MBS » First Trust Mortgage Income CEF
Page updated 3/7/2026

The First Trust Mortgage Income Fund (ticker symbol FMY) is a closed-end fund designed to provide a high level of current income, with capital preservation as a secondary objective. It primarily invests at least 80% of its assets in mortgage-backed securities (MBS), including both agency and non-agency instruments, collateralized mortgage obligations (CMOs), and other mortgage-related debt. The fund utilizes actively managed credit analysis to select holdings, seeking to optimize yield while balancing interest rate risk and credit risk across its portfolio. FMY employs leverage to enhance income potential, a distinctive attribute that can magnify returns in favorable fixed income environments. Compared to other closed-end funds, FMY may appeal to investors seeking relatively high and steady monthly distributions, supported by the consistency of cash flows from its underlying mortgage assets. Its focus on both agency & non-agency MBS adds diversification benefits, as non-agency securities tend to yield more but also carry higher credit risk, which is managed by the fund’s team. Additionally, FMY has periods where it trades at a discount or premium to net asset value (NAV), offering opportunistic entry points for investors aiming to enhance total return. For income-focused investors, especially those wary of equity volatility or seeking exposure to interest rate-sensitive sectors, FMY offers a compelling blend of professional management, high distribution rates, & the potential for risk-adjusted returns superior to traditional bond funds or equity-heavy CEFs. Its positioning in the mortgage-backed securities space sets it apart, making it attractive for those looking to diversify their income sources beyond corporate or municipal bond funds.