The Board of Trustees of First Trust/abrdn Emerging Opportunity
Fund (the "Fund") (NYSE: FEO), CUSIP 33731K102, previously approved
a managed distribution policy for the Fund (the "Managed
Distribution Plan") in reliance on exemptive relief received from
the Securities and Exchange Commission which permits the Fund to
make periodic distributions of long-term capital gains more
frequently than otherwise permitted with respect to its common
shares subject to certain conditions.
The Fund has declared a distribution payable on September 30,
2022, to shareholders of record as of September 23, 2022, with an
ex-dividend date of September 22, 2022. This Notice is meant to
provide you information about the sources of your Fund’s
distributions. You should not draw any conclusions about the Fund's
investment performance from the amount of its distribution or from
the terms of its Managed Distribution Plan.
The following tables set forth the estimated amounts of the
current distribution and the cumulative distributions paid this
fiscal year to date for the Fund from the following sources: net
investment income ("NII"); net realized short-term capital gains
("STCG"); net realized long-term capital gains ("LTCG"); and return
of capital ("ROC"). These estimates are based upon information
projected through September 30, 2022, are calculated based on a
generally accepted accounting principles ("GAAP") basis and include
the prior fiscal year-end undistributed net investment income. The
amounts and sources of distributions are expressed per common
share.
5 Yr. Avg.
Annualized Current
Annual Total
Fund
Fund
Fiscal
Total Current
Current Distribution
($)
Current Distribution
(%)
Dist. Rate as a
Return
Ticker
Cusip
Year
End
Distribution
NII
STCG
LTCG
ROC
(2)
NII
STCG
LTCG
ROC(2)
% of
NAV(3)
on
NAV(4)
FEO
33731K102
12/31/2022
$0.25000
$0.11615
-
-
$0.13385
46.46%
-
-
53.54%
9.98%
-1.99%
Total
Cumulative
Cumulative Fiscal
Fund
Fund
Fiscal
Cumulative Fiscal YTD
Cumulative Distributions
Fiscal YTD ($)
Cumulative Distributions
Fiscal YTD (%)
Fiscal YTD Distributions
as
YTD Total Return
Ticker
Cusip
Year
End
Distributions(1)
NII
STCG
LTCG
ROC
(2)
NII
STCG
LTCG
ROC(2)
a % of
NAV(3)
on
NAV(4)
FEO
33731K102
12/31/2022
$0.75000
$0.34845
-
-
$0.40155
46.46%
-
-
53.54%
7.49%
-24.10%
(1) Includes the most recent quarterly distribution paid on
September 30, 2022. (2) The Fund estimates that it has distributed
more than its income and net realized capital gains; therefore, a
portion of your distribution may be a return of capital. A return
of capital may occur, for example, when some or all of the money
that you invested in the Fund is paid back to you. A return of
capital distribution does not necessarily reflect the Fund's
investment performance and should not be confused with "yield" or
"income." (3) Based on Net Asset Value ("NAV") as of August 31,
2022. (4) Total Returns are through August 31, 2022.
The amounts and sources of distributions reported in this Notice
are only estimates and are not being provided for tax reporting
purposes. The actual amounts and sources of the amounts for tax
reporting purposes will depend upon the Fund's investment
experience during the remainder of its fiscal year and may be
subject to changes based on tax regulations. The Fund will send you
a Form 1099-DIV for the calendar year that will tell you how to
report these distributions for federal income tax purposes. You
should not use this Notice as a substitute for your Form
1099-DIV.
First Trust Advisors L.P. ("FTA") is a federally registered
investment advisor and serves as the Fund's investment advisor. FTA
and its affiliate First Trust Portfolios L.P. ("FTP"), a FINRA
registered broker-dealer, are privately-held companies that provide
a variety of investment services. FTA has collective assets under
management or supervision of approximately $193 billion as of
August 31, 2022 through unit investment trusts, exchange-traded
funds, closed-end funds, mutual funds and separate managed
accounts. FTA is the supervisor of the First Trust unit investment
trusts, while FTP is the sponsor. FTP is also a distributor of
mutual fund shares and exchange-traded fund creation units. FTA and
FTP are based in Wheaton, Illinois.
abrdn Inc. (formerly Aberdeen Standard Investments Inc.)
("abrdn") serves as the Fund's investment sub-advisor. abrdn is an
indirect wholly-owned subsidiary of abrdn plc. abrdn is the brand
name for the asset management group of abrdn plc, managing
approximately $469.2 billion in assets as of June 30, 2022 for a
range of pension funds, financial institutions, investment trusts,
unit trusts, offshore funds, charities and private clients.
Principal Risk Factors: Risks are inherent in all investing.
Certain risks applicable to the Fund are identified below, which
includes the risk that you could lose some or all of your
investment in the Fund. The principal risks of investing in the
Fund are spelled out in the Fund's annual shareholder reports. The
order of the below risk factors does not indicate the significance
of any particular risk factor. The Fund also files reports, proxy
statements and other information that is available for
review.
Past performance is no assurance of future results. Investment
return and market value of an investment in the Fund will
fluctuate. Shares, when sold, may be worth more or less than their
original cost. There can be no assurance that the Fund's investment
objectives will be achieved. The Fund may not be appropriate for
all investors.
Securities held by a fund, as well as shares of a fund itself,
are subject to market fluctuations caused by factors such as
general economic conditions, political events, regulatory or market
developments, changes in interest rates and perceived trends in
securities prices. Shares of a 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, spread of
infectious diseases or other public health issues, recessions, or
other events could have a significant negative impact on a fund and
its investments. Such events may affect certain geographic regions,
countries, sectors and industries more significantly than others.
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 could
have a significant impact on certain fund investments as well as
fund performance. The COVID-19 global pandemic 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. While the U.S. has resumed "reasonably"
normal business activity, many countries continue to impose
lockdown measures. Additionally, there is no guarantee that
vaccines will be effective against emerging variants of the
disease.
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.
The debt securities in which the Fund invests are subject to
certain risks, including issuer risk, reinvestment risk, prepayment
risk, credit risk, and interest rate risk. Issuer risk is the risk
that the value of fixed-income securities may decline for a number
of reasons which directly relate to the issuer. 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 bonds
at market interest rates that are below the Fund portfolio's
current earnings rate. Prepayment risk is the risk that, upon a
prepayment, the actual outstanding debt on which the Fund derives
interest income will be reduced. Credit risk is the risk that an
issuer of a security will be unable or unwilling to make dividend,
interest and/or principal payments when due and that the value of a
security may decline as a result. Interest rate risk is the risk
that fixed-income securities will decline in value because of
changes in market interest rates.
Asset-backed securities are subject to credit risk, extension
risk, interest rate risk, liquidity risk, prepayment risk and
valuation risk, as well as risk of default on the underlying
assets.
The value of the Fund's shares will fluctuate with changes in
the value of the equity securities in which the Fund invests.
Prices of equity securities fluctuate for several reasons.
The Fund invests in non-investment grade debt instruments,
commonly referred to as "high-yield securities". High yield
securities are subject to greater market fluctuations and risk of
loss than securities with higher ratings. Lower-quality debt tends
to be less liquid than higher-quality debt.
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.
Credit default swap transactions involve greater risks than if
the Fund had invested in the reference obligation directly.
Credit linked notes are securities that are collateralized by
one or more credit default swaps on designated debt securities that
are referred to as "reference securities." The market for credit
linked notes may suddenly become illiquid. Changes in liquidity may
result in significant, rapid and unpredictable changes in the
prices for credit linked notes. In certain cases, a market price
for a credit linked note may not be available.
The Fund invests in equity and debt securities of non-U.S.
issuers which are subject to higher volatility than securities of
U.S. issuers. Risks may be heightened for securities of companies
located in, or with significant operations in, emerging market
countries. Financial and other reporting by companies and
government entities also may be less reliable in emerging market
countries. Shareholder claims that are available in the U.S., as
well as regulatory oversight and authority that is common in the
U.S., including for claims based on fraud, may be difficult or
impossible for shareholders of securities in emerging market
countries or for U.S. authorities to pursue. Because the Fund
invests in non-U.S. securities, you may lose money if the local
currency of a non-U.S. market depreciates against the U.S. dollar.
In addition to the risks associated with investments in non-U.S.
securities generally, the Fund is subject to certain risks
associated specifically with investments in securities of Chinese
issuers.
Forward foreign currency exchange contracts involve certain
risks, including the risk of failure of the counterparty to perform
its obligations under the contract and the risk that the use of
forward contracts may not serve as a complete hedge because of an
imperfect correlation between movements in the prices of the
contracts and the prices of the currencies hedged.
The Fund may invest from time to time a substantial amount of
its assets in issuers located in a single country or region.
Because the Fund may concentrate its investments in this manner, it
assumes the risk that economic, political and social conditions in
that country or region will have a significant impact on its
investment performance, which may result in greater losses and
volatility than if it had diversified its investments across a
greater number of countries and regions.
To the extent a fund invests in floating or variable rate
obligations that use the London Interbank Offered Rate ("LIBOR") as
a reference interest rate, it is subject to LIBOR Risk. The United
Kingdom's Financial Conduct Authority, which regulates LIBOR has
ceased making LIBOR available as a reference rate over a phase-out
period that began December 31, 2021. 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.
Use of leverage can result in additional risk and cost, and can
magnify the effect of any losses.
The risks of investing in the Fund are spelled out in the
shareholder report and other regulatory filings.
The information presented is not intended to constitute an
investment recommendation for, or advice to, any specific person.
By providing this information, First Trust is not undertaking to
give advice in any fiduciary capacity within the meaning of ERISA,
the Internal Revenue Code or any other regulatory framework.
Financial professionals are responsible for evaluating investment
risks independently and for exercising independent judgment in
determining whether investments are appropriate for their
clients.
Forward-Looking Statements
Certain statements made in this press release that are not
historical facts are referred to as "forward‑looking statements"
under the U.S. federal securities laws. Actual future results or
occurrences may differ significantly from those anticipated in any
forward‑looking statements due to numerous factors. Generally, the
words "believe," "expect," "intend," "estimate," "anticipate,"
"project," "will" and similar expressions identify forward‑looking
statements, which generally are not historical in nature.
Forward‑looking statements are subject to certain risks and
uncertainties that could cause actual results to differ from those
anticipated in any forward-looking statements. You should not place
undue reliance on forward‑looking statements, which speak only as
of the date they are made. The Fund undertakes no responsibility to
update publicly or revise any forward‑looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20220930005431/en/
Inquiries: Don Swade (630) 765-8661
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