As filed with the Securities and Exchange Commission on March 25, 2011.
===============================================================================
                                                   1933 Act File No. 333-141457
                                                    1940 Act File No. 811-22039


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 14A

           PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                      EXCHANGE ACT OF 1934 (AMENDMENT NO.  )

Filed by the registrant [X]
Filed by a party other than the registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by
    Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Section 240.14a-12


         FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
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                (Name of Registrant as Specified in Its Charter)


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    (Name of Person(s) Filing Proxy Statement if Other Than the Registrant)


Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

     (1) Title of each class of securities to which transaction applies:

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     (2) Aggregate number of securities to which transaction applies:

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     (3) Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
         filing fee is calculated and state how it was determined):

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     (4) Proposed maximum aggregate value of transaction:

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     (5) Total fee paid:

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     [ ] Fee paid previously with preliminary materials.

     [ ] Check box if any part of the fee is offset as provided by Exchange
         Act Rule 0-11(a)(2) and identify the filing for which the offsetting
         fee was paid previously. Identify the previous filing by registration
         statement number, or the form or schedule and the date of its filing.

     (1) Amount Previously Paid:

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     (2) Form, Schedule or Registration Statement No.:

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     (3) Filing Party:

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     (4) Date Filed:









                         ENERGY INCOME AND GROWTH FUND
                    FIRST TRUST ENHANCED EQUITY INCOME FUND
              FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
                     FIRST TRUST/FIDAC MORTGAGE INCOME FUND
                     FIRST TRUST STRATEGIC HIGH INCOME FUND
                   FIRST TRUST STRATEGIC HIGH INCOME FUND II
                 FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
                   FIRST TRUST STRATEGIC HIGH INCOME FUND III
         FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
                    FIRST TRUST ACTIVE DIVIDEND INCOME FUND
                    FIRST TRUST HIGH INCOME LONG/SHORT FUND

                       120 East Liberty Drive, Suite 400
                            Wheaton, Illinois 60187

                                 March 23, 2011
Dear Shareholder:

      The accompanying materials relate to the Joint Annual Meetings of
Shareholders (collectively, the "Meeting") of Energy Income and Growth Fund,
First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global Opportunity
Income Fund, First Trust/FIDAC Mortgage Income Fund, First Trust Strategic High
Income Fund, First Trust Strategic High Income Fund II, First Trust/Aberdeen
Emerging Opportunity Fund, First Trust Strategic High Income Fund III, First
Trust Specialty Finance and Financial Opportunities Fund, First Trust Active
Dividend Income Fund and First Trust High Income Long/Short Fund (each a "Fund"
and collectively, the "Funds"). The Meeting will be held at the offices of First
Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187,
on Monday, April 18, 2011, at 4:00 p.m. Central Time.

      At the Meeting, you will be asked to vote on a proposal to elect one of
the Trustees of your Fund (the "Proposal") and to transact such other business
as may properly come before the Meeting and any adjournments or postponements
thereof. The Proposal is described in the accompanying Notice of Joint Annual
Meetings of Shareholders and Joint Proxy Statement.

      Your participation at the Meeting is very important. If you cannot attend
the Meeting, you may participate by proxy. As a Shareholder, you cast one vote
for each share of a Fund that you own and a proportionate fractional vote for
any fraction of a share that you own. Please take a few moments to read the
enclosed materials and then cast your vote on the enclosed proxy card.

      Voting takes only a few minutes. Each Shareholder's vote is important.
Your prompt response will be much appreciated.

      After you have voted on the Proposal, please be sure to sign your proxy
card and return it in the enclosed postage-paid envelope.

      We appreciate your participation in this important Meeting.

      Thank you.

                                        Sincerely,


                                        /s/ James A. Bowen

                                        James A. Bowen
                                        Chairman of the Board





                      INSTRUCTIONS FOR SIGNING PROXY CARDS

      The following general rules for signing proxy cards may be of assistance
to you and will avoid the time and expense to your Fund involved in validating
your vote if you fail to sign your proxy card properly.

      1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.

      2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration.

      3. All Other Accounts: The capacity of the individual signing the proxy
should be indicated unless it is reflected in the form of registration. For
example:

              REGISTRATION                          VALID SIGNATURE

     CORPORATE ACCOUNTS
     (1)  ABC Corp.                            ABC Corp.
     (2)  ABC Corp.                            John Doe, Treasurer
     (3)  ABC Corp.
             c/o John Doe, Treasurer           John Doe
     (4)  ABC Corp. Profit Sharing Plan        John Doe, Trustee


     TRUST ACCOUNTS
     (1)  ABC Trust                            Jane B. Doe, Trustee
     (2)  Jane B. Doe, Trustee
             u/t/d 12/28/78                    Jane B. Doe


     CUSTODIAL OR ESTATE ACCOUNTS
     (1)  John B. Smith, Cust.
             f/b/o John B. Smith, Jr., UGMA    John B. Smith
     (2)  John B. Smith                        John B. Smith, Jr., Executor





                         ENERGY INCOME AND GROWTH FUND
                    FIRST TRUST ENHANCED EQUITY INCOME FUND
              FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
                     FIRST TRUST/FIDAC MORTGAGE INCOME FUND
                     FIRST TRUST STRATEGIC HIGH INCOME FUND
                   FIRST TRUST STRATEGIC HIGH INCOME FUND II
                 FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
                   FIRST TRUST STRATEGIC HIGH INCOME FUND III
         FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
                    FIRST TRUST ACTIVE DIVIDEND INCOME FUND
                    FIRST TRUST HIGH INCOME LONG/SHORT FUND

                       120 East Liberty Drive, Suite 400
                            Wheaton, Illinois 60187

                NOTICE OF JOINT ANNUAL MEETINGS OF SHAREHOLDERS
                          To be held on April 18, 2011

March 23, 2011

To the Shareholders of the above Funds:

      Notice is hereby given that the Joint Annual Meetings of Shareholders
(collectively, the "Meeting") of Energy Income and Growth Fund, First Trust
Enhanced Equity Income Fund, First Trust/Aberdeen Global Opportunity Income
Fund, First Trust/FIDAC Mortgage Income Fund, First Trust Strategic High Income
Fund, First Trust Strategic High Income Fund II, First Trust/Aberdeen Emerging
Opportunity Fund, First Trust Strategic High Income Fund III, First Trust
Specialty Finance and Financial Opportunities Fund, First Trust Active Dividend
Income Fund and First Trust High Income Long/Short Fund (each a "Fund" and
collectively, the "Funds"), each a Massachusetts business trust, will be held at
the offices of First Trust Advisors L.P., 120 East Liberty Drive, Suite 400,
Wheaton, Illinois 60187, on Monday, April 18, 2011, at 4:00 p.m. Central Time,
for the following purposes:

      1. To elect one Trustee (the Class I Trustee) of each Fund.

      2. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.

      The Board of Trustees has fixed the close of business on January 31, 2011
as the record date for the determination of Shareholders entitled to notice of
and to vote at the Meeting and any adjournments or postponements thereof.

                                   By Order of the Board of Trustees,


                                   /s/ W. Scott Jardine

                                   W. Scott Jardine
                                   Secretary

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SHAREHOLDERS ARE REQUESTED TO PROMPTLY COMPLETE, SIGN, DATE AND RETURN
THE PROXY CARD IN THE ENCLOSED ENVELOPE WHICH DOES NOT REQUIRE POSTAGE IF
MAILED IN THE CONTINENTAL UNITED STATES. INSTRUCTIONS FOR THE PROPER
EXECUTION OF PROXIES ARE SET FORTH ON THE INSIDE COVER OF THIS PROXY
STATEMENT.
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                      This page intentionally left blank.








                         ENERGY INCOME AND GROWTH FUND
                    FIRST TRUST ENHANCED EQUITY INCOME FUND
              FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND
                     FIRST TRUST/FIDAC MORTGAGE INCOME FUND
                     FIRST TRUST STRATEGIC HIGH INCOME FUND
                   FIRST TRUST STRATEGIC HIGH INCOME FUND II
                 FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND
                   FIRST TRUST STRATEGIC HIGH INCOME FUND III
         FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND
                    FIRST TRUST ACTIVE DIVIDEND INCOME FUND
                    FIRST TRUST HIGH INCOME LONG/SHORT FUND

                     JOINT ANNUAL MEETINGS OF SHAREHOLDERS
                                 April 18, 2011

                       120 East Liberty Drive, Suite 400
                            Wheaton, Illinois 60187

                             JOINT PROXY STATEMENT
                                 March 23, 2011

      This Joint Proxy Statement and the enclosed proxy card will first be
mailed to shareholders on or about March 30, 2011.

      This Joint Proxy Statement is furnished in connection with the
solicitation of proxies by the Boards of Trustees of Energy Income and Growth
Fund, First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global
Opportunity Income Fund, First Trust/FIDAC Mortgage Income Fund, First Trust
Strategic High Income Fund, First Trust Strategic High Income Fund II, First
Trust/Aberdeen Emerging Opportunity Fund, First Trust Strategic High Income Fund
III, First Trust Specialty Finance and Financial Opportunities Fund, First Trust
Active Dividend Income Fund and First Trust High Income Long/Short Fund (each a
"Fund" and collectively, the "Funds"), each a Massachusetts business trust, for
use at the Annual Meetings of Shareholders of the Funds to be held on Monday,
April 18, 2011, at 4:00 p.m. Central Time, at the offices of First Trust
Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, and
at any adjournments or postponements thereof (collectively, the "Meeting"). A
Notice of Joint Annual Meetings of Shareholders and a proxy card accompany this
Joint Proxy Statement. The Boards of Trustees of the Funds have determined that
the use of this Joint Proxy Statement is in the best interests of each Fund in
light of the same matter being considered and voted on by shareholders.

      Proxy solicitations will be made primarily by mail. However, proxy
solicitations may also be made by telephone or personal interviews conducted by
officers and service providers of the Funds, including any agents or affiliates
of such service providers.

      The costs incurred in connection with the preparation of this Joint Proxy
Statement and its enclosures will be paid by the Funds. The Funds will also
reimburse brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of Fund shares.

      The close of business on January 31, 2011 has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Meeting.





      Each Fund has one class of shares of beneficial interest, par value $0.01
per share, known as common shares ("Shares").

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDER MEETING TO BE HELD ON APRIL 18, 2011. This Joint Proxy Statement is
available on the Internet at http://www.ftportfolios.com/LoadContent/gr4dgcbugw.
Each Fund's most recent annual and semi-annual reports are also available on the
Internet at http://www.ftportfolios.com. To find a report, select your Fund
under the "Closed-End Funds" tab, select the "News & Literature" link, and go to
the "Quarterly/Semi-Annual or Annual Reports" heading. In addition, the Funds
will furnish, without charge, copies of their most recent annual and semi-annual
reports to any shareholder upon request. To request a copy, please write to
First Trust Advisors L.P. ("First Trust Advisors" or the "Advisor") at 120 East
Liberty Drive, Suite 400, Wheaton, Illinois 60187, or call (800) 988-5891.

      You may call (800) 988-5891 for information on how to obtain directions to
be able to attend the Meeting and vote in person.

      In order that your Shares may be represented at the Meeting, you are
requested to:

      -   indicate your instructions on the proxy card;

      -   date and sign the proxy card;

      -   mail the proxy card promptly in the enclosed envelope which requires
          no postage if mailed in the continental United States; and

      -   allow sufficient time for the proxy card to be received by 4:00 p.m.
          Central Time, on Monday, April 18, 2011. (However, proxies received
          after this date may still be voted in the event the Meeting is
          adjourned or postponed to a later date.)


                                     - 2 -





                                     VOTING

      As described further in the proposal, for each Fund, the affirmative vote
of a plurality of the Shares present and entitled to vote at the Meeting will be
required to elect the specified nominee as the Class I Trustee of that Fund
provided a quorum is present. Abstentions and broker non-votes will have no
effect on the approval of the proposal.

      If the enclosed proxy card is properly executed and returned in time to be
voted at the Meeting, the Fund Shares represented thereby will be voted in
accordance with the instructions marked thereon, or, if no instructions are
marked thereon, will be voted in the discretion of the persons named on the
proxy card. Accordingly, unless instructions to the contrary are marked thereon,
a properly executed and returned proxy will be voted FOR the election of the
specified nominee as the Class I Trustee and at the discretion of the named
proxies on any other matters that may properly come before the Meeting, as
deemed appropriate. Any shareholder who has given a proxy has the right to
revoke it at any time prior to its exercise either by attending the Meeting and
voting his or her Shares in person, or by timely submitting a letter of
revocation or a later-dated proxy to the applicable Fund at its address above. A
list of shareholders entitled to notice of and to be present and to vote at the
Meeting will be available at the offices of the Funds, 120 East Liberty Drive,
Suite 400, Wheaton, Illinois 60187, for inspection by any shareholder during
regular business hours prior to the Meeting. Shareholders will need to show
valid identification and proof of Share ownership to be admitted to the Meeting
or to inspect the list of shareholders.

      Under the By-Laws of each Fund, a quorum is constituted by the presence in
person or by proxy of the holders of thirty-three and one-third percent (33-
1/3%) of the voting power of the outstanding Shares entitled to vote on a
matter. For the purposes of establishing whether a quorum is present, all Shares
present and entitled to vote, including abstentions and broker non-votes (i.e.,
Shares held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners or the persons entitled to vote and (ii) the
broker or nominee does not have discretionary voting power on a particular
matter), shall be counted. Any meeting of shareholders may be postponed prior to
the meeting with notice to the shareholders entitled to vote at that meeting.
Any meeting of shareholders may, by action of the chairman of the meeting, be
adjourned to permit further solicitation of proxies without further notice with
respect to one or more matters to be considered at such meeting to a designated
time and place, whether or not a quorum is present with respect to such matter.
In addition, upon motion of the chairman of the meeting, the question of
adjournment may be submitted to a vote of the shareholders, and in that case,
any adjournment must be approved by the vote of holders of a majority of the
Shares present and entitled to vote with respect to the matter or matters
adjourned, and without further notice. Unless a proxy is otherwise limited in
this regard, any Shares present and entitled to vote at a meeting, including
broker non-votes, may, at the discretion of the proxies named therein, be voted
in favor of such an adjournment.


                                     - 3 -





                           OUTSTANDING SHARES

      On the Record Date, each Fund had the following number of Shares
outstanding:



                                                                           TICKER                SHARES
FUND                                                                      SYMBOL(1)            OUTSTANDING
                                                                                         
ENERGY INCOME AND GROWTH FUND                                                FEN               11,244,133
FIRST TRUST ENHANCED EQUITY INCOME FUND                                      FFA               19,973,164
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND                          FAM               17,376,792
FIRST TRUST/FIDAC MORTGAGE INCOME FUND                                       FMY                4,056,945
FIRST TRUST STRATEGIC HIGH INCOME FUND                                       FHI                9,150,594
FIRST TRUST STRATEGIC HIGH INCOME FUND II                                    FHY                9,533,776
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND                               FEO                5,905,236
FIRST TRUST STRATEGIC HIGH INCOME FUND III                                   FHO                9,156,182
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND               FGB               14,278,252
FIRST TRUST ACTIVE DIVIDEND INCOME FUND                                      FAV                8,239,184
FIRST TRUST HIGH INCOME LONG/SHORT FUND                                      FSD               36,056,159


(1)  The Shares of each of the Funds are listed on the New York Stock
     Exchange ("NYSE") except for the Shares of Energy Income and Growth
     Fund, which are listed on the NYSE Amex.



      Shareholders of record on the Record Date are entitled to one vote for
each Share the shareholder owns and a proportionate fractional vote for any
fraction of a Share the shareholder owns.

      To the knowledge of the Board of Trustees, as of the Record Date, no
single shareholder or "group" (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934 (the "1934 Act")) beneficially owned more than
5% of any Fund's outstanding Shares, except as described in the following table.
A control person is one who owns, either directly or indirectly, more than 25%
of the voting securities of a Fund or acknowledges the existence of control. A
party that controls a Fund may be able to significantly affect the outcome of
any item presented to shareholders for approval. Information as to beneficial
ownership of Shares, including percentage of outstanding Shares beneficially
owned, is based on securities position listing reports as of the Record Date and
reports filed with the Securities and Exchange Commission ("SEC") by
shareholders. The Funds do not have any knowledge of the identity of the
ultimate beneficiaries of the Shares listed below.


                                     - 4 -







                                 BENEFICIAL OWNERSHIP OF SHARES

      NAME AND ADDRESS                                         SHARES BENEFICIALLY          % OF OUTSTANDING SHARES
     OF BENEFICIAL OWNER                                              OWNED                    BENEFICIALLY OWNED
                                                                                      
ENERGY INCOME AND GROWTH FUND:

Charles Schwab & Co., Inc.                                         786,234 Shares                     6.99%
2423 E. Lincoln Drive
Phoenix, AZ 85016

First Clearing, LLC                                              2,358,335 Shares                    20.97%
One North Jefferson Street
St. Louis, MO 63103

National Financial Services, LLC                                   844,363 Shares                     7.51%
200 Liberty Street
New York, NY  10281

Pershing LLC                                                       795,041 Shares                     7.07%
1 Pershing Plaza
Jersey City, NJ 07399

Robert W. Baird & Co., Inc.                                        606,089 Shares                     5.39%
777 E. Wisconsin Avenue
9th Floor
Milwaukee, WI  53202

FIRST TRUST ENHANCED EQUITY INCOME FUND:

The Bank of New York Mellon                                      1,285,095 Shares                     6.43%
525 William Penn Place
Pittsburgh, PA 15259

First Clearing, LLC                                              8,215,976 Shares                    41.14%
One North Jefferson Street
St. Louis, MO 63103

Merrill Lynch, Pierce Fenner & Smith Safekeeping                 1,028,773 Shares                     5.15%
101 Hudson Street, 8th Floor
Jersey City, NJ 07302

Raymond James & Associates, Inc.                                 1,617,483 Shares                     8.10%
P.O.  Box 14407
St. Petersburg, FL 33733

FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND:

Charles Schwab & Co., Inc.                                       1,062,100 Shares                     6.11%
2423 E. Lincoln Drive
Phoenix, AZ 85016

First Clearing, LLC                                              2,824,000 Shares                    16.25%
One North Jefferson Street
St. Louis, MO 63103

Merrill Lynch, Pierce Fenner & Smith Safekeeping                 1,833,140 Shares                    10.55%
101 Hudson Street, 8th Floor
Jersey City, NJ 07302

National Financial Services LLC                                  1,663,226 Shares                     9.57%
200 Liberty Street
New York, NY 10281

Pershing LLC                                                     1,377,398 Shares                     7.93%
1 Pershing Plaza
Jersey City, NJ 07399

RBC Capital Markets Corporation                                  1,204,757 Shares                     6.93%
510 Marquette Ave. South
Minneapolis, MN 55402

FIRST TRUST/FIDAC MORTGAGE INCOME FUND:

Charles Schwab & Co., Inc.                                         216,404 Shares                     5.33%
2423 E. Lincoln Drive
Phoenix, AZ 85016

First Clearing, LLC                                                482,657 Shares                    11.90%
One North Jefferson Street
St. Louis, MO 63103


                                     - 5 -





      NAME AND ADDRESS                                         SHARES BENEFICIALLY          % OF OUTSTANDING SHARES
     OF BENEFICIAL OWNER                                              OWNED                    BENEFICIALLY OWNED

FIRST TRUST/FIDAC MORTGAGE INCOME FUND (CONTINUED):

Merrill Lynch, Pierce Fenner & Smith Safekeeping                   304,860 Shares                     7.51%
101 Hudson Street, 8th Floor
Jersey City, NJ 07302

National Financial Services LLC                                    700,208 Shares                    17.26%
200 Liberty Street
New York, NY 10281

The Northern Trust Company                                         269,351 Shares                     6.64%
801 S. Canal Street
Chicago, IL 60607

Pershing LLC                                                       248,157 Shares                     6.12%
1 Pershing Plaza
Jersey City, NJ 07399

Sit Investment Associates, Inc.                                   465,972 Shares*                    11.52%*
3300 IDS Center
80 South Eighth Street
Minneapolis, MN 55402

FIRST TRUST STRATEGIC HIGH INCOME FUND:

Charles Schwab & Co., Inc.                                         552,576 Shares                     6.04%
2423 E. Lincoln Drive
Phoenix, AZ 85016

Citigroup Global Markets Inc.                                      492,389 Shares                     5.38%
700 Red Brook Blvd.
Suite 300
Owings Mills, MD  21117

First Clearing, LLC                                              1,017,727 Shares                    11.12%
One North Jefferson Street
St. Louis, MO 63103

National Financial Services LLC                                  1,212,692 Shares                    13.25%
200 Liberty Street
New York, NY 10281

Pershing LLC                                                       678,236 Shares                     7.41%
1 Pershing Plaza
Jersey City, NJ 07399

RBC Capital Markets Corporation                                    893,274 Shares                     9.76%
510 Marquette Ave. South
Minneapolis, MN 55402

TD Ameritrade Clearing, Inc.                                       498,746 Shares                     5.45%
1005 N. Ameritrade Place
Bellevue, NE  68005

FIRST TRUST STRATEGIC HIGH INCOME FUND II:

First Clearing, LLC                                              1,543,703 Shares                    16.19%
One North Jefferson Street
St. Louis, MO 63103

National Financial Services LLC                                    702,274 Shares                     7.37%
200 Liberty Street
New York, NY 10281


*  Information is according to Amendment No. 8 to Schedule 13G filed
   by the reporting person with the SEC on January 11, 2011.


                                     - 6 -





      NAME AND ADDRESS                                         SHARES BENEFICIALLY          % OF OUTSTANDING SHARES
     OF BENEFICIAL OWNER                                              OWNED                    BENEFICIALLY OWNED

FIRST TRUST STRATEGIC HIGH INCOME FUND II (CONTINUED):

Oppenheimer & Co. Inc.                                             491,044 Shares                     5.15%
125 Broad Street, 15th Floor
New York, NY 10004

Pershing LLC                                                     1,023,512 Shares                    10.74%
1 Pershing Plaza
Jersey City, NJ 07399

RBC Capital Markets Corporation                                    785,600 Shares                     8.24%
510 Marquette Ave. South
Minneapolis, MN 55402

FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND:
Citigroup Global Markets Inc.                                      352,097 Shares                     5.96%
700 Red Brook Blvd, Suite 300
Owings Mills, MD 21117

First Clearing, LLC                                              1,331,360 Shares                    22.55%
One North Jefferson Street
St. Louis, MO 63103

Merrill Lynch, Pierce Fenner & Smith Safekeeping                   409,059 Shares                     6.93%
101 Hudson Street, 8th Floor
Jersey City, NJ 07302

Raymond James & Associates, Inc.                                   398,794 Shares                     6.75%
880 Carillon Parkway
P.O. Box 12749
St. Petersburg, FL 33716

State Street Bank and Trust Co.                                    435,991 Shares                     7.38%
1776 Heritage Drive
North Quincy, MA  02171

Lazard Asset Management LLC                                        858,922 Shares*                   16.12%*
30 Rockefeller Plaza
New York, NY 10112

FIRST TRUST STRATEGIC HIGH INCOME FUND III:
Charles Schwab & Co., Inc.                                         841,579 Shares                     9.19%
2423 E. Lincoln Drive
Phoenix, AZ 85016

Citigroup Global Markets Inc.                                    1,141,403 Shares                    12.47%
700 Red Brook Blvd, Suite 300
Owings Mills, MD 21117

First Clearing, LLC                                              1,282,853 Shares                    14.01%
One North Jefferson Street
St. Louis, MO 63103

National Financial Services LLC                                    642,153 Shares                     7.01%
200 Liberty Street
New York, NY 10281

Pershing LLC                                                       675,984 Shares                     7.38%
1 Pershing Plaza
Jersey City, NJ 07399

RBC Capital Markets Corporation                                  1,087,418 Shares                    11.88%
510 Marquette Ave. South
Minneapolis, MN 55402


*     Information is according to Schedule 13G/A filed by the reporting person
      with the SEC on February 11, 2011.


                                     - 7 -





      NAME AND ADDRESS                                         SHARES BENEFICIALLY          % OF OUTSTANDING SHARES
     OF BENEFICIAL OWNER                                              OWNED                    BENEFICIALLY OWNED

FIRST TRUST STRATEGIC HIGH INCOME FUND III (CONTINUED):

Morgan Stanley                                                     777,121 Shares*                   8.50%*
Morgan Stanley Smith Barney LLC
1585 Broadway
New York, NY 10036

FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND:

First Clearing, LLC                                              9,205,696 Shares                    64.47%
One North Jefferson Street
St. Louis, MO 63103

Stifel, Nicolaus & Company, Incorporated                         1,047,741 shares                     7.34%
501 N. Broadway, 7th Floor
St. Louis, MO 63102

FIRST TRUST ACTIVE DIVIDEND INCOME FUND:

Charles Schwab & Co., Inc.                                         510,076 Shares                     6.19%
2423 E. Lincoln Drive
Phoenix, AZ 85016

First Clearing, LLC                                                856,168 Shares                    10.39%
One North Jefferson Street
St. Louis, MO 63103

Merrill Lynch, Pierce Fenner & Smith Safekeeping                   531,368 Shares                     6.45%
101 Hudson Street, 8th Floor
Jersey City, NJ 07302

National Financial Services LLC                                    667,265 Shares                     8.10%
200 Liberty Street
New York, NY 10281

Pershing LLC                                                       418,652 Shares                     5.08%
1 Pershing Plaza
Jersey City, NJ 07399

Raymond James & Associates, Inc.                                 2,470,538 Shares                    29.99%
880 Carillon Parkway
P.O. Box 12749
St. Petersburg, FL 33716

FIRST TRUST HIGH INCOME LONG/SHORT FUND:
Citigroup Global Markets Inc.                                    7,094,141 Shares                    19.68%
700 Red Brook Blvd, Suite 300
Owings Mills, MD 21117

First Clearing, LLC                                              5,370,347 Shares                    14.89%
One North Jefferson Street
St. Louis, MO 63103

Merrill Lynch, Pierce Fenner & Smith Safekeeping                 5,748,618 Shares                    15.94%
101 Hudson Street, 8th Floor
Jersey City, NJ 07302

Morgan Stanley Smith Barney LLC                                  5,439,140 Shares                    15.09%
2000 Westchester Avenue
Purchase, NY  10577

Raymond James & Associates, Inc.                                 2,252,934 Shares                     6.25%
880 Carillon Parkway
P.O. Box 12749
St. Petersburg, FL 33716

RBC Capital Markets Corporation                                  2,453,814 Shares                     6.81%
510 Marquette Ave. South
Minneapolis, MN 55402



*    Information is according to Schedule 13G filed by the reporting
     persons with the SEC on February 14, 2011. According to such filing,
     the reporting persons had sole voting power of 323,892 Shares,
     shared voting power of 88,614 Shares and sole dispositive power of
     777,121 Shares.


                                     - 8 -





               PROPOSAL: ELECTION OF CLASS I TRUSTEE OF EACH FUND

One (1) Class I Trustee is to be elected by holders of Shares of each Fund.
Current Trustee Robert F. Keith is the nominee for election as the Class I
Trustee by shareholders of each Fund for a three-year term.

      Each Fund has established a staggered Board of Trustees pursuant to its
By-Laws, and, accordingly, Trustees are divided into the following three (3)
classes: Class I, Class II and Class III. Robert F. Keith is currently the Class
I Trustee of each Fund, with a term expiring at the Meeting or until his
successor is elected and qualified. If elected, Mr. Keith will hold office for a
three-year term expiring at the Funds' annual meetings of shareholders in 2014.
Richard E. Erickson, Thomas R. Kadlec, James A. Bowen and Niel B. Nielson are
current and continuing Trustees. Messrs. Erickson and Kadlec are Class II
Trustees for a term expiring at the Funds' annual meetings of shareholders in
2012. Messrs. Bowen and Nielson are Class III Trustees for a term expiring at
the Funds' annual meetings of shareholders in 2013. Each Trustee serves until
his successor is elected and qualified, or until he resigns, retires or is
otherwise removed.

      Required Vote: For each Fund, the nominee for election as the Class I
Trustee must be elected by the affirmative vote of the holders of a plurality of
the Shares of the Fund, cast in person or by proxy at the Meeting and entitled
to vote thereon, provided a quorum is present. Abstentions and broker non-votes
will have no effect on the approval of the proposal. Proxies cannot be voted for
a greater number of persons than the number of seats open for election.

      Unless you give contrary instructions on your proxy card, your Shares will
be voted FOR the election of the nominee listed if your proxy card has been
properly executed and timely received by the applicable Fund. If the nominee
should withdraw or otherwise become unavailable for election prior to the
Meeting, the proxies named on your proxy card intend to vote FOR any substitute
nominee recommended by the Funds in accordance with the Funds' procedures.

The Board of Trustees of each Fund Unanimously Recommends that Shareholders Vote
FOR the Election of the Nominee.


                                     - 9 -





                               MANAGEMENT

MANAGEMENT OF THE FUNDS

      The general supervision of the duties performed for the Funds under their
respective investment management agreement with the Advisor is the
responsibility of the Board. The Trustees set broad policies for the Funds and
choose the Funds' officers. The following is a list of the Trustees and officers
of each Fund and a statement of their present positions and principal
occupations during the past five years, the number of portfolios each Trustee
oversees and the other directorships each Trustee holds or has held during the
past five years, if applicable. As noted above, each Fund has established a
staggered Board consisting of five (5) Trustees divided into three (3) classes:
Class I, Class II and Class III. The length of the term of office of each
Trustee is generally three years, and when each Trustee's term begins and ends
depends on the Trustee's designated class. The officers of the Funds serve
indefinite terms. James A. Bowen is deemed an "interested person" (as that term
is defined in the Investment Company Act of 1940, as amended ("1940 Act"))
("Interested Trustee") of the Funds due to his position as Chief Executive
Officer of the Advisor. Except for Mr. Bowen, each Trustee is not an "interested
person" (as that term is defined in the 1940 Act) and is therefore referred to
as an "Independent Trustee."


            The remainder of this page is intentionally left blank.


                                     - 10 -







                                                  INTERESTED TRUSTEE

                                                                                        NUMBER OF          OTHER
                                                               PRINCIPAL                PORTFOLIOS IN      DIRECTORSHIPS
                                          TERM OF OFFICE(2)    OCCUPATION(S)            FIRST TRUST FUND   HELD BY TRUSTEE
NAME, ADDRESS, AND     POSITION(S)        AND LENGTH OF TIME   DURING PAST FIVE         COMPLEX OVERSEEN   DURING PAST FIVE
DATE OF BIRTH          HELD WITH FUNDS    SERVED(3)            YEARS                    BY TRUSTEE         YEARS

                                                                                            
James A. Bowen(1)      President,         Class III            Chief Executive          67 Portfolios      Trustee of
120 East Liberty       Chairman of the                         Officer (December                           Wheaton College
   Drive               Board, Chief       Since 2004           2010 to Present),
Suite 400              Executive Officer                       President (until
Wheaton, IL 60187      and Trustee                             December 2010),
DOB: 9/55                                                      First Trust
                                                               Advisors L.P. and
                                                               First Trust
                                                               Portfolios L.P.;
                                                               Chairman of the
                                                               Board of Directors,
                                                               BondWave LLC Software
                                                               Development
                                                               Company/Investment
                                                               Advisor) and
                                                               Stonebridge
                                                               Advisors LLC
                                                               (Investment Advisor)



                                                  INDEPENDENT TRUSTEES

                                                                                        NUMBER OF          OTHER
                                                               PRINCIPAL                PORTFOLIOS IN      DIRECTORSHIPS
                                          TERM OF OFFICE(2)    OCCUPATION(S)            FIRST TRUST FUND   HELD BY TRUSTEE
NAME, ADDRESS, AND     POSITION(S)        AND LENGTH OF TIME   DURING PAST FIVE         COMPLEX OVERSEEN   DURING PAST FIVE
DATE OF BIRTH          HELD WITH FUNDS    SERVED(3)            YEARS                    BY TRUSTEE         YEARS

Richard E. Erickson    Trustee            Class II             Physician;               67 Portfolios      NONE
c/o First Trust                                                President, Wheaton
Advisors L.P.                             Since 2004           Orthopedics;
120 East Liberty                                               Co-owner and
   Drive                                                       Co-Director
Suite 400                                                      (January 1996 to
Wheaton, IL 60187                                              May 2007), Sports
DOB: 4/51                                                      Med Center for
                                                               Fitness; Limited
                                                               Partner, Gundersen
                                                               Real Estate Limited
                                                               Partnership;
                                                               Member, Sportsmed LLC

Thomas R. Kadlec       Trustee            Class II             President (March         67 Portfolios      Director of ADM
c/o First Trust                                                2010 to Present),                           Investor Services,
Advisors L.P.                             Since 2004           Senior Vice                                 Inc.; ADM Investor
120 East Liberty                                               President and                               Services
   Drive                                                       Chief Financial                             International; and
Suite 400                                                      Officer (May 2007                           ADM Investor
Wheaton, IL 60187                                              to March 2010),                             Services Hong Kong
DOB: 11/57                                                     Vice President and                          Ltd.
                                                               Chief Financial
                                                               Officer (1990 to
                                                               May 2007), ADM
                                                               Investor Services,
                                                               Inc. (Futures
                                                               Commission Merchant)

Robert F. Keith        Trustee            Class I Nominee      President (2003 to       67 Portfolios      Trust Company of
c/o First Trust                                                Present), Hibs                              Illinois
Advisors  L.P.                            Since 2006           Enterprises
120 East Liberty                                               (Financial and
   Drive                                                       Management
Suite 400                                                      Consulting)
Wheaton, IL 60187
DOB: 11/56

Niel B. Nielson        Trustee            Class III            President (June          67 Portfolios      Director of Covenant
c/o First Trust                                                2002 to Present),                           Transport Inc.
Advisors  L.P.                            Since 2004           Covenant College
120 East Liberty
   Drive
Suite 400
Wheaton, IL 60187
DOB: 3/54



                                     - 11 -









                                                OFFICERS


                                                        TERM OF OFFICE(2)           PRINCIPAL OCCUPATION(S)
    NAME, ADDRESS, AND                 POSITION(S)        AND LENGTH OF                 DURING PAST FIVE
       DATE OF BIRTH                 HELD WITH FUNDS     TIME SERVED(3)                     YEARS

                                                                    

Mark R. Bradley                      Treasurer, Chief      Indefinite        Chief Financial Officer, Chief Operating
120 East Liberty Drive, Suite 400    Financial Officer                       Officer (December 2010 to Present), First
Wheaton, IL 60187                    and Chief             Since 2004        Trust Advisors L.P. and First Trust Portfolios
DOB: 11/57                           Accounting Officer                      L.P.; Chief Financial Officer, BondWave LLC
                                                                             (Software Development Company/Investment
                                                                             Advisor) and Stonebridge Advisors LLC
                                                                             (Investment Advisor)


Erin E. Chapman                      Assistant             Indefinite        Assistant General Counsel (October 2007 to
120 East Liberty Drive, Suite 400    Secretary                               Present), Associate Counsel (March 2006 to
Wheaton, IL 60187                                          Since June        October 2007), First Trust Advisors L.P. and
DOB: 8/76                                                  2009              First Trust Portfolios L.P.; Associate
                                                                             Attorney (November 2003 to March 2006), Doyle
                                                                             & Bolotin, Ltd.


James M. Dykas                       Assistant             Indefinite        Controller (January 2011 to Present), Senior
120 East Liberty Drive, Suite 400    Treasurer                               Vice President (April 2007 to Present), Vice
Wheaton, IL 60187                                          Since 2005        President (January 2005 to April 2007), First
DOB: 1/66                                                                    Trust Advisors L.P. and First Trust Portfolios L.P.


Christopher R. Fallow                Assistant Vice        Indefinite        Assistant Vice President (August 2006 to
120 East Liberty Drive, Suite 400    President                               Present), Associate (January 2005 to August
Wheaton, IL 60187                                          Since 2006        2006), First Trust Advisors L.P. and First
DOB: 4/79                                                                    Trust Portfolios L.P.


Rosanne Gatta                        Assistant             Indefinite        Board Liaison Associate (July 2010 to
120 East Liberty Drive, Suite 400    Secretary                               Present), First Trust Advisors L.P. and First
Wheaton, IL 60187                                          Since March       Trust Portfolios L.P.; Assistant Vice
DOB: 7/55                                                  2011              President (February 2001 to July 2010), PNC
                                                                             Global Investment Servicing


W. Scott Jardine                     Secretary             Indefinite        General Counsel, First Trust Advisors L.P.,
120 East Liberty Drive, Suite 400                                            First Trust Portfolios L.P. and BondWave LLC
Wheaton, IL 60187                                          Since 2004        (August 2009 to Present) (Software Development
DOB: 5/60                                                                    Company/Investment Advisor); Secretary of
                                                                             Stonebridge Advisors LLC (Investment Advisor)


Daniel J. Lindquist                  Vice President        Indefinite        Senior Vice President (September 2005 to
120 East Liberty Drive, Suite 400                                            Present), Vice President (April 2004 to
Wheaton, IL 60187                                          Since 2005        September 2005), First Trust Advisors L.P. and
DOB: 2/70                                                                    First Trust Portfolios L.P.


Coleen D. Lynch                      Assistant Vice        Indefinite        Assistant Vice President (January 2008 to
120 East Liberty Drive, Suite 400    President                               Present), First Trust Advisors L.P. and First
Wheaton, IL 60187                                          Since July        Trust Portfolios L.P.; Vice President (May
DOB: 7/58                                                  2008              1998 to January 2008), Van Kampen Asset
                                                                             Management and Morgan Stanley Investment
                                                                             Management


Kristi A. Maher                      Assistant             Indefinite        Deputy General Counsel (May 2007 to Present),
120 East Liberty Drive, Suite 400    Secretary and                           Assistant General Counsel (March 2004 to May
Wheaton, IL 60187                    Chief Compliance      Assistant         2007), First Trust Advisors L.P. and First
DOB: 12/66                           Officer               Secretary         Trust Portfolios L.P.
                                                           since 2004

                                                           Chief
                                                           Compliance
                                                           Officer since
                                                           January 2011


1   Mr. Bowen is deemed an "interested person" of the Funds due to his position
    as Chief Executive Officer of First Trust Advisors L.P., investment advisor
    of the Funds.

2   Currently, Robert F. Keith, as the Class I Trustee, is serving a term for
    each of the Funds until the Meeting or until his successor is elected and
    qualified. Richard E. Erickson and Thomas R. Kadlec, as Class II Trustees,
    are each serving a term for each of the Funds until the Funds' 2012 annual
    meetings of shareholders or until their successors are elected and
    qualified. James A. Bowen and Niel B. Nielson, as Class III Trustees, are
    each serving a term for each of the Funds until the Funds' 2013 annual
    meetings of shareholders or until their successors are elected and
    qualified. Officers of the Funds have an indefinite term.

3   Except as otherwise provided below, all Trustees and officers were elected
    or appointed (i) in 2004 for the then-existing Funds, (ii) in 2005 for First
    Trust/FIDAC Mortgage Income Fund and First Trust Strategic High Income Fund,
    (iii) in 2006 for First Trust Strategic High Income Fund II, First
    Trust/Aberdeen Emerging Opportunity Fund and First Trust Strategic High
    Income Fund III, (iv) in 2007 for First Trust Specialty Finance and
    Financial Opportunities Fund and First Trust Active Dividend Income Fund and
    (v) in 2010 for First Trust High Income Long/Short Fund. Daniel J. Lindquist
    and James M. Dykas were elected Vice President and Assistant Treasurer,
    respectively, of all funds in the First Trust Fund Complex, including the
    then-existing Funds, on December 12, 2005. Christopher R. Fallow was elected
    Assistant Vice President of the then-existing Funds on December 10, 2006.
    Robert F. Keith was appointed Trustee of the then-existing Funds on June 12,
    2006. Coleen D. Lynch was elected Assistant Vice President of all funds in
    the First Trust Fund Complex, including the then-existing Funds, on July 29,
    2008. Erin E. Chapman was elected Assistant Secretary of all funds in the
    First Trust Fund Complex, including the then-existing Funds, on June 1,
    2009. Kristi A. Maher was elected Chief Compliance Officer of all funds in
    the First Trust Fund Complex, including the Funds, on December 13, 2010,
    effective January 1, 2011. Rosanne Gatta was elected Assistant Secretary of
    all funds in the First Trust Fund Complex, including the Funds, on March 21,
    2011.


                                     - 12 -





UNITARY BOARD LEADERSHIP STRUCTURE

      The same five persons serve as Trustees on each Fund's Board and on the
boards of all other funds in the First Trust Fund Complex (the "First Trust
Funds"), which is known as a "unitary" board leadership structure. The unitary
board structure was adopted for the First Trust Funds because of the
efficiencies it achieves with respect to the governance and oversight of the
First Trust Funds. Each First Trust Fund is subject to the rules and regulations
of the 1940 Act (and other applicable securities laws), which means that many of
the First Trust Funds face similar issues with respect to certain of their
fundamental activities, including risk management, portfolio liquidity,
portfolio valuation and financial reporting. In addition, all of the First Trust
Funds that are closed-end funds (the "First Trust Closed-end Funds") are managed
by the Advisor and employ common service providers for custody, fund accounting,
administration and transfer agency that provide substantially similar services
to the First Trust Closed-end Funds pursuant to substantially similar
contractual arrangements. Because of the similar and often overlapping issues
facing the First Trust Funds, including among the First Trust Closed-end Funds,
the Board of the First Trust Funds believes that maintaining a unitary board
structure promotes efficiency and consistency in the governance and oversight of
all First Trust Funds and reduces the costs, administrative burdens and possible
conflicts that may result from having multiple boards. In adopting a unitary
board structure, the Trustees seek to provide effective governance through
establishing a board the overall composition of which will, as a body, possess
the appropriate skills, diversity, independence and experience to oversee the
First Trust Funds' business.

      Annually, the Board reviews its governance structure and the committee
structures, their performance and functions and reviews any processes that would
enhance Board governance over the Funds' business. The Board has determined that
its leadership structure, including the unitary board and committee structure,
is appropriate based on the characteristics of the funds it serves and the
characteristics of the First Trust Fund Complex as a whole. The Board is
composed of four Independent Trustees and one Interested Trustee. The Interested
Trustee serves as the Chief Executive Officer, President, and Chairman of the
Board of each Fund.

      In order to streamline communication between the Advisor and the
Independent Trustees and create certain efficiencies, the Board has a Lead
Independent Trustee who is responsible for: (i) coordinating activities of the
Independent Trustees; (ii) working with the Advisor, Fund counsel and the
independent legal counsel to the Independent Trustees to determine the agenda
for Board meetings; (iii) serving as the principal contact for and facilitating
communication between the Independent Trustees and the Funds' service providers,
particularly the Advisor; and (iv) any other duties that the Independent
Trustees may delegate to the Lead Independent Trustee. The Lead Independent
Trustee is selected by the Independent Trustees and serves a two-year term until
his successor is selected. Effective January 1, 2010, Niel B. Nielson serves as
the Lead Independent Trustee.

      The Board has established four standing committees (as described below)
and has delegated certain of its responsibilities to those committees. The Board
and its committees meet frequently throughout the year to oversee the Funds'
activities, review contractual arrangements with and performance of service
providers, oversee compliance with regulatory requirements, and review Fund
performance. The Independent Trustees are represented by independent legal
counsel at all Board and committee meetings. Generally, the Board acts by
majority vote of all the Trustees, except where a different vote is required by
applicable law.


                                     - 13 -





      The three committee chairmen and the Lead Independent Trustee rotate every
two years in serving as Chairman of the Audit Committee, the Nominating and
Governance Committee or the Valuation Committee, or as Lead Independent Trustee.
The Lead Independent Trustee also serves on the Executive Committee with the
Interested Trustee.

      In addition to the Funds, the First Trust Fund Complex includes: First
Defined Portfolio Fund, LLC, an open-end management investment company with 8
portfolios advised by First Trust Advisors; First Trust Senior Floating Rate
Income Fund II and Macquarie/First Trust Global Infrastructure/Utilities
Dividend & Income Fund, closed-end funds advised by First Trust Advisors; First
Trust Series Fund, an open-end management investment company with two portfolios
advised by First Trust Advisors; and First Trust Exchange-Traded Fund, First
Trust Exchange-Traded Fund II and First Trust Exchange-Traded AlphaDEX(R) Fund,
each an exchange-traded fund with 18, 10 and 16 operating portfolios (each such
portfolio, an "ETF"), respectively, advised by First Trust Advisors.

      The four standing committees of the Board are: the Executive Committee
(and Pricing and Dividend Committee), the Nominating and Governance Committee,
the Valuation Committee and the Audit Committee. The Executive Committee, which
meets between Board meetings, is authorized to exercise all powers of and to act
in the place of the Board of Trustees to the extent permitted by each Fund's
Declaration of Trust and By-Laws. The members of the Executive Committee also
serve as a special committee of the Board known as the Pricing and Dividend
Committee which is authorized to exercise all of the powers and authority of the
Board in respect of the issuance and sale, through an underwritten public
offering, of the Shares of each Fund and all other such matters relating to such
financing, including determining the price at which such Shares are to be sold,
approval of the final terms of the underwriting agreement, and approval of the
members of the underwriting syndicate. Such Committee is also responsible for
the declaration and setting of dividends. Mr. Nielson and Mr. Bowen are members
of the Executive Committee. The number of meetings of the Executive Committee
held by each Fund during its last fiscal year is shown on Schedule 1 hereto.

      The Nominating and Governance Committee is responsible for appointing and
nominating non interested persons to the Board of Trustees. Messrs. Erickson,
Kadlec, Keith and Nielson are members of the Nominating and Governance
Committee, and each is an Independent Trustee who is also an "independent
director" within the meaning of the listing standards of the NYSE or NYSE Amex,
as applicable. The Nominating and Governance Committee operates under a written
charter adopted and approved by the Board, a copy of which is available on the
Funds' website at http://www.ftportfolios.com. If there is no vacancy on the
Board of Trustees, the Board will not actively seek recommendations from other
parties, including shareholders. In 2005, the Board of Trustees adopted a
mandatory retirement age of 72 for Trustees, beyond which age Trustees are
ineligible to serve. The Nominating and Governance Committee Charter provides
that the Committee will not consider new trustee candidates who are 72 years of
age or older or will turn 72 years old during the initial term. When a vacancy
on the Board of Trustees occurs and nominations are sought to fill such vacancy,
the Nominating and Governance Committee may seek nominations from those sources
it deems appropriate in its discretion, including shareholders of the applicable
Fund. The Nominating and Governance Committee may retain a search firm to
identify candidates. To submit a recommendation for nomination as a candidate
for a position on the Board of Trustees, shareholders of the applicable Fund
shall mail such recommendation to W. Scott Jardine, Secretary, at the Fund's
address, 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187. Such
recommendation shall include the following information: (i) evidence of Fund
ownership of the person or entity recommending the candidate (if a Fund
shareholder); (ii) a full description of the proposed candidate's


                                     - 14 -





background, including their education, experience, current employment and date
of birth; (iii) names and addresses of at least three professional references
for the candidate; (iv) information as to whether the candidate is an
"interested person" in relation to the Fund, as such term is defined in the 1940
Act, and such other information that may be considered to impair the candidate's
independence; and (v) any other information that may be helpful to the Committee
in evaluating the candidate (see also "ADDITIONAL INFORMATION - SHAREHOLDER
PROPOSALS" below). If a recommendation is received with satisfactorily completed
information regarding a candidate during a time when a vacancy exists on the
Board or during such other time as the Nominating and Governance Committee is
accepting recommendations, the recommendation will be forwarded to the Chair of
the Nominating and Governance Committee and the counsel to the Independent
Trustees. Recommendations received at any other time will be kept on file until
such time as the Nominating and Governance Committee is accepting
recommendations, at which point they may be considered for nomination. In
connection with the evaluation of candidates, the review process may include,
without limitation, personal interviews, background checks, written submissions
by the candidates and third party references. Under no circumstances shall the
Nominating and Governance Committee evaluate nominees recommended by a
shareholder of the Funds on a basis substantially different than that used for
other nominees for the same election or appointment of Trustees. The number of
meetings of the Nominating and Governance Committee held by each Fund during its
last fiscal year is shown on Schedule 1 hereto.

      The Valuation Committee is responsible for the oversight of the pricing
procedures of each Fund. Messrs. Erickson, Kadlec, Keith and Nielson are members
of the Valuation Committee. The number of meetings of the Valuation Committee
held by each Fund during its last fiscal year is shown on Schedule 1 hereto.

      The Audit Committee is responsible for overseeing each Fund's accounting
and financial reporting process, the system of internal controls, audit process
and evaluating and appointing independent auditors (subject also to Board
approval). Messrs. Erickson, Kadlec, Keith and Nielson, all of whom are
"independent" as defined in the listing standards of the NYSE or NYSE Amex, as
applicable, serve on the Audit Committee. Messrs. Kadlec and Keith serve as
Audit Committee Financial Experts. The number of meetings of the Audit Committee
held by each Fund during its last fiscal year is shown in Schedule 1 hereto.

      In carrying out its responsibilities, as described below under
"INDEPENDENT AUDITORS' FEES-Pre-Approval," the Audit Committee pre-approves all
audit services and permitted non-audit services for each Fund (including the
fees and terms thereof) and non-audit services to be performed for the Advisor
by Deloitte & Touche LLP ("Deloitte & Touche"), the Funds' independent
registered public accounting firm ("independent auditors") if the engagement
relates directly to the operations and financial reporting of the Funds.


RISK OVERSIGHT

      As part of the general oversight of each Fund, the Board is involved in
the risk oversight of the Funds. The Board has adopted and periodically reviews
policies and procedures designed to address the Funds' risks. Oversight of
investment and compliance risk, including oversight of sub-advisors, is
performed primarily at the Board level in conjunction with the Advisor's
investment oversight group and the Funds' Chief Compliance Officer ("CCO").
Oversight of other risks also occurs at the Committee level. The Advisor's
investment oversight group reports to the Board at quarterly meetings regarding,
among other things, Fund performance and the various drivers of such performance
as well as information related to sub-advisors and their operations and
processes. The Board reviews reports on the Funds' and the service providers'


                                     - 15 -





compliance policies and procedures at each quarterly Board meeting and receives
an annual report from the CCO regarding the operations of the Funds' and the
service providers' compliance program. In addition, the Independent Trustees
meet privately each quarter with the CCO. The Audit Committee reviews with the
Advisor the Funds' major financial risk exposures and the steps the Advisor has
taken to monitor and control these exposures, including the Funds' risk
assessment and risk management policies and guidelines. The Audit Committee
also, as appropriate, reviews in a general manner the processes other Board
committees have in place with respect to risk assessment and risk management.
The Nominating and Governance Committee monitors all matters related to the
corporate governance of the Funds. The Valuation Committee monitors valuation
risk and compliance with the Funds' Valuation Procedures and oversees the
pricing agents and actions by the Advisor's Pricing Committee with respect to
the valuation of portfolio securities.

      Not all risks that may affect the Funds can be identified nor can controls
be developed to eliminate or mitigate their occurrence or effects. It may not be
practical or cost-effective to eliminate or mitigate certain risks, the
processes and controls employed to address certain risks may be limited in their
effectiveness, and some risks are simply beyond the reasonable control of the
Funds or the Advisor or other service providers. Moreover, it is necessary to
bear certain risks (such as investment related risks) to achieve a Fund's goals.
As a result of the foregoing and other factors, the Funds' ability to manage
risk is subject to substantial limitations.

BOARD DIVERSIFICATION AND TRUSTEE QUALIFICATIONS

      As described above, the Nominating and Governance Committee of the Board
oversees matters related to the nomination of Trustees. The Nominating and
Governance Committee seeks to establish an effective Board with an appropriate
range of skills and diversity, including, as appropriate, differences in
background, professional experience, education, vocations, and other individual
characteristics and traits in the aggregate. Each Trustee must meet certain
basic requirements, including relevant skills and experience, time availability,
and if qualifying as an Independent Trustee, independence from the Advisor, sub-
advisors, underwriters or other service providers, including any affiliates of
these entities.

      Listed below for each current Trustee and nominee are the experiences,
qualifications and attributes that led to the conclusion, as of the date of this
Joint Proxy Statement, that each current Trustee and nominee should serve as a
trustee.

Independent Trustees

      Richard E. Erickson, M.D., is an orthopedic surgeon and President of
Wheaton Orthopedics. He also has been a co-owner and director of a fitness
center and a limited partner of two real estate companies. Dr. Erickson has
served as a Trustee of each Fund since its inception and of the First Trust
Funds since 1999. Dr. Erickson has also served as the Lead Independent Trustee
(2008 - 2009), Chairman of the Nominating and Governance Committee (2003 - 2007)
and Chairman of the Valuation Committee (June 2006 - 2007) of the First Trust
Funds. He currently serves as Chairman of the Valuation Committee (since 2010)
of the First Trust Funds.

      Thomas R. Kadlec is President of ADM Investor Services Inc. ("ADMIS"), a
futures commission merchant and wholly-owned subsidiary of the Archer Daniels
Midland Company ("ADM"). Mr. Kadlec has been employed by ADMIS and its
affiliates since 1990 in various accounting, financial, operations and risk


                                     - 16 -





management capacities. Mr. Kadlec serves on the boards of several international
affiliates of ADMIS and is a member of ADM's Integrated Risk Committee, which is
tasked with the duty of implementing and communicating enterprise-wide risk
management. Mr. Kadlec has served as a Trustee of each Fund since its inception.
Mr. Kadlec also served on the Executive Committee from the organization of the
first First Trust Closed-end Fund in 2003 until he was elected as the first Lead
Independent Trustee in December 2005, serving as such through 2007. He also
served as Chairman of the Valuation Committee (2008 - 2009) and currently serves
as Chairman of the Audit Committee (since 2010) of the First Trust Funds.

      Robert F. Keith is President of Hibs Enterprises, a financial and
management consulting firm. Mr. Keith has been with Hibs Enterprises since 2003.
Prior thereto, Mr. Keith spent 18 years with ServiceMaster and Aramark,
including three years as President and COO of ServiceMaster Consumer Services,
where he led the initial expansion of certain products overseas, five years as
President and COO of ServiceMaster Management Services Company and two years as
President of Aramark ServiceMaster Management Services. Mr. Keith is a certified
public accountant and also has held the positions of Treasurer and Chief
Financial Officer of ServiceMaster, at which time he oversaw the financial
aspects of ServiceMaster's expansion of its Management Services division into
Europe, the Middle East and Asia. Mr. Keith has served as a Trustee of the First
Trust Funds since June 2006. Mr. Keith has also served as the Chairman of the
Audit Committee (2008 - 2009) of the First Trust Funds and currently serves as
Chairman of the Nominating and Governance Committee (since 2010) of the First
Trust Funds.

      Niel B. Nielson, Ph.D., has served as the President of Covenant College
since 2002. Mr. Nielson formerly served as a partner and trader (of options and
futures contracts for hedging options) for Ritchie Capital Markets Group (1996 -
1997), where he held an administrative management position at this proprietary
derivatives trading company. He also held prior positions in new business
development for ServiceMaster Management Services Company, and in personnel and
human resources for NationsBank of North Carolina, N.A. and Chicago Research and
Trading Group, Ltd. ("CRT"). His international experience includes serving as a
director of CRT Europe, Inc. for two years, directing out of London all aspects
of business conducted by the U.K. and European subsidiary of CRT. Prior to that,
Mr. Nielson was a trader and manager at CRT in Chicago. Mr. Nielson has served
as a Trustee of each Fund since its inception and of the First Trust Funds since
1999. Mr. Nielson has also served as the Chairman of the Audit Committee (2003 -
2007), Chairman of the Nominating and Governance Committee (2008 - 2009) and
currently serves as Lead Independent Trustee (since 2010) of the First Trust
Funds.

Interested Trustee

      James A. Bowen is President and Chief Executive Officer of the First Trust
Funds and Chief Executive Officer of First Trust Advisors L.P. and First Trust
Portfolios L.P. Mr. Bowen is involved in the day-to-day management of the First
Trust Funds and serves on the Executive Committee. He has over 27 years of
experience in the investment company business in sales, sales management and
executive management. Mr. Bowen has served on the Board of Trustees for Wheaton
College since October 2005. Mr. Bowen has served as a Trustee of each Fund since
its inception and of the First Trust Funds since 1999.


                                     - 17 -





OTHER INFORMATION

     Independent Trustees

      During the past five years, none of the Independent Trustees, nor any of
their immediate family members, has been a director, trustee, officer, general
partner or employee of, or consultant to, First Trust Advisors, First Trust
Portfolios L.P. (an affiliate of First Trust Advisors), any sub-advisor to any
fund in the First Trust Fund Complex, or any of their affiliates.

     Officers and Interested Trustee

      The officers of each Fund, including Mr. Bowen, Chief Executive Officer of
each Fund, hold the same positions with each fund in the First Trust Fund
Complex (representing 67 portfolios) as they hold with the Funds, except for
Christopher R. Fallow. Mr. Fallow is an officer of 13 closed-end funds in the
First Trust Fund Complex and an officer of First Trust Series Fund, but is not
an officer of First Defined Portfolio Fund, LLC, First Trust Exchange-Traded
Fund, First Trust Exchange-Traded Fund II or First Trust Exchange-Traded
AlphaDEX(R) Fund.

      The Advisor is a limited partnership, with one limited partner, Grace
Partners of DuPage L.P., and one general partner, The Charger Corporation. Grace
Partners of DuPage L.P. is a limited partnership with one general partner, The
Charger Corporation, and a number of limited partners. The Charger Corporation
is an Illinois corporation controlled by Mr. Bowen, the Chief Executive Officer
of the Advisor. On August 24, 2010, members of the Robert Donald Van Kampen
family entered into a stock purchase agreement with Mr. Bowen to sell 100% of
the common stock of The Charger Corporation to him (he holds the interest
through a limited liability company of which he is the sole member) (the
"Transaction") for $3,000,000 payable at the Transaction closing. The
Transaction was completed in accordance with its terms on October 12, 2010. In
addition, in October 2010, Mr. Bowen sold three limited partnership units of
Grace Partners of DuPage L.P. to Grace Partners of DuPage L.P. for a price of
$1,000,000 per unit.(1)




(1) Grace Partners of DuPage L.P. owns a 99% membership interest, and The
    Charger Corporation owns a 1% membership interest, in First Trust Capital
    Partners, LLC, which is the sole member of FTIA Holdings, LLC. FTIA
    Holdings, LLC holds a controlling membership interest (i.e., greater than
    25%) in Aviance Capital Management, LLC, the sub-advisor to First Trust
    Active Dividend Income Fund.


                                     - 18 -





BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUNDS BY TRUSTEES AND OFFICERS

      The following table sets forth the dollar range and number of equity
securities beneficially owned by the Trustees in each Fund and all funds in the
First Trust Fund Complex, including the Funds, as of December 31, 2010:



     DOLLAR RANGE OF EQUITY SECURITIES IN THE FUNDS AND FIRST TRUST FUND COMPLEX (NUMBER OF SHARES HELD)

                         INTERESTED                                        INDEPENDENT
                          TRUSTEE                                           TRUSTEES

     FUND               James A. Bowen      Richard E. Erickson   Thomas R. Kadlec    Robert F. Keith     Niel B. Nielson
                                                                                           
ENERGY INCOME AND            $0             $10,001-$50,000       $10,001-$50,000          $0             $10,001-$50,000
GROWTH FUND             (0 Shares)          (357 Shares)          (700 Shares)        (0 Shares)          (397 Shares)

FIRST TRUST                  $0             $1-$10,000            $10,001-$50,000          $0             $1-$10,000
ENHANCED EQUITY         (0 Shares)          (299 Shares)          (850 Shares)        (0 Shares)          (335 Shares)
INCOME FUND

FIRST TRUST/                 $0             $10,001-$50,000       $10,001-$50,000     $10,001-$50,000     $10,001-$50,000
ABERDEEN                (0 Shares)          (1,073 Shares)        (850 Shares)        (2,495 Shares)      (625 Shares)
GLOBAL OPPORTUNITY
INCOME FUND

FIRST TRUST/FIDAC            $0                  $0               $10,001-$50,000          $0             $1-$10,000
MORTGAGE INCOME FUND    (0 Shares)          (0 Shares)            (650 Shares)        (0 Shares)          (386 Shares)

FIRST TRUST             $1-$10,000               $0                    $0                  $0             $1-$10,000
STRATEGIC               (1,000 Shares)      (0 Shares)            (0 Shares)          (0 Shares)          (552 Shares)
HIGH INCOME FUND

FIRST TRUST             $10,001-$50,000          $0                    $0                  $0             $1-$10,000
STRATEGIC               (3,750 Shares)      (0 Shares)            (0 Shares)          (0 Shares)          (543 Shares)
HIGH INCOME FUND II

FIRST                        $0                  $0               $10,001-$50,000          $0             $10,001-$50,000
TRUST/ABERDEEN          (0 Shares)          (0 Shares)            (1,000 Shares)      (0 Shares)          (454 Shares)
EMERGING
OPPORTUNITY FUND

FIRST TRUST                  $0                  $0                    $0                  $0                  $0
STRATEGIC HIGH          (0 Shares)          (0 Shares)            (0 Shares)          (0 Shares)          (0 Shares)
INCOME FUND III

FIRST TRUST                  $0                  $0                    $0                  $0                  $0
SPECIALTY FINANCE       (0 Shares)          (0 Shares)            (0 Shares)          (0 Shares)          (0 Shares)
AND FINANCIAL
OPPORTUNITIES FUND

FIRST TRUST ACTIVE           $0                  $0                    $0                  $0                  $0
DIVIDEND INCOME FUND    (0 Shares)          (0 Shares)            (0 Shares)          (0 Shares)          (0 Shares)

FIRST TRUST HIGH             $0                  $0                    $0                  $0                  $0
INCOME LONG/SHORT       (0 Shares)          (0 Shares)            (0 Shares)          (0 Shares)          (0 Shares)
FUND

AGGREGATE DOLLAR        $50,001-$100,000    Over $100,000         Over $100,000       Over $100,000       Over $100,000
RANGE OF EQUITY         (7,000 Shares)      (9,778.7 Shares)      (9,677.6 Shares)    (8,527 Shares)      (6,633 Shares)
SECURITIES IN ALL
REGISTERED INVESTMENT
COMPANIES IN THE
FIRST TRUST FUND
COMPLEX OVERSEEN
BY TRUSTEE


      As of December 31, 2010, the Independent Trustees and their immediate
family members did not own, beneficially or of record, any class of securities
of First Trust Advisors or any sub-advisor or principal underwriter of any Fund
or any person, other than a registered investment company, directly or
indirectly controlling, controlled by, or under common control with First Trust
Advisors or any sub-advisor or principal underwriter of any Fund, nor, since the
beginning of the most recently completed fiscal year of any Fund, did any
Independent Trustee purchase or sell securities of First Trust Advisors, or any
sub-advisor to any fund in the First Trust Fund Complex, their parents or any
subsidiaries of any of the foregoing.


                                     - 19 -





      As of December 31, 2010, the Trustees and officers of the Funds as a group
beneficially owned approximately 46,000 shares of the funds in the First Trust
Fund Complex (less than 1% of the shares outstanding). As of December 31, 2010,
the Trustees and officers of the Funds as a group beneficially owned the
following number of Shares of each Fund, which is less than 1% of each Fund's
Shares outstanding:

FUND                                                         SHARES OWNED

ENERGY INCOME AND GROWTH FUND                                     1,454.2
FIRST TRUST ENHANCED EQUITY INCOME FUND                           1,484.2
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND                5,043
FIRST TRUST/FIDAC MORTGAGE INCOME FUND                             1,036
FIRST TRUST STRATEGIC HIGH INCOME FUND                             1,552
FIRST TRUST STRATEGIC HIGH INCOME FUND II                          4,293
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND                     1,454
FIRST TRUST STRATEGIC HIGH INCOME FUND III                           0
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND       0
FIRST TRUST ACTIVE DIVIDEND INCOME FUND                              0
FIRST TRUST HIGH INCOME LONG/SHORT FUND                              0

COMPENSATION

      Under the Trustees' compensation plan, each Independent Trustee is paid an
annual retainer of $10,000 per trust for the first 14 trusts in the First Trust
Fund Complex and an annual retainer of $7,500 per trust for each subsequent
trust added to the First Trust Fund Complex. The annual retainer is allocated
equally among each of the trusts. No additional meeting fees are paid in
connection with Board or committee meetings. Additionally, effective January 1,
2010, Mr. Nielson is paid annual compensation of $10,000 to serve as the Lead
Independent Trustee, Mr. Kadlec is paid annual compensation of $5,000 to serve
as the Chairman of the Audit Committee, Dr. Erickson is paid annual compensation
of $2,500 to serve as the Chairman of the Valuation Committee and Mr. Keith is
paid annual compensation of $2,500 to serve as the Chairman of the Nominating
and Governance Committee. Each Committee Chairman and the Lead Independent
Trustee will serve a two-year term expiring December 31, 2011 before rotating to
serve as a chairman of another committee or as Lead Independent Trustee. The
additional compensation is allocated equally among each of the trusts in the
First Trust Fund Complex. Trustees are also reimbursed by the trusts in the
First Trust Fund Complex for travel and out-of-pocket expenses in connection
with all meetings.

      The number of Board meetings held by each Fund during its last fiscal year
is shown in Schedule 1 hereto.


                                     - 20 -





The aggregate fees and expenses paid to all Trustees by each Fund for its
last fiscal year (including reimbursement for travel and out-of-pocket
expenses) amounted to the following:

                                                             AGGREGATE FEES AND
               FUND                                            EXPENSES PAID

ENERGY INCOME AND GROWTH FUND                                     $39,693
FIRST TRUST ENHANCED EQUITY INCOME FUND                           $39,683
FIRST TRUST/ABERDEEN GLOBAL OPPORTUNITY INCOME FUND               $39,683
FIRST TRUST/FIDAC MORTGAGE INCOME FUND                            $39,693
FIRST TRUST STRATEGIC HIGH INCOME FUND                            $39,693
FIRST TRUST STRATEGIC HIGH INCOME FUND II                         $39,693
FIRST TRUST/ABERDEEN EMERGING OPPORTUNITY FUND                    $39,683
FIRST TRUST STRATEGIC HIGH INCOME FUND III                        $39,693
FIRST TRUST SPECIALTY FINANCE AND FINANCIAL OPPORTUNITIES FUND    $39,693
FIRST TRUST ACTIVE DIVIDEND INCOME FUND                           $39,693
FIRST TRUST HIGH INCOME LONG/SHORT FUND(1)                        $39,160

(1) Since the Fund commenced operations on September 27, 2010 and, therefore,
    has not completed its first full fiscal year, the aggregate fees and
    expenses paid to the Trustees have been estimated based on payments expected
    to be made by the Fund during the fiscal year ending October 31, 2011.

      The following table sets forth certain information regarding the
compensation of each Fund's Trustees (including reimbursement for travel and
out-of-pocket expenses) for each Fund's most recently completed fiscal year. The
Funds have no retirement or pension plans. The officers and the Interested
Trustee of each Fund receive no compensation from the Funds for serving in such
capacities.


                                     - 21 -







                                                   AGGREGATE COMPENSATION FOR EACH FUND'S FISCAL YEAR

                                       INTERESTED                                        INDEPENDENT
                                        TRUSTEE                                           TRUSTEES
FUND                                 James A. Bowen     Richard E. Erickson   Thomas R. Kadlec    Robert F. Keith   Niel B. Nielson
                                                                                                          
ENERGY INCOME AND GROWTH FUND (1)        $0                  $9,816                $9,816              $9,743            $10,318


FIRST TRUST ENHANCED EQUITY INCOME       $0                  $9,706                $9,853              $9,706            $10,417
FUND (2)

FIRST TRUST/ABERDEEN GLOBAL              $0                  $9,706                $9,853              $9,706            $10,417
OPPORTUNITY INCOME FUND (2)

FIRST TRUST/FIDAC MORTGAGE INCOME        $0                  $9,816                $9,816              $9,743            $10,318
FUND (3)

FIRST TRUST STRATEGIC HIGH INCOME        $0                  $9,816                $9,816              $9,743            $10,318
FUND (3)

FIRST TRUST STRATEGIC HIGH INCOME        $0                  $9,816                $9,816              $9,743            $10,318
FUND II (3)

FIRST TRUST/ABERDEEN EMERGING            $0                  $9,706                $9,853              $9,706            $10,417
OPPORTUNITY FUND (2)

FIRST TRUST STRATEGIC HIGH INCOME        $0                  $9,816                $9,816              $9,743            $10,318
FUND III (3)

FIRST TRUST SPECIALTY FINANCE AND        $0                  $9,816                $9,816              $9,743            $10,318
FINANCIAL OPPORTUNITIES FUND (1)

FIRST TRUST ACTIVE DIVIDEND INCOME       $0                  $9,816                $9,816              $9,743            $10,318
FUND (1)


FIRST TRUST HIGH INCOME LONG/SHORT       $0                  $9,614                $9,755              $9,614            $10,177
FUND (3, 4)

TOTAL COMPENSATION FOR SERVING THE       $0                 $167,426              $169,963            $167,426           $179,633
FIRST TRUST FUND COMPLEX (5)


(1) For fiscal year ended November 30, 2010.
(2) For fiscal year ended December 31, 2010.
(3) For fiscal year ended October 31, 2010.
(4) Since the Fund commenced operations on September 27, 2010 and, therefore,
    has not completed its first full fiscal year, compensation has been
    estimated based on compensation expected to be paid by the Fund during the
    fiscal year ending October 31, 2011.
(5) For the calendar year ended December 31, 2010. Compensation includes, with
    respect to certain ETFs, compensation paid by the Advisor from its
    advisory fee rather than by the ETF directly.


                                     - 22 -





ATTENDANCE AT ANNUAL MEETINGS OF SHAREHOLDERS

      The policy of the Board is to have as many Trustees as possible in
attendance at annual meetings of shareholders. The policy of the Nominating and
Governance Committee relating to attendance by Trustees at annual meetings of
shareholders is contained in the Funds' Nominating and Governance Committee
Charter, which is available on each Fund's website located at
http://www.ftportfolios.com. In addition, the Board's attendance at last year's
annual shareholder meeting is available on each Fund's website located at
http://www.ftportfolios.com. To find the Board's attendance, select your Fund
under the "Closed-End Funds" tab, select the "News & Literature" link, and go to
the "Shareholder Updates and Information" heading.

AUDIT COMMITTEE REPORT

      The role of the Audit Committee is to assist the Board of Trustees in its
oversight of the Funds' accounting and financial reporting process. The Audit
Committee operates pursuant to a charter (the "Charter") that was most recently
reviewed and approved by the Board of Trustees on December 13, 2010, a copy of
which is attached as Exhibit A hereto, and is available on the Fund's website
located at http://www.ftportfolios.com. As set forth in the Charter, management
of the Fund is responsible for maintaining appropriate systems for accounting
and internal controls and the audit process. The Fund's independent auditors are
responsible for planning and carrying out proper audits of the Fund's financial
statements and expressing an opinion as to their conformity with accounting
principles generally accepted in the United States of America.

      In performing its oversight function, the Audit Committee reviewed and
discussed with management and the independent auditors, Deloitte & Touche LLP,
the audited financial statements of the First Trust/FIDAC Mortgage Income Fund,
the First Trust Strategic High Income Fund, the First Trust Strategic High
Income Fund II, the First Trust Strategic High Income Fund III and the First
Trust High Income Long/Short Fund for the fiscal year ended October 31, 2010 at
a meeting held on December 13, 2010; the Energy Income and Growth Fund, the
First Trust Specialty Finance and Financial Opportunities Fund and the First
Trust Active Dividend Income Fund for the fiscal year ended November 30, 2010 at
a meeting held on January 20, 2011; and the First Trust Enhanced Equity Income
Fund, the First Trust/Aberdeen Global Opportunity Income Fund and the First
Trust/Aberdeen Emerging Opportunity Fund for the fiscal year ended December 31,
2010 at a meeting held on February 23, 2011, and discussed the audits of such
financial statements with the independent auditors and management.

      In addition, the Audit Committee discussed with the independent auditors
the accounting principles applied by each Fund and such other matters brought to
the attention of the Audit Committee by the independent auditors as required by
the Public Company Accounting Oversight Board ("PCAOB") AU 380, Communication
with Audit Committees. The Audit Committee also received from the independent
auditors the written disclosures and letter required by PCAOB Ethics and
Independence Rule 3526, Communication with Audit Committees Concerning
Independence, delineating relationships between the independent auditors and
each Fund and discussed the impact that any such relationships may have on the
objectivity and independence of the independent auditors.

      The members of the Funds' Audit Committee are not full-time employees of
the Funds and are not performing the functions of auditors or accountants. As
such, it is not the duty or responsibility of the Audit Committee or its members
to conduct "field work" or other types of auditing or accounting reviews or


                                     - 23 -





procedures or to set auditor independence standards. Members of the Funds' Audit
Committee necessarily rely on the information provided to them by Fund
management and the independent auditors. Accordingly, the Audit Committee's
considerations and discussions referred to above do not assure that the audit of
each Fund's financial statements has been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the independent auditors are in fact "independent."

      Based on its consideration of each Fund's audited financial statements and
the discussions referred to above with Fund management and Deloitte & Touche
LLP, and subject to the limitations on the responsibilities and role of the
Audit Committee as set forth in the Charter and discussed above, the Audit
Committee recommended to the Board the inclusion of each Fund's audited
financial statements in each Fund's Annual Report to Shareholders for the years
ended October 31, November 30 and December 31, 2010, respectively.

         Submitted by the Audit Committee of the Funds:
         Richard E. Erickson
         Thomas R. Kadlec
         Robert F. Keith
         Niel B. Nielson

INDEPENDENT AUDITORS' FEES

      Deloitte & Touche has been selected to serve as the independent auditors
for each Fund for its current fiscal year, and acted as the independent auditors
for each Fund for its most recently completed fiscal year. Deloitte & Touche has
advised the Funds that, to the best of its knowledge and belief, Deloitte &
Touche professionals did not have any direct or material indirect ownership
interest in the Funds inconsistent with independent professional standards
pertaining to independent registered public accounting firms. Representatives of
Deloitte & Touche are not expected to be present at the Meeting, but will have
the opportunity to make a statement if they desire to do so and will be
available should any matter arise requiring their presence. In reliance on Rule
32a-4 under the 1940 Act, each Fund is not seeking shareholder ratification of
the selection of Deloitte & Touche as independent auditors.


                                     - 24 -





Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees

      During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed each Fund and the Advisor for the following fees:




                         AUDIT FEES(1)              AUDIT-RELATED                 TAX                 ALL OTHER
                                                       FEES(2)                   FEES(3)                FEES

FEES BILLED TO:        2009          2010         2009          2010       2009        2010        2009       2010

                                                                                        
ENERGY INCOME AND
GROWTH FUND(4)
   Fund             $72,000       $124,000          $0            $0    $42,400     $60,335          $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST
ENHANCED EQUITY
INCOME FUND(5)
   Fund             $39,000       $39,000           $0            $0    $7,320      $5,215           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST/
ABERDEEN
GLOBAL OPPORTUNITY
INCOME FUND(5)
   Fund             $46,800       $46,800           $0            $0    $5,200      $5,215           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST/FIDAC
MORTGAGE INCOME
FUND(6)
   Fund             $45,000       $45,000           $0            $0    $5,200      $5,200           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST
STRATEGIC HIGH
INCOME FUND(6)
   Fund             $45,800       $45,800           $0            $0    $5,200      $5,200           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST
STRATEGIC HIGH
INCOME FUND II(6)
   Fund             $45,800       $45,800           $0            $0    $5,200      $5,200           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST/
ABERDEEN EMERGING
OPPORTUNITY
FUND(5)
   Fund             $46,800       $52,000           $0            $0    $8,090      $6,990           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST
STRATEGIC HIGH
INCOME FUND III(6)
   Fund             $45,800       $45,800           $0            $0    $0          $10,400          $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST
SPECIALTY FINANCE
AND FINANCIAL
OPPORTUNITIES
FUND(4)
   Fund             $44,000       $44,000           $0            $0    $5,200      $5,216           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST ACTIVE
DIVIDEND INCOME
FUND(4)
   Fund             $49,800       $54,800           $0            $0    $4,500      $4,515           $0         $0
   Advisor          N/A           N/A               $0            $0    $0          $0               $0         $0

FIRST TRUST HIGH
INCOME LONG/SHORT
FUND(7)
   Fund             N/A           $9,000           N/A            $0        N/A          $0         N/A         $0
   Advisor          N/A           N/A              N/A          $10,000     N/A          $0         N/A         $0


(1)  These fees were the aggregate fees billed for professional services for the
     audit of the Fund's annual financial statements or services that are
     normally provided in connection with statutory and regulatory filings or
     engagements.
(2)  With respect to First Trust High Income Long/Short Fund, these fees were
     for the organizational and offering fees of such Fund.
(3)  These fees were for tax consultation or tax return preparation.
(4)  These fees were for the fiscal years ended November 30.
(5)  These fees were for the fiscal years ended December 31.
(6)  These fees were for the fiscal years ended October 31.
(7)  These fees were for the period from inception on September 27, 2010 through
     October 31, 2010.


                                     - 25 -





Non-Audit Fees

      During each of the last two fiscal years of the Funds, Deloitte & Touche
has billed the Fund and the Advisor for the non-audit fees listed below for
services provided to the entities indicated.

                            AGGREGATE NON-AUDIT FEES

FUND                                                  2009              2010
Energy Income and Growth Fund(1)
  Fund                                              $42,400           $60,335
  Advisor                                           $36,000(5)        $2,400(6)

First Trust Enhanced Equity Income Fund(2)
  Fund                                               $7,320            $5,215
  Advisor                                            $36,000(5)        $6,000(6)

First Trust/Aberdeen Global Opportunity
Income Fund(2)
  Fund                                               $5,200            $5,215
  Advisor                                            $36,000(5)        $6,000(6)

First Trust/FIDAC Mortgage Income Fund(3)
  Fund                                               $5,200            $5,200
  Advisor                                            $36,000(5)        $6,000(6)

First Trust Strategic High Income Fund(3)
  Fund                                               $5,200            $5,200
  Advisor                                            $36,000(5)        $6,000(6)

First Trust Strategic High Income Fund II(3)
  Fund                                               $5,200            $5,200
  Advisor                                            $36,000(5)        $6,000(6)

First Trust/Aberdeen Emerging
Opportunity Fund(2)
  Fund                                               $8,090            $6,990
  Advisor                                            $36,000(5)        $6,000(6)

First Trust Strategic High Income Fund III(3)
  Fund                                               $0                $10,400
  Advisor                                            $36,000(5)        $6,000(6)

First Trust Specialty Finance and
Financial Opportunities Fund(1)
  Fund                                               $5,200            $5,216
  Advisor                                            $36,000(5)        $6,000(6)

First Trust Active Dividend Income Fund(1)
  Fund                                               $4,500            $4,515
  Advisor                                            $36,000(5)        $6,000(6)

First Trust High Income Long/Short Fund(4)
  Fund                                                 N/A             $0
  Advisor                                              N/A             $6,000(6)


(1)  These fees were for the fiscal years ended November 30.
(2)  These fees were for the fiscal years ended December 31.
(3)  These fees were for the fiscal years ended October 31.
(4)  These fees were for the period from inception on September 27, 2010 through
     October 31, 2010.
(5)  These fees relate to Global Investment Performance Standards (GIPS(R))
     matters and 2008 federal and state tax matters.
(6)  These fees relate to partnership tax compliance matters and 2009 federal
     and state tax matters.

Pre-Approval

      Pursuant to its Charter and its Audit and Non-Audit Services Pre-Approval
Policy, the Audit Committee of each Fund is responsible for the pre-approval of
all audit services and permitted non-audit services (including the fees and
terms thereof) to be performed for each Fund by its independent auditors. The
chairman of the Audit Committee is authorized to give such pre-approvals on
behalf of the Audit Committee up to $25,000 and report any such pre-approval to
the full Audit Committee.


                                     - 26 -





      The Audit Committee is also responsible for the pre-approval of the
independent auditors' engagements for non-audit services with the Advisor and
any entity controlling, controlled by or under common control with the Advisor
that provides ongoing services to the respective Fund, if the engagement relates
directly to the operations and financial reporting of the Funds, subject to the
de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditors have provided non-audit services to
the Advisor or any entity controlling, controlled by or under common control
with the Advisor that provides ongoing services to the respective Fund that were
not pre-approved pursuant to its policies, the Audit Committee will consider
whether the provision of such non-audit services is compatible with the
auditors' independence.

      None of the Audit Fees, Audit-Related Fees, Tax Fees, and All Other Fees
or the Aggregate Non-Audit Fees disclosed above that were required to be pre-
approved by the Audit Committee pursuant to its pre-approval policies were pre-
approved by the Audit Committee pursuant to the pre-approval exceptions included
in Regulation S-X.

      The Audit Committee of each Fund has considered whether the provision of
non-audit services that were rendered to the Advisor and any entity controlling,
controlled by, or under common control with the Advisor that provides ongoing
services to the respective Fund that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.


                             ADDITIONAL INFORMATION

SHAREHOLDER PROPOSALS

      Shareholder Proposals for Inclusion in the Funds' Proxy Statement. To be
considered for presentation at the Joint Annual Meetings of Shareholders of the
Funds to be held in 2012 and included in a Fund's proxy statement relating to
such meeting, a shareholder proposal submitted pursuant to Rule 14a-8 of the
1934 Act must be received at the offices of the applicable Fund at 120 East
Liberty Drive, Suite 400, Wheaton, Illinois 60187, not later than December 1,
2011. Such a proposal will be included in the Fund's proxy statement if it meets
the requirements of Rule 14a-8. Timely submission of a proposal does not mean
that such proposal will be included in a Fund's proxy statement.

      Other Shareholder Proposals. Under the Funds' By-Laws, any proposal to
elect any person nominated by shareholders for election as Trustee and any other
proposals by shareholders may only be brought before an annual meeting of a Fund
if timely written notice (the "Shareholder Notice") is provided to the Secretary
of the Fund. In accordance with the advance notice provisions included in the
Funds' By-Laws, unless a greater or lesser period is required under applicable
law, to be timely, the Shareholder Notice must be delivered to or mailed and
received at the Fund's address, 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, Attn: W. Scott Jardine, Secretary, not less than forty-five (45)
days nor more than sixty (60) days prior to the first anniversary date of the
date of the proxy statement released to shareholders for the preceding year's
annual meeting. However, if and only if the annual meeting is not scheduled to
be held within a period that commences thirty (30) days before the first
anniversary date of the annual meeting for the preceding year and ends thirty
(30) days after such anniversary date (an annual meeting date outside such
period being referred to herein as an "Other Annual Meeting Date"), such
Shareholder Notice must be given as described above by the later of the close of
business on (i) the date forty-five (45) days prior to such Other Annual Meeting
Date or (ii) the tenth (10th) business day following the date such Other Annual
Meeting Date is first publicly announced or disclosed.


                                     - 27 -





      Any shareholder submitting a nomination of any person or persons (as the
case may be) for election as a Trustee or Trustees of a Fund is required to
deliver, as part of such Shareholder Notice: (i) a statement in writing setting
forth: (A) the name, age, date of birth, business address, residence address and
nationality of the person or persons to be nominated; (B) the class or series
and number of all Shares of the Fund owned of record or beneficially by each
such person or persons, as reported to such shareholder by such nominee(s); (C)
any other information regarding each such person required by paragraphs (a),
(d), (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22 of
Rule 14a-101 (Schedule 14A) under the 1934 Act (or any successor provision
thereto); (D) any other information regarding the person or persons to be
nominated that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitation of proxies for
election of trustees or directors pursuant to Section 14 of the 1934 Act and the
rules and regulations promulgated thereunder; and (E) whether such shareholder
believes any nominee is or will be an "interested person" of the Fund (as
defined in the 1940 Act) and, if not an "interested person," information
regarding each nominee that will be sufficient for the Fund to make such
determination; and (ii) the written and signed consent of any person nominated
to be named as a nominee and to serve as a Trustee if elected. In addition, the
Trustees may require any proposed nominee to furnish such other information as
they may reasonably require or deem necessary to determine the eligibility of
such proposed nominee to serve as a Trustee.

      Without limiting the foregoing, any shareholder who gives a Shareholder
Notice of any matter proposed to be brought before a shareholder meeting
(whether or not involving nominees for Trustees) is required to deliver, as part
of such Shareholder Notice: (i) the description of and text of the proposal to
be presented; (ii) a brief written statement of the reasons why such shareholder
favors the proposal; (iii) such shareholder's name and address as they appear on
the Fund's books; (iv) any other information relating to the shareholder that
would be required to be disclosed in a proxy statement or other filings required
to be made in connection with the solicitation of proxies with respect to the
matter(s) proposed pursuant to Section 14 of the 1934 Act and the rules and
regulations promulgated thereunder; (v) the class or series and number of all
Shares of the Fund owned beneficially and of record by such shareholder; (vi)
any material interest of such shareholder in the matter proposed (other than as
a shareholder); (vii) a representation that the shareholder intends to appear in
person or by proxy at the shareholder meeting to act on the matter(s) proposed;
(viii) if the proposal involves nominee(s) for Trustees, a description of all
arrangements or understandings between the shareholder and each proposed nominee
and any other person or persons (including their names) pursuant to which the
nomination(s) are to be made by the shareholder; and (ix) in the case of a
shareholder (a "Beneficial Owner") that holds Shares entitled to vote at the
meeting through a nominee or "street name" holder of record, evidence
establishing such Beneficial Owner's indirect ownership of, and entitlement to
vote, Shares at the meeting of shareholders. Shares "beneficially owned" means
all Shares which such person is deemed to beneficially own pursuant to Rules
13d-3 and 13d-5 under the 1934 Act.

      In addition, the By-Laws provide that, unless required by federal law, no
matters shall be considered at or brought before any annual or special meeting
unless such matter has been deemed a proper matter for shareholder action by at
least sixty-six and two-thirds percent (66-2/3%) of the Trustees. Timely
submission of a proposal does not mean that such proposal will be brought before
the meeting.


                                     - 28 -





SHAREHOLDER COMMUNICATIONS

      Shareholders of a Fund who want to communicate with the Board of Trustees
or any individual Trustee should write the Fund to the attention of the Fund
Secretary, W. Scott Jardine. The letter should indicate that you are a Fund
shareholder. If the communication is intended for a specific Trustee and so
indicates, it will be sent only to that Trustee. If a communication does not
indicate a specific Trustee, it will be sent to the Chairman of the Nominating
and Governance Committee of the Board and the independent legal counsel to the
Independent Trustees for further distribution as deemed appropriate by such
persons.

INVESTMENT ADVISOR, SUB-ADVISORS, ADMINISTRATOR AND TRANSFER AGENT

      First Trust Advisors L.P., 120 East Liberty Drive, Suite 400, Wheaton,
Illinois 60187, serves as the Funds' investment advisor. Energy Income Partners,
LLC, 49 Riverside Avenue, Westport, Connecticut 06880, serves as the investment
sub-advisor to Energy Income and Growth Fund. An affiliate of the Advisor owns
an interest in Energy Income Partners, LLC. Chartwell Investment Partners, L.P.,
1235 Westlakes Drive, Berwyn, Pennsylvania 19312, serves as the investment sub-
advisor to First Trust Enhanced Equity Income Fund. Aberdeen Asset Management
Inc., 1735 Market Street, 32nd Floor, Philadelphia, Pennsylvania 19103, serves
as the investment sub-advisor to First Trust/Aberdeen Global Opportunity Income
Fund and First Trust/Aberdeen Emerging Opportunity Fund. Fixed Income Discount
Advisory Company, 1211 Avenue of the Americas, 29th Floor, New York, New York
10036, serves as the investment sub-advisor to First Trust/FIDAC Mortgage Income
Fund, but has submitted its notice of resignation, effective April 30, 2011.
Brookfield Investment Management Inc., Three World Financial Center, 200 Vesey
Street, 10th Floor, New York, New York 10281, serves as the investment sub-
advisor to First Trust Strategic High Income Fund, First Trust Strategic High
Income Fund II and First Trust Strategic High Income Fund III. Confluence
Investment Management LLC, 349 Marshall Avenue, Suite 302, St. Louis, Missouri
63119, serves as the investment sub-advisor to First Trust Specialty Finance and
Financial Opportunities Fund. Aviance Capital Management, LLC, 2080 Ringling
Boulevard, Sarasota, Florida 34237, serves as the investment sub-advisor to
First Trust Active Dividend Income Fund. An affiliate of the Advisor owns an
interest in Aviance Capital Management, LLC. MacKay Shields LLC, 9 West 57th
Street, New York, New York 10019, serves as the investment sub-advisor to First
Trust High Income Long/Short Fund.

      BNY Mellon Investment Servicing (US) Inc. acts as the administrator,
accounting agent and transfer agent to the Funds and its principal U.S. office
is located at 4400 Computer Drive, Westborough, Massachusetts 01581.

SECTION 30(h) AND SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 30(h) of the 1940 Act and Section 16(a) of the 1934 Act require
the Funds' officers and Trustees, certain persons affiliated with First Trust
Advisors and any sub-advisor and persons who beneficially own more than 10% of a
Fund's Shares to file reports of ownership and changes of ownership with the SEC
and the NYSE or NYSE Amex, as applicable, and to furnish the Funds with copies
of all Section 16(a) forms they file. Based solely upon a review of copies of
such forms received by the Funds and certain written representations, the Funds
believe that during the fiscal years ended October 31, 2010, November 30, 2010
and December 31, 2010, all such filing requirements applicable to such persons
were met.


                                     - 29 -





FISCAL YEAR

      The fiscal year end for First Trust/FIDAC Mortgage Income Fund, First
Trust Strategic High Income Fund, First Trust Strategic High Income Fund II,
First Trust Strategic High Income Fund III and First Trust High Income
Long/Short Fund was October 31, 2010. The fiscal year end for Energy Income and
Growth Fund, First Trust Specialty Finance and Financial Opportunities Fund and
First Trust Active Dividend Income Fund was November 30, 2010. The fiscal year
end for First Trust Enhanced Equity Income Fund, First Trust/Aberdeen Global
Opportunity Income Fund and First Trust/Aberdeen Emerging Opportunity Fund was
December 31, 2010.

DELIVERY OF CERTAIN DOCUMENTS

      Annual reports will be sent to shareholders of record of each Fund
following the Fund's fiscal year end. Each Fund will furnish, without charge, a
copy of its annual report and/or semi-annual report as available upon request.
Such written or oral requests should be directed to the Fund at 120 East Liberty
Drive, Suite 400, Wheaton, Illinois 60187 or by calling (800) 988-5891.

      Please note that only one annual or semi-annual report, proxy statement or
Notice of Internet Availability of Proxy Materials (as applicable) may be
delivered to two or more shareholders of a Fund who share an address, unless the
Fund has received instructions to the contrary. To request a separate copy of an
annual or semi-annual report, proxy statement or Notice of Internet Availability
of Proxy Materials (as applicable), or for instructions as to how to request a
separate copy of such documents or as to how to request a single copy if
multiple copies of such documents are received, shareholders should contact the
applicable Fund at the address and phone number set forth above. Pursuant to a
request, a separate copy will be delivered promptly.


                OTHER MATTERS TO COME BEFORE THE MEETING

      No business other than the matter described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote thereon
according to their best judgment in the interests of the Funds.

March 23, 2011

-------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS ARE
THEREFORE URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS SOON
AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
-------------------------------------------------------------------------------


                                     - 30 -







                                                       SCHEDULE 1

                                        NUMBER OF BOARD AND COMMITTEE MEETINGS
                                      HELD DURING EACH FUND'S LAST FISCAL YEAR

                                                                                  NOMINATING
                                                                                      AND
                                          AUDIT             EXECUTIVE             GOVERNANCE        VALUATION
                      BOARD             COMMITTEE           COMMITTEE             COMMITTEE         COMMITTEE
FUND                MEETINGS            MEETINGS            MEETINGS               MEETINGS         MEETINGS

                                                                                        
ENERGY INCOME AND         9                   9                   6                4                   4
GROWTH FUND (1)

FIRST TRUST               8                   7                   4                4                   4
ENHANCED EQUITY
INCOME FUND (2)

FIRST TRUST/              8                   7                  12                4                   4
ABERDEEN
GLOBAL OPPORTUNITY
INCOME FUND (2)

FIRST TRUST/FIDAC         7                   7                  12                4                   4
MORTGAGE INCOME
FUND (3)

FIRST TRUST               8                   7                  12                4                   4
STRATEGIC HIGH
INCOME FUND (3)

FIRST TRUST               8                   7                  12                4                   4
STRATEGIC HIGH
INCOME FUND II (3)

FIRST TRUST/              9                   7                   4                4                   4
ABERDEEN EMERGING
OPPORTUNITY FUND (2)

FIRST TRUST               8                   7                  12                4                   4
STRATEGIC HIGH
INCOME FUND III (3)

FIRST TRUST               7                   9                   4                4                   4
SPECIALTY FINANCE
AND FINANCIAL
OPPORTUNITIES FUND (1)

FIRST TRUST ACTIVE        8                   9                   4                4                   4
DIVIDEND INCOME
FUND (1)

FIRST TRUST HIGH          0                   0                   2                0                   0
INCOME LONG/SHORT
FUND (3, 4)


(1)  For fiscal year ended November 30, 2010.
(2)  For fiscal year ended December 31, 2010.
(3)  For fiscal year ended October 31, 2010.
(4)  The inception date of this Fund was September 27, 2010.





                                EXHIBIT A

                         AUDIT COMMITTEE CHARTER

I.      PURPOSE

      The Audit Committee (the "Committee") is appointed by the Boards of
Trustees (the "Boards") of investment companies (the "Funds") advised by First
Trust Advisors L.P. ("Fund Management") for the following purposes:

            1. to oversee the accounting and financial reporting processes of
      each Fund and its internal controls and, as the Audit Committee deems
      appropriate, to inquire into the internal controls of certain third-party
      service providers;

            2. to oversee the quality and integrity of each Fund's financial
      statements and the independent audit thereof;

            3. to oversee, or, as appropriate, assist Board oversight of, each
      Fund's compliance with legal and regulatory requirements that relate to
      the Fund's accounting and financial reporting, internal controls and
      independent audits; and

            4. to approve, prior to the appointment, the engagement of each
      Fund's independent auditor and, in connection therewith, to review and
      evaluate the qualifications, independence and performance of the Fund's
      independent auditor.

II.     COMMITTEE ORGANIZATION AND COMPOSITION

      A. Size and Membership Requirements.

            1. The Committee shall be composed of at least three members, all of
      whom shall be trustees of the Funds. Each member of the Committee, and a
      Committee chairperson, shall be appointed by the Board on the
      recommendation of the Nominating and Governance Committee.

            2. Each member of the Committee shall be independent of the Fund and
      must be free of any relationship that, in the opinion of the Board, would
      interfere with the exercise of independent judgment as a Committee member.
      With respect to the Funds which are closed-end funds or open-end
      exchange-traded funds ("ETFs"), each member must meet the independence and
      experience requirements of the New York Stock Exchange, NYSE Arca, NYSE
      AMEX or the NASDAQ Stock Market (as applicable), and Section 10A of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule
      10A-3 thereunder, and other applicable rules and regulations of the
      Securities and Exchange Commission ("SEC"). Included in the foregoing is
      the requirement that no member of the Committee be an "interested person"
      of the Funds within the meaning of Section 2(a)(19) of the Investment
      Company Act of 1940, as amended (the "1940 Act"), nor shall any Committee
      member accept, directly or indirectly, any consulting, advisory or other
      compensatory fee from the Funds (except in the capacity as a Board or
      committee member).





            3. At least one member of the Committee shall have been determined
      by the Board, exercising its business judgment, to qualify as an "audit
      committee financial expert" as defined by the SEC.

            4. With respect to Funds whose shares are listed on NYSE Arca or on
      the New York Stock Exchange, each member of the Committee shall have been
      determined by the Board, exercising its business judgment, to be
      "financially literate" as required by the New York Stock Exchange or NYSE
      Arca (as applicable). In addition, at least one member of the Committee
      shall have been determined by the Board, exercising its business judgment,
      to have "accounting or related financial management expertise," as
      required by the New York Stock Exchange or NYSE Arca (as applicable). Such
      member may, but need not be, the same person as the Funds' "audit
      committee financial expert." With respect to Funds that are closed-end
      funds or ETFs whose shares are listed on the NYSE AMEX or the NASDAQ Stock
      Market, each member of the Committee shall be able to read and understand
      fundamental financial statements, including a Fund's balance sheet, income
      statement and cash flow statement. In addition, at least one member of the
      Committee shall have been determined by the Board, exercising its business
      judgment, to be "financially sophisticated," as required by the NYSE AMEX
      or the NASDAQ Stock Market (as applicable). A member whom the Board
      determines to be the Funds' "audit committee financial expert" shall be
      presumed to qualify as financially sophisticated.

            5. With respect to Funds that are closed-end funds, Committee
      members shall not serve simultaneously on the audit committee of more than
      two public companies, in addition to their service on the Committee.

      B. Frequency of Meetings.

      The Committee will ordinarily meet once for every regular meeting of the
Board. The Committee may meet more or less frequently as appropriate, but no
less than twice per year.

      C. Term of Office.

      Committee members shall serve until they resign or are removed or replaced
by the Board.

III.    RESPONSIBILITIES

      A. With respect to Independent Auditors:

            1. The Committee shall be responsible for the appointment or
      replacement (subject, if applicable, to Board and/or shareholder
      ratification), compensation, retention and oversight of the work of any
      registered public accounting firm engaged (including resolution of
      disagreements between management and the auditor regarding financial
      reporting) for the purpose of preparing or issuing an audit report or
      performing other audit, review or attest services for the Funds ("External
      Auditors"). The External Auditors shall report directly to the Committee.

            2. The Committee shall meet with the External Auditors and Fund
      Management to review the scope, fees, audit plans and staffing of the
      proposed audits for each fiscal year. At the conclusion of the audit, the
      Committee shall review such audit results, including the External


                                      A-2





      Auditor's evaluation of the Fund's financial and internal controls, any
      comments or recommendations of the External Auditors, any audit problems
      or difficulties and Fund Management's response, including any restrictions
      on the scope of the External Auditor's activities or on access to
      requested information, any significant disagreements with Fund Management,
      any accounting adjustments noted or proposed by the auditor but not made
      by the Fund, any communications between the audit team and the audit firm
      's national office regarding auditing or accounting issues presented by
      the engagement, any significant changes required from the originally
      planned audit programs and any adjustments to the financial statements
      recommended by the External Auditors.

            3. The Committee shall meet with the External Auditors in the
      absence of Fund Management, as necessary.

            4. The Committee shall pre-approve all audit services and permitted
      non-audit services (including the fees and terms thereof) to be performed
      for the Fund by its External Auditors in accordance with the Audit and
      Non-Audit Services Pre-Approval Policy. The Chairman of the Committee is
      authorized to give such pre-approvals on behalf of the Committee where the
      fee for such engagement does not exceed the amount specified in the Audit
      and Non-Audit Services Pre-Approval Policy, and shall report any such
      pre-approval to the full Committee.

            5. The Committee shall pre-approve the External Auditor's
      engagements for non-audit services to Fund Management and any entity
      controlling, controlled by or under common control with Fund Management
      that provides ongoing services to the Fund, if the engagement relates
      directly to the operations and financial reporting of the Fund, subject to
      the de minimis exceptions for non-audit services described in Rule 2-01 of
      Regulation S-X. The Chairman of the Committee is authorized to give such
      pre-approvals on behalf of the Committee, and shall report any such
      pre-approval to the full Committee.

            6. If the External Auditors have provided non-audit services to Fund
      Management and any entity controlling, controlled by or under common
      control with Fund Management that provides ongoing services to the Fund
      that were not pre-approved pursuant to the de minimis exception, the
      Committee shall consider whether the provision of such non-audit services
      is compatible with the External Auditor's independence.

            7. The Committee shall obtain and review a report from the External
      Auditors at least annually (including a formal written statement
      delineating all relationships between the auditors and the Fund consistent
      with PCAOB Ethics and Independence Rule 3526) regarding (a) the External
      Auditor's internal quality-control procedures; (b) any material issues
      raised by the most recent internal quality-control review, or peer review,
      of the firm, or by an inquiry or investigation by governmental or
      professional authorities within the preceding five years, respecting one
      or more independent audits carried out by the firm; (c) any steps taken to
      deal with any such issues; and (d) the External Auditor's independence,
      including all relationships between the External Auditors and the Fund and
      its affiliates; and evaluating the qualifications, performance and
      independence of the External Auditors, including their membership in the
      SEC practice section of the AICPA and their compliance with all applicable
      requirements for independence and peer review, and a review and evaluation
      of the lead partner, taking into account the opinions of management and


                                      A-3





      discussing such reports with the External Auditors. The Committee shall
      present its conclusions with respect to the External Auditors to the
      Board.

            8. The Committee shall review reports and other information provided
      to it by the External Auditors regarding any illegal acts that the
      External Auditors should discover (whether or not perceived to have a
      material effect on the Fund' s financial statements), in accordance with
      and as required by Section 10A(b) of the Exchange Act.

            9. The Committee shall ensure the rotation of the lead (or
      concurring) audit partner having primary responsibility for the audit and
      the audit partner responsible for reviewing the audit as required by law,
      and further considering the rotation of the independent auditor firm
      itself.

            10. The Committee shall establish and recommend to the Board for
      ratification a policy of the Funds with respect to the hiring of employees
      or former employees of the External Auditors who participated in the
      audits of the Funds' financial statements.

            11. The Committee shall take (and, where appropriate, recommend that
      the Board take) appropriate action to oversee the independence of the
      External Auditors.

            12. The Committee shall report regularly to the Board on the results
      of the activities of the Committee, including any issues that arise with
      respect to the quality or integrity of the Funds' financial statements,
      the Funds' compliance with legal or regulatory requirements, the
      performance and independence of the Funds' External Auditors, or the
      performance of the internal audit function, if any.

      B. With respect to Fund Financial Statements:

            1. The Committee shall meet to review and discuss with Fund
      Management and the External Auditors the annual audited financial
      statements of the Funds, major issues regarding accounting and auditing
      principles and practices, and the Funds' disclosures under "Management's
      Discussion and Analysis," and shall meet to review and discuss with Fund
      Management the semi-annual financial statements of the Funds and the
      Funds' disclosures under "Management's Discussion and Analysis."

            2. The Committee shall review and discuss reports, both written and
      oral, from the External Auditors or Fund Management regarding (a) all
      critical accounting policies and practices to be used; (b) all alternative
      treatments of financial information within generally accepted accounting
      principles ("GAAP") for policies and practices that have been discussed
      with management, including the ramifications of the use of such
      alternative treatments and disclosures and the treatment preferred by the
      External Auditors; (c) other material written communications between the
      External Auditors and management, such as any management letter or
      schedule of unadjusted differences; and (d) all non-audit services
      provided to any entity in the investment company complex (as defined in
      Rule 2-01 of Regulation S-X) that were not pre-approved by the Committee.

            3. The Committee shall review disclosures made to the Committee by
      the Funds' principal executive officer and principal financial officer


                                      A-4





      during their certification process for the Funds' periodic reports about
      any significant deficiencies in the design or operation of internal
      controls or material weaknesses therein and any fraud involving management
      or other employees who have a significant role in the Funds' internal
      controls.

            4. The Committee shall discuss with the External Auditors the
      matters required to be discussed by PCAOB AU Section 380 that arise during
      the External Auditor's review of the Funds' financial statements.

            5. The Committee shall review and discuss with management and the
      External Auditors (a) significant financial reporting issues and judgments
      made in connection with the preparation and presentation of the Funds'
      financial statements, including any significant changes in the Funds'
      selection or application of accounting principles and any major issues as
      to the adequacy of the Funds' internal controls and any special audit
      steps adopted in light of material control deficiencies, and (b) analyses
      prepared by Fund Management or the External Auditors setting forth
      significant financial reporting issues and judgments made in connection
      with the preparation of the financial statements, including analyses of
      the effects of alternative GAAP methods on the financial statements.

            6. The Committee shall review and discuss with management and the
      External Auditors the effect of regulatory and accounting initiatives on
      the Funds' financial statements.

            7. The Committee shall discuss with Fund Management the Funds' press
      releases regarding financial results and dividends, as well as financial
      information and earnings guidance provided to analysts and rating
      agencies. This discussion may be done generally, consisting of discussing
      the types of information to be disclosed and the types of presentations to
      be made. The Chairman of the Committee shall be authorized to have these
      discussions with Fund Management on behalf of the Committee, and shall
      report to the Committee regarding any such discussions.

            8. The Committee shall discuss with Fund Management the Funds' major
      financial risk exposures and the steps Fund Management has taken to
      monitor and control these exposures, including the Funds' risk assessment
      and risk management policies and guidelines. In fulfilling its obligations
      under this paragraph, the Committee may, as applicable, review in a
      general manner the processes other Board committees have in place with
      respect to risk assessment and risk management.

      C. With respect to serving as a Qualified Legal Compliance Committee:

            1. The Committee shall serve as the Funds' "qualified legal
      compliance committee" ("QLCC") within the meaning of the rules of the SEC
      and, in that regard, the following shall apply.

            (i)   The Committee shall receive and retain, in confidence, reports
                  of evidence of (a) a material violation of any federal or
                  state securities laws, (b) a material breach of a fiduciary
                  duty arising under any federal or state laws or (c) a similar
                  material violation of any federal or state law by a Fund or
                  any of its officers, trustees, employees or agents (a "Report
                  of Material Violation"). Reports of Material Violation may be
                  addressed to the Funds, attention W. Scott Jardine, at the


                                      A-5





                  address of the principal offices of the Funds, which currently
                  is 120 East Liberty Drive, Wheaton, Illinois 60187, who shall
                  forward the Report of Material Violation to the Committee.

            (ii)  Upon receipt of a Report of Material Violation, the Committee
                  shall (a) inform the Fund's chief legal officer and chief
                  executive officer (or the equivalents thereof) of the report
                  (unless the Committee determines it would be futile to do so),
                  and (b) determine whether an investigation is necessary.

            (iii) After considering the Report of a Material Violation, the
                  Committee shall do the following if it deems an investigation
                  necessary:

                  (1)   Notify the full Board;

                  (2)   Initiate an investigation, which may be conducted either
                        by the chief legal officer (or the equivalent thereof)
                        of the Fund or by outside attorneys; and

                  (3)   Retain such additional expert personnel as the Committee
                        deems necessary.

            (iv)  At the conclusion of any such investigation, the Committee
                  shall:

                  (4)   Recommend, by majority vote, that the Fund implement an
                        appropriate response to evidence of a material
                        violation; and

                  (5)   Inform the chief legal officer and the chief executive
                        officer (or the equivalents thereof) and the Board of
                        the results of any such investigation and the
                        appropriate remedial measures to be adopted.

            2. The Committee shall take all other action that it deems
      appropriate in the event that the Fund fails in any material respect to
      implement an appropriate response that the Committee, as the QLCC, has
      recommended the Fund take.

D.      Other Responsibilities:

            1. The Committee shall receive, retain and handle complaints
      received by the Funds regarding accounting, internal accounting controls,
      or auditing matters from any person, whether or not an employee of the
      Funds or Fund Management, and shall receive submissions of concerns
      regarding questionable accounting or auditing matters by employees of the
      Funds and Fund Management, administrator, principal underwriter, or any
      other provider of accounting-related services for the Funds. All such
      complaints and concerns shall be handled in accordance with the
      Committee's procedures for operating as a QLCC, outlined in III.C above.

            2. The Committee shall review, with fund counsel and independent
      legal counsel, any legal matters that could have significant impact on the
      Fund's financial statements or compliance policies and the findings of any
      examination by a regulatory agency as they relate to financial statement
      matters.


                                      A-6





            3. The Committee shall review and reassess the adequacy of this
      charter on an annual basis and provide a recommendation to the Board for
      approval of any proposed changes deemed necessary or advisable by the
      Committee.

            4. The Committee shall evaluate on an annual basis the performance
      of the Committee.

            5. The Committee shall review with the External Auditors and with
      Fund Management the adequacy and effectiveness of the Funds' internal
      accounting and financial controls.

            6. The Committee shall discuss with Fund Management and the External
      Auditors any correspondence with regulators or governmental agencies that
      raise material issues regarding the Funds' financial statements or
      accounting policies.

            7. The Committee shall obtain any reports from Fund Management with
      respect to the Funds' policies and procedures regarding compliance with
      applicable laws and regulations. The Committee shall perform other special
      reviews, investigations or oversight functions as requested by the Board
      and shall receive and review periodic or special reports issued on
      exposure/controls, irregularities and control failures related to the
      Funds.

            8. The Committee shall prepare any report of the Committee required
      to be included in a proxy statement for a Fund.

            9. The Committee may request any officer or employee of a Fund or
      Fund Management, independent legal counsel, fund counsel and the External
      Auditors to attend a meeting of the Committee or to meet with any members
      of, or consultants to, the Committee.

            10. The Committee shall maintain minutes of its meetings.

            11. The Committee shall perform such other functions and have such
      powers as may be necessary or appropriate in the efficient and lawful
      discharge of its responsibilities.

IV.     AUTHORITY TO ENGAGE ADVISERS

      The Committee may engage independent counsel and other advisers, as it
determines necessary to carry out its duties. The Funds' External Auditors shall
have unrestricted accessibility at any time to Committee members.

V.      FUNDING PROVISIONS

     A. The Committee shall determine the:

            1. Compensation to any independent registered public accounting firm
      engaged for the purpose of preparing or issuing an audit report or
      performing other audit, review or attest services for a Fund; and

            2. Compensation to any advisers employed by the Committee.


                                      A-7





      B. The expenses enumerated in this Article V and all necessary and
appropriate administrative expenses of the Committee shall be paid by the
applicable Fund or Fund Management.

VI.     MANAGEMENT AND EXTERNAL AUDITOR'S RESPONSIBILITIES

      A. Fund Management has the primary responsibility for establishing and
maintaining systems for accounting, reporting, disclosure and internal controls.
The External Auditors have the primary responsibility to plan and implement an
audit, with proper consideration given to the accounting, reporting and internal
controls. All External Auditors engaged for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for the
Funds shall report directly to the Committee. The External Auditors' ultimate
accountability is to the Board and the Committee, as representatives of
shareholders.

      B. While the Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Committee to plan or conduct audits or
to determine that the Funds' financial statements are complete and accurate and
are in accordance with GAAP, nor is it the duty of the Committee to assure
compliance with laws and regulations and/or the Funds' Code of Ethics.

      C. In discharging its responsibilities, the Committee and its members are
entitled to rely on information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or presented by: (1)
one or more officers of a Fund; (2) legal counsel, public accountants, or other
persons as to matters the Committee member reasonably believes are within the
person's professional or expert competence; or (3) a Board committee of which
the Committee member is not a member.

Amended:        June 16, 2010




                                      A-8







FORM OF PROXY CARD
------------------



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      where step-by-step instructions will prompt you through enrollment.
--------------------------------------------------------------------------------




                              FOLD AND DETACH HERE

________________________________________________________________________________


                                     PROXY

                                 [ FUND NAME ]

                Annual Meeting of Shareholders - April 18, 2011


PROXY SOLICITED BY THE BOARD OF TRUSTEES

The undersigned holder of shares of the [ FUND NAME ] (the "Fund"), a
Massachusetts business trust, hereby appoints W. Scott Jardine, Mark R. Bradley,
Kristi A. Maher, James M. Dykas and Erin E. Chapman as attorneys and proxies for
the undersigned, with full powers of substitution and revocation, to represent
the undersigned and to vote on behalf of the undersigned all shares of the Fund
that the undersigned is entitled to vote at the Annual Meeting of Shareholders
of the Fund (the "Meeting") to be held at the offices of First Trust Advisors
L.P., 120 East Liberty Drive, Suite 400, Wheaton, Illinois 60187, at 4:00 p.m.
Central time on the date indicated above, and any adjournments or postponements
thereof. The undersigned hereby acknowledges receipt of the Notice of Joint
Annual Meetings of Shareholders and Joint Proxy Statement dated March 23, 2011,
and hereby instructs said attorneys and proxies to vote said shares as indicated
hereon. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting and any adjournments or
postponements thereof (including, but not limited to, any questions as to
adjournments or postponements of the Meeting). A majority of the proxies present
and acting at the Meeting in person or by substitute (or, if only one shall be
so present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any proxy
previously given. This proxy, if properly executed, will be voted in the manner
directed by the undersigned shareholder.


IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
NOMINEE SET FORTH. PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE.

           ADDRESS CHANGE/COMMENTS
(Mark the corresponding box on the reverse side)
------------------------------------------------

                                                 BNY MELLON SHAREOWNER SERVICES
                                                 P.O. BOX 3550
                                                 SOUTH HACKENSACK, NJ 07606-9250

------------------------------------------------


                          RESTRICTED AREA - SCAN LINE

                                                                          WO#
(Continued and to be marked, dated and signed, on the other side)       95744-1


                        RESTRICTED AREA - SIGNATURE LINE





      [ FUND NAME ]





  WO#
 95744-1                       FOLD AND DETACH HERE

________________________________________________________________________________

                                                   Please mark your votes as
                                                   indicated in this example [X]




                           ANNUAL MEETING PROXY CARD

 THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
               VOTED "FOR" THE ELECTION OF THE NOMINEE SET FORTH.

Election of Class I Trustee - The Board of Trustees
recommends that you vote FOR the election of the
Nominee for a three-year term.

     NOMINEE                            FOR       WITHHOLD

     01 Robert F. Keith                 [ ]         [ ]
        (Class I)








                                                       Mark Here for
                RESTRICTED AREA - SCAN LINE            Address Change
                                                       or Comments
                                                       SEE REVERSE     [ ]




NOTE: Please sign exactly as your name appears on this Proxy. If joint owners,
EITHER may sign this proxy. When signing as attorney, executor, administrator,
trustee, guardian or corporate officer, please give full title.



Signature _________________ Signature _________________ Date___________________