ThZeal - The Zeal

First Trust Enhanced Equity Income Fund
(Exact name of registrant as specified in charter)

120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Address of principal executive offices) (Zip code)

W. Scott Jardine, Esq.
First Trust Portfolios L.P.
120 East Liberty Drive, Suite 400
Wheaton, IL 60187
(Name and address of agent for service)

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

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Caution Regarding Forward-Looking Statements

This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. (“First Trust” or the “Advisor”) and/or Chartwell Investment Partners, LLC (“Chartwell” or the “Sub-Advisor”) and their respective representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as “anticipate,” “estimate,” “intend,” “expect,” “believe,” “plan,” “may,” “should,” “would” or other words that convey uncertainty of future events or outcomes.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of First Trust Enhanced Equity Income Fund (the “Fund”) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. When evaluating the information included in this report, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of the Advisor and/or Sub-Advisor and their respective representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.

Managed Distribution Policy

The Board of Trustees of the Fund has approved a managed distribution policy for the Fund (the “Plan”) in reliance on exemptive relief received from the Securities and Exchange Commission which permits the Fund to make periodic distributions of long-term capital gains more frequently than otherwise permitted with respect to its common shares subject to certain conditions. Under the Plan, the Fund currently intends to pay a quarterly distribution in the amount of $0.315 per share. A portion of this quarterly distribution may include realized capital gains. This may result in a reduction of the long-term capital gain distribution necessary at year end by distributing realized capital gains throughout the year. The annual distribution rate is independent of the Fund’s performance during any particular period but is expected to correlate with the Fund’s performance over time. Accordingly, you should not draw any conclusions about the Fund’s investment performance from the amount of any distribution or from the terms of the Plan. The Board of Trustees may amend or terminate the Plan at any time without prior notice to shareholders.

Performance and Risk Disclosure

There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund’s shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund. See “Principal Risks” in the Additional Information section of this report for a discussion of certain other risks of investing in the Fund.

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit www.ftportfolios.com or speak with your financial advisor. Investment returns, net asset value and common share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost.

The Advisor may also periodically provide additional information on Fund performance on the Fund’s web page at www.ftportfolios.com.

How to Read This Report

This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund’s performance and investment approach.

By reading the portfolio commentary by the portfolio management team of the Fund, you may obtain an understanding of how the market environment affected the Fund’s performance. The statistical information that follows may help you understand the Fund’s performance compared to that of relevant market benchmarks.

It is important to keep in mind that the opinions expressed by personnel of First Trust and Chartwell are just that: informed opinions. They should not be considered to be promises or advice. The opinions, like the statistics, cover the period through the date on the cover of this report. The material risks of investing in the Fund are spelled out in the prospectus, the statement of additional information, this report and other Fund regulatory filings.

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Shareholder Letter

First Trust Enhanced Equity Income Fund (FFA)

Semi-Annual Letter from the Chairman and CEO

June 30, 2021

Dear Shareholders,

First Trust is pleased to provide you with the semi-annual report for the First Trust Enhanced Equity Income Fund (the “Fund”), which contains detailed information about the Fund for the six months ended June 30, 2021.

Since December of 2008, the Federal Reserve (the “Fed”) has largely maintained an extremely accommodating stance on monetary policy. In other words, it has kept interest rates at very low levels, and has done so on purpose. From December 2008 through June 2021 (a period that captured a portion of the financial crisis of 2007-2008 and the entire coronavirus (“COVID-19”) pandemic), the Federal Funds target rate (upper bound) stood at 0.25% for approximately eight years and three months of that 12.5-year period. That is an aggressive posture to hold for such a long duration. For comparative purposes, the Federal Funds target rate averaged 4.50% for the 20-year period ended December 31, 2008. All along, the Fed has been signaling to savers, investors, and businesses alike that it wanted them to assume more risk. The Fed did not want money just sitting idle on the sidelines. It wanted the money to be put to work, so to speak, in such a way that it would stimulate U.S. economic growth and stave off any deflationary pressures potentially looming. It has been a tough road to hoe, as I’m sure those investors who follow the economy closely have noticed.

Why am I taking this trip down memory lane? It is because the Federal Funds target rate currently stands at 0.25%, just like it did back in December 2008. We can cite the severe hit to many parts of the U.S. economy from the COVID-19 pandemic, such as the leisure and travel industry, as to why the target rate has returned to such a low level. For all intents and purposes, until the economy reaches full employment (4% unemployment rate) and a 2% plus inflation rate for a sustained period, the Fed has stated that it intends to maintain the status quo. Since inflation has risen notably in recent months, the Fed is now forecasting a couple of rate hikes in 2023. At a minimum, that is still 18 months away. Keep in mind, however, the Fed reserves the right to change its posture at any time.

As previously noted, the Fed has been encouraging savers and investors to assume more risk for over a decade. One of the best barometers of risk in the securities markets is the default rate on speculative-grade (below investment-grade) debt, in my opinion. High yield corporate bonds behave like a hybrid security between other fixed-income securities and stocks. They share behavioral characteristics of both, and they are economically sensitive. Moody’s reported that its global speculative-grade default rate stood at 4.0% in June 2021, according to its own release. Moody’s puts the historical average default rate at 4.2%. Its baseline scenario sees the default rate declining to 1.7% by December 2021. Moody’s recorded 28 defaults over the first six months of 2021, down from 114 defaults over the same period a year ago. I believe that investors should take some comfort in knowing that defaults are trending lower, not higher, in the current economic climate.

Companies have heeded the Fed’s call for risk-taking, as measured by this year’s robust global mergers and acquisitions (“M&A”) activity. Global M&A activity set a record high in the first half of 2021, with announced deals valued at $2.8 trillion, according to data from Refinitiv. U.S. M&A activity also reached a record high, coming in at $1.3 trillion for the same period, or around 46% of the global total. M&A specialists expect deal-making to remain robust for the rest of 2021, due to low borrowing costs and stronger economic growth.

In closing, we welcome the reopening of the U.S. economy and, hopefully, the global economy shortly thereafter. We encourage investors to stay the course even though the markets could experience some turbulence in the months ahead. The potential for additional volatility represents an opportunity for investors to check their asset allocation levels to determine if they are suitable for an extended inflationary climate.

Thank you for giving First Trust the opportunity to play a role in your financial future. We value our relationship with you and will report on the Fund again in six months.

Sincerely,

James A. Bowen

Chairman of the Board of Trustees

Chief Executive Officer of First Trust Advisors L.P.

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First Trust Enhanced Equity Income Fund (FFA)

“AT A GLANCE”

As of June 30, 2021 (Unaudited)

Fund Statistics
Symbol on New York Stock Exchange	FFA
Common Share Price	$20.32
Common Share Net Asset Value (“NAV”)	$20.41
Premium (Discount) to NAV	(0.44)%
Net Assets Applicable to Common Shares	$407,831,501
Current Quarterly Distribution per Common Share⁽¹⁾	$0.3150
Current Annualized Distribution per Common Share	$1.2600
Current Distribution Rate on Common Share Price⁽²⁾	6.20%
Current Distribution Rate on NAV⁽²⁾	6.17%

Common Share Price & NAV (weekly closing price)

Performance
			Average Annual Total Returns
	6 Months Ended 6/30/21	1 Year Ended 6/30/21	5 Years Ended 6/30/21	10 Years Ended 6/30/21	Inception (8/26/04) to 6/30/21
Fund Performance⁽³⁾
NAV	15.22%	41.77%	14.75%	12.04%	8.82%
Market Value	19.07%	49.39%	17.40%	12.97%	8.50%
Index Performance
S&P 500^® Index	15.25%	40.79%	17.65%	14.84%	10.63%
CBOE S&P 500 BuyWrite Monthly Index	11.10%	27.28%	7.05%	7.01%	5.00%

⁽¹⁾	Most recent distribution paid or declared through June 30, 2021. Subject to change in the future.

⁽²⁾	Distribution rates are calculated by annualizing the most recent distribution paid or declared through the report date and then dividing by Common Share Price or NAV, as applicable, as of June 30, 2021. Subject to change in the future.

⁽³⁾

Total return is based on the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.

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Portfolio Commentary

First Trust Enhanced Equity Income Fund (FFA)

Semi-Annual Report

June 30, 2021 (Unaudited)

Advisor

First Trust Advisors L.P. (“First Trust” or the “Advisor”) is the investment advisor to the First Trust Enhanced Equity Income Fund (the “Fund”). First Trust is responsible for the ongoing monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund.

Sub-Advisor

Chartwell Investment Partners, LLC (“Chartwell”), a wholly-owned subsidiary of TriState Capital Holdings, Inc., is a research-based equity and fixed-income manager with a disciplined, team-oriented investment process. Chartwell is the portfolio manager of the Fund.

Portfolio Management Team

Douglas W. Kugler, CFA

Principal, Senior Portfolio Manager

Peter M. Schofield, CFA

Principal, Senior Portfolio Manager

Commentary

First Trust Enhanced Equity Income Fund

The Fund’s investment objective is to provide a high level of current income and gains and, to a lesser extent, capital appreciation. The Fund pursues its investment objective by investing in a diversified portfolio of equity securities. Under normal market conditions, the Fund pursues an integrated investment strategy in which the Fund invests substantially all of its Managed Assets in a diversified portfolio of common stocks of U.S. corporations and U.S. dollar-denominated equity securities of non-U.S. issuers in each case that are traded on U.S. securities exchanges. In addition, on an ongoing and consistent basis, the Fund writes (sells) covered call options on a portion of the Fund’s Managed Assets. “Managed Assets” means the total value of the Fund minus the sum of the Fund’s liabilities, including the value of call options written (sold). There can be no assurance that the Fund’s investment objective will be achieved. The Fund may not be appropriate for all investors.

Market Recap

While the sizeable impacts of the coronavirus (“COVID-19”) pandemic on our lives, the economy, and the markets have diminished a great deal from their peak during 2020, COVID-19 is still having an out-sized effect on the lives of the people it has touched directly, and its after-effects will likely continue to be felt by individuals and the world, collectively, for a long time in the future. For the six-month period ended June 30, 2021, the S&P 500^® Index (the “Index”) rose 15.25% (inclusive of dividends, 14.41% price-only), closing at an all-time high which marked the 34th all-time high the Index attained during the first six months of the year. After a small decline in January 2021, the Index registered five consecutive months of increases with the first and second quarters of 2021 up 6.17% and 8.55%, respectively. With those quarterly increases, the Index has risen by greater than 5% for five successive quarters – a feat that had only occurred once since 1945; the other time being 1954. This has been quite the reversal from the depths of the pandemic sell-off. On June 30, 2021, the Index closed a little over 92% higher than its pandemic low in March of 2020. The rally off the lows began with fiscal and monetary authorities providing extraordinary support for the economy, the eventual creation and roll-out of effective vaccinations, and the initial ‘re-openings’ of states from near-total lockdowns that had been implemented. In 2021, vaccination levels climbed, more pandemic restrictions were removed, some of the money from stimulus packages passed in late 2020 started flowing into the economy, the Federal Reserve (the “Fed”) continued its accommodative monetary stance, and then an additional $1.9 trillion stimulus package was signed into law. A combination of these items offset some continuing weakness in employment and allowed the U.S. economy to grow 6.3% in the first quarter of 2021 with an initial GDP growth estimate of 6.5% for the second quarter. Corporate earnings certainly rebounded along with the growth in gross domestic product. The Index’s composite earnings for the first quarter of 2021 far exceeded any previous quarter with expectations for full-year 2021 earnings to be as much as 20% above 2019’s record earnings.

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Portfolio Commentary (Continued)

First Trust Enhanced Equity Income Fund (FFA)

Semi-Annual Report

June 30, 2021 (Unaudited)

Performance Summary

For the six-month period ended June 30, 2021, the Fund’s net asset value (“NAV”) and market value total returns¹ were 15.22% and 19.07%, respectively, on a total return basis. The Index returned 15.25% on a total return basis over the same period. The covered call options program had a slightly negative influence on the Fund’s return for the same period, which we are pleased with, given the significantly positive market move. Excluding that negative influence, the equity-only portion of the portfolio slightly outperformed the Index during the same period, with the aid of two small tailwinds. As we’ve written about in the past, our approach in managing the Fund is to create a portfolio with a yield that is higher than that of the market while also having an overall valuation that is lower than that of the market. This causes the portfolio to have a slight tilt towards the value side of the value/growth continuum. For the first time in recent memory, this ‘tilt’ was beneficial to the portfolio as the total return of the Russell 1000^® Value Index exceeded the total return of the Russell 1000^® Growth Index by approximately four percentage points during the six-month period. Another slight benefit was that higher yielding stocks outperformed lower yielding stocks as shown by a Bank of America Merrill Lynch study. This study segmented the Index into those stocks with the highest yields and those with the lowest yields and compared their relative performance. For the six-month period ended June 30, 2021, the 200 stocks in the Index with the highest yields returned an average of 15.12% while the 200 stocks in the Index with the lowest yields returned 13.97%. Specifically, within the equity portfolio, the largest drag on relative performance came from stock selection in the Financials sector. Examples include holdings in Chubb, Ltd. (+4.26%), and not owning stocks such as Goldman Sachs (+44.95%), Wells Fargo & Co. (+50.85%) and Bank of America Co. (+37.27%). An additional detractor from relative performance was stock selection within the Industrials sector. Portfolio holdings such as CSX Corp. (+6.67%), Lockheed Martin Corporation (+8.15%), and Honeywell International Inc. (+4.03%) did not keep up with the Index’s rise and, therefore, hurt relative performance. On the positive side, relative performance was helped by stock selection in the Consumer Discretionary sector with holdings such as Foot Locker, Inc. (+53.40%) and General Motors Co. (+42.10%) helping, while not owning Amazon.com Inc. (+5.63%) and Tesla Inc. (-3.68%) also benefitted relative performance. Another significant aid to relative performance was stock selection in the Information Technology sector with stocks like PayPal Holdings, Inc. (+24.46%), Microsoft Inc. (+22.36%) and NVDIA Corp. (+53.30%) strongly outperforming the Index.

Market Outlook

We wouldn’t characterize the state of affairs at the time of this writing as being anywhere near back to normal, but the situation has certainly improved a great deal since our last communication, in our opinion. As things continue to return to pre-pandemic life, the stock market’s reaction to that normalization most likely depends on the path that is taken to get there and how long the journey takes, in our view. Between now and then, we believe there are many potential issues that could make that journey more difficult, but we continue to believe that human ingenuity and spirit will win in the end.

With the Index closing the six-month period ended June 30, 2021 at all-time highs, we continue to think the market is looking for strong earnings growth beyond the stunningly high growth we have seen the last few quarters. The ability of companies to attain this expected strong earnings growth is partially based on the continued recovery in the economy. As mentioned above, there are many potential issues that could interfere with the economic growth and recovery that is expected and, if several of them come to fruition, the market could stumble. Many of these issues are being discussed by market participants currently, but as we learned with COVID-19, something totally unexpected can come along as well. In no particular order some of these issues are: the possibility of higher corporate and individual taxes; the impact of fiscal stimulus dissipating; the timing of when the Fed begins to ‘taper’ their asset purchases and the timing of when they may actually begin to raise the Federal Funds target rate; the increasing spread of COVID-19 variants, such as the Delta variant, both domestically and globally; the possibility of increasing government regulations on certain technology companies and other sectors; whether or not recent increased inflationary readings are ‘transitory’; and the continued shortage of microchips which has reduced the production of automobiles and other goods.

While the list of possible issues is long, our belief continues to be that human ingenuity, perseverance, and the strength of the worldwide healthcare system will allow us to continue to progress toward something very close to the ‘normal’ that we had before the pandemic struck. While we have no idea when that point will be reached, we think that the time is continuing to draw closer. In the meantime, the hard work of getting our lives and the economy back to normal continues. Should this process continue on a solid path, in our opinion, the market’s expectations should be met and that would provide a solid backdrop for the market and the Fund going forward. Should the re-opening stumble or the market’s expectations not be met, we would anticipate a bout of increased volatility which could cause the Index to decline, and possibly significantly. However, no matter the outcome, we will continue to manage the Fund with the objective of providing a high level of current income and gains and, to a lesser extent, capital appreciation over the market cycle.

Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per Common Share for NAV returns and changes in Common Share price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.

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First Trust Enhanced Equity Income Fund (FFA)

Portfolio of Investments

June 30, 2021 (Unaudited)

Shares	Description	Value
COMMON STOCKS – 94.3%
	Aerospace & Defense – 1.8%
14,000	Boeing (The) Co. (a) (b)	$3,353,840
11,000	Lockheed Martin Corp. (a)	4,161,850
		7,515,690
	Automobiles – 1.1%
75,000	General Motors Co. (a) (b)	4,437,750
	Banks – 6.4%
350,000	Huntington Bancshares, Inc.	4,994,500
100,000	JPMorgan Chase & Co.	15,554,000
100,000	Truist Financial Corp.	5,550,000
		26,098,500
	Beverages – 2.5%
107,000	Coca-Cola (The) Co. (a)	5,789,770
18,500	Constellation Brands, Inc., Class A (a)	4,326,965
		10,116,735
	Biotechnology – 2.5%
55,000	AbbVie, Inc. (a)	6,195,200
45,000	Horizon Therapeutics PLC (a) (b)	4,213,800
		10,409,000
	Capital Markets – 1.2%
52,500	Morgan Stanley (a)	4,813,725
	Chemicals – 1.1%
15,000	Linde PLC (a)	4,336,500
	Communications Equipment – 1.5%
117,500	Cisco Systems, Inc. (a)	6,227,500
	Diversified Telecommunication Services – 3.0%
215,000	AT&T, Inc. (a)	6,187,700
110,000	Verizon Communications, Inc. (a)	6,163,300
		12,351,000
	Electric Utilities – 2.0%
100,000	Exelon Corp. (a)	4,431,000
135,000	PPL Corp.	3,775,950
		8,206,950
	Electronic Equipment, Instruments & Components – 0.8%
22,500	Keysight Technologies, Inc. (b)	3,474,225
	Entertainment – 4.7%
79,000	Activision Blizzard, Inc. (a)	7,539,760
90,000	Cinemark Holdings, Inc. (a) (b)	1,975,500
157,500	Lions Gate Entertainment Corp., Class B (a) (b)	2,882,250
38,000	Walt Disney (The) Co. (a) (b)	6,679,260
		19,076,770
	Food & Staples Retailing – 1.7%
17,500	Costco Wholesale Corp. (a)	6,924,225
	Food Products – 0.7%
45,000	Mondelez International, Inc., Class A (a)	2,809,800

See Notes to Financial Statements

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First Trust Enhanced Equity Income Fund (FFA)

Portfolio of Investments (Continued)

June 30, 2021 (Unaudited)

Shares	Description	Value
COMMON STOCKS (Continued)
	Health Care Equipment & Supplies – 1.9%
28,200	Danaher Corp. (a)	$7,567,752
	Health Care Providers & Services – 2.6%
27,000	UnitedHealth Group, Inc. (a)	10,811,880
	Hotels, Restaurants & Leisure – 2.8%
85,000	Carnival Corp. (a) (b)	2,240,600
70,000	Las Vegas Sands Corp. (a) (b)	3,688,300
52,000	Restaurant Brands International, Inc. (a)	3,350,880
47,500	Six Flags Entertainment Corp. (a) (b)	2,055,800
		11,335,580
	Industrial Conglomerates – 1.6%
29,000	Honeywell International, Inc. (a)	6,361,150
	Insurance – 2.6%
35,000	Arthur J. Gallagher & Co.	4,902,800
37,000	Chubb, Ltd. (a)	5,880,780
		10,783,580
	Interactive Media & Services – 4.0%
4,500	Alphabet, Inc., Class C (a) (b)	11,278,440
14,000	Facebook, Inc., Class A (a) (b)	4,867,940
		16,146,380
	Internet & Direct Marketing Retail – 1.0%
17,500	Alibaba Group Holding Ltd., ADR (a) (b)	3,968,650
	IT Services – 4.3%
22,500	Mastercard, Inc., Class A	8,214,525
31,500	PayPal Holdings, Inc. (b)	9,181,620
		17,396,145
	Life Sciences Tools & Services – 1.9%
15,300	Thermo Fisher Scientific, Inc. (a)	7,718,391
	Machinery – 2.3%
22,000	Caterpillar, Inc. (a)	4,787,860
22,000	Stanley Black & Decker, Inc. (a)	4,509,780
		9,297,640
	Multiline Retail – 0.8%
15,500	Dollar General Corp. (a)	3,354,045
	Oil, Gas & Consumable Fuels – 2.3%
50,000	Hess Corp. (a)	4,366,000
58,500	Occidental Petroleum Corp. (a)	1,829,295
19,000	Pioneer Natural Resources Co. (a)	3,087,880
		9,283,175
	Pharmaceuticals – 3.3%
100,000	Bristol-Myers Squibb Co. (a)	6,682,000
37,500	Zoetis, Inc.	6,988,500
		13,670,500
	Road & Rail – 1.0%
126,000	CSX Corp. (a)	4,042,080

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See Notes to Financial Statements

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First Trust Enhanced Equity Income Fund (FFA)

Portfolio of Investments (Continued)

June 30, 2021 (Unaudited)

Shares	Description	Value
COMMON STOCKS (Continued)
	Semiconductors & Semiconductor Equipment – 5.5%
137,000	Intel Corp. (a)	$7,691,180
56,500	Micron Technology, Inc. (a) (b)	4,801,370
12,500	NVIDIA Corp.	10,001,250
		22,493,800
	Software – 11.3%
14,000	Adobe, Inc. (a) (b)	8,198,960
123,000	Microsoft Corp. (a)	33,320,700
16,000	Synopsys, Inc. (a) (b)	4,412,640
		45,932,300
	Specialty Retail – 4.5%
17,000	Burlington Stores, Inc. (a) (b)	5,473,830
99,000	Foot Locker, Inc. (a)	6,101,370
34,000	Lowe’s Cos., Inc. (a)	6,594,980
		18,170,180
	Technology Hardware, Storage & Peripherals – 6.8%
204,000	Apple, Inc. (a)	27,939,840
	Textiles, Apparel & Luxury Goods – 1.9%
50,000	NIKE, Inc., Class B	7,724,500
	Water Utilities – 0.9%
24,000	American Water Works Co., Inc. (a)	3,699,120
	Total Common Stocks	384,495,058
	(Cost $243,926,307)
REAL ESTATE INVESTMENT TRUSTS – 3.2%
	Equity Real Estate Investment Trusts – 3.2%
34,000	Crown Castle International Corp. (a)	6,633,400
72,000	Gaming and Leisure Properties, Inc.	3,335,760
120,000	Healthcare Trust of America, Inc., Class A (a)	3,204,000
	Total Real Estate Investment Trusts	13,173,160
	(Cost $10,055,845)
COMMON STOCKS – BUSINESS DEVELOPMENT COMPANIES - 1.1%
	Capital Markets – 1.1%
215,000	Ares Capital Corp. (a)	4,211,850
	(Cost $3,728,891)
WARRANTS – 0.0%
	Oil, Gas & Consumable Fuels – 0.0%
7,312	Occidental Petroleum Corp., expiring 08/03/2027 (b)	101,710
	(Cost $36,194)

Shares	Description	Stated Rate	Stated Maturity	Value
$100 PAR PREFERRED SECURITIES – 1.1%
	Health Care Equipment & Supplies – 0.6%
22,500	Boston Scientific Corp., Series A	5.50%	06/01/23	2,611,350

See Notes to Financial Statements

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First Trust Enhanced Equity Income Fund (FFA)

Portfolio of Investments (Continued)

June 30, 2021 (Unaudited)

Shares	Description	Stated Rate	Stated Maturity	Value
$100 PAR PREFERRED SECURITIES (Continued)
	Media – 0.5%
27,000	ViacomCBS, Inc., Series A	5.75%	04/01/24	$2,001,510
	Total $100 Par Preferred Securities			4,612,860
	(Cost $4,323,308)

	Total Investments – 99.7%		406,594,638
	(Cost $262,070,545) (c)

Number of Contracts	Description	Notional Amount	Exercise Price	Expiration Date	Value
CALL OPTIONS WRITTEN – (0.2)%
(30)	Adobe, Inc.	$(1,756,920)	$570.00	Jul 2021	(61,140)
(200)	Carnival Corp.	(527,200)	32.50	Jul 2021	(2,000)
(200)	Cinemark Holdings, Inc.	(439,000)	25.00	Jul 2021	(4,400)
(40)	Constellation Brands, Inc., Class A	(935,560)	237.50	Jul 2021	(9,600)
(200)	General Motors Co.	(1,183,400)	62.50	Jul 2021	(7,600)
(125)	Hess Corp.	(1,091,500)	95.00	Jul 2021	(6,250)
(100)	Horizon Therapeutics PLC	(936,400)	100.00	Jul 2021	(8,000)
(50)	Keysight Technologies, Inc.	(772,050)	150.00	Jul 2021	(29,150)
(250)	Lions Gate Entertainment Corp., Class B	(457,500)	22.00	Sep 2021	(11,500)
(30)	NVIDIA Corp.	(2,400,300)	800.00	Jul 2021	(72,000)
(175)	Occidental Petroleum Corp.	(547,225)	33.00	Jul 2021	(12,425)
(150)	Occidental Petroleum Corp.	(469,050)	36.00	Jul 2021	(3,300)
(100)	S&P 500^® Index (d)	(42,975,000)	4,300.00	Jul 2021	(332,000)
(250)	S&P 500^® Index (d)	(107,437,500)	4,350.00	Jul 2021	(265,000)
(200)	S&P 500^® Index (d)	(85,950,000)	4,375.00	Jul 2021	(81,000)
(150)	Six Flags Entertainment Corp.	(649,200)	50.00	Jul 2021	(2,550)
	Total Call Options Written				(907,915)
	(Premiums received $660,093)

	Net Other Assets and Liabilities – 0.5%		2,144,778
	Net Assets – 100.0%		$407,831,501


(a)	All or a portion of these securities are pledged to cover index call options written.
(b)	Non-income producing security.
(c)	Aggregate cost for financial reporting purposes approximates the aggregate cost for federal income tax purposes. As of June 30, 2021, the aggregate gross unrealized appreciation for all investments in which there was an excess of value over tax cost was $154,161,256 and the aggregate gross unrealized depreciation for all investments in which there was an excess of tax cost over value was $9,884,985. The net unrealized appreciation was $144,276,271. The unrealized amounts presented are inclusive of derivative contracts.
(d)	Call options on securities indices were written on a portion of the common stock positions that were not used to cover call options written on individual equity securities held in the Fund’s portfolio.

ADR	American Depositary Receipt

Page 10

See Notes to Financial Statements

Table of Contents

First Trust Enhanced Equity Income Fund (FFA)

Financial Highlights

For a Common Share outstanding throughout each period

	Six Months Ended 6/30/2021 (Unaudited)	Year Ended December 31,
	Six Months Ended 6/30/2021 (Unaudited)	2020	2019	2018	2017	2016
Net asset value, beginning of period	$ 18.29	$ 16.92	$ 13.89	$ 16.51	$ 15.23	$ 14.99
Income from investment operations:
Net investment income (loss)	0.04	0.12	0.17	0.19	0.20	0.19
Net realized and unrealized gain (loss)	2.71 (a)	2.39	4.00	(1.67)	2.19	1.01
Total from investment operations	2.75	2.51	4.17	(1.48)	2.39	1.20
Distributions paid to shareholders from:
Net investment income	(0.63)	(0.08)	(0.14)	(0.19)	(0.23)	(0.18)
Net realized gain	—	(1.06)	(1.00)	(0.95)	(0.88)	(0.48)
Return of capital	—	—	—	—	—	(0.30)
Total distributions paid to Common Shareholders	(0.63)	(1.14)	(1.14)	(1.14)	(1.11)	(0.96)
Net asset value, end of period	$20.41	$18.29	$16.92	$13.89	$16.51	$15.23
Market value, end of period	$20.32	$17.62	$17.25	$12.92	$16.19	$13.51
Total return based on net asset value (b)	15.22% (a)	16.84%	30.78%	(9.19)%	16.53% (c)	9.18%
Total return based on market value (b)	19.07%	10.41%	43.34%	(13.86)%	28.82%	9.98%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000’s)	$ 407,832	$ 365,432	$ 338,198	$ 277,443	$ 329,835	$ 304,114
Ratio of total expenses to average net assets	1.11% (d)	1.15%	1.14%	1.14%	1.14%	1.13%
Ratio of net investment income (loss) to average net assets	0.41% (d)	0.77%	1.08%	1.13%	1.21%	1.27%
Portfolio turnover rate	8%	20%	37%	45%	36%	32%

(a)	The Fund received a reimbursement from Chartwell in the amount of $52,217, which represents less than $0.01 per share. Since the Fund was reimbursed, there was no effect on the Fund’s total return.
(b)	Total return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan, and changes in net asset value per share for net asset value returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.
(c)	The Fund received a reimbursement from Chartwell in the amount of $17,250, which represents less than $0.01 per share. Since the Fund was reimbursed, there was no effect on the Fund’s total return.
(d)	Annualized.

See Notes to Financial Statements

Page 15

Table of Contents

Notes to Financial Statements

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

1. Organization

First Trust Enhanced Equity Income Fund (the “Fund”) is a diversified, closed-end management investment company organized as a Massachusetts business trust on May 20, 2004, and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund trades under the ticker symbol “FFA” on the New York Stock Exchange (“NYSE”).

The Fund’s investment objective is to provide a high level of current income and gains and, to a lesser extent, capital appreciation. The Fund pursues its investment objective by investing in a diversified portfolio of equity securities. Under normal market conditions, the Fund pursues an integrated investment strategy in which the Fund invests substantially all of its Managed Assets in a diversified portfolio of common stocks of U.S. corporations and U.S. dollar-denominated equity securities of non-U.S. issuers, in each case that are traded on U.S. securities exchanges. In addition, on an ongoing and consistent basis, the Fund writes (sells) covered call options on a portion of the Fund’s Managed Assets. “Managed Assets” means the total asset value of the Fund minus the sum of the Fund’s liabilities, including the value of call options written (sold). There can be no assurance that the Fund will achieve its investment objective. The Fund may not be appropriate for all investors.

2. Managed Distribution Policy

The Board of Trustees of the Fund has approved a managed distribution policy for the Fund (the “Plan”) in reliance on exemptive relief received from the SEC that permits the Fund to make periodic distributions of long-term capital gains more frequently than otherwise permitted with respect to its common shares subject to certain conditions. Under the Plan, the Fund currently intends to pay a quarterly distribution in the amount of $0.315 per share. A portion of this quarterly distribution may include realized capital gains. This may result in a reduction of the long-term capital gain distribution necessary at year end by distributing realized capital gains throughout the year. The annual distribution rate is independent of the Fund’s performance during any particular period but is expected to correlate with the Fund’s performance over time. Accordingly, you should not draw any conclusions about the Fund’s investment performance from the amount of any distribution or from the terms of the Plan. The Board of Trustees may amend or terminate the Plan at any time without prior notice to shareholders.

3. Significant Accounting Policies

The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, “Financial Services-Investment Companies.” The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

A. Portfolio Valuation

The net asset value (“NAV”) of the Common Shares of the Fund is determined daily as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. The Fund’s NAV per Common Share is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses, the value of call options written (sold) and dividends declared but unpaid) by the total number of Common Shares outstanding.

The Fund’s investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Pricing Committee of the Fund’s investment advisor, First Trust Advisors L.P. (“First Trust” or the “Advisor”), in accordance with valuation procedures adopted by the Fund’s Board of Trustees, and in accordance with provisions of the 1940 Act. Investments valued by the Advisor’s Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. The Fund’s investments are valued as follows:

Common stocks, real estate investment trusts (“REITs”), exchange-traded funds, convertible preferred stocks, and other equity securities listed on any national or foreign exchange (excluding The Nasdaq Stock Market LLC (“Nasdaq”) and the London Stock Exchange Alternative Investment Market (“AIM”)) are valued at the last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price. Securities traded on more than one securities exchange are valued at the last sale price or official closing price, as applicable, at the close of the securities exchange representing the principal market for such securities.

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Notes to Financial Statements (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

Securities traded in an over-the-counter market are fair valued at the mean of their most recent bid and asked price, if available, and otherwise at their closing bid price.

Exchange-traded options contracts are valued at the closing price in the market where such contracts are principally traded. If no closing price is available, exchange-traded options contracts are fair valued at the mean of their most recent bid and asked price, if available, and otherwise at their closing bid price. Over-the-counter options contracts are fair valued at the mean of their most recent bid and asked price, if available, and otherwise at their closing bid price.

Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Fund’s Board of Trustees or its delegate, the Advisor’s Pricing Committee, at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a third-party pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market or fair value price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of the Fund’s NAV or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the third-party pricing service, does not reflect the security’s fair value. As a general principle, the current fair value of a security would appear to be the amount which the owner might reasonably expect to receive for the security upon its current sale. When fair value prices are used, generally they will differ from market quotations or official closing prices on the applicable exchanges. A variety of factors may be considered in determining the fair value of such securities, including, but not limited to, the following:

1)	the type of security;
2)	the size of the holding;
3)	the initial cost of the security;
4)	transactions in comparable securities;
5)	price quotes from dealers and/or third-party pricing services;
6)	relationships among various securities;
7)	information obtained by contacting the issuer, analysts, or the appropriate stock exchange;
8)	an analysis of the issuer’s financial statements; and
9)	the existence of merger proposals or tender offers that might affect the value of the security.

The Fund is subject to fair value accounting standards that define fair value, establish the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation as of the measurement date. The three levels of the fair value hierarchy are as follows:

•	Level 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
•	Level 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following:

o	Quoted prices for similar investments in active markets.
o	Quoted prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly.
o	Inputs other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates).
o	Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•	Level 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the investment.

The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value the Fund’s investments as of June 30, 2021, is included with the Fund’s Portfolio of Investments.

B. Option Contracts

The Fund is subject to equity price risk in the normal course of pursuing its investment objective and may write (sell) options to hedge against changes in the value of equities. Also, the Fund seeks to generate additional income, in the form of premiums received, from

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Notes to Financial Statements (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

writing (selling) the options. The Fund may write (sell) covered call options (“options”) on all or a portion of the equity securities held in the Fund’s portfolio and on securities indices as determined to be appropriate by Chartwell Investment Partners, LLC (“Chartwell” or the “Sub-Advisor”), consistent with the Fund’s investment objective. The number of options the Fund can write (sell) is limited by the amount of equity securities the Fund holds in its portfolio. Options on securities indices are designed to reflect price fluctuations in a group of securities or segment of the securities market rather than price fluctuations in a single security and are similar to options on single securities, except that the exercise of securities index options requires cash settlement payments and does not involve the actual purchase or sale of securities. The Fund will not write (sell) “naked” or uncovered options. If certain equity securities held in the Fund’s portfolio are not covered by a related call option on the individual equity security, securities index options may be written on all or a portion of such uncovered securities. When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is included in “Options written, at value” on the Fund’s Statement of Assets and Liabilities. Options are marked-to-market daily and their value will be affected by changes in the value and dividend rates of the underlying equity securities, changes in interest rates, changes in the actual or perceived volatility of the securities markets and the underlying equity securities and the remaining time to the options’ expiration. The value of options may also be adversely affected if the market for the options becomes less liquid or trading volume diminishes.

Options the Fund writes (sells) will either be exercised, expire or be canceled pursuant to a closing transaction. If the price of the underlying equity security exceeds the option’s exercise price, it is likely that the option holder will exercise the option. If an option written (sold) by the Fund is exercised, the Fund would be obligated to deliver the underlying equity security to the option holder upon payment of the strike price. In this case, the option premium received by the Fund will be added to the amount realized on the sale of the underlying security for purposes of determining gain or loss and is included in “Net realized gain (loss) on investments” on the Statement of Operations. If the price of the underlying equity security is less than the option’s strike price, the option will likely expire without being exercised. The option premium received by the Fund will, in this case, be treated as short-term capital gain on the expiration date of the option. The Fund may also elect to close out its position in an option prior to its expiration by purchasing an option of the same series as the option written (sold) by the Fund. Gain or loss on options is presented separately as “Net realized gain (loss) on written options contracts” on the Statement of Operations.

The options that the Fund writes (sells) give the option holder the right, but not the obligation, to purchase a security from the Fund at the strike price on or prior to the option’s expiration date. The ability to successfully implement the writing (selling) of covered call options depends on the ability of the Sub-Advisor to predict pertinent market movements, which cannot be assured. Thus, the use of options may require the Fund to sell portfolio securities at inopportune times or for prices other than current market value, which may limit the amount of appreciation the Fund can realize on an investment, or may cause the Fund to hold a security that it might otherwise sell. As the writer (seller) of a covered option, the Fund foregoes, during the option’s life, the opportunity to profit from increases in the market value of the security covering the option above the sum of the premium and the strike price of the option, but has retained the risk of loss should the price of the underlying security decline. The writer (seller) of an option has no control over the time when it may be required to fulfill its obligation as a writer (seller) of the option. Once an option writer (seller) has received an exercise notice, it cannot effect a closing purchase transaction in order to terminate its obligation under the option and must deliver the underlying security to the option holder at the exercise price.

Over-the-counter options have the risk of the potential inability of counterparties to meet the terms of their contracts. The Fund’s maximum equity price risk for purchased options is limited to the premium initially paid. In addition, certain risks may arise upon entering into option contracts including the risk that an illiquid secondary market will limit the Fund’s ability to close out an option contract prior to the expiration date and that a change in the value of the option contract may not correlate exactly with changes in the value of the securities hedged.

C. Securities Transactions and Investment Income

Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, if any, is recorded on the accrual basis, including the amortization of premiums and accretion of discounts.

Distributions received from the Fund’s investments in REITs may be comprised of return of capital, capital gains, and income. The actual character of the amounts received during the year are not known until after the REITs’ fiscal year end. The Fund records the character of distributions received from the REITs during the year based on estimates available. The characterization of distributions received by the Fund may be subsequently revised based on information received from the REITs after their tax reporting periods conclude.

D. Dividends and Distributions to Shareholders

Dividends from net investment income of the Fund are declared and paid quarterly or as the Board of Trustees may determine from time to time. Distributions of any net realized capital gains earned by the Fund are distributed at least annually. Distributions will

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Table of Contents

Notes to Financial Statements (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

automatically be reinvested into additional Common Shares pursuant to the Fund’s Dividend Reinvestment Plan unless cash distributions are elected by the shareholder.

Distributions from net investment income and realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These permanent differences are primarily due to the varying treatment of income and gain/loss on portfolio securities held by the Fund and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for financial statement and tax purposes, will reverse at some point in the future. The character of distributions for tax reporting purposes will depend on the Fund’s investment experience during the remainder of its fiscal year. Based on information for the period through June 30, 2021, it is likely that the Fund’s distributions will include a return of capital component for the fiscal year ending December 31, 2021.

The tax character of distributions paid by the Fund during the fiscal year ended December 31, 2020, was as follows:

Distributions paid from:
Ordinary income	$4,535,363
Capital gains	18,245,072
Return of capital	—

As of December 31, 2020, the components of distributable earnings and net assets on a tax basis were as follows:

Undistributed ordinary income	$2,101,603
Undistributed capital gains	—
Total undistributed earnings	2,101,603
Accumulated capital and other losses	—
Net unrealized appreciation (depreciation)	103,234,551
Total accumulated earnings (losses)	105,336,154
Other	(3,986,150)
Paid-in capital	264,081,955
Total net assets	$365,431,959

E. Income Taxes

The Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net realized gains to shareholders. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund’s taxable income exceeds the distributions from such taxable income for the calendar year.

The Fund intends to utilize provisions of the federal income tax laws, which allow it to carry a realized capital loss forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At December 31, 2020, for federal income tax purposes, the Fund had no non-expiring capital loss carryforwards that may be carried forward indefinitely.

The Fund is subject to accounting standards that establish a minimum threshold for recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. Taxable years ended 2017, 2018, 2019, and 2020 remain open to federal and state audit. As of June 30, 2021, management has evaluated the application of these standards to the Fund, and has determined that no provision for income tax is required in the Fund’s financial statements for uncertain tax positions.

F. Expenses

The Fund will pay all expenses directly related to its operations.

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Notes to Financial Statements (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

4. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements

First Trust, the investment advisor to the Fund, is a limited partnership with one limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust is responsible for the ongoing monitoring of the Fund’s investment portfolio, managing the Fund’s business affairs and providing certain administrative services necessary for the management of the Fund. For these services, First Trust is entitled to a monthly fee calculated at an annual rate of 1.00% of the Fund’s Managed Assets. First Trust also provides fund reporting services to the Fund for a flat annual fee in the amount of $9,250.

Chartwell manages the Fund’s portfolio subject to First Trust’s supervision. Chartwell receives a monthly portfolio management fee calculated at an annual rate of 0.50% of the Fund’s Managed Assets that is paid monthly by First Trust out of its investment advisory fee.

During the six months ended June 30, 2021, the Fund received a reimbursement from the Sub-Advisor of $52,217 in connection with a trade error.

BNY Mellon Investment Servicing (US) Inc. (“BNYM IS”) serves as the Fund’s transfer agent in accordance with certain fee arrangements. As transfer agent, BNYM IS is responsible for maintaining shareholder records for the Fund. The Bank of New York Mellon (“BNYM”) serves as the Fund’s administrator, fund accountant, and custodian in accordance with certain fee arrangements. As administrator and fund accountant, BNYM is responsible for providing certain administrative and accounting services to the Fund, including maintaining the Fund’s books of account, records of the Fund’s securities transactions, and certain other books and records. As custodian, BNYM is responsible for custody of the Fund’s assets. BNYM IS and BNYM are subsidiaries of The Bank of New York Mellon Corporation, a financial holding company.

Each Trustee who is not an officer or employee of First Trust, any sub-advisor or any of their affiliates (“Independent Trustees”) is paid a fixed annual retainer that is allocated equally among each fund in the First Trust Fund Complex. Each Independent Trustee is also paid an annual per fund fee that varies based on whether the fund is a closed-end or other actively managed fund, a defined-outcome fund or an index fund.

Additionally, the Lead Independent Trustee and the Chairmen of the Audit Committee, Nominating and Governance Committee and Valuation Committee are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Lead Independent Trustee and Committee Chairmen rotate every three years. The officers and “Interested” Trustee receive no compensation from the Fund for acting in such capacities.

5. Purchases and Sales of Securities

The cost of purchases and proceeds from sales of securities, excluding short-term investments, for the six months ended June 30, 2021, were $30,735,023 and $38,714,429, respectively.

6. Derivative Transactions

The following table presents the types of derivatives held by the Fund at June 30, 2021, the primary underlying risk exposure and the location of these instruments as presented on the Statement of Assets and Liabilities.

		Asset Derivatives		Liability Derivatives
Derivative Instrument	Risk Exposure	Statement of Assets and Liabilities Location	Value	Statement of Assets and Liabilities Location	Value
Written Options	Equity Risk	—	$ —	Options written, at value	$ 907,915

The following table presents the amount of net realized gain (loss) and change in net unrealized appreciation (depreciation) recognized for the six months ended June 30, 2021, on derivative instruments, as well as the primary underlying risk exposure associated with each instrument.

Statement of Operations Location
Equity Risk Exposure
Net realized gain (loss) on written options contracts	$698,277
Net change in unrealized appreciation (depreciation) on written options contracts	(472,460)

Page 20

Table of Contents

Additional Information

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

Dividend Reinvestment Plan

If your Common Shares are registered directly with the Fund or if you hold your Common Shares with a brokerage firm that participates in the Fund’s Dividend Reinvestment Plan (the “Plan”), unless you elect, by written notice to the Fund, to receive cash distributions, all dividends, including any capital gain distributions, on your Common Shares will be automatically reinvested by BNY Mellon Investment Servicing (US) Inc. (the “Plan Agent”), in additional Common Shares under the Plan. If you elect to receive cash distributions, you will receive all distributions in cash paid by check mailed directly to you by the Plan Agent, as the dividend paying agent.

If you decide to participate in the Plan, the number of Common Shares you will receive will be determined as follows:

(1)

If Common Shares are trading at or above net asset value (“NAV”) at the time of valuation, the Fund will issue new shares at a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date.

(2)

If Common Shares are trading below NAV at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants’ accounts. It is possible that the market price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase Common Shares in the open market within 30 days of the valuation date except where temporary curtailment or suspension of purchases is necessary to comply with federal securities laws. Interest will not be paid on any uninvested cash payments.

You may elect to opt-out of or withdraw from the Plan at any time by giving written notice to the Plan Agent, or by telephone at (866) 340-1104, in accordance with such reasonable requirements as the Plan Agent and the Fund may agree upon. If you withdraw or the Plan is terminated, you will receive a certificate for each whole share in your account under the Plan, and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions.

The Plan Agent maintains all Common Shareholders’ accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Common Shares in your account will be held by the Plan Agent in non-certificated form. The Plan Agent will forward to each participant any proxy solicitation material and will vote any shares so held only in accordance with proxies returned to the Fund. Any proxy you receive will include all Common Shares you have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.

Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions. Capital gains and income are realized although cash is not received by you. Consult your financial advisor for more information.

If you hold your Common Shares with a brokerage firm that does not participate in the Plan, you will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above.

The Fund reserves the right to amend or terminate the Plan if in the judgment of the Board of Trustees the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained by writing BNY Mellon Investment Servicing (US) Inc., 301 Bellevue Parkway, Wilmington, Delaware 19809.

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies and information on how the Fund voted proxies relating to portfolio investments during the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (800) 988-5891; (2) on the Fund’s website at www.ftportfolios.com; and (3) on the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.

Portfolio Holdings

The Fund files portfolio holdings information for each month in a fiscal quarter within 60 days after the end of the relevant fiscal quarter on Form N-PORT. Portfolio holdings information for the third month of each fiscal quarter will be publicly available on the

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Additional Information (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

SEC’s website at www.sec.gov. The Fund’s complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the semi-annual and annual reports to shareholders, respectively, and is filed with the SEC on Form N-CSR. The semi-annual and annual report for the Fund is available to investors within 60 days after the period to which it relates. The Fund’s Forms N-PORT and Forms N-CSR are available on the SEC’s website listed above.

Submission of Matters to a Vote of Shareholders

The Fund held its Annual Meeting of Shareholders (the “Annual Meeting”) on April 26, 2021. At the Annual Meeting, Richard E. Erickson and Thomas R. Kadlec were elected by the Common Shareholders of First Trust Enhanced Equity Income Fund as Class II Trustees for a three-year term expiring at the Fund’s annual meeting of shareholders in 2024. The number of votes cast in favor of Mr. Erickson was 13,282,125 and the number of votes withheld was 4,130,050. The number of votes cast in favor of Mr. Kadlec was 13,269,984 and the number of votes withheld was 4,142,191. James A. Bowen, Niel B. Nielson, and Robert F. Keith are the other current and continuing Trustees.

Principal Risks

The following discussion summarizes certain (but not all) of the principal risks associated with investing in the Fund. The Fund is subject to the informational requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940 and, in accordance therewith, files reports, proxy statements and other information that is available for review. The order of the below risk factors does not indicate the significance of any particular risk factor.

Cyber Security Risk. The Fund is susceptible to potential operational risks through breaches in cyber security. A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause the Fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized access to the Fund’s digital information systems through “hacking” or malicious software coding, but may also result from outside attacks such as denial-of-service attacks through efforts to make network services unavailable to intended users. In addition, cyber security breaches of the Fund’s third-party service providers, such as its administrator, transfer agent, custodian, or sub-advisor, as applicable, or issuers in which the Fund invests, can also subject the Fund to many of the same risks associated with direct cyber security breaches. The Fund has established risk management systems designed to reduce the risks associated with cyber security. However, there is no guarantee that such efforts will succeed, especially because the Fund does not directly control the cyber security systems of issuers or third party service providers.

Equity Securities Risk. The value of the Fund’s shares will fluctuate with changes in the value of the equity securities in which the Fund invests. Equity securities prices fluctuate for several reasons, including changes in investors’ perceptions of the financial condition of an issuer or the general condition of the relevant stock market or when political or economic events affecting the issuers or their industries occur. An adverse event affecting an issuer, such as an unfavorable earnings report, may depress the value of a particular equity security held by the Fund. Also, the prices of equity securities are sensitive to general movements in the stock market and a drop in the stock market may depress the prices of equity securities to which the Fund has exposure. Common stock prices may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase. Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

Income Risk. Net investment income paid by the Fund to its Common Shareholders is derived from the premiums it receives from writing (selling) call options and from the dividends and interest it receives from the equity securities and other investments held in the Fund’s portfolio and short-term gains thereon. Premiums from writing (selling) call options and dividends and interest payments made by the securities in the Fund’s portfolio can vary widely over time. Dividends on equity securities are not fixed but are declared at the discretion of an issuer’s board of directors. There is no guarantee that the issuers of the equity securities in which the Fund invests will declare dividends in the future or that if declared they will remain at current levels. The Fund cannot assure as to what percentage of the distributions paid on the Common Shares, if any, will consist of qualified dividend income or long-term capital gains, both of which are taxed at lower rates for individuals than are ordinary income and short-term capital gains.

Industry and Sector Risk. The Fund may not invest 25% or more of its total assets in securities of issuers in any single industry. If the Fund is focused in an industry, it may present more risks than if it were broadly diversified over numerous industries of the economy. Individual industries may be subject to unique risks which may include, among others, governmental regulation, inflation, technological innovations that may render existing products and equipment obsolete, competition from new entrants, high research and development costs, and rising interest rates.

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Table of Contents

Additional Information (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

The Fund may invest 25% or more of its total assets in securities of issuers in a single sector. Currently, the Fund makes significant investments in equity securities of companies in the information technology sector. Information technology companies produce and provide hardware, software and information technology systems and services. Information technology companies are generally subject to the following risks: rapidly changing technologies and existing product obsolescence; short product life cycles; fierce competition; aggressive pricing and reduced profit margins; the loss of patent, copyright and trademark protections; cyclical market patterns; evolving industry standards; and frequent new product introductions and new market entrants. Information technology companies may be smaller and less experienced companies, with limited product lines, markets or financial resources and fewer experienced management or marketing personnel. Information technology company stocks, particularly those involved with the internet, have experienced extreme price and volume fluctuations that are often unrelated to their operating performance. In addition, information technology companies are particularly vulnerable to federal, state and local government regulation, and competition and consolidation, both domestically and internationally, including competition from foreign competitors with lower production costs. Information technology companies also face competition for services of qualified personnel and heavily rely on patents and intellectual property rights and the ability to enforce such rights to maintain a competitive advantage.

Investment Risk. An investment in the Fund’s Common Shares is subject to investment risk, including the possible loss of the entire principal invested. An investment in Common Shares represents an indirect investment in the securities owned by the Fund. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably. Common Shares at any point in time may be worth less than the original investment, even after taking into account the reinvestment of Fund dividends and distributions. When the Advisor or Sub-Advisor determines that it is temporarily unable to follow the Fund’s investment strategy or that it is impractical to do so (such as when a market disruption event has occurred and trading in the securities is extremely limited or absent), the Fund may take temporary defensive positions.

Management Risk and Reliance on Key Personnel. In managing the Fund’s investment portfolio, the Fund’s portfolio managers will apply investment techniques and risk analyses that may not produce the desired result. Additionally, the implementation of the Fund’s investment strategy depends upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and experience and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team could have a negative impact on the Fund.

Market Discount from Net Asset Value. Shares of closed-end investment companies such as the Fund frequently trade at a discount from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset value.

Market Risk. Securities held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations caused by factors such as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of the Fund could decline in value or underperform other investments as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on the Fund and its investments. Such events may affect certain geographic regions, countries, sectors and industries more significantly than others. The outbreak of the respiratory disease designated as COVID-19 in December 2019 caused significant volatility and declines in global financial markets, which caused losses for investors. The COVID-19 pandemic may last for an extended period of time and will continue to impact the economy for the foreseeable future.

Non-U.S. Securities Risk. Investing in securities of non-U.S. issuers may involve certain risks not typically associated with investing in securities of U.S. issuers. These risks include: (i) there may be less publicly available information about non-U.S. issuers or markets due to less rigorous disclosure or accounting standards or regulatory practices; (ii) non-U.S. markets may be smaller, less liquid and more volatile than the U.S. market; (iii) the economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession; (iv) the impact of economic, political, social or diplomatic events as well as of foreign governmental laws or restrictions and differing legal standards; (v) certain non-U.S. countries may impose restrictions on the ability of non-U.S. issuers to make payments of principal and interest to investors located in the United States due to blockage of non-U.S. currency exchanges or otherwise; and (vi) withholding and other non-U.S. taxes may decrease the Fund’s return. Foreign companies are generally not subject to the same accounting, auditing and financial reporting standards as are U.S. companies. In addition, there may be difficulty in obtaining or enforcing a court judgment abroad, including in the event the issuer of a non-U.S. security defaults or enters bankruptcy, administration or other proceedings. These risks may be more pronounced to the extent that the Fund invests a significant amount of its assets in companies located in one region.

Option Risk. The Fund may write (sell) covered call options on all or a portion of the equity securities held in the Fund’s portfolio as determined to be appropriate by the Fund’s Sub-Advisor, consistent with the Fund’s investment objective. The ability to successfully implement the Fund’s investment strategy depends on the Sub-Advisor’s ability to predict pertinent market movements, which cannot be assured. Thus, the use of options may require the Fund to sell portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation the Fund can realize on an investment, or may cause the Fund to hold an

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Table of Contents

Additional Information (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

equity security that it might otherwise sell. There can be no assurance that a liquid market for the options will exist when the Fund seeks to close out an option position. Additionally, to the extent that the Fund purchases options pursuant to a hedging strategy, the Fund will be subject to additional risks.

Potential Conflicts of Interest Risk. First Trust, Chartwell and the portfolio managers have interests which may conflict with the interests of the Fund. In particular, First Trust and Chartwell currently manage and may in the future manage and/or advise other investment funds or accounts with the same or substantially similar investment objectives and strategies as the Fund.

Advisory and Sub-Advisory Agreements

Board Considerations Regarding Approval of Investment Management and Investment Sub-Advisory Agreements

The Board of Trustees of First Trust Enhanced Equity Income Fund (the “Fund”), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the “Advisory Agreement”) between the Fund and First Trust Advisors L.P. (the “Advisor”) and the Investment Sub-Advisory Agreement (the “Sub-Advisory Agreement” and together with the Advisory Agreement, the “Agreements”) among the Fund, the Advisor and Chartwell Investment Partners, LLC (the “Sub-Advisor”). The Board approved the continuation of the Agreements for a one-year period ending June 30, 2022 at a meeting held on June 6–7, 2021. The Board determined that the continuation of the Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.

To reach this determination, the Board considered its duties under the Investment Company Act of 1940, as amended (the “1940 Act”), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 26, 2021 and June 6–7, 2021, the Board, including the Independent Trustees, reviewed materials provided by the Advisor and the Sub-Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor and the Sub-Advisor to the Fund (including the relevant personnel responsible for these services and their experience); the advisory fee rate payable by the Fund and the sub-advisory fee rate as compared to fees charged to a peer group of funds (the “Expense Group”) and a broad peer universe of funds (the “Expense Universe”), each assembled by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent source, and as compared to fees charged to other clients of the Advisor and the Sub-Advisor; the expense ratio of the Fund as compared to expense ratios of the funds in the Fund’s Expense Group and Expense Universe; performance information for the Fund, including comparisons of the Fund’s performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the “Performance Universe”), each assembled by Broadridge; the nature of expenses incurred in providing services to the Fund and the potential for the Advisor and the Sub-Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; financial data for the Sub-Advisor; any fall-out benefits to the Advisor and the Sub-Advisor; and information on the Advisor’s and the Sub-Advisor’s compliance programs. The Board reviewed initial materials with the Advisor at the meeting held on April 26, 2021, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor and the Sub-Advisor. Following the April meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 6–7, 2021 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangements between the Fund and the Advisor and among the Fund, the Advisor and the Sub-Advisor continue to be reasonable business arrangements from the Fund’s perspective. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in the Fund knowing that the Advisor and the Sub-Advisor manage the Fund.

In reviewing the Agreements, the Board considered the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory Agreement, the Board considered that the Advisor is responsible for the overall management and administration of the Fund and reviewed all of the services provided by the Advisor to the Fund, including the oversight of the Sub-Advisor, as well as the background and experience of the persons responsible for such services. The Board noted that the Advisor oversees the Sub-Advisor’s day-to-day management of the Fund’s investments, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor’s, the Sub-Advisor’s and the Fund’s compliance with the 1940 Act, as well as the Fund’s compliance with its investment objective, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Fund. Finally, as part of the Board’s consideration of the Advisor’s services, the Advisor, in its written materials and at the April 26, 2021

Page 25

Table of Contents

Additional Information (Continued)

First Trust Enhanced Equity Income Fund (FFA)

June 30, 2021 (Unaudited)

meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Fund and the other funds in the First Trust Fund Complex. With respect to the Sub-Advisory Agreement, the Board reviewed the materials provided by the Sub-Advisor and considered the services that the Sub-Advisor provides to the Fund, including the Sub-Advisor’s day-to-day management of the Fund’s investments. In considering the Sub-Advisor’s management of the Fund, the Board noted the background and experience of the Sub-Advisor’s portfolio management team, including the Board’s prior meetings with members of the portfolio management team. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Fund by the Advisor and the Sub-Advisor under the Agreements have been and are expected to remain satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has managed the Fund consistent with its investment objective, policies and restrictions.

The Board considered the advisory and sub-advisory fee rates payable under the Agreements for the services provided. The Board noted that the sub-advisory fee is paid by the Advisor from its advisory fee. The Board received and reviewed information showing the advisory fee rates and expense ratios of the peer funds in the Expense Group, as well as advisory and unitary fee rates charged by the Advisor and the Sub-Advisor to other fund and non-fund clients, as applicable. With respect to the Expense Group, the Board, at the April 26, 2021 meeting, discussed with the Advisor limitations in creating a relevant peer group for the Fund, including that not all peer funds employ an advisor/sub-advisor management structure. The Board took these limitations into account in considering the peer data, and noted that the contractual advisory fee rate payable by the Fund, based on average net assets, was equal to the median contractual advisory fee of the peer funds in the Expense Group. With respect to fees charged to other clients, the Board considered differences between the Fund and other clients that limited their comparability. In considering the advisory fee rate overall, the Board also considered the Advisor’s statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor’s demonstrated long-term commitment to the Fund and the other funds in the First Trust Fund Complex.

The Board considered performance information for the Fund. The Board noted the process it has established for monitoring the Fund’s performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor and Sub-Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund’s performance. The Board received and reviewed information comparing the Fund’s performance for periods ended December 31, 2020 to the performance of the funds in the Performance Universe and to that of two benchmark indexes. In reviewing the Fund’s performance as compared to the performance of the Performance Universe, the Board took into account the limitations described above with respect to creating a relevant peer group for the Fund. Based on the information provided on net asset value performance, the Board noted that the Fund outperformed the Performance Universe median and one of the benchmark indexes for the one-, three-, five- and ten-year periods ended December 31, 2020. The Board also noted that the Fund underperformed the other benchmark index for the one , three , five- and ten-year periods ended December 31, 2020. The Board also received information on the Fund’s annual distribution rate as of December 31, 2020 and the Fund’s average trading discount for various periods and comparable information for a peer group.

On the basis of all the information provided on the fees, expenses and performance of the Fund and the ongoing oversight by the Board, the Board concluded that the advisory and sub-advisory fees continue to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor to the Fund under the Agreements.

The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Fund and noted the Advisor’s statement that it believes its expenses will likely increase during the next twelve months as the Advisor continues to hire personnel and build infrastructure, including technology, to improve the services to the Fund. The Board determined that due to the Fund’s closed-end structure, the potential for realization of economies of scale as Fund assets grow was not a material factor to be considered. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to the Fund for the twelve months ended December 31, 2020 and the estimated profitability level for the Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor’s profitability level for the Fund was not unreasonable. In addition, the Board considered fall-out benefits described by the Advisor that may be realized from its relationship with the Fund, including the Advisor’s compensation for fund reporting services pursuant to a separate Fund Reporting Services Agreement. The Board concluded that the character and amount of potential fall-out benefits to the Advisor were not unreasonable.

The Board considered the Sub-Advisor’s statement that since the Sub-Advisor’s inception as sub-advisor, assets in the Fund have not grown considerably, so further economies of scale have not been achieved. The Board did not review the profitability of the Sub-Advisor with respect to the Fund. The Board noted that the Advisor pays the Sub-Advisor from its advisory fee and its understanding that the Fund’s sub-advisory fee rate was the product of an arm’s length negotiation. The Board concluded that the profitability analysis for the Advisor was more relevant. The Board considered fall-out benefits that may be realized by the Sub-Advisor from its relationship with the Fund, including that the Sub-Advisor enters into soft-dollar arrangements in connection

Page 26

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 12. Disclosure of Securities Lending Activities For Closed-End Management Investment Companies.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

ASSETS TABLE
	Total Value at 6/30/2021	Level 1 Quoted Prices	Level 2 Significant Observable Inputs	Level 3 Significant Unobservable Inputs
Common Stocks*	$ 384,495,058	$ 384,495,058	$ —	$ —
Real Estate Investment Trusts*	13,173,160	13,173,160	—	—
Common Stocks - Business Development Companies*	4,211,850	4,211,850	—	—
Warrants*	101,710	101,710	—	—
$100 Par Preferred Securities*	4,612,860	4,612,860	—	—
Total Investments	$ 406,594,638	$ 406,594,638	$—	$—
LIABILITIES TABLE
	Total Value at 6/30/2021	Level 1 Quoted Prices	Level 2 Significant Observable Inputs	Level 3 Significant Unobservable Inputs
Call Options Written	$ (907,915)	$ (901,665)	$ (6,250)	$ —

ASSETS:
Investments, at value (Cost $262,070,545)	$ 406,594,638
Cash	2,272,600
Dividends receivable	285,752
Prepaid expenses	15,782
Total Assets	409,168,772
LIABILITIES:
Options written, at value (Premiums received $660,093)	907,915
Payables:
Investment advisory fees	333,899
Audit and tax fees	26,526
Shareholder reporting fees	17,586
Administrative fees	17,384
Custodian fees	15,565
Legal fees	8,464
Transfer agent fees	5,258
Trustees’ fees and expenses	3,903
Financial reporting fees	771
Total Liabilities	1,337,271
NET ASSETS	$407,831,501
NET ASSETS consist of:
Paid-in capital	$ 263,882,127
Par value	199,828
Accumulated distributable earnings (loss)	143,749,546
NET ASSETS	$407,831,501
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share)	$20.41
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized)	19,982,838

INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $8,268)		$ 2,943,353
Interest		218
Total investment income		2,943,571
EXPENSES:
Investment advisory fees		1,936,004
Administrative fees		94,765
Shareholder reporting fees		48,060
Audit and tax fees		21,572
Transfer agent fees		16,349
Legal fees		9,086
Listing expense		8,993
Trustees’ fees and expenses		7,786
Financial reporting fees		4,625
Custodian fees		1,525
Other		9,377
Total expenses		2,158,142
NET INVESTMENT INCOME (LOSS)		785,429
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments		13,918,808
Written options contracts		698,277
Net realized gain (loss)		14,617,085
Net increase from payment by the sub-advisor		52,217
Net change in unrealized appreciation (depreciation) on:
Investments		40,006,459
Written options contracts		(472,460)
Net change in unrealized appreciation (depreciation)		39,533,999
NET REALIZED AND UNREALIZED GAIN (LOSS)		54,203,301
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		$ 54,988,730

	Six Months Ended 6/30/2021 (Unaudited)	Year Ended 12/31/2020
OPERATIONS:
Net investment income (loss)	$ 785,429	$ 2,473,957
Net realized gain (loss)	14,617,085	20,203,325
Net increase from payment by the sub-advisor	52,217	—
Net change in unrealized appreciation (depreciation)	39,533,999	27,336,667
Net increase (decrease) in net assets resulting from operations	54,988,730	50,013,949
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment operations	(12,589,188)	(22,780,435)
Total increase (decrease) in net assets	42,399,542	27,233,514
NET ASSETS:
Beginning of period	365,431,959	338,198,445
End of period	$ 407,831,501	$ 365,431,959
COMMON SHARES:
Common Shares at end of period	19,982,838	19,982,838

Shareholder Letter	2
At a Glance	3
Portfolio Commentary	5
Portfolio of Investments	7
Statement of Assets and Liabilities	12
Statement of Operations	13
Statements of Changes in Net Assets	14
Financial Highlights	15
Notes to Financial Statements	16
Additional Information	22

Top Ten Holdings	% of Total Investments
Microsoft Corp.	8.2%
Apple, Inc.	6.9
JPMorgan Chase & Co.	3.8
Alphabet, Inc., Class C	2.8
UnitedHealth Group, Inc.	2.7
NVIDIA Corp.	2.5
PayPal Holdings, Inc.	2.3
Mastercard, Inc., Class A	2.0
Adobe, Inc.	2.0
NIKE, Inc., Class B	1.9
Total	35.1%

Sector Allocation	% of Total Investments
Information Technology	30.4%
Health Care	13.0
Communication Services	12.2
Consumer Discretionary	12.0
Financials	11.3
Industrials	6.7
Consumer Staples	4.9
Real Estate	3.2
Utilities	2.9
Energy	2.3
Materials	1.1
Total	100.0%

Fund Allocation	% of Net Assets
Common Stocks	94.3%
Real Estate Investment Trusts	3.2
$100 Par Preferred Securities	1.1
Common Stocks - Business Development Companies	1.1
Warrants	0.0*
Call Options Written	(0.2)
Net Other Assets and Liabilities	0.5
Total	100.0%

By (Signature and Title)*		/s/ James M. Dykas
		James M. Dykas, President and Chief Executive Officer (principal executive officer)

By (Signature and Title)*		/s/ Donald P. Swade
		Donald P. Swade, Treasurer, Chief Financial Officer and Chief Accounting Officer (principal financial officer)