, which may adversely affect the price that the Fund pays for or recovers upon the sale of such securities. Illiquid
and restricted securities are also more difficult to value, especially in challenging markets.</span></div>
<div id="xdx_8A1_zp9WK1CVkhub" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--InflationRiskMember_z4VljDWMTx2g" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Inflation
Risk. <span style="font-weight: normal">The Fund invests in securities that are subject to inflation risk. Inflation risk is the
risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money.
As inflation increases, the present value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect
to debt securities. Inflation creates uncertainty over the future real value (after inflation) of an investment. Inflation rates may change
frequently and drastically as a result of various factors, including unexpected shifts in the domestic or global economy, and the Fund’s
investments may not keep pace with inflation, which may result in losses to Fund investors.</span></div>
<div id="xdx_8AB_zZKko5phEJrk" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_896_ecef--RiskTextBlock_hcef--RiskAxis__custom--InterestRateAndDurationRiskMember_zalSyQXEPgme" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Interest
Rate and Duration Risk<span style="font-weight: normal">. Interest rate risk is the risk that securities will decline in value because
of changes in market interest rates. For fixed rate securities, when market interest rates rise, the market value of such securities
generally will fall. Investments in fixed rate securities with long-term maturities may experience significant price declines if
long-term interest rates increase. During periods of rising interest rates, the average life of certain types of securities may
be extended because of slower than expected prepayments. This may lock in a below-market yield, increase the security’s duration
and further reduce the value of the security. Fixed rate securities with longer durations tend to be more sensitive to changes in
interest rates, usually making them more volatile than securities with shorter durations. 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.</span></div>
<div style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">The
interest rates payable on floating rate securities are not fixed and may fluctuate based upon changes in market rates. As short-term
interest rates decline, interest payable on floating rate securities typically decreases. Alternatively, during periods of rising
interest rates, interest payable on floating rate securities typically increases. Changes in interest rates on floating rate securities
may lag behind changes in market rates or may have limits on the maximum increases in interest rates. The value of floating rate
securities may decline if their interest rates do not rise as much, or as quickly, as interest rates in general.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Many
financial instruments use or may use a floating rate based upon the LIBOR. The United Kingdom’s Financial Conduct Authority (the
“FCA”), which regulates LIBOR, has ceased making LIBOR available as a reference rate over a phase-out period that began December 31,
2022. There is no assurance that any alternative reference rate, including the Secured Overnight Financing Rate (“SOFR”) will
be similar to or produce the same value or economic equivalence as LIBOR or that instruments using an alternative rate will have the same
volume or liquidity. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain Fund investments
and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition
away from LIBOR on the Fund or on certain instruments in which the Fund invests can be difficult to ascertain, and they may vary depending
on a variety of factors, and they could result in losses to the Fund.</div>
<div id="xdx_8A8_zdhvbwvpT7Oe" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"> </div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--InterestRateSwapsRiskMember_zyNzFuBv8g24" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Interest
Rate Swaps Risk.<span style="font-weight: normal"> If short-term interest rates are lower than the Fund’s fixed rate of payment
on an interest rate swap, the swap will reduce common share net earnings. In addition, a default by the counterparty to a swap transaction
could also negatively impact the performance of the common shares.</span></div>
<div id="xdx_8A9_zBII2fBMNOD7" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--LeverageRiskMember_ziCYIdZIRRel" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Leverage
Risk. <span style="font-weight: normal">The use of leverage by the Fund can magnify the effect of any losses. If the income and gains
from the securities and investments purchased with leverage proceeds do not cover the cost of leverage, the return to the common shares
will be less than if leverage had not been used. Leverage involves risks and special considerations for common shareholders including:
(i) the likelihood of greater volatility of net asset value and market price of the common shares than a comparable portfolio without
leverage; (ii) the risk that fluctuations in interest rates on borrowings will reduce the return to the common shareholders or will result
in fluctuations in the dividends paid on the common shares; (iii) in a declining market, the use of leverage is likely to cause a greater
decline in the net asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the
market price of the common shares; and (iv) when the Fund uses certain types of leverage, the investment advisory fee payable to the Advisor
and by the Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.</span></div>
<div id="xdx_8AB_z58keaKJQo85" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div> </div>
<div style="width: 100%"> </div>
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<div style="width: 100%"> <span id="xx_b275651e-ab09-4954-81c3-6fd2cd12a5e5_5"> </span>
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<div id="xdx_891_ecef--RiskTextBlock_hcef--RiskAxis__custom--ManagementRiskAndRelianceOnKeyPersonnelMember_zvyHdjZqglai" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Management
Risk and Reliance on Key Personnel<span style="font-weight: normal">. The implementation of the Fund’s investment strategy
depends upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and
experience and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team
could have a negative impact on the Fund.</span></div>
<div id="xdx_8AF_zZT7AMKHobYf" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketDiscountFromNetAssetValueMember_z7RT6T1VhoDc" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Market
Discount from Net Asset Value<span style="font-weight: normal">. Shares of closed-end investment companies such as the Fund frequently
trade at a discount from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset
value.</span></div>
<div id="xdx_8AF_zExKDMUOFLKk" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_89F_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketRiskMember_zYA3VW8E113d" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Market
Risk.<span style="font-weight: normal"> Investments held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations
caused by real or perceived economic conditions, political events, regulatory factors or market developments, changes in interest rates
and perceived trends in securities prices. Shares of the Fund could decline in value or underperform other investments as a result of
the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism,
market manipulation, government defaults, government shutdowns, regulatory actions, political changes, diplomatic developments, the imposition
of sanctions and other similar measures, spread of infectious diseases or other public health issues, recessions, or other events could
have a significant negative impact on the Fund and its investments. Any of such circumstances could have a materially negative impact
on the value of the Fund’s shares, the liquidity of an investment, and result in increased market volatility. During any such events,
the Fund’s shares may trade at increased premiums or discounts to their net asset value, the bid/ask spread on the Fund’s
shares may widen and the returns on investment may fluctuate.</span></div>
<div id="xdx_8A1_zJSOGe1ILUh" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--NonUSSecuritiesRiskMember_zZUYCRUsJSI2" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Non-U.S.
Securities Risk<span style="font-weight: normal">. Investing in securities of non-U.S. issuers, which are generally denominated
in non-U.S. currencies, may involve certain risks not typically associated with investing in securities of U.S. issuers. These risks include:
(i) there may be less publicly available information about non-U.S. issuers or markets due to less rigorous disclosure or accounting standards
or regulatory practices; (ii) non-U.S. markets may be smaller, less liquid and more volatile than the U.S. market; (iii) potential adverse
effects of fluctuations in currency exchange rates or controls on the value of the Fund’s investments; (iv) the economies of non-U.S.
countries may grow at slower rates than expected or may experience a downturn or recession; (v) the impact of economic, political, social
or diplomatic events; (vi) certain non-U.S. countries may impose restrictions on the ability of non-U.S. issuers to make payments of principal
and interest to investors located in the United States due to blockage of non-U.S. currency exchanges or otherwise; and (vii) withholding
and other non-U.S. taxes may decrease the Fund’s return. Foreign companies are generally not subject to the same accounting, auditing
and financial reporting standards as are U.S. companies. In addition, there may be difficulty in obtaining or enforcing a court judgment
abroad. These risks may be more pronounced to the extent that the Fund invests a significant amount of its assets in companies located
in one region or in emerging markets.</span></div>
<div id="xdx_8A3_zziflarri8ka" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--OperationalRiskMember_zZB0AKvkVt3d" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Operational
Risk.<span style="font-weight: normal"> The Fund is subject to risks arising from various operational factors, including, but not limited
to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties,
failed or inadequate processes and technology or systems failures. The Fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its
investment objective. Although the Fund and the Fund’s investment advisor seek to reduce these operational risks through controls
and procedures, there is no way to completely protect against such risks.</span></div>
<div id="xdx_8A4_zlphD08wY8P2" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_897_ecef--RiskTextBlock_hcef--RiskAxis__custom--PotentialConflictsOnInterestRiskMember_ziuDTYKcDyP6" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Potential
Conflicts on Interest Risk<span style="font-weight: normal">. First Trust, Stonebridge and the portfolio managers have interests which
may conflict with the interests of the Fund. In particular, First Trust and Stonebridge currently manage and may in the future manage
and/or advise other investment funds or accounts with the same or substantially similar investment objective and strategies as the Fund.
In addition, while the Fund is using leverage, the amount of the fees paid to First Trust (and by First Trust to Stonebridge) for investment
advisory and management services are higher than if the Fund did not use leverage because the fees paid are calculated based on managed
assets. Therefore, First Trust and Stonebridge have a financial incentive to leverage the Fund.</span></div>
<div id="xdx_8A4_zsknGcEDVyde" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--PreferredHybridPreferredAndDebtSecuritiesRiskMember_zCX7a7CCAZE3" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Preferred/Hybrid
Preferred and Debt Securities Risk<span style="font-weight: normal">. An investment in preferred/hybrid preferred and debt securities
is subject to certain risks, including:</span></div>
<div style="text-align: left">
<table cellpadding="3" cellspacing="0" style="border-collapse: collapse; empty-cells: show; margin-left: 4.44%; margin-top: 1pt; width: 95.56%">
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Issuer
Risk<span style="font-style: normal">. The value of these securities may decline for a number of reasons which directly relate to the
issuer, such as management performance, leverage and reduced demand for the issuer’s goods and services.</span> </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Interest
Rate Risk<span style="font-style: normal">. Interest rate risk is the risk that fixed rate securities will decline in value because of
changes in market interest rates. When market interest rates rise, the market value of fixed rate securities generally will fall. Market
value generally falls further for fixed rate securities with longer duration. During periods of rising interest rates, the average life
of certain types of securities may be extended because of slower than expected prepayments. This may lock in a below-market yield, increase
the security’s duration and further reduce the value of the security. Investments in fixed rate securities with long-term maturities
may experience significant price declines if long-term interest rates increase.</span> </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Floating
Rate and Fixed-to-Floating Rate Risk<span style="font-style: normal">. The market value of floating rate and fixed-to-floating rate
securities may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag
between the</span> </td></tr>
</table> </div> </div>
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<div style="width: 100%"> <span id="xx_b275651e-ab09-4954-81c3-6fd2cd12a5e5_6"> </span>
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<div style="margin-top: 13pt; width: 100%">
<div style="text-align: left">
<table cellpadding="3" cellspacing="0" style="border-collapse: collapse; empty-cells: show; margin-left: 4.44%; margin-top: 0pt; width: 95.56%">
<tr style="page-break-inside: avoid">
<td style="line-height: 0pt; padding-left: 0pt; padding-right: 2pt; text-align: left; vertical-align: top; width: 2.33%"> </td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">rise
in interest rates and the interest rate reset. Securities with a floating or variable interest rate component can be less sensitive to
interest rate changes than securities with fixed interest rates. A secondary risk associated with declining interest rates is the risk
that income earned by the Fund on floating rate and fixed-to-floating rate securities may decline due to lower coupon payments on floating
rate securities. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Prepayment
Risk<span style="font-style: normal">. Prepayment risk is the risk that the issuer of a debt security will repay principal prior to the
scheduled maturity date. During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal
earlier than scheduled, forcing the Fund to reinvest the proceeds from such prepayment in lower yielding securities, which may result
in a decline in the Fund’s income and distributions to common shareholders.</span> </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Reinvestment
Risk<span style="font-style: normal">. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the Fund
invests the proceeds from matured, traded or called securities at market interest rates that are below the Fund portfolio’s current
earnings rate.</span> </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%"> <span style="font-style: italic">Subordination
Risk</span>. Preferred securities are typically subordinated to bonds and other debt instruments in a company’s capital structure,
in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt
instruments. </td></tr>
</table> </div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">In
addition, preferred and hybrid preferred securities are subject to certain other risks, including deferral and omission risk, limited
voting rights risk and special redemption rights risk.</div>
<div id="xdx_8A5_zpkuoazkXzT1" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"> </div>
<div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--ReversePurchaseAgreementsRiskMember_zamkU7gc0sza" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Reverse
Repurchase Agreements Risk<span style="font-weight: normal">. The Fund’s use of reverse repurchase agreements may involve leverage
risk. There is also the risk that the market value of the securities acquired with the proceeds of the reverse repurchase agreement may
decline below the price of the securities that the Fund has sold but remains obligated to repurchase. In addition, there is a risk that
the market value of the securities retained by the Fund may decline. Reverse repurchase agreements also involve 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.</span></div>
<div id="xdx_8A0_z3L2gdPWPk5c" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--RiskOfConcentrationInTheFinancialsSectorMember_zwKjR1DriW56" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Risks
of Concentration in the Financials Sector<span style="font-weight: normal">. Because the Fund invests 25% or more of its managed assets
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. The Fund may emphasize its investments in certain industries such as the banking
and insurance industries and therefore may make the Fund more economically vulnerable in the event of a downturn in those industries.
Financial companies are subject to extensive governmental regulation and intervention, which may adversely affect the scope of their activities,
the prices they can charge, the amount and types of capital they must maintain and, potentially, their size. Governmental regulation may
change frequently and may have significant adverse consequences for financial companies, including effects not intended by such regulation.
The impact of more stringent capital requirements, or recent or future regulation in various countries, on any individual financial company
or on financial companies as a whole cannot be predicted. Certain risks may impact the value of investments in financial companies more
severely than those of investments in other issuers, including the risks associated with companies that operate with substantial financial
leverage. Financial companies may also be adversely affected by volatility in interest rates, loan losses and other customer defaults,
decreases in the availability of money or asset valuations, credit rating downgrades and adverse conditions in other related markets.
Insurance companies in particular may be subject to severe price competition and/or rate regulation, which may have an adverse impact
on their profitability. Financial companies are also a target for cyber attacks and may experience technology malfunctions and disruptions
as a result.</span></div>
<div id="xdx_8A3_z5oL59KX8ymb" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_891_ecef--RiskTextBlock_hcef--RiskAxis__custom--SmallerCompaniesRiskMember_z6O6PFM5q6x6" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Smaller
Companies Risk.<span style="font-weight: normal"> Small and/or mid capitalization companies may be more vulnerable to adverse general
market or economic developments, and their securities may be less liquid and may experience greater price volatility than larger, more
established companies as a result of several factors, including limited trading volumes, fewer products or financial resources, management
inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market risk than larger,
more established companies.</span></div>
<div id="xdx_8A4_z5pf4JnFfPg5" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_89B_ecef--RiskTextBlock_hcef--RiskAxis__custom--TrustPreferredSecuritiesRiskMember_z6lD9yc0ej2f" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Trust
Preferred Securities Risk<span style="font-weight: normal">. 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. If a financial institution is financially unsound and defaults on interest payments to the trust, the trust will
not be able to make payments to holders of the trust preferred securities such as the Fund. The issuer of trust preferred securities is
generally able to defer or skip payments for up to five years without being in default and certain enhanced trust preferred securities
may have longer interest payment deferral periods.</span></div>
<div id="xdx_8AD_zzzgvB9HK2N9" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--ValuationRiskMember_zi3hoJOjRb43" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Valuation
Risk<span style="font-weight: normal">. Unlike publicly traded common stock which trades on national exchanges, there is no central
place or exchange for certain preferred securities and debt securities trading. Preferred securities and debt securities generally trade
on an “over-the-</span></div> </div>
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<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">counter”
market which may be anywhere in the world where the buyer and seller can settle on a price. Due to the lack of centralized information
and trading, the valuation of certain preferred securities and debt securities may carry more risk than that of common stock. Uncertainties
in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of valuation models and processes
may lead to inaccurate asset pricing.</div>
<div id="xdx_8A6_zDzLulF0SY6l" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"> </div>
<div id="xdx_896_ecef--RiskTextBlock_hcef--RiskAxis__custom--ContingentConvertibleSecuritiesRiskMember_zTRF3IcLGMQ9" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Contingent
Convertible Securities Risk.<span style="font-weight: normal"> CoCos are hybrid securities most commonly issued by banking institutions
that present risks similar to debt securities and convertible securities. CoCos are distinct in that they are intended to either convert
into equity or have their principal written down upon the occurrence of certain “triggers.” When an issuer’s capital
ratio falls below a specified trigger level, or in a regulator’s discretion depending on the regulator’s judgment about the
issuer’s solvency prospects, a CoCo may be written down, written off or converted into an equity security. Due to the contingent
write-down, write-off and conversion feature, CoCos may have substantially greater risk than other securities in times of financial stress.
If the trigger level is breached, the issuer’s decision to write down, write off or convert a CoCo may be outside its control, and
the Fund may suffer a complete loss on an investment in CoCos with no chance of recovery even if the issuer remains in existence. CoCos
are usually issued in the form of subordinated debt instruments to provide the appropriate regulatory capital treatment. If an issuer
liquidates, dissolves or winds-up before a conversion to equity has occurred, the rights and claims of the holders of the CoCos (such
as the Fund) against the issuer generally rank junior to the claims of holders of unsubordinated obligations of the issuer. In addition,
if the CoCos are converted into the issuer’s underlying equity securities after a conversion event (i.e., a “trigger”),
each holder will be further subordinated. CoCos also may have no stated maturity and have fully discretionary coupons. This means coupon
payments can be canceled at the issuer’s discretion or at the request of the relevant regulatory authority in order to help the
bank absorb losses, without causing a default. In general, the value of CoCos is unpredictable and is influenced by many factors including,
without limitation: the creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; supply and
demand for CoCos; general market conditions and available liquidity; and economic, financial and political events that affect the issuer,
its particular market or the financial markets in general.</span></div>
<div id="xdx_89C_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAgencyRiskMember_zGKYtMqpXLFj" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Credit
Agency Risk<span style="font-weight: normal">. Credit ratings are determined by credit rating agencies and are only the opinions
of such entities. Ratings assigned by a rating agency are not absolute standards of credit quality and do not evaluate market risk or
the liquidity of securities. Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings
may adversely affect the credit ratings of securities held by the Fund or such credit rating agency’s ability to evaluate creditworthiness
and, as a result, may adversely affect those securities’ perceived or actual credit risk.</span></div>
<div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--CreditAndBelowInvestmentGradeSecuritiesRiskMember_z8JdsBqzl7Z6" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Credit
and Below-Investment Grade Securities Risk<span style="font-weight: normal">. Credit risk is the risk that the issuer or other obligated
party of a debt security in the Fund’s portfolio will fail to pay, or it is perceived that it will fail to pay, dividends or interest
and/or repay principal when due. Below-investment grade instruments, including instruments that are not rated but judged to be of comparable
quality, are commonly referred to as high-yield securities or “junk” bonds and are considered speculative with respect to
the issuer’s capacity to pay dividends or interest and repay principal and are more susceptible to default or decline in market
value than investment grade securities due to adverse economic and business developments. High-yield securities are often unsecured and
subordinated to other creditors of the issuer. The market values for high-yield securities tend to be very volatile, and these securities
are generally less liquid than investment grade securities. For these reasons, an investment in the Fund is subject to the following specific
risks: (i) increased price sensitivity to changing interest rates and to a deteriorating economic environment; (ii) greater risk of loss
due to default or declining credit quality; (iii) adverse company specific events more likely to render the issuer unable to make dividend,
interest and/or principal payments; (iv) negative perception of the high-yield market which may depress the price and liquidity of high-yield
securities; (v) volatility; and (vi) liquidity.</span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--CurrentMarketConditionsRiskMember_zVtbDmqb9rtc" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Current
Market Conditions Risk.<span style="font-weight: normal"> Current market conditions risk is the risk that a particular investment, or
shares of the Fund in general, may fall in value due to current market conditions. As a means to fight inflation, which remains at elevated
levels, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal
Reserve has announced that it intends to reverse previously implemented quantitative easing. U.S. regulators have proposed several changes
to market and issuer regulations which would directly impact the Fund, and any regulatory changes could adversely impact the Fund’s
ability to achieve its investment strategies or make certain investments. Recent and potential future bank failures could result in disruption
to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which
may also heighten market volatility and reduce liquidity. The ongoing adversarial political climate in the United States, as well as political
and diplomatic events both domestic and abroad, have and may continue to have an adverse impact the U.S. regulatory landscape, markets
and investor behavior, which could have a negative impact on the Fund’s investments and operations. Other unexpected political,
regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial
markets and the broader economy. For example, in February 2022, Russia invaded Ukraine which has caused and could continue to cause significant
market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting
from those hostilities have and could continue to have a significant impact on certain Fund investments as well as Fund performance and
liquidity. The economies of the United States and its trading partners, as well as the financial markets generally, may be adversely impacted
by trade disputes and other matters. For example, the United States has imposed trade barriers and restrictions on China. In addition,
the Chinese government is engaged in a longstanding dispute with Taiwan, continually threatening an invasion. If the political climate
between the United States and China does not improve or continues to deteriorate, if China were to attempt invading Taiwan, or if other
geopolitical conflicts develop or worsen, economies, markets and individual securities may be adversely affected, and the value of the
Fund’s assets may go down. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by
governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets,
negatively impacting global growth prospects. While vaccines have been developed, there is no guarantee that vaccines will be effective
against emerging future variants of the disease. As this global pandemic illustrated, such events may affect certain geographic regions,
countries, sectors and industries more significantly than others. Advancements in technology may also adversely impact markets and the
overall performance of the Fund. For instance, the economy may be significantly impacted by the advanced development and increased regulation
of artificial intelligence. These events, and any other future events, may adversely affect the prices and liquidity of the Fund’s
portfolio investments and could result in disruptions in the trading markets.</span></div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--CyberSecurityRiskMember_zGgRmC6zQEng" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Cyber
Security Risk.<span style="font-weight: normal"> The Fund is susceptible to potential operational risks through breaches in cyber security.
A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information,
suffer data corruption or lose operational capacity. Such events could cause the Fund to incur regulatory penalties, reputational damage,
additional compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized
access to the Fund’s digital information systems through “hacking” or malicious software coding, but may also result
from outside attacks such as denial-of-service attacks through efforts to make network services unavailable to intended users. In addition,
cyber security breaches of the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or Sub-Advisor,
as applicable, or issuers in which the Fund invests, can also subject the Fund to many of the same risks associated with direct cyber
security breaches. The Fund has established risk management systems designed to reduce the risks associated with cyber security. However,
there is no guarantee that such efforts will succeed, especially because the Fund does not directly control the cyber</span></div> <div style="width: 100%">
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<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">security
systems of issuers or third party service providers. Substantial costs may be incurred by the Fund in order to resolve or prevent cyber
incidents in the future.</div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--IlliquidAndRestrictedSecuritiesRiskMember_z0SOTqgkApIg" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Illiquid
and Restricted Securities Risk<span style="font-weight: normal">. The Fund may invest in securities that are restricted and/or illiquid
securities. Restricted securities are securities that cannot be offered for public resale unless registered under the applicable
securities laws or that have a contractual restriction that prohibits or limits their resale. Restricted securities may be illiquid
as they generally are not listed on an exchange and may have no active trading market. Investments in restricted securities could have
the effect of increasing the amount of the Fund’s assets invested in illiquid securities if qualified institutional buyers are unwilling
to purchase these securities. Illiquid and restricted securities may be difficult to dispose of at a fair price at the times when the
Fund believes it is desirable to do so. The market price of illiquid and restricted securities generally is more volatile than that of
more liquid securities, which may adversely affect the price that the Fund pays for or recovers upon the sale of such securities. Illiquid
and restricted securities are also more difficult to value, especially in challenging markets.</span></div>
<div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--InflationRiskMember_z4VljDWMTx2g" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Inflation
Risk. <span style="font-weight: normal">The Fund invests in securities that are subject to inflation risk. Inflation risk is the
risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money.
As inflation increases, the present value of the Fund’s assets and distributions may decline. This risk is more prevalent with respect
to debt securities. Inflation creates uncertainty over the future real value (after inflation) of an investment. Inflation rates may change
frequently and drastically as a result of various factors, including unexpected shifts in the domestic or global economy, and the Fund’s
investments may not keep pace with inflation, which may result in losses to Fund investors.</span></div>
<div id="xdx_896_ecef--RiskTextBlock_hcef--RiskAxis__custom--InterestRateAndDurationRiskMember_zalSyQXEPgme" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Interest
Rate and Duration Risk<span style="font-weight: normal">. Interest rate risk is the risk that securities will decline in value because
of changes in market interest rates. For fixed rate securities, when market interest rates rise, the market value of such securities
generally will fall. Investments in fixed rate securities with long-term maturities may experience significant price declines if
long-term interest rates increase. During periods of rising interest rates, the average life of certain types of securities may
be extended because of slower than expected prepayments. This may lock in a below-market yield, increase the security’s duration
and further reduce the value of the security. Fixed rate securities with longer durations tend to be more sensitive to changes in
interest rates, usually making them more volatile than securities with shorter durations. 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.</span></div>
<div style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"><span style="font-weight: normal"> </span></div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">The
interest rates payable on floating rate securities are not fixed and may fluctuate based upon changes in market rates. As short-term
interest rates decline, interest payable on floating rate securities typically decreases. Alternatively, during periods of rising
interest rates, interest payable on floating rate securities typically increases. Changes in interest rates on floating rate securities
may lag behind changes in market rates or may have limits on the maximum increases in interest rates. The value of floating rate
securities may decline if their interest rates do not rise as much, or as quickly, as interest rates in general.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Many
financial instruments use or may use a floating rate based upon the LIBOR. The United Kingdom’s Financial Conduct Authority (the
“FCA”), which regulates LIBOR, has ceased making LIBOR available as a reference rate over a phase-out period that began December 31,
2022. There is no assurance that any alternative reference rate, including the Secured Overnight Financing Rate (“SOFR”) will
be similar to or produce the same value or economic equivalence as LIBOR or that instruments using an alternative rate will have the same
volume or liquidity. The unavailability or replacement of LIBOR may affect the value, liquidity or return on certain Fund investments
and may result in costs incurred in connection with closing out positions and entering into new trades. Any potential effects of the transition
away from LIBOR on the Fund or on certain instruments in which the Fund invests can be difficult to ascertain, and they may vary depending
on a variety of factors, and they could result in losses to the Fund.</div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--InterestRateSwapsRiskMember_zyNzFuBv8g24" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Interest
Rate Swaps Risk.<span style="font-weight: normal"> If short-term interest rates are lower than the Fund’s fixed rate of payment
on an interest rate swap, the swap will reduce common share net earnings. In addition, a default by the counterparty to a swap transaction
could also negatively impact the performance of the common shares.</span></div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--LeverageRiskMember_ziCYIdZIRRel" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Leverage
Risk. <span style="font-weight: normal">The use of leverage by the Fund can magnify the effect of any losses. If the income and gains
from the securities and investments purchased with leverage proceeds do not cover the cost of leverage, the return to the common shares
will be less than if leverage had not been used. Leverage involves risks and special considerations for common shareholders including:
(i) the likelihood of greater volatility of net asset value and market price of the common shares than a comparable portfolio without
leverage; (ii) the risk that fluctuations in interest rates on borrowings will reduce the return to the common shareholders or will result
in fluctuations in the dividends paid on the common shares; (iii) in a declining market, the use of leverage is likely to cause a greater
decline in the net asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the
market price of the common shares; and (iv) when the Fund uses certain types of leverage, the investment advisory fee payable to the Advisor
and by the Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage.</span></div>
<div id="xdx_891_ecef--RiskTextBlock_hcef--RiskAxis__custom--ManagementRiskAndRelianceOnKeyPersonnelMember_zvyHdjZqglai" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Management
Risk and Reliance on Key Personnel<span style="font-weight: normal">. The implementation of the Fund’s investment strategy
depends upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and
experience and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team
could have a negative impact on the Fund.</span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketDiscountFromNetAssetValueMember_z7RT6T1VhoDc" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Market
Discount from Net Asset Value<span style="font-weight: normal">. Shares of closed-end investment companies such as the Fund frequently
trade at a discount from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset
value.</span></div>
<div id="xdx_89F_ecef--RiskTextBlock_hcef--RiskAxis__custom--MarketRiskMember_zYA3VW8E113d" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Market
Risk.<span style="font-weight: normal"> Investments held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations
caused by real or perceived economic conditions, political events, regulatory factors or market developments, changes in interest rates
and perceived trends in securities prices. Shares of the Fund could decline in value or underperform other investments as a result of
the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism,
market manipulation, government defaults, government shutdowns, regulatory actions, political changes, diplomatic developments, the imposition
of sanctions and other similar measures, spread of infectious diseases or other public health issues, recessions, or other events could
have a significant negative impact on the Fund and its investments. Any of such circumstances could have a materially negative impact
on the value of the Fund’s shares, the liquidity of an investment, and result in increased market volatility. During any such events,
the Fund’s shares may trade at increased premiums or discounts to their net asset value, the bid/ask spread on the Fund’s
shares may widen and the returns on investment may fluctuate.</span></div>
<div id="xdx_89A_ecef--RiskTextBlock_hcef--RiskAxis__custom--NonUSSecuritiesRiskMember_zZUYCRUsJSI2" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Non-U.S.
Securities Risk<span style="font-weight: normal">. Investing in securities of non-U.S. issuers, which are generally denominated
in non-U.S. currencies, may involve certain risks not typically associated with investing in securities of U.S. issuers. These risks include:
(i) there may be less publicly available information about non-U.S. issuers or markets due to less rigorous disclosure or accounting standards
or regulatory practices; (ii) non-U.S. markets may be smaller, less liquid and more volatile than the U.S. market; (iii) potential adverse
effects of fluctuations in currency exchange rates or controls on the value of the Fund’s investments; (iv) the economies of non-U.S.
countries may grow at slower rates than expected or may experience a downturn or recession; (v) the impact of economic, political, social
or diplomatic events; (vi) certain non-U.S. countries may impose restrictions on the ability of non-U.S. issuers to make payments of principal
and interest to investors located in the United States due to blockage of non-U.S. currency exchanges or otherwise; and (vii) withholding
and other non-U.S. taxes may decrease the Fund’s return. Foreign companies are generally not subject to the same accounting, auditing
and financial reporting standards as are U.S. companies. In addition, there may be difficulty in obtaining or enforcing a court judgment
abroad. These risks may be more pronounced to the extent that the Fund invests a significant amount of its assets in companies located
in one region or in emerging markets.</span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--OperationalRiskMember_zZB0AKvkVt3d" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Operational
Risk.<span style="font-weight: normal"> The Fund is subject to risks arising from various operational factors, including, but not limited
to, human error, processing and communication errors, errors of the Fund’s service providers, counterparties or other third-parties,
failed or inadequate processes and technology or systems failures. The Fund relies on third-parties for a range of services, including
custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund’s ability to meet its
investment objective. Although the Fund and the Fund’s investment advisor seek to reduce these operational risks through controls
and procedures, there is no way to completely protect against such risks.</span></div>
<div id="xdx_897_ecef--RiskTextBlock_hcef--RiskAxis__custom--PotentialConflictsOnInterestRiskMember_ziuDTYKcDyP6" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Potential
Conflicts on Interest Risk<span style="font-weight: normal">. First Trust, Stonebridge and the portfolio managers have interests which
may conflict with the interests of the Fund. In particular, First Trust and Stonebridge currently manage and may in the future manage
and/or advise other investment funds or accounts with the same or substantially similar investment objective and strategies as the Fund.
In addition, while the Fund is using leverage, the amount of the fees paid to First Trust (and by First Trust to Stonebridge) for investment
advisory and management services are higher than if the Fund did not use leverage because the fees paid are calculated based on managed
assets. Therefore, First Trust and Stonebridge have a financial incentive to leverage the Fund.</span></div>
<div id="xdx_899_ecef--RiskTextBlock_hcef--RiskAxis__custom--PreferredHybridPreferredAndDebtSecuritiesRiskMember_zCX7a7CCAZE3" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Preferred/Hybrid
Preferred and Debt Securities Risk<span style="font-weight: normal">. An investment in preferred/hybrid preferred and debt securities
is subject to certain risks, including:</span></div>
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Risk<span style="font-style: normal">. The value of these securities may decline for a number of reasons which directly relate to the
issuer, such as management performance, leverage and reduced demand for the issuer’s goods and services.</span> </td></tr>
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<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Interest
Rate Risk<span style="font-style: normal">. Interest rate risk is the risk that fixed rate securities will decline in value because of
changes in market interest rates. When market interest rates rise, the market value of fixed rate securities generally will fall. Market
value generally falls further for fixed rate securities with longer duration. During periods of rising interest rates, the average life
of certain types of securities may be extended because of slower than expected prepayments. This may lock in a below-market yield, increase
the security’s duration and further reduce the value of the security. Investments in fixed rate securities with long-term maturities
may experience significant price declines if long-term interest rates increase.</span> </td></tr>
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</td>
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Rate and Fixed-to-Floating Rate Risk<span style="font-style: normal">. The market value of floating rate and fixed-to-floating rate
securities may fall in a declining interest rate environment and may also fall in a rising interest rate environment if there is a lag
between the</span> </td></tr>
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<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">rise
in interest rates and the interest rate reset. Securities with a floating or variable interest rate component can be less sensitive to
interest rate changes than securities with fixed interest rates. A secondary risk associated with declining interest rates is the risk
that income earned by the Fund on floating rate and fixed-to-floating rate securities may decline due to lower coupon payments on floating
rate securities. </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Prepayment
Risk<span style="font-style: normal">. Prepayment risk is the risk that the issuer of a debt security will repay principal prior to the
scheduled maturity date. During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal
earlier than scheduled, forcing the Fund to reinvest the proceeds from such prepayment in lower yielding securities, which may result
in a decline in the Fund’s income and distributions to common shareholders.</span> </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal italic 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%">Reinvestment
Risk<span style="font-style: normal">. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if the Fund
invests the proceeds from matured, traded or called securities at market interest rates that are below the Fund portfolio’s current
earnings rate.</span> </td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 0pt; padding-right: 2pt; text-align: left; text-transform: none; vertical-align: top; white-space: nowrap; width: 2.33%">•
</td>
<td style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; padding-bottom: 0pt; padding-left: 2pt; text-align: left; text-transform: none; vertical-align: top; width: 97.67%"> <span style="font-style: italic">Subordination
Risk</span>. Preferred securities are typically subordinated to bonds and other debt instruments in a company’s capital structure,
in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt
instruments. </td></tr>
</table> </div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">In
addition, preferred and hybrid preferred securities are subject to certain other risks, including deferral and omission risk, limited
voting rights risk and special redemption rights risk.</div>
<div id="xdx_890_ecef--RiskTextBlock_hcef--RiskAxis__custom--ReversePurchaseAgreementsRiskMember_zamkU7gc0sza" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Reverse
Repurchase Agreements Risk<span style="font-weight: normal">. The Fund’s use of reverse repurchase agreements may involve leverage
risk. There is also the risk that the market value of the securities acquired with the proceeds of the reverse repurchase agreement may
decline below the price of the securities that the Fund has sold but remains obligated to repurchase. In addition, there is a risk that
the market value of the securities retained by the Fund may decline. Reverse repurchase agreements also involve 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.</span></div>
<div id="xdx_898_ecef--RiskTextBlock_hcef--RiskAxis__custom--RiskOfConcentrationInTheFinancialsSectorMember_zwKjR1DriW56" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Risks
of Concentration in the Financials Sector<span style="font-weight: normal">. Because the Fund invests 25% or more of its managed assets
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. The Fund may emphasize its investments in certain industries such as the banking
and insurance industries and therefore may make the Fund more economically vulnerable in the event of a downturn in those industries.
Financial companies are subject to extensive governmental regulation and intervention, which may adversely affect the scope of their activities,
the prices they can charge, the amount and types of capital they must maintain and, potentially, their size. Governmental regulation may
change frequently and may have significant adverse consequences for financial companies, including effects not intended by such regulation.
The impact of more stringent capital requirements, or recent or future regulation in various countries, on any individual financial company
or on financial companies as a whole cannot be predicted. Certain risks may impact the value of investments in financial companies more
severely than those of investments in other issuers, including the risks associated with companies that operate with substantial financial
leverage. Financial companies may also be adversely affected by volatility in interest rates, loan losses and other customer defaults,
decreases in the availability of money or asset valuations, credit rating downgrades and adverse conditions in other related markets.
Insurance companies in particular may be subject to severe price competition and/or rate regulation, which may have an adverse impact
on their profitability. Financial companies are also a target for cyber attacks and may experience technology malfunctions and disruptions
as a result.</span></div>
<div id="xdx_891_ecef--RiskTextBlock_hcef--RiskAxis__custom--SmallerCompaniesRiskMember_z6O6PFM5q6x6" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Smaller
Companies Risk.<span style="font-weight: normal"> Small and/or mid capitalization companies may be more vulnerable to adverse general
market or economic developments, and their securities may be less liquid and may experience greater price volatility than larger, more
established companies as a result of several factors, including limited trading volumes, fewer products or financial resources, management
inexperience and less publicly available information. Accordingly, such companies are generally subject to greater market risk than larger,
more established companies.</span></div>
<div id="xdx_89B_ecef--RiskTextBlock_hcef--RiskAxis__custom--TrustPreferredSecuritiesRiskMember_z6lD9yc0ej2f" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Trust
Preferred Securities Risk<span style="font-weight: normal">. 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. If a financial institution is financially unsound and defaults on interest payments to the trust, the trust will
not be able to make payments to holders of the trust preferred securities such as the Fund. The issuer of trust preferred securities is
generally able to defer or skip payments for up to five years without being in default and certain enhanced trust preferred securities
may have longer interest payment deferral periods.</span></div>
<div id="xdx_89E_ecef--RiskTextBlock_hcef--RiskAxis__custom--ValuationRiskMember_zi3hoJOjRb43" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Valuation
Risk<span style="font-weight: normal">. Unlike publicly traded common stock which trades on national exchanges, there is no central
place or exchange for certain preferred securities and debt securities trading. Preferred securities and debt securities generally trade
on an “over-the-</span></div> <div style="width: 100%"> </div>
<div style="margin-top: 8pt; width: 100%">
</div> <div style="clear: both; font-size: 12pt; height: 0pt"> </div> <hr style="margin-bottom: 0pt"/>
<span id="xx_b275651e-ab09-4954-81c3-6fd2cd12a5e5_7"> </span>
<div style="width: 100%">
</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">counter”
market which may be anywhere in the world where the buyer and seller can settle on a price. Due to the lack of centralized information
and trading, the valuation of certain preferred securities and debt securities may carry more risk than that of common stock. Uncertainties
in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of valuation models and processes
may lead to inaccurate asset pricing.</div>
<div id="xdx_80C_ecef--EffectsOfLeverageTextBlock_zZnv9ZS9uSal" style="font: normal bold 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 15pt; text-align: center; text-transform: none">Effects
of Leverage</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 3pt; text-align: left; text-transform: none">The
aggregate principal amount of borrowings under the credit agreement (the “Credit Agreement”) with The Bank of Nova Scotia
represented 30.75% of the Managed Assets as of October 31, 2023. Asset coverage with respect to the borrowings under the Credit
Agreement was 325.21% as of October 31, 2023, and the Fund had $271,800,000 of unutilized funds available for borrowing under the Credit
Agreement as of that date. As of October 31, 2023, the maximum commitment amount under the credit agreement was $725,000,000.
As of October 31, 2023, the approximate average annual interest and fee rate payable on such borrowings was 6.17%. </div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">Assuming
that the Fund’s leverage costs remain as described above (at an assumed average annual cost of <span id="xdx_903_ecef--AnnualInterestRatePercent_pp4p2_uRatio_c20221031__20231031_zQDqU1as15Yl">6.17</span>%), the annual return that the
Fund’s portfolio must experience (net of expenses) in order to cover its leverage costs would be <span id="xdx_90A_ecef--AnnualCoverageReturnRatePercent_pp4p2_uRatio_c20221031__20231031_zH2Bn1tyAjY4">1.90</span>%</div>
<div id="xdx_892_ecef--EffectsOfLeveragePurposeTextBlock_zwlkhqcjhKmi" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on Common
Share total return, assuming investment portfolio total returns (comprised of income and changes in the value of securities held in the
Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. These assumed investment portfolio returns are hypothetical figures and are
not necessarily indicative of the investment portfolio returns experienced or expected to be experienced by the Fund.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
table further assumes leverage representing 30.75% of the Fund’s Managed Assets, net of expenses, and an annual leverage interest
and fee rate of 6.17%.</div>
<div id="xdx_8A5_z8cff5TB6gx8" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"> </div>
<div id="xdx_897_ecef--EffectsOfLeverageTableTextBlock_zHZaXkBUnjgc" style="text-align: left">
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; empty-cells: show; margin-top: 0pt; width: 100%">
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 0pt; text-decoration: none; color: #000000; text-align: left; text-transform: none; vertical-align: bottom; width: 55.56%">
<div style="float: left">Assumed Portfolio Total Return (Net of Expenses)</div><hr style="border-bottom: Black medium dotted; border-width: 0; background-color: transparent; border-left-color: transparent; border-right-color: transparent; border-top-color: transparent; margin-bottom: -5pt; margin-top: 5pt; padding-top: 3pt; vertical-align: auto"/>
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-10%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-5%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 18.83pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">0%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">5%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">10%
</td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt 0pt; text-decoration: none; color: #000000; text-align: left; text-transform: none; vertical-align: bottom; width: 55.56%">
<div style="float: left">Common Share Total Return</div><hr style="border-bottom: Black medium dotted; border-width: 0; background-color: transparent; border-left-color: transparent; border-right-color: transparent; border-top-color: transparent; margin-bottom: -5pt; margin-top: 5pt; padding-top: 3pt; vertical-align: auto"/>
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-<span id="xdx_906_ecef--ReturnAtMinusTenPercent_iN_pp4p2_di_uRatio_c20221031__20231031_zdJEnyNkcy35">17.18</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-<span id="xdx_905_ecef--ReturnAtMinusFivePercent_iN_pp4p2_di_uRatio_c20221031__20231031_zKSgKikDB3cj">9.96</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-<span id="xdx_901_ecef--ReturnAtZeroPercent_iN_pp4p2_di_uRatio_c20221031__20231031_zyDDPTYX0mEb">2.74</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%"><span id="xdx_909_ecef--ReturnAtPlusFivePercent_pp4p2_uRatio_c20221031__20231031_zS2Xs5SwUEyl">4.48</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%"><span id="xdx_90D_ecef--ReturnAtPlusTenPercent_pp4p2_uRatio_c20221031__20231031_zq9pf2hKN7ii">11.70</span>%
</td></tr>
</table> </div>
<div id="xdx_8A5_zcW8thRTa0rj" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none"> </div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; text-align: left; text-transform: none">Common
Share total return is composed of two elements: the Common Share dividends paid by the Fund (the amount of which is largely determined
by the net investment income of the Fund after paying dividends or interest on its leverage) and gains or losses on the value of the securities
the Fund owns. As required by SEC rules, the table above assumes that the Fund is more likely to suffer capital losses than to enjoy capital
appreciation. For example, to assume a total return of 0% the Fund must assume that the distributions it receives on its investments are
entirely offset by losses in the value of those securities.</div>
0.0617
0.0190
<div id="xdx_892_ecef--EffectsOfLeveragePurposeTextBlock_zwlkhqcjhKmi" style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on Common
Share total return, assuming investment portfolio total returns (comprised of income and changes in the value of securities held in the
Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. These assumed investment portfolio returns are hypothetical figures and are
not necessarily indicative of the investment portfolio returns experienced or expected to be experienced by the Fund.</div>
<div style="font: normal 10pt/13pt Times New Roman; text-decoration: none; color: #000000; margin-top: 8pt; text-align: left; text-transform: none">The
table further assumes leverage representing 30.75% of the Fund’s Managed Assets, net of expenses, and an annual leverage interest
and fee rate of 6.17%.</div>
<div id="xdx_897_ecef--EffectsOfLeverageTableTextBlock_zHZaXkBUnjgc" style="text-align: left">
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; empty-cells: show; margin-top: 0pt; width: 100%">
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 0pt; text-decoration: none; color: #000000; text-align: left; text-transform: none; vertical-align: bottom; width: 55.56%">
<div style="float: left">Assumed Portfolio Total Return (Net of Expenses)</div><hr style="border-bottom: Black medium dotted; border-width: 0; background-color: transparent; border-left-color: transparent; border-right-color: transparent; border-top-color: transparent; margin-bottom: -5pt; margin-top: 5pt; padding-top: 3pt; vertical-align: auto"/>
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-10%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-5%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 18.83pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">0%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">5%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 12pt 3pt 1.5pt 15.5pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">10%
</td></tr>
<tr style="page-break-inside: avoid">
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt 0pt; text-decoration: none; color: #000000; text-align: left; text-transform: none; vertical-align: bottom; width: 55.56%">
<div style="float: left">Common Share Total Return</div><hr style="border-bottom: Black medium dotted; border-width: 0; background-color: transparent; border-left-color: transparent; border-right-color: transparent; border-top-color: transparent; margin-bottom: -5pt; margin-top: 5pt; padding-top: 3pt; vertical-align: auto"/>
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-<span id="xdx_906_ecef--ReturnAtMinusTenPercent_iN_pp4p2_di_uRatio_c20221031__20231031_zdJEnyNkcy35">17.18</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-<span id="xdx_905_ecef--ReturnAtMinusFivePercent_iN_pp4p2_di_uRatio_c20221031__20231031_zKSgKikDB3cj">9.96</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%">-<span id="xdx_901_ecef--ReturnAtZeroPercent_iN_pp4p2_di_uRatio_c20221031__20231031_zyDDPTYX0mEb">2.74</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%"><span id="xdx_909_ecef--ReturnAtPlusFivePercent_pp4p2_uRatio_c20221031__20231031_zS2Xs5SwUEyl">4.48</span>%
</td>
<td style="font: normal 10pt/13pt Times New Roman; padding: 1.5pt 3pt 6pt; text-decoration: none; color: #000000; text-align: center; text-transform: none; vertical-align: bottom; white-space: nowrap; width: 8.89%"><span id="xdx_90D_ecef--ReturnAtPlusTenPercent_pp4p2_uRatio_c20221031__20231031_zq9pf2hKN7ii">11.70</span>%
</td></tr>
</table> </div>
-0.1718
-0.0996
-0.0274
0.0448
0.1170