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I am a well-known expert in income investing, often covering complex securities and strategies, such as these two preferred, closed-end income funds.

First Trust Intermediate Duration Preferred & Income Fund (FPF) is a preferred income fund with an investment objective of high current income and a secondary objective of capital appreciation.

Under normalized market conditions, FPF invests at least 80% of its managed assets in a portfolio of preferred stocks and other income-producing securities issued by U.S. and non-U.S. companies.

Securities include traditional preferred issues, convertible preferreds, and debt instruments. FPF invests at least 25% of its managed assets in the financial sector, insurance space, and REITs. The fund also invests in energy, utilities, industrials, healthcare, and telecom.

As of Aug. 31, 2021, the portfolio’s industry breakdown was dominated by Banks (41.98%), followed by Insurance (16.00%), Capital Markets (8.78%), and Oil, Gas & Consumable Fuels (7.31%). The top five holdings were Barclays Bank (BCS) (2.50%), Aercap Holdings (AER) (2.00%), Emera Inc. (EMRAF) (1.97%), Land O’Lakes (1.65%), and Credit Agricole (CRARY) (1.64%).

Performance has been strong historically, with the fund posting a market price total return of +13.01% in the year-to-date period ended Aug. 31, 2021. This closed-end fund remains suitable for low- to medium-risk taxable portfolios. Distributions are taxed on a variable basis, but largely at advantageous rates. I would say to buy at $28.50 or lower for a 5.35% annualized yield.

John Hancock Financial Opportunities Fund (BTO) — formerly John Hancock Bank and Thrift Opportunity Fund — seeks to provide a high level of total return, based on current income and long-term capital appreciation.

The fund typically invests at least 80% of its net assets in equity securities of U.S. and non-U.S. financial institutions. This includes bank holding companies, thrift institutions, finance companies, securities companies, insurers, and REITs.

Banks typically made up the lion’s share of the fund’s portfolio, accounting for 81.56% as of June 30, 2021. Following Banks as concentrations were Capital Markets at 9.20% and Thrifts and Mortgage Finance at 4.73%. BTO’s largest holdings included Huntington Bancshares (HBAN) (3.06%), Bank of America (BAC) (2.45%), KKR & Co. (KKR) (2.38%), Blackstone Group (BX) (2.37%), and U.S. Bancorp (USB) (2.32%).

Total return performance has been reasonably solid over the years, with the market price total return a very strong +48.93% through the year-to-date period ended Aug. 31, 2021.

BTO’s quarterly distributions are taxed on a variable basis, based on the underlying mix of qualified dividends, non-qualified dividends, and long-term capital gains. This investment remains suitable for low- to medium-risk taxable portfolios. With this review, we are raising the fair-value price to $48.00 from $23.95.