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FPL: A Switch From FEN Makes Sense


  • First Trust New Opportunities MLP & Energy Fund has done well since our last bullish call.
  • The pricing has dropped on a relative basis to its sister fund, First Trust Energy Income & Growth Fund.
  • We go over the numbers and tell you why a switch makes sense.
  • I do much more than just articles at Conservative Income Portfolio: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
African man with red and blue pills

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When we last covered First Trust New Opportunities MLP & Energy Fund (NYSE:FPL) we had a bullish outlook on the beaten down fund. The returns since then have been good and the fund benefitted from the bounce in the energy

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This article was written by

Trapping Value profile picture
Trapping Value is a team of analysts with over 40 years of combined experience generating options income while also focusing on capital preservation. They run the investing group Conservative Income Portfolio in partnership with Preferred Stock Trader. The investing group features two income-generating portfolios and a bond ladder. Trapping Value provides Covered Calls, and Preferred Stock Trader covers Fixed Income. The Covered Calls Portfolio is designed to provide lower volatility income investing with a focus on capital preservation. The fixed income portfolio focuses on buying securities with high income potential and heavy undervaluation relative to comparatives. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of TRP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (15)

Good data and commentary.
7865671 profile picture
Glad to see the case made for FPL. FEN was recently promoted as the "top pick" in another SA author's article. I own both, but see FPL as a better "top pick" currently.
This is a tough sell for me. I lost a bunch of $ on FPL, and not so much with FEN during the crisis, and, as I recall, a lot of that was related to the difference in leverage. Also FEN is a Mstr 5* fund while FPL is 3*. But, still, considering the relative premium/discount and now similar leverage, it is hard for me argue with the author's position, and I been thinking along the same line -- so I really appreciate this supportive article. Thanks
@oagfy I could be wrong as I am not a CEF expert but M* in general looks backwards, in a very conservative way, to make its ratings. But that may not be helpful with looking forward at future results when the metrics of CEFs (leverage, premium and discount) change, yet the holdings are so similar. Discount in this case seems to be a mispricing that removes a lot of risk. Also the black swan of the Covid crash was a one-off and reading future results out of it as CEFS changed to adapt leverage, debt, holdings, etc. is not easy.
Alex The Mechanic profile picture
I sold FEN 2 days ago as soon as I realised it jumped into premium territory. My plan was to wait until it goes back into discount but now (thanks to this article) I have an opportunity to switch......Thanks TV !
Ha, sometimes the SA Gods deliver. Thanks for the heads up TV.

I was rotating some money this A.M. to add a bit more utility/mlp exposure since all indications are it is going to be a good defensive and perhaps growing sector in the year ahead. Was planning to nibble at FEN or FEI today to add to larger holdings of EPD and MPLX (going to aim for 1099 and no more K-1s) and a trade had not cleared so I could not buy.

You saved me money by alerting me to FPL.

Interestingly the MLPs didn't drop much today, nor the utilities. Thanks for the alert. We'll see what happens tomorrow.
Trapping Value profile picture
@RealRural Glad it was useful. Thanks for reading and letting me know.
John Batman profile picture
This is a good call. Thank you.
Bilbozark profile picture
100% of income = ROC??
wealthcoach10 profile picture
@Bilbozark only to the extent that income is sourced from the mlp holdings. It's not the problem you think it is in this case.
What's the tax deal with FPL? K-1?
I own FEI same difference no?
Trapping Value profile picture
@Erik2647 That's midway in premiums so I suggested FPL.
Just jumped in for the last divy and got some capital gain too. I’m going to like this fund.
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