Edgar Filing: FIRST TRUST ENHANCED EQUITY INCOME FUND

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-21586
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First Trust Enhanced Equity Income Fund
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(Exact name of registrant as specified in charter)

120 East Liberty Drive, Suite 400
Wheaton, IL 60187
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(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
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(Name and address of agent for service)

registrant's telephone number, including area code: (630) 765-8000
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2010
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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. ss. 3507.

ITEM 1. REPORTS TO STOCKHOLDERS.

The Report to Shareholders is attached herewith.

ANNUAL REPORT

FOR THE YEAR ENDED
DECEMBER 31, 2010

FIRST TRUST
ENHANCED EQUITY
INCOME FUND

[LOGO OMITTED]

Chartwell Investment Partners
------------------------------------------
Institutional and Private Asset Management
[LOGO OMITTED]

First Trust

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Table of Contents
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FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

Shareholder Letter......................................................1
At A Glance.............................................................2
Portfolio Commentary....................................................3
Portfolio of Investments................................................6
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
Report of Independent Registered Public Accounting Firm................23
Additional Information.................................................24
Board of Trustees and Officers.........................................26
Privacy Policy.........................................................30

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, L.P. ("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
the 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.

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
shares may therefore be less than what you paid for them. Accordingly, you can
lose money by investing in the Fund. See "Risk Considerations" in the Notes to
Financial Statements 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
http://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.

HOW TO READ THIS REPORT

This report contains information that may help you evaluate your investment. 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
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 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
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FIRST TRUST ENHANCED EQUITY INCOME FUND (FFA)
ANNUAL LETTER FROM THE PRESIDENT
DECEMBER 31, 2010

Dear Shareholders:

I am pleased to present you with the annual report for your investment in First
Trust Enhanced Equity Income Fund (the "Fund").

First Trust Advisors L.P. ("First Trust") has always believed that staying
invested in quality products and having a long-term horizon can help investors
reach their financial goals. While the past two years have been challenging,
successful investors understand that having a long-term investment perspective
through all kinds of markets can help them reach their investing goals. While
the markets showed improvement throughout 2010, First Trust is a long-term
investor and investment manager, and we will continue to bring investments we
believe fit investors with long-term goals.

The report you hold contains detailed information about your investment; a
portfolio commentary from the Fund's management team that provides a recap of
the period; a performance analysis and a market and Fund outlook. Additionally,
you will find the Fund's financial statements for the twelve months this report
covers. I encourage you to read this document and discuss it with your financial
advisor.

First Trust offers a variety of products that can fit many financial plans to
help those investors who are seeking long-term financial success and we remain
committed to bringing you quality investment solutions regardless of the
inevitable volatility the market experiences. In addition to going over your
investment plan, you may want to talk to your advisor about the investments
First Trust offers that might also fit your financial goals.

At First Trust we continue to be committed to making available up-to-date
information about your investments so you and your financial advisor have
current information on your portfolio. We value our relationship with you, and
we thank you for the opportunity to assist you in achieving your financial
goals. I look forward to 2011 and to the next edition of your Fund's report.

Sincerely,

/s/ James A. Bowen

James A. Bowen
President of First Trust Enhanced Equity Income Fund

Page 1

FIRST TRUST ENHANCED EQUITY INCOME FUND
"AT A GLANCE"
AS OF DECEMBER 31, 2010 (UNAUDITED)

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FUND STATISTICS
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Symbol on New York Stock Exchange FFA
Common Share Price $12.63
Common Share Net Asset Value ("NAV") $13.20
Premium (Discount) to NAV (4.32)%
Net Assets Applicable to Common Shares $263,614,448
Current Quarterly Distribution per Common Share (1) $0.220
Current Annualized Distribution per Common Share $0.880
Current Distribution Rate on Closing Common Share Price (2) 6.97%
Current Distribution Rate on NAV (2) 6.67%
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COMMON SHARE PRICE & NAV (WEEKLY CLOSING PRICE)
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Common
Share
Price NAV
----- -----
12/31/2009 11.70 12.32
1/8/2010 11.68 12.55
1/15/2010 12.04 12.50
1/22/2010 11.70 12.12
1/29/2010 10.97 11.95
2/5/2010 11.18 11.90
2/12/2010 10.96 12.08
2/19/2010 11.55 12.44
2/26/2010 11.41 12.42
3/5/2010 11.73 12.71
3/12/2010 11.72 12.81
3/19/2010 11.56 12.66
3/26/2010 11.73 12.76
4/1/2010 11.98 12.92
4/9/2010 11.97 13.05
4/16/2010 11.94 13.03
4/23/2010 12.10 13.19
4/30/2010 12.01 12.94
5/7/2010 10.51 12.11
5/14/2010 11.00 12.35
5/21/2010 10.36 11.83
5/28/2010 10.50 11.94
6/4/2010 10.34 11.66
6/11/2010 10.62 12.05
6/18/2010 10.85 12.31
6/25/2010 10.37 11.72
7/2/2010 9.92 11.22
7/9/2010 10.54 11.84
7/16/2010 10.44 11.72
7/23/2010 11.04 12.14
7/30/2010 11.17 12.18
8/6/2010 11.40 12.34
8/13/2010 11.23 11.93
8/20/2010 11.27 11.86
8/27/2010 11.16 11.81
9/3/2010 11.48 12.21
9/10/2010 11.65 12.22
9/17/2010 11.91 12.41
9/24/2010 11.64 12.38
10/1/2010 11.92 12.42
10/8/2010 11.76 12.64
10/15/2010 11.80 12.73
10/22/2010 11.83 12.74
10/29/2010 11.95 12.70
11/5/2010 12.26 13.04
11/12/2010 11.86 12.81
11/19/2010 11.79 12.89
11/26/2010 11.80 12.81
12/3/2010 12.06 13.09
12/10/2010 12.18 13.24
12/17/2010 11.80 13.26
12/23/2010 12.40 13.17
12/31/2010 12.63 13.20
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PERFORMANCE
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Average Annual Average Annual
Total Return Total Return
1 Year Ended 5 Years Ended Inception (8/26/2004)
12/31/2010 12/31/2010 to 12/31/2010
------------ -------------- ---------------------
Fund Performance(3)
NAV 15.50% 2.59% 3.73%
Market Value 16.37% 3.81% 2.26%
Index Performance
S&P 500 Index 15.06% 2.29% 4.19%
BXM Index 5.86% 2.81% 3.64%
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% OF TOTAL
TOP 10 HOLDINGS INVESTMENTS
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Occidental Petroleum Corp. 3.60%
Exxon Mobil Corp. 3.33
International Business Machines Corp. 2.79
Intel Corp. 2.68
Bristol-Myers Squibb Co. 2.62
SPDR KBW Bank ETF 2.60
JPMorgan Chase & Co. 2.37
Microsoft Corp. 2.12
Target Corp. 2.06
Coca-Cola (The) Co. 2.00
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Total 26.17%
=======

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% OF TOTAL
SECTOR CLASSIFICATION INVESTMENTS
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Financials 17.76%
Information Technology 16.03
Industrial 13.05
Energy 13.04
Consumer Staples 10.81
Consumer Discretionary 10.26
Health Care 7.44
Materials 5.96
Telecommunication Services 3.55
Utilities 1.86
Other 0.24
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Total 100.00%
=======

(1) Most recent distribution paid or declared through 12/31/2010. 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 12/31/2010. 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 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
less than one year. Past performance is not indicative of future results.

Page 2

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Portfolio Commentary
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SUB-ADVISOR

Chartwell Investment Partners, L.P. ("Chartwell") is an employee-owned
investment advisory firm founded on April 1, 1997 by nine investment
professionals from Delaware Investment Advisers. The firm is 75% owned by the
partners and employees of Chartwell and 25% owned by a limited partnership
comprised of three passive investors in the Philadelphia area. There are no
affiliates at this time. The firm is a research-based equity and fixed-income
manager with a disciplined, team-oriented investment process.

Timothy J. Riddle, an executive with 31 years of investment industry experience,
is the Chief Executive Officer of Chartwell. Michael J. McCloskey, an executive
with 23 years of management experience, serves as President. G. Gregory Hagar is
Chartwell's Chief Financial Officer and Chief Compliance Officer. He has 22
years of related experience.

PORTFOLIO MANAGEMENT TEAM

[PHOTO OMITTED] BERNARD P. SCHAFFER
MANAGING PARTNER, SENIOR PORTFOLIO MANAGER
Mr. Schaffer is a founding partner of Chartwell and has 39
years of investment industry experience. He serves as senior
portfolio manager for Chartwell's closed-end fund and hedged
large-cap equity strategies. As the lead portfolio manager
for the Fund since 2007, he focuses on securities in the
Energy, Financials and Consumer Staples sectors. He was
employed as a Senior Portfolio Manager at Delaware Investment
Advisers from 1990 to 1997, managing two closed-end equity
income funds that utilized option strategies to generate
portfolio gains. Mr. Schaffer earned a Bachelor's degree in
Economics from Villanova University and an MBA from the
University of Pennsylvania's Wharton School.

[PHOTO OMITTED] DOUGLAS W. KUGLER, CFA
PRINCIPAL, PORTFOLIO MANAGER
Mr. Kugler is a portfolio manager on Chartwell's large-cap
equity portfolio management team and has 13 years of
investment industry experience. His areas of focus include
the Transportation and Consumer Discretionary sectors of the
market. He has been a portfolio manager for the Fund since
2007. From 1993 to 2003, he held several positions at Morgan
Stanley Investment Management (Miller Anderson & Sherrerd)
including Head of Mutual Fund Administration and Vice
President and Treasurer of the MAS Funds, Junior Associate in
the Equity Department, and his last position held prior to
joining Chartwell was Senior Associate and Analyst for the
Large Cap Value team. Prior to joining Morgan Stanley, he was
an Assistant Vice President and Senior Accounting Officer at
Provident Financial Processing Corporation. Mr. Kugler holds
the Chartered Financial Analyst designation and is a member
of the CFA (Chartered Financial Analysts) Institute and the
CFA Society of Philadelphia. Mr. Kugler earned a Bachelor's
degree in Accounting from the University of Delaware.

[PHOTO OMITTED] KEVIN A. MELICH, CFA
MANAGING PARTNER, SENIOR PORTFOLIO MANAGER
Mr. Melich is a founding partner of Chartwell and has 46
years of investment industry experience. He is a member of
Chartwell's large-cap equity portfolio management team and
implements portfolio management decisions for high-yield
equity institutional portfolios, including the Fund. He has
been a portfolio manager for the Fund since 2007. His areas
of focus are in the Automotive, Machinery, Office Electronics
and REITs sectors. He was employed as a Senior Portfolio
Manager at Delaware Investment Advisers from 1983 to 1997.
There he managed over $1.6 billion for institutional accounts
in the value style. From 1979 to 1983, Mr. Melich was a
Partner with the economics consulting firm, A.B. Laffer
Associates. From 1964 to 1979, he was the Senior Investment
Officer and Manager of the Trust and Investment Division of
Security Trust Company. Mr. Melich holds the Chartered
Financial Analyst designation and is a member of the CFA
Institute and the CFA Society of Philadelphia. He earned a
Bachelor of Science degree in Economics from St. John Fisher
College.

Page 3

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Portfolio Commentary - Continued
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Commentary

FIRST TRUST ENHANCED EQUITY INCOME FUND
The investment objective of First Trust Enhanced Equity Income Fund (the "Fund")
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
foreign issuers. These securities are traded on U.S. securities exchanges. In
addition, on an ongoing and consistent basis, the Fund will write (sell) covered
call options on a portion of the Fund's managed assets. There can be no
assurance that the Fund's investment objective will be achieved.

MARKET RECAP
The stock market during the year ended December 31, 2010 was volatile and
contained two powerful rallies of greater than 15% as measured by the Standard &
Poor's 500 Index (S&P 500), offset partially by a decline of almost 16% and
several other smaller reversals. The rallies, in our opinion, were fueled by
strengthening corporate profits, accommodative monetary policy, a forward look
to the mid-term elections, and a number of economic indicators showing that the
nascent economic recovery is continuing to gain momentum. The declines appear to
have been caused by concerns over the Eurozone's sovereign debt and banking
industry issues, fears of slowing Chinese economic growth, and a possible double
dip in the U.S. economy. Overall, with the S&P 500 returning 15.06% for the
year, the substantial liquidity available in the markets, combined with the
powerful rally in corporate profits, appears to have overcome the fears of
economic weakness.

PERFORMANCE ANALYSIS
The net asset value ("NAV") total return1 of the Fund for the year ending
December 31, 2010 was 15.50% and the market value total return1 of the Fund was
16.37%. Both these returns were inclusive of dividends paid during the period
covered by this report. During this time period, the S&P 500 and the BXM Index2
returned 15.06% and 5.86%, respectively. While volatility in the market has
declined significantly over the last two years, the Fund continued to take
advantage of volatility in the market where it could and sold call options on a
significant percentage of the Fund's holdings. This supplemented the dividend
stream and provided support to the Fund's performance. We continue to believe
the strategy of combining high dividend-paying stocks and an option overwrite
program is an excellent long-term strategy.

Similar to last year, two major contributors to the performance of the S&P 500
during the twelve-month period were lower quality and smaller capitalization
stocks - although to a much lesser extent than the previous year. A Bank of
America Merrill Lynch study showed that for the year stocks with quality
rankings of B or lower outperformed the S&P 500 by ten percentage points. The
impact of market capitalization on 2010 market returns can be seen in the fact
that the equally-weighted S&P 500 returned (on a price-only basis) seven
percentage points more than the capitalization-weighted S&P 500 during the year.
The Fund's portfolio has been, and will continue to be, focused in higher
quality, large capitalization dividend-paying stocks. Due to strong sector
allocation and stock selection, the Fund was able to overcome the headwinds
discussed above and outperform the S&P 500 by almost 0.50% for the twelve-month
period. From a portfolio holdings standpoint, the weakest relative performance
versus the S&P 500 came from lagging stock selection in the Technology and
Healthcare sectors and underweighting the Automobile and Components sub-group.
Positive contributors to the Fund's portfolio performance versus the S&P 500
during 2010 were the Financials, Consumer Discretionary, Materials and
Industrials sectors. The outperformance in the first three groups was driven by
the Fund's good stock selection while outperformance in the Industrials sector
was driven by both an overweight allocation to the sector and strong stock
selection. In addition, as the global economy continued to recover, positions in
high-quality industrial companies were added to the portfolio, the timing of
which benefited relative performance.

--------------------
(1) Total return is based on the combination of reinvested dividends,
capital gain and return of capital distributions, if any, at prices
obtained by the Dividend Reinvestment Plan and changes in NAV 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 less than one year. Past performance is not
indicative of future results.

(2) The CBOE S&P 500 BuyWrite Index (BXM) is a passive total return index
based on (1) buying an S&P 500 stock index portfolio, and (2) "writing"
(or selling) the near-term, at the money S&P 500 Index (SPXSM) call
option.

Page 4

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Portfolio Commentary - Continued
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MARKET AND FUND OUTLOOK
The S&P 500 had one of its strongest Decembers in history, up 6.5% on data
showing healthy retail sales during the holiday shopping season. The December
rally capped off a second straight strong year for the stock market. This left
the S&P 500 at levels last seen just prior to Lehman's collapse and up just
under 86% from its March 9, 2009 closing low. As the stock market is a forward
looking indicator, it appears to be pointing to a continuation of the economic
recovery. In general, we are in agreement and we believe that the economy will
be on better footing in 2011. In our opinion, this improvement will come from,
among other things, continued low interest rates, continued global economic
improvement, a slow return to job growth, and a steep yield curve helping the
banking industry. The main question for investors is: will this economic
recovery be sustainable or will rising commodity prices, large governmental
budget deficits, possible rising interest rates, and a possible double-dip in
housing derail the modest economic growth we have seen over the last year? While
we are positively inclined towards both the economy and stock market in the
upcoming year, with the market at levels last seen in September 2008, and with
the sizeable unresolved questions listed above, we are prepared to react as the
outlook changes. We will continue to manage the portfolio with the dual
objectives of earning dividend income and options gains while seeking capital
appreciation opportunities over the market cycle.

Page 5

FIRST TRUST ENHANCED EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (a)
DECEMBER 31, 2010

Shares Description Value
------------ -------------------------------------------------- -------------

COMMON STOCKS - 92.1%

AEROSPACE & DEFENSE - 3.9%
75,900 Honeywell International, Inc. (b)................. $ 4,034,844
40,000 Raytheon Co. ..................................... 1,853,600
55,000 United Technologies Corp. ........................ 4,329,600
_____________
10,218,044
_____________
AIR FREIGHT & LOGISTICS - 1.4%
50,000 United Parcel Service, Inc., Class B ............. 3,629,000
_____________

BEVERAGES - 5.0%
80,000 Coca-Cola (The) Co. .............................. 5,261,600
34,800 Diageo PLC, ADR .................................. 2,586,684
80,000 PepsiCo, Inc. .................................... 5,226,400
_____________
13,074,684
_____________

CAPITAL MARKETS - 6.0%
56,300 Ameriprise Financial, Inc. (c).................... 3,240,065
320,000 Apollo Investment Corp. .......................... 3,542,400
14,000 BlackRock, Inc. .................................. 2,668,120
80,000 Horizon Technology Finance Corp. ................. 1,156,000
160,000 Invesco, Ltd. .................................... 3,849,600
60,000 Solar Capital, Ltd. .............................. 1,486,800
_____________
15,942,985
_____________
CHEMICALS - 4.9%
100,000 Dow Chemical (The) Co. (b)........................ 3,414,000
90,000 E.I. Du Pont de Nemours & Co. (b) ................ 4,489,200
60,000 PPG Industries, Inc. ............................. 5,044,200
_____________
12,947,400
_____________

COMMERCIAL SERVICES & SUPPLIES - 0.8%
55,000 Waste Management, Inc. ........................... 2,027,850
_____________

COMMUNICATIONS EQUIPMENT - 1.9%
245,200 Cisco Systems, Inc. (d)........................... 4,960,396
_____________

COMPUTERS & PERIPHERALS - 4.7%
117,000 Hewlett-Packard Co. .............................. 4,925,700
50,000 International Business Machines Corp. ............ 7,338,000
_____________
12,263,700
_____________

DIVERSIFIED FINANCIAL SERVICES - 3.6%
147,000 JPMorgan Chase & Co. ............................. 6,235,740
110,000 NYSE Euronext .................................... 3,297,800
_____________
9,533,540
_____________

DIVERSIFIED TELECOMMUNICATION SERVICES - 2.9%
62,100 AT&T, Inc. ....................................... 1,824,498
113,005 Frontier Communications Corp. .................... 1,099,539
130,000 Verizon Communications, Inc. ..................... 4,651,400
_____________
7,575,437
_____________

Page 6 See Notes to Financial Statements

FIRST TRUST ENHANCED EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2010

Shares Description Value
------------ -------------------------------------------------- -------------

COMMON STOCKS - (CONTINUED)

ELECTRIC UTILITIES - 1.1%
79,100 Southern Co. ..................................... $ 3,023,993
_____________

ELECTRICAL EQUIPMENT - 1.5%
69,100 Emerson Electric Co. ............................. 3,950,447
_____________

ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.5%
40,000 Tyco Electronics, Ltd. ........................... 1,416,000
_____________

FOOD & STAPLES RETAILING - 1.3%
40,000 CVS Caremark Corp. ............................... 1,390,800
70,000 Sysco Corp. ...................................... 2,058,000
_____________
3,448,800
_____________
FOOD PRODUCTS - 0.6%
50,000 Kraft Foods, Inc., Class A ....................... 1,575,500
_____________

HOTELS, RESTAURANTS & LEISURE - 1.9%
50,000 Carnival Corp. (b)................................ 2,305,500
35,000 McDonald's Corp. ................................. 2,686,600
_____________
4,992,100
_____________
INDUSTRIAL CONGLOMERATES - 2.4%
40,000 3M Co. (b)........................................ 3,452,000
150,000 General Electric Co. ............................. 2,743,500
_____________
6,195,500
_____________
INSURANCE - 3.7%
120,000 Lincoln National Corp. ........................... 3,337,200
85,000 MetLife, Inc. .................................... 3,777,400
45,000 Prudential Financial, Inc. ....................... 2,641,950
_____________
9,756,550
_____________
IT SERVICES - 0.8%
44,000 Accenture PLC .................................... 2,133,560
_____________

LEISURE EQUIPMENT & PRODUCTS - 1.1%
110,000 Mattel, Inc. ..................................... 2,797,300
_____________

LIFE SCIENCES TOOLS & SERVICES - 0.6%
37,000 Agilent Technologies, Inc. (d).................... 1,532,910
_____________

MACHINERY - 2.0%
55,000 Caterpillar, Inc. (c)............................. 5,151,300
_____________

MARINE - 1.2%
50,000 Nordic American Tanker Shipping, Ltd. ............ 1,301,000
150,000 Seaspan Corp. .................................... 1,863,000
_____________
3,164,000
_____________
MEDIA - 0.9%
200,000 Regal Entertainment Group, Class A ............... 2,348,000
_____________

MULTILINE RETAIL - 3.5%
120,000 J.C. Penney Co., Inc. (b)......................... 3,877,200

See Notes to Financial Statements Page 7

FIRST TRUST ENHANCED EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2010

Shares Description Value
------------ -------------------------------------------------- -------------

COMMON STOCKS - (CONTINUED)

MULTILINE RETAIL - (CONTINUED)
90,000 Target Corp. ..................................... $ 5,411,700
_____________
9,288,900
_____________

OIL, GAS & CONSUMABLE FUELS - 8.3%
40,000 Chevron Corp. .................................... 3,650,000
120,000 Exxon Mobil Corp. ................................ 8,774,400
96,600 Occidental Petroleum Corp. ....................... 9,476,460
_____________
21,900,860
_____________
PAPER & FOREST PRODUCTS - 1.0%
100,000 International Paper Co. .......................... 2,724,000
_____________

PERSONAL PRODUCTS - 1.3%
120,000 Avon Products, Inc. .............................. 3,487,200
_____________
PHARMACEUTICALS - 7.4%
80,000 Abbott Laboratories .............................. 3,832,800
260,000 Bristol-Myers Squibb Co. (b)...................... 6,884,800
100,000 Merck & Co., Inc. ................................ 3,604,000
300,000 Pfizer, Inc. ..................................... 5,253,000
_____________
19,574,600
_____________
REAL ESTATE INVESTMENT TRUSTS (REITS) - 1.1%
3,400 Annaly Capital Management, Inc. .................. 60,928
250,000 MFA Mortgage Investments, Inc. ................... 2,040,000
60,000 ProLogis (c)...................................... 866,400
_____________
2,967,328
_____________
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.2%
335,000 Intel Corp. ...................................... 7,045,050
120,000 Microchip Technology, Inc. ....................... 4,105,200
_____________
11,150,250
_____________

SOFTWARE - 3.3%
200,000 Microsoft Corp. .................................. 5,584,000
100,000 Oracle Corp. (b).................................. 3,130,000
_____________
8,714,000
_____________

SPECIALTY RETAIL - 2.7%
60,000 Best Buy Co., Inc. ............................... 2,057,400
100,000 Limited Brands, Inc. ............................. 3,073,000
90,000 Staples, Inc. .................................... 2,049,300
_____________
7,179,700
_____________
THRIFTS & MORTGAGE FINANCE - 0.6%
120,000 People's United Financial, Inc. .................. 1,681,200
_____________

TOBACCO - 2.6%
160,000 Altria Group, Inc. ............................... 3,939,200
50,000 Philip Morris International, Inc. ................ 2,926,500
_____________
6,865,700
_____________

Page 8 See Notes to Financial Statements

FIRST TRUST ENHANCED EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2010

Shares/
Units Description Value
------------ -------------------------------------------------- -------------

COMMON STOCKS - (CONTINUED)

WATER UTILITIES - 0.7%
74,200 American Water Works Co., Inc. ................... $ 1,876,518
_____________

WIRELESS TELECOMMUNICATION SERVICES - 0.7%
67,000 Vodafone Group PLC, ADR .......................... 1,770,810
_____________
TOTAL COMMON STOCKS .............................. 242,840,062
_____________
(Cost $232,954,067)

MASTER LIMITED PARTNERSHIPS - 4.7%

OIL, GAS & CONSUMABLE FUELS - 4.7%
80,000 Copano Energy, LLC ............................... 2,700,000
90,000 Energy Transfer Partners, L.P. ................... 4,663,800
40,000 Enterprise Products Partners, L.P. ............... 1,664,400
60,000 Magellan Midstream Partners, L.P. ................ 3,390,000
_____________
Total Master Limited Partnerships ................ 12,418,200
_____________
(Cost $7,152,175)

EXCHANGE-TRADED FUNDS - 2.8%

CAPITAL MARKETS - 2.8%
264,200 SPDR KBW Bank ETF (b)............................. 6,845,422
5,000 SPDR S&P 500 ETF Trust ........................... 628,900
_____________
Total Exchange-Traded Funds ...................... 7,474,322
_____________
(Cost $4,548,862)

CONVERTIBLE PREFERRED SECURITIES - 0.2%

AUTOMOBILES - 0.2%
7,500 General Motors Co., 4.75% ........................ 405,825
_____________
Total Convertible Preferred Securities ........... 405,825
_____________
(Cost $375,000)

TOTAL INVESTMENTS - 99.8% ........................ 263,138,409
_____________
(Cost $245,030,104) (e)

Number of
Contracts Description Value
------------ -------------------------------------------------- -------------

CALL OPTIONS WRITTEN - (0.5%)
3M Co. Call
200 @ 90 due January 11................................. (5,200)
_____________

Ameriprise Financial, Inc. Call
563 @ 60 due January 11................................. (22,520)
_____________

Bristol-Myers Squibb Co. Call
500 @ 27 due January 11................................. (5,500)
_____________

See Notes to Financial Statements Page 9

FIRST TRUST ENHANCED EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2010

Number of
Contracts Description Value
------------ -------------------------------------------------- -------------

CALL OPTIONS WRITTEN - (CONTINUED)

Carnival Corp. Call
400 @ 47 due January 11................................ $ (30,000)
_____________

Caterpillar, Inc. Call
550 @ 95 due January 11................................ (73,150)
_____________

Dow Chemical (The) Co. Call
500 @ 36 due January 11................................. (9,500)
_____________

E.I. Du Pont. Call
300 @ 50 due January 11................................. (24,600)
_____________

Honeywell International, Inc. Call
300 @ 55 due January 11................................. (9,300)
_____________

J.C. Penney Co., Inc. Call
300 @ 36 due January 11................................. (4,800)
_____________

Oracle Corp. Call
250 @ 33 due January 11................................. (2,500)
_____________

ProLogis Call
600 @ 15 due January 11................................. (12,000)
_____________

S&P 500 Index Call (f)
1,000 @ 1275 due January 11............................... (1,000,000)
_____________

SPDR KBW Bank ETF Call
1,000 @ 26 due January 11................................. (62,500)
_____________

TOTAL CALL OPTIONS WRITTEN ....................... (1,261,570)
_____________
(Premiums received $1,054,558)

NET OTHER ASSETS AND LIABILITIES - 0.7% .......... 1,737,609
_____________
NET ASSETS - 100.0% .............................. $ 263,614,448
=============

___________________
(a) All percentages shown in the Portfolio of Investments are based on net
assets.

(b) Call options were written on a portion of the common stock position and
are fully covered by the common stock position.

(d) Non-income producing security.

(e) Aggregate cost for federal income tax purposes is $246,962,068. As of
December 31, 2010, the aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was
$30,814,590 and the aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over value was
$14,638,249.

(f) Call options on securities indices were written on a portion of the common
stock positions that were not used to cover call options on individual
equity securities held in the Fund's portfolio.

ADR American Depositary Receipt

Page 10 See Notes to Financial Statements

FIRST TRUST ENHANCED EQUITY INCOME FUND
PORTFOLIO OF INVESTMENTS (a) - (CONTINUED)
DECEMBER 31, 2010

VALUATION INPUTS

A summary of the inputs used to value the Fund's investments as of December 31,
2010 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):

ASSETS TABLE

LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2010 PRICES INPUTS INPUTS
_________________ _________________ _________________ _________________

Common Stocks*........................... $242,840,062 $242,840,062 $ -- $ --
Master Limited Partnerships*............. 12,418,200 12,418,200 -- --
Exchange-Traded Funds*................... 7,474,322 7,474,322 -- --
Convertible Preferred Securities*........ 405,825 405,825 -- --
_________________ _________________ _________________ _________________

TOTAL INVESTMENTS........................ $263,138,409 $263,138,409 $ -- $ --
================= ================= ================= =================

LIABILITIES TABLE
LEVEL 2 LEVEL 3
TOTAL LEVEL 1 SIGNIFICANT SIGNIFICANT
VALUE AT QUOTED OBSERVABLE UNOBSERVABLE
12/31/2010 PRICES INPUTS INPUTS
_________________ _________________ _________________ _________________

Call Options Written..................... $ (1,261,570) $ (1,261,570) $ -- $ --
================= ================= ================= =================

*See the Portfolio of Investments for industry breakdown.

See Notes to Financial Statements Page 11

FIRST TRUST ENHANCED EQUITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2010

ASSETS:

Investments, at value
(Cost $245,030,104)......................................................................... $ 263,138,409
Cash .......................................................................................... 1,606,011
Prepaid expenses............................................................................... 11,954
Receivables:
Dividends.................................................................................. 469,967
Interest................................................................................... 189
______________
Total Assets............................................................................ 265,226,530
==============

LIABILITIES:
Options written, at value (Premiums received $1,054,558)....................................... 1,261,570
Payables:
Investment advisory fees................................................................... 223,183
Audit and tax fees......................................................................... 44,200
Printing fees.............................................................................. 36,362
Administrative fees........................................................................ 20,074
Legal fees................................................................................. 12,450
Custodian fees............................................................................. 10,398
Transfer agent fees........................................................................ 2,583
Trustees' fees and expenses................................................................ 34
Other liabilities.............................................................................. 1,228
______________
Total Liabilities....................................................................... 1,612,082
______________
NET ASSETS..................................................................................... $ 263,614,448
==============

NET ASSETS CONSIST OF:
Paid-in capital................................................................................ $ 331,404,201
Par value...................................................................................... 199,732
Accumulated net investment income (loss)....................................................... 499,073
Accumulated net realized gain (loss) on investments and written options transactions........... (86,389,851)
Net unrealized appreciation (depreciation) on investments and written options.................. 17,901,293
______________
NET ASSETS..................................................................................... $ 263,614,448
==============
NET ASSET VALUE, per Common Share (par value $0.01 per Common Share)........................... $ 13.20
==============
Number of Common Shares outstanding (unlimited number of Common Shares has been authorized).... 19,973,164
==============

Page 12 See Notes to Financial Statements

FIRST TRUST ENHANCED EQUITY INCOME FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010

INVESTMENT INCOME:

Dividends...................................................................................... $ 7,824,487
Interest....................................................................................... 1,463
_____________
Total investment income................................................................. 7,825,950
_____________
EXPENSES:
Investment advisory fees....................................................................... 2,485,660
Administrative fees............................................................................ 226,299
Printing fees.................................................................................. 115,230
Custodian fees................................................................................. 52,947
Audit and tax fees............................................................................. 44,215
Legal fees..................................................................................... 43,670
Trustees' fees and expenses.................................................................... 39,662
Transfer agent fees............................................................................ 34,916
Other.......................................................................................... 64,542
_____________
Total expenses.......................................................................... 3,107,141
_____________
NET INVESTMENT INCOME (LOSS)................................................................... 4,718,809
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments................................................................................ 4,348,977
Written option transactions (a)............................................................ 913,389
_____________
Net realized gain (loss)....................................................................... 5,262,366
_____________
Net change in unrealized appreciation (depreciation) on:
Investments................................................................................ 25,720,085
Written options held (a)................................................................... (558,436)
_____________
Net change in unrealized appreciation (depreciation)........................................... 25,161,649
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS)........................................................ 30,424,015
_____________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............................... $ 35,142,824
=============

(a) Primary risk exposure is equity option contracts.

See Notes to Financial Statements Page 13

FIRST TRUST ENHANCED EQUITY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS

YEAR YEAR
ENDED ENDED
12/31/2010 12/31/2009
------------ ------------

OPERATIONS:
Net investment income (loss)........................................................ $ 4,718,809 $ 3,977,623
Net realized gain (loss)............................................................ 5,262,366 (55,181,310)
Net change in unrealized appreciation (depreciation)................................ 25,161,649 93,750,564
_____________ _____________
Net increase (decrease) in net assets resulting from operations..................... 35,142,824 42,546,877
_____________ _____________

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income............................................................... (11,824,976) (3,797,356)
Net realized gain................................................................... -- --
Return of capital................................................................... (5,751,408) (15,376,882)
_____________ _____________
Total distributions to shareholders................................................. (17,576,384) (19,174,238)
_____________ _____________
CAPITAL TRANSACTIONS:
Proceeds from Common Shares reinvested.............................................. -- --
_____________ _____________
Net increase (decrease) in net assets resulting from capital transactions........... -- --
_____________ _____________

Total increase (decrease) in net assets............................................. 17,566,440 23,372,639

NET ASSETS:
Beginning of period................................................................. 246,048,008 222,675,369
_____________ _____________
End of period....................................................................... $ 263,614,448 $ 246,048,008
============= =============

Accumulated net investment income (loss) at end of period........................... $ 499,073 $ 187,549
============= =============

CAPITAL TRANSACTIONS WERE AS FOLLOWS:
Common Shares at beginning of period................................................ 19,973,164 19,973,164
Common Shares issued as reinvestment under the Dividend Reinvestment Plan........... -- --
_____________ _____________
Common Shares at end of period...................................................... 19,973,164 19,973,164
============= =============

Page 14 See Notes to Financial Statements

FIRST TRUST ENHANCED EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD

YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
12/31/2010 12/31/2009 12/31/2008 12/31/2007 (a) 12/31/2006
---------- ---------- ---------- -------------- ----------

Net asset value, beginning of period........ $ 12.32 $ 11.15 $ 18.38 $ 18.65 $ 18.99
_________ _________ _________ __________ _________
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)................ 0.24 0.20 0.42 0.14 0.02
Net realized and unrealized gain (loss) .... 1.52 1.93 (6.05) 1.24 1.24
_________ _________ _________ __________ _________
Total from investment operations............ 1.76 2.13 (5.63) 1.38 1.26
_________ _________ _________ __________ _________
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income....................... (0.59) (0.19) (0.43) (0.14) (0.02)
Net realized gain .......................... -- -- (0.10) (1.51) (1.58)
Return of capital........................... (0.29) (0.77) (1.07) -- --
_________ _________ _________ __________ _________
Total from distributions ................... (0.88) (0.96) (1.60) (1.65) (1.60)
_________ _________ _________ __________ _________
Net asset value, end of period.............. $ 13.20 $ 12.32 $ 11.15 $ 18.38 $ 18.65
========= ========= ========= ========== =========

Market value, end of period................. $ 12.63 $ 11.70 $ 8.85 $ 16.14 $ 18.41
========= ========= ========= ========== =========

TOTAL RETURN BASED ON NET ASSET VALUE (b) .. 15.50% 22.24% (30.54)% 8.19% 7.09%
========= ========= ========= ========== =========

TOTAL RETURN BASED ON MARKET VALUE (b) ..... 16.37% 46.26% (37.22)% (3.76)% 17.26%
========= ========= ========= ========== =========
-----------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)....... $ 263,614 $ 246,048 $ 222,675 $ 367,009 $ 372,576
Ratio of total expenses to average net assets 1.25% 1.34% 1.31% 1.21% 1.24%
Ratio of net investment income (loss) to average
net assets................................ 1.90% 1.80% 2.80% 0.76% 0.13%
Portfolio turnover rate..................... 41% 74% 121% 174% 131%
-----------------------------------------------

(a) On September 14, 2007, Chartwell Investment Partners, L.P. became the
sub-advisor to the Fund.

(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 less than one year. Past performance is not
indicative of future results.

See Notes to Financial Statements Page 15

--------------------------------------------------------------------------------
Notes to Financial Statements
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

1. FUND DESCRIPTION

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, and on an ongoing and consistent basis
writes (sells) covered call options on a portion of the Fund's managed assets.
There can be no assurance that the Fund will achieve its investment objective.
The Fund may not be appropriate for all investors.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America 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. Domestic debt securities
and foreign securities are priced using data reflecting the earlier closing of
the principal markets for those securities. The 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 in accordance with valuation procedures
adopted by the Fund's Board of Trustees, and in accordance with provisions of
the 1940 Act. The following securities, for which accurate and reliable market
quotations are readily available, will be valued as follows:

Common stocks, MLPs, exchange-traded funds and other securities listed on
any national or foreign exchange (excluding the NASDAQ National Market
("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. If there are no transactions on the valuation
day, the securities are valued at the mean between the most recent bid
and asked prices.

Securities listed on the NASDAQ or the AIM are valued at the official
closing price. If there is no official closing price on the valuation
day, the securities are valued at the mean between the most recent bid
and asked prices.

Securities traded in the over-the-counter market are valued at
their closing bid prices.

Exchange-traded options and futures 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 and futures contracts
are valued at the mean between the most recent bid and asked prices.
Over-the-counter options and futures contracts are valued at their
closing bid prices.

All market quotations used in valuing the Fund's securities will be obtained
from a third party pricing service. If no quotation is received from a pricing
service, attempts will be made to obtain one or more broker quotes for the
security. In the event the pricing service does not provide a valuation, broker
quotations are not readily available, or the valuations received are deemed
unreliable, the Fund's Board of Trustees has designated First Trust Advisors
L.P. ("First Trust") to use a fair value method to value the Fund's securities.
Additionally, if events occur after the close of the principal markets for
certain securities (e.g., domestic debt and foreign securities) that could
materially affect the Fund's NAV, First Trust will use a fair value method to
value the Fund's securities. The use of fair value pricing is governed by
valuation procedures adopted by the Fund's Board of Trustees, and in accordance
with the provisions of the 1940 Act. As a general principle, the fair value of a
security is the amount which the Fund might reasonably expect to receive for the
security upon its current sale. However, in light of the judgment involved in
fair valuations, there can be no assurance that a fair value assigned to a
particular security will be the amount which the Fund might be able to receive
upon its current sale. Fair valuation of a security will be based on the
consideration of all available information, including, but not limited to the
following:

Page 16

--------------------------------------------------------------------------------
Notes to Financial Statements - (Continued)
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

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 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.

If the securities in question are foreign securities, the following additional
information may be considered:

1) the value of similar foreign securities traded on other foreign markets;
2) ADR trading of similar securities;
3) closed-end fund trading of similar securities;
4) foreign currency exchange activity;
5) the trading prices of financial products that are tied to baskets of
foreign securities;
6) factors relating to the event that precipitated the pricing problem;
7) whether the event is likely to recur; and
8) whether the effects of the event are isolated or whether they affect
entire markets, countries or regions.

Short-term investments that mature in less than 60 days when purchased are
valued at amortized cost.

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:

o Level 1 - Level 1 inputs are quoted prices in active markets for identical
securities. An active market is a market in which transactions for the
security occur with sufficient frequency and volume to provide pricing
information on an ongoing basis.
o Level 2 - Level 2 inputs are observable inputs, either directly or
indirectly, and include the following:
o Quoted prices for similar securities in active markets.
o Quoted prices for identical or similar securities in
markets that are non-active. A non-active market is a
market where there are few transactions for the security,
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 security (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.
o 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 security.

The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. A summary
of the inputs used to value the Fund's investments as of December 31, 2010, is
included with the Fund's Portfolio of Investments.

B. OPTION CONTRACTS:

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, L.P.
("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. By writing (selling) options, the Fund seeks to
generate additional income, in the form of premiums received, for writing
(selling) the options, and to provide a partial hedge against a market decline
in the underlying equity security. 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

Page 17

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

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 cancelled
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. 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 option transactions" 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.

The Fund is subject to equity price risk in the normal course of pursuing its
investment objective. Over-the-counter ("OTC") 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 daily on the accrual basis, including amortization of premiums and
accretion of discounts.

The Fund may hold publicly-traded master limited partnerships ("MLPs") and real
estate investment trusts ("REITs"). Distributions from such investments may
include a return of capital component from the MLP or REIT to the extent of the
cost basis of such MLP or REIT investments. The actual character of amounts
received during the year is not known until after the fiscal year end. The Fund
records the character of distributions received from the MLPs or REITs during
the year based on estimates available. The Fund's characterization may be
subsequently revised based on information received from the MLPs or 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 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 income and realized capital gains are determined in
accordance with income tax regulations, which may differ from accounting
principles generally accepted in the United States of America. 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 net asset value
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 time in the future. Permanent differences
incurred during the tax year ended December 31, 2010, resulting in book and tax
accounting differences, have been reclassified at year end to reflect an
increase in accumulated net investment income (loss) of $7,417,691, a decrease
in accumulated net realized gain (loss) on investments and written option
transactions of $708,873 and a decrease to paid-in capital of $6,708,818. Net
assets were not affected by this reclassification.

Page 18

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

The tax character of distributions paid during the fiscal year ended December
31, 2010 and December 31, 2009 was as follows:

Distributions paid from: 2010 2009
Ordinary income.................................... $ 11,824,976 $ 3,797,356
Long-term capital gain............................. -- --
Return of capital.................................. 5,751,408 15,376,882

As of December 31, 2010, the distributable earnings and net assets on a tax
basis were as follows:

Undistributed ordinary income.................... $ --
Undistributed capital gains...................... --
--------------
Total undistributed earnings..................... --
Accumulated capital and other losses............. (77,633,872)
Net unrealized appreciation (depreciation)....... 16,236,329
--------------
Total accumulated earnings (losses).............. (61,397,543)
Other............................................ (6,591,942)
Paid-in capital.................................. 331,603,933
--------------
Net assets....................................... $ 263,614,448
==============

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 or state income taxes.

The Fund intends to utilize provisions of the federal income tax laws which
allow it to carry realized capital losses forward for eight years 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, 2010, the
Fund had a capital loss carryforward for federal income tax purposes of
$77,633,872 as follows:

EXPIRATION DATE AMOUNT
December 31, 2016 $ 8,032,997
December 31, 2017 $ 69,600,875

During the taxable year ended December 31, 2010, the Fund utilized capital loss
carryforwards in the amount of $6,992,065.

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 ending 2007, 2008,
2009 and 2010 remain open to federal and state audit. As of December 31, 2010,
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.

On December 22, 2010, President Obama signed into law the Regulated Investment
Company Modernization Act of 2010 effective for tax years beginning after
December 22, 2010. Management is currently evaluating the impact the Act will
have on future financial statement disclosures.

F. EXPENSES:

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

G. ACCOUNTING PRONOUNCEMENT:

In January 2010, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") No. 2010-06 "Improving Disclosures about
Fair Value Measurements." ASU No. 2010-06 amends FASB Accounting Standards
Codification Topic 820, Fair Value Measurements and Disclosures, to require
additional disclosures regarding fair value measurements. Certain disclosures
required by ASU No. 2010-06 are effective for interim and annual reporting
periods beginning after December 15, 2010, and for interim periods within those
fiscal years. Management is currently evaluating the impact ASU No. 2010-06 will
have on the Fund's financial statement disclosures, if any.

Page 19

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

3. 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. 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 investment management services, First Trust is entitled to a
monthly fee calculated at an annual rate of 1.00% of the Fund's Managed Assets
(the average daily total asset value of the Fund minus the sum of the Fund's
liabilities, including the value of call options written (sold)).

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.

James A. Bowen, the President of First Trust, on October 12, 2010, acquired 100%
of the voting stock of The Charger Corporation, the general partner of First
Trust (the "Transaction"). The consummation of the Transaction was deemed to be
an "assignment" (as defined in the 1940 Act) of the Fund's investment management
agreement and investment sub-advisory agreement and resulted in the automatic
termination of the agreements. The Transaction did not impact the day-to-day
operations of the Fund.

The Board of Trustees of the Fund approved an interim investment management
agreement with First Trust and an interim investment sub-advisory agreement,
which were entered into effective upon the closing of the Transaction and were
effective for a maximum period of 150 days. A new investment management
agreement with First Trust and a new investment sub-advisory agreement were
approved by the Board of Trustees of the Fund and were submitted to shareholders
of the Fund as of the record date (September 30, 2010) to take effect upon such
shareholder approval. A special shareholder meeting of the Fund to vote on a
proposal to approve the new investment management agreement and the new
investment sub-advisory agreement was held on December 20, 2010, at which time
the new investment management agreement and new investment sub-advisory
agreement were approved by the Fund's shareholders. Until December 20, 2010,
advisory fees payable to First Trust and Chartwell were held in escrow. See
Submission of Matters to a Vote of Shareholders, in the Additional Information
section of this report, for the results.

BNY Mellon Investment Servicing (US) Inc. (formerly PNC Global Investment
Servicing (U.S.) Inc.) serves as the Fund's Administrator, Fund Accountant and
Transfer Agent in accordance with certain fee arrangements. PFPC Trust Company,
which will be renamed BNY Mellon Investment Servicing Trust Company effective
July 1, 2011, serves as the Fund's Custodian in accordance with certain fee
arrangements.

Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustee") is paid an annual retainer of
$10,000 per trust for the first 14 trusts of the First Trust Fund Complex and an
annual retainer of $7,500 per trust for each subsequent trust in the First Trust
Fund Complex. The annual retainer is allocated equally among each of the trusts.
No additional meeting fees are paid in connection with Board or Committee
meetings.

Additionally, the Lead Independent Trustee is paid $10,000 annually, the
Chairman of the Audit Committee is paid $5,000 annually, and each of the
Chairmen of the Nominating and Governance Committee and the Valuation Committee
is paid $2,500 annually to serve in such capacities, with such compensation paid
by the trusts in the First Trust Fund Complex and divided among those trusts.
Trustees are also reimbursed by the trusts in the First Trust Fund Complex for
travel and out-of-pocket expenses in connection with all meetings. The Lead
Independent Trustee and each Committee chairman will serve two-year terms before
rotating to serve as chairman of another committee or as Lead Independent
Trustee. The officers and "Interested" Trustee receive no compensation from the
Fund for serving in such capacities.

4. PURCHASES AND SALES OF SECURITIES

Cost of purchases and proceeds from sales of investment securities, excluding
short-term investments, for the year ended December 31, 2010 were $100,845,882
and $112,515,814, respectively.

Written option activity for the Fund was as follows:

NUMBER
OF
WRITTEN OPTIONS CONTRACTS PREMIUMS
-------------- -------------
Options outstanding at December 31, 2009........... 24,445 $ 2,227,651
Options written.................................... 240,951 25,362,448
Options expired.................................... (130,244) (11,278,573)
Options exercised.................................. (13,995) (693,617)
Options closed .................................... (114,694) (14,563,351)
--------- ------------
Options outstanding at December 31, 2010........... 6,463 $ 1,054,558
========= ============

Page 20

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

5. INDEMNIFICATION

The Fund has a variety of indemnification obligations under contracts with its
service providers. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.

6. RISK CONSIDERATIONS

Risks are inherent in all investing. The following summarizes some of the risks
that should be considered for the Fund. For additional information about the
risks associated with investing in the Fund, please see the Fund's prospectus
and statement of additional information, as well as other Fund regulatory
filings.

INVESTMENT AND MARKET 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. Security prices can fluctuate for several reasons including
the general condition of the securities markets, or when political or economic
events affecting the issuers occur. 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.

EQUITY SECURITIES RISK: The Fund invests in equity securities. 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. 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.

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 can not 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 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.

INDUSTRY 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.

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.

NON-U.S. RISK: The Fund may invest a portion of its assets in the equity
securities of issuers domiciled in jurisdictions other than the U.S. Investments
in the securities and instruments of non-U.S. issuers involve certain
considerations and risks not ordinarily associated with investments in
securities and instruments of U.S. issuers. Non-U.S. companies are not generally
subject to uniform accounting, auditing and financial standards and requirements
comparable to those applicable to U.S. companies. Non-U.S. securities exchanges,
brokers and listed companies may be subject to less government supervision and
regulation than exists in the United States. Dividend and interest income may be
subject to withholding and other non-U.S. taxes, which may adversely affect the
net return on such investments. A related risk is that there may be difficulty
in obtaining or enforcing a court judgment abroad.

Page 21

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010

7. SUBSEQUENT EVENTS

Management has evaluated the impact of all subsequent events to the Fund through
the date the financial statements were issued, and has determined that there
were no subsequent events requiring recognition or disclosure in the financial
statements that have not already been disclosed.

Page 22

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Report of Independent Registered Public Accounting Firm
--------------------------------------------------------------------------------

TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FIRST TRUST ENHANCED EQUITY
INCOME FUND:

We have audited the accompanying statement of assets and liabilities of First
Trust Enhanced Equity Income Fund (the "Fund"), including the portfolio of
investments, as of December 31, 2010, the related statement of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2010 by correspondence with the Fund's
custodian and brokers. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
First Trust Enhanced Equity Income Fund as of December 31, 2010, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for the each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the
United States of America.

/s/ Deloitte & Touche LLP

Chicago, Illinois
February 25, 2011

Page 23

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Additional Information
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010 (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 located at http://www.ftportfolios.com; and (3) on the
Securities and Exchange Commission's ("SEC") website located at
http://www.sec.gov.

Page 24

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Additional Information - (Continued)
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FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010 (UNAUDITED)

PORTFOLIO HOLDINGS

The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q
are available (1) by calling (800) 988-5891; (2) on the Fund's website located
at http://www.ftportfolios.com; (3) on the SEC's website at http://www.sec.gov;
and (4) for review and copying at the SEC's Public Reference Room ("PRR") in
Washington, DC. Information regarding the operation of the PRR may be obtained
by calling (800) SEC-0330.

NYSE CERTIFICATION INFORMATION

In accordance with Section 303A-12 of the NYSE Listed Company Manual, the Fund's
President has certified to the NYSE that, as of June 14, 2010, he was not aware
of any violation by the Fund of NYSE corporate governance listing standards. In
addition, the Fund's reports to the SEC on Form N-CSR and N-Q contain
certifications by the Fund's principal executive officer and principal financial
officer to the Fund's public disclosure in such reports and that are required by
Rule 30a-2 under the 1940 Act.

TAX INFORMATION

Of the ordinary income (including short-term capital gain, if applicable),
distributions made by the Fund during the year ended December 31, 2010, 4.05%
qualified for the corporate dividends received deduction available to corporate
shareholders. The Fund hereby designates as qualified dividend income 4.81% of
its ordinary income distributions (including short-term capital gain, if
applicable), for the year ended December 31, 2010.

SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

The Joint Annual Meeting of Shareholders of the Common Shares of Macquarie/First
Trust Global Infrastructure/Utilities Dividend & Income Fund, Energy Income and
Growth Fund, First Trust Enhanced Equity Income Fund, First Trust/Aberdeen
Global Opportunity Income Fund, First Trust/FIDAC Mortgage Income Fund, First
Trust Strategic High Income Fund, First Trust Strategic High Income Fund II,
First Trust/Aberdeen Emerging Opportunity Fund, First Trust Strategic High
Income Fund III, First Trust Specialty Finance and Financial Opportunities Fund
and First Trust Active Dividend Income Fund was held on April 14, 2010. At the
Annual Meeting, Trustees James A. Bowen and Niel B. Nielson were elected by the
Common Shareholders of the First Trust Enhanced Equity Income Fund as Class III
Trustees for a three-year term expiring at the Fund's annual meeting of
shareholders in 2013. The number of votes cast in favor of Mr. Bowen was
17,536,210, the number of votes against was 313,173 and the number of
abstentions was 2,123,780. The number of votes cast in favor of Mr. Nielson was
17,538,579, the number of votes against was 310,804 and the number of
abstentions was 2,123,780. Richard E. Erickson, Thomas R. Kadlec and Robert F.
Keith are the other current and continuing Trustees.

A special meeting of shareholders of the Fund was held on December 20, 2010. At
the meeting, shareholders approved a new investment management agreement between
the Fund and First Trust and a new investment sub-advisory agreement between the
Fund, First Trust and Chartwell. 10,221,520 (51.13%) of the outstanding voting
securities were voted at the meeting. The number of votes cast in favor of the
new investment management agreement was 9,317,640, the number of votes against
was 262,416, and the number of abstentions was 631,464. The number of votes cast
in favor of the new investment sub-advisory agreement was 9,300,492, the number
of votes against was 289,235 and the number of abstentions was 621,793. The
terms of the new investment management agreement and new investment sub-advisory
agreement are substantially similar to the terms of the previous agreements.

INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS

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

The Board of Trustees of First Trust Enhanced Equity Income Fund (the "Fund"),
including the Independent Trustees, approved the Interim Investment Management
Agreement and the New Investment Management Agreement (collectively, the
"Advisory Agreements") between the Fund and First Trust Advisors L.P. (the
"Advisor") and the Interim Investment Sub-Advisory Agreement and New Investment
Sub-Advisory Agreement (collectively, the "Sub-Advisory Agreements" and together
with the Advisory Agreements, the "Agreements") among the Fund, the Advisor and
Chartwell Investment Partners (the "Sub-Advisor"), at a meeting held on
September 20, 2010. The Board determined that the terms of the Agreements are
fair and reasonable and that the Agreements are in the best interests of the

Page 25

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Additional Information - (Continued)
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010 (UNAUDITED)

Fund. The Board also determined that it believes that the scope and quality of
services to be provided to the Fund under the Agreements will be at least
equivalent to the scope and quality of services provided under the current
Investment Management Agreement with the Advisor and the current Investment
Sub-Advisory Agreement among the Fund, the Advisor and the Sub-Advisor
(collectively, the "Original Agreements").

On August 25, 2010, the Independent Trustees were informed that James A. Bowen,
the President of the Advisor and a Trustee and Chairman of the Board of the
Fund, had entered into an agreement to acquire 100% of the common stock of The
Charger Corporation, the general partner of the Advisor (the "Transaction"), the
consummation of which would constitute a "change of control" of the Advisor and
would result in the "assignment" and termination of the current Investment
Management Agreement and may also result in the "assignment" and termination of
the current Investment Sub-Advisory Agreement pursuant to their terms and in
accordance with Section 15 of the Investment Company Act of 1940, as amended
(the "1940 Act"). On August 31, 2010, counsel to the Independent Trustees
forwarded to Mr. Bowen and the Advisor a request for information regarding the
Transaction. In anticipation of the consummation of the Transaction, the Board
at its meeting held on September 20, 2010, considered the information provided
by Mr. Bowen and the Advisor in response to the Independent Trustees' request
for information and considered the approval of the Agreements.

To reach its determination, the Board considered its duties under 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. In connection with its deliberations
regarding the Agreements, the Board noted the Advisor's representation that
apart from their effective and termination dates and any provisions of the
Interim Investment Management Agreement and Interim Investment Sub-Advisory
Agreement required by Rule 15a-4 under the 1940 Act, the Advisory Agreements and
Sub-Advisory Agreements were the same in all material respects as the Original
Agreements. The Board noted that it had recently considered the Advisor's and
Sub-Advisor's capabilities and the terms of the Original Agreements at a meeting
held on March 21-22, 2010 and had determined to renew the Original Agreements
for an additional one-year term (the "2010 Renewal"). The Board considered that
in connection with the 2010 Renewal, it had received a report from each of the
Advisor and the Sub-Advisor that, among other things, outlined the services
provided by the Advisor and the Sub-Advisor (including the relevant personnel
responsible for these services and their experience); the advisory and
sub-advisory fees for the Fund as compared to fees charged to other clients of
the Advisor and the Sub-Advisor and as compared to fees charged by investment
advisors and sub-advisors to comparable funds; expenses of the Fund as compared
to expense ratios of comparable funds; the nature of expenses incurred in
providing services to the Fund and the potential for economies of scale, if any;
financial data on the Advisor and 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. Prior to the September meeting, the Advisor
represented to the Board that there had been no material changes to the
information provided in March 2010 and that the Board could continue to rely on
such information. In addition, the Sub-Advisor represented to the Board that,
except for updates to its Form ADV and financial statements, there had been no
material changes to the information provided in March 2010 and that the Board
could continue to rely on such information.

Because the Board determined that any differences between the Original
Agreements and the Agreements were immaterial, the Board determined that much of
its previous analysis in connection with the 2010 Renewal applied to its review
and consideration of the Agreements. Accordingly, the Board took note of such
prior analysis and supplemented it with the additional considerations noted
below. The Independent Trustees also met separately with their independent legal
counsel to discuss the Transaction and their consideration of the Agreements.

In reviewing the Agreements, the Board considered the nature, quality and extent
of services to be provided by the Advisor and the Sub-Advisor under the
Agreements. The Board noted that the Transaction was not expected to result in
any changes to the personnel of the Advisor and Sub-Advisor responsible for
providing services to the Fund. The Board also considered the representations of
both the Advisor and the Sub-Advisor that there will be no diminution in
services provided under the Agreements. In light of the information presented
and the considerations made at the September meeting, including the
considerations made in connection with the 2010 Renewal, the Board concluded
that the nature, quality and extent of services to be provided to the Fund by
the Advisor and the Sub-Advisor under the Agreements are expected to be
satisfactory.

The Board considered the advisory and sub-advisory fees payable under the
Agreements, noting that they would be the same as the fees payable under the
Original Agreements. The Board considered that in connection with the 2010
Renewal it had reviewed the advisory fees charged by the Advisor to similar
funds and other non-fund clients, and had noted that the Advisor does not
provide advisory services to other clients with investment objectives and
policies similar to the Fund's. The Board also considered that it had reviewed
information provided by the Sub-Advisor as to the fees it charges to other
similar clients, noting that the sub-advisory fee is lower than the fees charged
by the Sub-Advisor to another closed-end fund with similar investment strategies
to which it provides advisory services. The Board also considered performance
information for the Fund, including the Fund's quarterly performance report,
which is part of the process that the Board has established for monitoring the
Fund's performance and portfolio risk on an ongoing basis. In light of the

Page 26

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Additional Information - (Continued)
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010 (UNAUDITED)

information presented on the fees and performance of the Fund and the
considerations made at the September meeting, including the considerations made
in connection with the 2010 Renewal, the Board concluded that the advisory and
sub-advisory fees were reasonable and appropriate in light of the nature,
quality and extent of services expected to be provided by the Advisor and
Sub-Advisor under the Agreements.

The Board noted that the Advisor has continued to invest in personnel and
infrastructure and considered whether fee levels reflect any economies of scale
for the benefit of shareholders. The Board concluded that the advisory fee
continues to reflect an appropriate level of sharing of any economies of scale
at current asset levels. The Board noted that in connection with the 2010
Renewal it had reviewed the costs of the services provided and profits realized
by the Advisor from serving as investment manager to the Fund for the twelve
months ended December 31, 2009. The Board considered its prior conclusion that
the Advisor's profitability appeared to be not excessive in light of the
services provided to the Fund. The Board considered whether the Advisor derives
any ancillary benefits from its relationship with the Fund and noted that the
typical fall out benefits to the Advisor such as soft dollars are not present.
The Board noted that the Advisor will receive compensation from the Fund for
providing fund reporting services. The Board concluded that any other fall out
benefits received by the Advisor or its affiliates would appear to be limited.

The Board considered the Sub-Advisor's representation in connection with the
2010 Renewal that the Sub-Advisor had continually reinvested its capital to
build a large, experienced group of professionals to serve its clients,
including the Fund. The Board considered that the sub-advisory fee rate was
negotiated at arm's length between the Advisor and the Sub-Advisor, an
unaffiliated third party. The Board considered the fall-out benefits realized by
the Sub-Advisor from its relationship with the Fund, including soft-dollar
arrangements.

Based on all of the information considered and the conclusions reached, the
Board, including the Independent Trustees, determined that the terms of the
Agreements are fair and reasonable and that the approval of the Agreements is in
the best interests of the Fund. No single factor was determinative in the
Board's analysis.

Page 27

--------------------------------------------------------------------------------
Board of Trustees and Officers
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010 (UNAUDITED)

NUMBER OF
PORTFOLIOS IN
THE FIRST OTHER
TRUST TRUSTEESHIPS OR
NAME, ADDRESS, TERM OF OFFICE FUND COMPLEX DIRECTORSHIPS
DATE OF BIRTH AND AND LENGTH OF PRINCIPAL OCCUPATIONS OVERSEEN BY HELD BY
POSITION WITH THE FUND SERVICE(2) DURING PAST 5 YEARS TRUSTEE TRUSTEE

------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
------------------------------------------------------------------------------------------------------------------------------------

Richard E. Erickson, Trustee o Three Year Physician; President, Wheaton 67 None
c/o First Trust Advisors L.P. Term Orthopedics; Co-owner and Co-Director
120 E. Liberty Drive, (January 1996 to May 2007), Sports
Suite 400 Med Center for Fitness; Limited
Wheaton, IL 60187 o Since Fund Partner, Gundersen Real Estate
D.O.B.: 04/51 Inception Limited Partnership; Member,
Sportsmed LLC

Thomas R. Kadlec, Trustee o Three Year President (March 2010 to Present), 67 Director of ADM
c/o First Trust Advisors L.P. Term Senior Vice President and Chief Investor
120 E. Liberty Drive, Financial Officer (May 2007 to March Services, Inc.
Suite 400 o Since Fund 2010), Vice President and Chief and ADM
Wheaton, IL 60187 Inception Financial Officer (1990 to May 2007), Investor
D.O.B.: 11/57 ADM Investor Services, Inc. (Futures Services
Commission Merchant) International

Robert F. Keith, Trustee o Three Year President (2003 to Present), 67 None
c/o First Trust Advisors L.P. Term Hibs Enterprises (Financial and
120 E. Liberty Drive, Management Consulting)
Suite 400 o Since June
Wheaton, IL 60187 2006
D.O.B.: 11/56

Niel B. Nielson, Trustee o Three Year President (June 2002 67 Director of
c/o First Trust Advisors L.P. Term to Present), Covenant Covenant
120 E. Liberty Drive, College Transport Inc.
Suite 400 o Since Fund
Wheaton, IL 60187 Inception
D.O.B.: 03/54

------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------

James A. Bowen, Trustee, o Three Year Chief Executive Officer (December 2010 67 Trustee of
President, Chairman of the Board Trustee to Present), President (until Wheaton College
and CEO(1) Term and December 2010), First Trust Advisors
120 E. Liberty Drive, Indefinite L.P. and First Trust Portfolios L.P.;
Suite 400 Officer Chairman of the Board of Directors,
Wheaton, IL 60187 Term BondWave LLC (Software Development
D.O.B.: 09/55 Company/Investment Advisor) and
o Since Fund Stonebridge Advisors LLC (Investment
Inception Advisor)

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

(1) Mr. Bowen is deemed an interested person of the Fund due to his position
of Chief Executive Officer of First Trust Advisors L.P., investment advisor
of the Fund.
(2) Currently, Robert F. Keith, as a Class I Trustee, is serving as a trustee
until the Fund's 2011 annual meeting of shareholders. Richard E. Erickson
and Thomas R. Kadlec, as Class II Trustees, are serving as trustees until
the Fund's 2012 annual meeting of shareholders. James A. Bowen and Niel B.
Nielson, as Class III Trustees, are serving as trustees until the Fund's
2013 annual meeting of shareholders. Officers of the Fund have an
indefinite term. The term "officer" means the president, vice president,
secretary, treasurer, controller or any other officer who performs a
policy making function.

Page 28

--------------------------------------------------------------------------------
Board of Trustees and Officers - (Continued)
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010 (UNAUDITED)

TERM OF OFFICE
NAME, ADDRESS AND POSITION AND OFFICES AND LENGTH OF PRINCIPAL OCCUPATIONS
DATE OF BIRTH WITH FUND SERVICE DURING PAST 5 YEARS

-----------------------------------------------------------------------------------------------------------------------------------
OFFICERS WHO ARE NOT TRUSTEES (3)
-----------------------------------------------------------------------------------------------------------------------------------

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

Erin E. Chapman Assistant Secretary o Indefinite term Assistant General Counsel
120 E. Liberty Drive, (October 2007 to Present),
Suite 400 o Since June 2009 Associate Counsel (March
Wheaton, IL 60187 2006 to October 2007), First
D.O.B.: 08/76 Trust Advisors L.P. and
First Trust Portfolios L.P.;
Associate Attorney (November
2003 to March 2006), Doyle &
Bolotin, Ltd.

James M. Dykas Assistant Treasurer o Indefinite term Controller (January 2011 to
120 E. Liberty Drive, Present) and Senior Vice President
Suite 400 o Since Fund (April 2007 to Present),
Wheaton, IL 60187 Inception Vice President (January 2005 to
D.O.B.: 01/66 April 2007), First Trust
Advisors L.P. and First
Trust Portfolios L.P.

Christopher R. Fallow Assistant Vice o Indefinite term Assistant Vice President
120 E. Liberty Drive, President (August 2006 to Present),
Suite 400 o Since Fund Associate (January 2005 to
Wheaton, IL 60187 Inception August 2006), First Trust
D.O.B.: 04/79 Advisors L.P. and First
Trust Portfolios L.P.

W. Scott Jardine Secretary o Indefinite term General Counsel, First Trust
120 E. Liberty Drive, Advisors L.P., First Trust
Suite 400 o Since Fund Portfolios L.P. and BondWave
Wheaton, IL 60187 Inception LLC (Software Development
D.O.B.: 05/60 Company/Investment Advisor);
Secretary of Stonebridge
Advisors LLC (Investment Advisor)

Daniel J. Lindquist Vice President o Indefinite term Senior Vice President
120 E. Liberty Drive, (September 2005 to Present),
Suite 400 o Since Fund First Trust Advisors L.P. and
Wheaton, IL 60187 Inception First Trust Portfolios L.P.
D.O.B: 02/70

Coleen D. Lynch Assistant Vice o Indefinite term Assistant Vice President
120 E. Liberty Drive, President (January 2008 to Present),
Suite 400 o Since July 2008 First Trust Advisors L.P. and
Wheaton, IL 60187 First Trust Portfolios L.P.;
DOB: 07/58 Vice President (May 1998 to
January 2008), Van Kampen
Asset Management and Morgan
Stanley Investment Management

Kristi A. Maher Assistant Secretary o Indefinite term Deputy General Counsel (May
120 E. Liberty Drive, and Chief Compliance 2007 to Present), Assistant
Suite 400 Officer o Assistant General Counsel (March 2004 to
Wheaton, IL 60187 Secretary since May 2007), First Trust
D.O.B.: 12/66 Fund Inception Advisors L.P. and First Trust
Portfolios L.P.
o Chief
Compliance
Officer since
January 2011

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

(3) The term "officer" means the president, vice president, secretary,
treasurer, controller or any other officer who performs a policy making
function.

Page 29

--------------------------------------------------------------------------------
Privacy Policy
--------------------------------------------------------------------------------

FIRST TRUST ENHANCED EQUITY INCOME FUND
DECEMBER 31, 2010 (UNAUDITED)

The open-end and closed-end funds advised by First Trust Advisors L.P. (each a
"Fund") value our relationship with you and consider your privacy an important
priority in maintaining our relationship. We are committed to protecting the
security and confidentiality of your personal information.

SOURCES OF INFORMATION

We may collect nonpublic personal information about you from the following
sources:

o Information we receive from you or your broker-dealer,
investment advisor or financial representative through
interviews, applications, agreements or other forms;

o Information about your transactions with us, our affiliates or
others;

o Information we receive from your inquiries by mail, e-mail or
telephone; and

o Information we collect on our website through the use of
"cookies." For example, we may identify the pages on our
website that your browser requests or visits.

INFORMATION COLLECTED

The type of data we collect may include your name, address, social security
number, age, financial status, assets, income, tax information, retirement and
estate plan information, transaction history, account balance, payment history,
investment objectives, marital status, family relationships and other personal
information.

DISCLOSURE OF INFORMATION

We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except as permitted by law. In addition to using
this information to verify your identity (as required by law), the permitted
uses may also include the disclosure of such information to unaffiliated
companies for the following reasons:

o In order to provide you with products and services and to
effect transactions that you request or authorize, we may
disclose your personal information as described above to
unaffiliated financial service providers and other companies
that perform administrative or other services on our behalf,
such as transfer agents, custodians and trustees, or that
assist us in the distribution of investor materials such as
trustees, banks, financial representatives and printers.

o We may release information we have about you if you direct us
to do so, if we are compelled by law to do so, or in other
legally limited circumstances (for example to protect your
account from fraud).

In addition, in order to alert you to our other financial products and services,
we may share your personal information with affiliates of the Fund.

CONFIDENTIALITY AND SECURITY

With regard to our internal security procedures, the Fund restricts access to
your nonpublic personal information to those individuals who need to know that
information to provide products or services to you. We maintain physical,
electronic and procedural safeguards to protect your nonpublic personal
information.

POLICY UPDATES AND INQUIRIES

As required by federal law, we will notify you of our privacy policy annually.
We reserve the right to modify this policy at any time; however if we do change
it, we will tell you promptly. For questions about our policy, or for additional
copies of this notice, please go to www.ftportfolios.com, or contact us at (800)
621-1675 (First Trust Portfolios) or (800) 222-6822 (First Trust Advisors).

Page 30

This Page Left Blank Intentionally.

[LOGO OMITTED]

First Trust

INVESTMENT SUB-ADVISOR
Chartwell Investment Partners, L.P.
1235 Westlakes Drive, Suite 400
Berwyn, PA 19312

ADMINISTRATOR,
FUND ACCOUNTANT &
TRANSFER AGENT
BNY Mellon Investment Servicing (US) Inc.
301 Bellevue Parkway
Wilmington, DE 19809

CUSTODIAN
PFPC Trust Company
8800 Tinicum Boulevard
Philadelphia, PA 19153

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
111 S. Wacker Drive
Chicago, IL 60606

LEGAL COUNSEL
Chapman and Cutler LLP
111 W. Monroe Street
Chicago, IL 60603

ITEM 2. CODE OF ETHICS.

(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or
a third party.

(c) There have been no amendments, during the period covered by this report,
to a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code
of ethics description.

(d) The registrant has not granted any waivers, including an implicit waiver,
from a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set
forth in paragraph (b) of this item's instructions.

(e) Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

As of the end of the period covered by the report, the registrant's board of
trustees has determined that Thomas

R. Kadlec and Robert F. Keith are qualified to serve as audit committee
financial experts serving on its audit committee and that each of them is
"independent," as defined by Item 3 of Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) Audit Fees (Registrant) -- The aggregate fees billed for each of the
last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements were $39,000.00 for 2009 and
$39,000.00 for 2010.

(b) Audit-Related Fees (Registrant) -- The aggregate fees billed in each
of the last two fiscal years, for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under paragraph
(a) of this Item were $0 for 2009 and $0 for 2010.

Audit-Related Fees (Investment Adviser) -- The aggregate fees billed
in each of the last two fiscal years of the registrant for assurance and related
services by the principal accountant that are reasonably related to the
performance of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item were $0 for 2009 and $0 for 2010.

(c) Tax Fees (Registrant) -- The aggregate fees billed in each of the last
two fiscal years for professional services rendered by the principal accountant
for tax compliance, tax advice, and tax planning to the registrant were
$7,320.00 for 2009 and $5,215.18 for 2010. These fees were for tax preparation.

Tax Fees (Investment Adviser) -- The aggregate fees billed in each of
the last two fiscal years of the registrant for professional services rendered
by the principal accountant for tax compliance, tax advice, and tax planning to
the registrant's adviser were $0 for 2009 and $0 for 2010.

(d) All Other Fees (Registrant) -- The aggregate fees billed in each of
the last two fiscal years for products and services provided by the principal
accountant to the registrant, other than the services reported in paragraphs (a)
through (c) of this Item were $0 for 2009 and $0 for 2010.

All Other Fees (Investment Adviser) -- The aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant to the registrant's investment adviser, other than services
reported in paragraphs (a) through (c) of this Item were $0 for 2008 and $0 for
2009.

(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

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

The Committee is also responsible for the pre-approval of the independent
auditor's engagements for non-audit services with the registrant's adviser (not
including a sub-adviser whose role is primarily portfolio management and is
sub-contracted or overseen by another investment adviser) and any entity
controlling, controlled by or under common control with the investment adviser
that provides ongoing services to the registrant, if the engagement relates
directly to the operations and financial reporting of the registrant, subject to
the de minimis exceptions for non-audit services described in Rule 2-01 of
Regulation S-X. If the independent auditor has provided non-audit services to
the registrant's adviser (other than any sub-adviser whose role is primarily
portfolio management and is sub-contracted with or overseen by another
investment adviser) and any entity controlling, controlled by or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to its policies, the Committee
will consider whether the provision of such non-audit services is compatible
with the auditor's independence.

(e)(2) The percentage of services described in each of paragraphs (b)
through (d) for the registrant and the registrant's investment adviser of this
Item that were approved by the audit committee pursuant to the pre-approval
exceptions included in paragraph (c)(7)(i)(c) or paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X are as follows:

(b) 0%

(d) 0%

(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most recent
fiscal year that were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees was less than fifty
percent.

(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the Registrant for 2009 were $7,320.00
and $36,000.00 for the Registrant and the Registrant's investment adviser,
respectively, and for 2010 were $5,215.18 and $6,000.00, for the Registrant and
the Registrant's investment adviser, respectively.

(h) The Registrant's audit committee of its Board of Trustees determined
that the provision of non-audit services that were rendered to the Registrant's
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the Registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X is compatible with maintaining the principal accountant's
independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

(a) The Registrant has a separately designated audit committee consisting of
all the independent trustees of the Registrant. The members of the audit
committee are: Thomas R. Kadlec, Niel B. Nielson, Richard E. Erickson and
Robert F. Keith.

ITEM 6. INVESTMENTS.

(a) Schedule of Investments in securities of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.

(b) Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

The Proxy Voting Policies are attached herewith.

CHARTWELL INVESTMENT PARTNERS
PROXY VOTING POLICIES AND PROCEDURES

As Further Amended July, 2009

PURPOSE. Chartwell Investment Partners ("Chartwell") has adopted these Proxy
Voting Policies and Procedures ("Policies") to seek to ensure that it exercises
voting authority on behalf of Chartwell clients in a manner consistent with the
best interests of each client and its agreement with the client.

SCOPE. These Policies apply where clients have delegated the authority and
responsibility to Chartwell to decide how to vote proxies. Chartwell does not
accept or retain authority to vote proxies in accordance with individual client
guidelines (with the exception of Clients who wish to instruct Chartwell not to
vote in accordance with AFL-CIO Key Vote Survey recommendations, as described
below). Clients that wish to arrange to vote proxies in accordance with their
own guidelines may elect to do so at any time by notifying Chartwell. Chartwell
generally will follow these Policies if asked to make recommendations about
proxy voting to clients who request that advice but have not delegated proxy
voting responsibility to Chartwell.

GUIDING PRINCIPLES. Chartwell believes that voting proxies in the best interests
of each client means making a judgment as to what voting decision is most likely
to maximize total return to the client as an investor in the securities being
voted, and casting the vote accordingly. For this reason, Chartwell's evaluation
of the possible impact of a proxy vote on the economic interests of company
shareholders similarly situated to Chartwell's clients will be the primary
factor governing Chartwell's proxy voting decisions.

USE OF INDEPENDENT PROXY VOTING SERVICE. Chartwell has retained RiskMetrics
Group, an independent proxy voting service, to assist it in analyzing specific
proxy votes with respect to securities held by Chartwell clients and to handle
the mechanical aspects of casting votes. Historically, Chartwell has placed
substantial reliance on RiskMetrics Group's (RMG - formerly ISS) analyses and
recommendations and generally gives instructions to RMG/ISS to vote proxies in
accordance with RMG/ISS' recommendations, unless Chartwell reaches a different
conclusion than RMG/ISS about how a particular matter should be voted. RMG/ISS'
proxy voting recommendations typically are made available to Chartwell about a
week before the proxy must be voted, and are reviewed and monitored by members
of the Proxy Voting Committee (and, in certain cases, by Chartwell portfolio
managers), with a view to determining whether it is in the best interests of
Chartwell's clients to vote proxies as recommended by RMG/ISS, or whether client
proxies should be voted on a particular proposal in another manner. In addition,
Chartwell generally votes in accordance with AFL-CIO Key Votes Survey, a list of
proposals and meetings based on the AFL-CIO Proxy Voting Guidelines. To the
extent that any of the proxy voting positions stated in these Policies are
inconsistent with a Key Vote Survey recommendation, Chartwell will generally
vote in accordance with the Key Vote Survey recommendation on all impacted
securities unless any client has chosen to instruct Chartwell to refrain from
doing so. In that case, Chartwell will vote the client's securities position in
accordance with these Policies (which may or may not cause the vote to be the
same as the Key Vote Survey recommendation).

ADMINISTRATION OF POLICIES. Chartwell has established a Proxy Voting Committee
to oversee and administer the voting of proxies on behalf of clients, comprised
of approximately five representatives of the firm's compliance and operations
departments. The Committee's responsibilities include reviewing and updating
these Policies as may be appropriate from time to time; identifying and
resolving any material conflicts of interest on the part of Chartwell or its
personnel that may affect particular proxy votes; evaluating and monitoring, on
an ongoing basis, the analyses, recommendations and other services provided by
RMG/ISS or another third party retained to assist Chartwell in carrying out its
proxy voting responsibilities; when deemed appropriate by the Committee,
consulting with Chartwell portfolio managers and investment professionals on
particular proposals or categories of proposals presented for vote; and
determining when and how client proxies should be voted other than in accordance
with the general rules and criteria set forth in Chartwell's Proxy Voting
Guidelines or with the recommendations of RMG or another independent proxy
voting service retained by Chartwell .. CONFLICTS OF INTEREST. It is Chartwell's
policy not to exercise its authority to decide how to vote a proxy if there is a
material conflict of interest between Chartwell's interests and the interests of
the client that owns the shares to be voted that could affect the vote on that
matter. To seek to identify any such material conflicts, a representative of the
Proxy Voting Committee screens all proxies and presents any potential conflicts
identified to the Committee for determination of whether the conflict exists and
if so, whether it is material.

Conflicts of interest could result from a variety of circumstances, including,
but not limited to, significant personal relationships between executive
officers of an issuer and Chartwell personnel, a current or prospective
investment adviser-client relationship between an issuer or a pension plan
sponsored by an issuer and Chartwell, a significant ownership interest by
Chartwell or its personnel in the issuer and various other business, personal or
investment relationships. Generally, a current or prospective adviser-client
relationship will not be considered material for these purposes if the net
advisory revenues to Chartwell have not in the most recent fiscal year and are
not expected in the current fiscal year to exceed 1/2 of 1 percent of
Chartwell's annual advisory revenue.

Currently, the Proxy Voting Committee has determined that voting in accordance
with AFL-CIO Key Votes Survey recommendations is not a material conflict of
interest. In reaching this decision, the Committee recognized that Chartwell has
many union clients and many clients that are not union-oriented. By voting all
impacted securities positions in accordance with AFL-CIO recommendations, it
could be said that Chartwell is attempting to retain or attract existing and
prospective union clients. However, the overall number of proxy issues in the
AFL-CIO Key Votes Survey on which Chartwell has historically voted is
approximately 14 - 30 out of a total of approximately 500 company meetings and
thousands of proxy votes cast by Chartwell each year. Chartwell does not use its
AFL-CIO Key Votes Survey rankings for marketing purposes so to the extent any
client or prospect becomes aware of how Chartwell votes in the Surveys, it does
so on its own. Recognizing that deciding this is not a material conflict of
interest is fundamentally subjective, Chartwell nonetheless discloses its
practices to clients and invites clients to instruct Chartwell not to change any
vote in these Policies to be consistent with an AFL-CIO Key Votes Survey
recommendation (even though voting consistently with these Policies may result
in voting the same way).

In the event the Committee determines that there is a material conflict of
interest that may affect a particular proxy vote, Chartwell will NOT make the
decision how to vote the proxy in accordance with these Policies unless the
Policies specify how votes shall be cast on that particular type of matter,
i.e., "for" or "against" the proposal. Where the Policies provide that the
voting decision will be made on a "case-by-case" basis, Chartwell will either
request the client to make the voting decision, or the vote will be cast in
accordance with the recommendations of RMG/ISS or another independent proxy
voting service retained by Chartwell for that purpose. Chartwell also will not
provide advice to clients on proxy votes without first disclosing any material
conflicts to the client requesting such advice.

WHEN CHARTWELL DOES NOT VOTE PROXIES. Chartwell may not vote proxies respecting
client securities in certain circumstances, including, but not limited to,
situations where (a) the securities are no longer held in a client's account;
(b) the proxy and other relevant materials are not received in sufficient time
to allow analysis or an informed vote by the voting deadline; (c) Chartwell
concludes that the cost of voting the proxy will exceed the expected potential
benefit to the client; (d) the securities have been loaned out pursuant to a
client's securities lending program and are unavailable to vote; or (e) in the
case of voting in accordance with AFL-CIO Key Votes Survey recommendations, a
client has instructed Chartwell not to vote in accordance with such
recommendations but to vote in accordance with these Policies (which may or may
not be the same on a given proxy issue).

PROXY VOTING GUIDELINES

Generally, Chartwell votes all proxies in accordance with the RiskMetrics
guidelines. These guidelines may be changed or supplemented from time to time.
Votes on matters not covered by these guidelines will be determined in
accordance with the principles set forth above. Client guidelines may be
inconsistent with these guidelines and may cause Chartwell to vote differently
for different clients on the same matter.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

(a)(1) IDENTIFICATION OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS AND
DESCRIPTION OF ROLE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS

INFORMATION PROVIDED AS OF MARCH 7, 2011

Chartwell Investment Partners, L.P. ("Chartwell" or the "Sub-Adviser"), founded
in 1997, is an employee-owned investment firm focusing on institutional,
sub-advisory and private client relationships. The firm is a research-based
equity and fixed-income manager with a disciplined, team-oriented investment
process. The Portfolio Management Team consists of the following:

PORTFOLIO MANAGEMENT TEAM

BERNARD P. SCHAFFER
MANAGING PARTNER, SENIOR PORTFOLIO MANAGER
Mr. Schaffer is a founding partner of Chartwell and has 38 years of investment
industry experience. He serves as senior portfolio manager for Chartwell's
closed-end fund and hedged large-cap equity strategies. As the lead portfolio
manager for the Fund since 2007, he focuses on securities in the Energy,
Financials and Consumer Staples sectors. He was employed as a Senior Portfolio
Manager at Delaware Investment Advisers from 1990 to 1997, managing two
closed-end equity income funds that utilized option strategies to generate
portfolio gains. Mr. Schaffer earned a Bachelor's degree in Economics from
Villanova University and an MBA from the University of Pennsylvania's Wharton
School.

DOUGLAS W. KUGLER, CFA
PRINCIPAL, PORTFOLIO MANAGER
Mr. Kugler is a portfolio manager on Chartwell's large-cap equity portfolio
management team and has 12 years of investment industry experience. His areas of
focus include the Transportation and Consumer Discretionary sectors of the
market. He has been a portfolio manager for the Fund since 2007. From 1993 to
2003, he held several positions at Morgan Stanley Investment Management (Miller
Anderson & Sherrerd) including Head of Mutual Fund Administration and Vice
President and Treasurer of the MAS Funds, Junior Associate in the Equity
Department, and his last position held prior to joining Chartwell was Senior
Associate and Analyst for the Large Cap Value team. Prior to joining Morgan
Stanley, he was an Assistant Vice President and Senior Accounting Officer at
Provident Financial Processing Corporation. Mr. Kugler is a member of the CFA
(Chartered Financial Analysts) Institute and the CFA Society of Philadelphia. He
holds the Chartered Financial Analyst designation. Mr. Kugler earned a
Bachelor's degree in Accounting from the University of Delaware.

KEVIN A. MELICH, CFA
MANAGING PARTNER, SENIOR PORTFOLIO MANAGER
Mr. Melich is a founding partner of Chartwell and has 45 years of investment
industry experience. He is a member of Chartwell's large-cap equity portfolio
management team and implements portfolio management decisions for high-yield
equity institutional portfolios, including the Fund. He has been a portfolio
manager for the Fund since 2007. His areas of focus are in the Automotive,
Machinery, Office Electronics and REITs sectors. He was employed as a Senior
Portfolio Manager at Delaware Investment Advisers from 1983 to 1997. There he
managed over $1.6 billion for institutional accounts in the value style. From
1979 to 1983, Mr. Melich was a Partner with the economics consulting firm A.B.
Laffer Associates. From 1964 to 1979, he was the Senior Investment Officer and
Manager of the Trust and Investment Division of Security Trust Company. Mr.
Melich is a member of the CFA Institute and the CFA Society of Philadelphia. He
holds the Chartered Financial Analyst designation. He earned a Bachelor of
Science degree in Economics from St. John Fisher College.

The investment team for the First Trust Enhanced Equity Income Fund consists of
three portfolio managers with an average of 27 years of investment experience.
All team members conduct fundamental research and meet with company management.
Purchase and sale decisions are made by the portfolio managers. The day-to-day
work and the management of the Fund is divided evenly among the portfolio
managers.

(a)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBER AND POTENTIAL CONFLICTS OF INTEREST

INFORMATION PROVIDED AS OF DECEMBER 31, 2010

OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBER

(assets in millions).

# of Accounts Total Assets
Managed for for which
Total # of which Advisory Advisory Fee
Name of Portfolio Manager or Accounts Total Fee is Based on is Based on
Team Member Type of Accounts* Managed Assets Performance Performance
----------- ----------------- ------- ------ ----------- -----------

1. Bernard P. Schaffer Registered Investment 1 $58.5 0 $0
Companies:
Other Pooled Investment 0 $0 0 $0
Vehicles:
Other Accounts: 16 $177.1 0 $0

2. Kevin A. Melich Registered Investment 1 $58.5 0 $0
Companies:
Other Pooled Investment 0 $0 0 $0
Vehicles:
Other Accounts: 16 $177.1 0 $0

3. Douglas W. Kugler Registered Investment 1 $58.5 0 $0
Companies:
Other Pooled Investment 0 $0 0 $0
Vehicles:
Other Accounts: 16 $177.1 0 $0

POTENTIAL CONFLICTS OF INTERESTS

The portfolio managers manage other accounts for Chartwell including the
Chartwell Dividend and Income Fund, (CWF) and institutional portfolios of
similar investment styles. None of these portfolio managers manage any hedge
funds nor any accounts with performance-based fees.

When registered funds and investment accounts are managed side-by-side, firm
personnel must strictly follow the policies and procedures outlined in our Trade
Allocation Policy to ensure that accounts are treated in a fair and equitable
manner, and that no client or account is favored over another. When registered
funds and investment accounts are trading under the same investment product, and
thus trading the same securities, shares are allocated on a pro-rata basis based
on market value, and all portfolios obtain the same average price.

On a monthly basis, a member of Chartwell's Compliance Group, oversees the
performance calculation process handled in Operations, and completes a
spreadsheet of monthly portfolio returns by client. This person provides this
spreadsheet to the CEO, CCO and various investment personnel for their review.
Any performance dispersion noted by anyone on the distribution list is
investigated by a member of Chartwell's Compliance Group by reviewing the
underlying transactional detail, holdings & security weightings by portfolio.
This monthly process ensures that all portfolios that are managed under the same
investment product are treated fairly, and traded in accordance with firm
policy.

(a)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBERS

INFORMATION PROVIDED AS OF MARCH 7, 2011

The compensation paid to a Chartwell portfolio manager and analyst consists of
base salary, annual bonus, ownership distribution, and an annual profit-sharing
contribution to the firm's retirement plan.

A portfolio manager's and analyst's base salary is determined by Chartwell's
Compensation Committee and is reviewed at least annually. A portfolio manager's
and analyst's experience, historical performance, and role in firm or product
team management are the primary considerations in determining the base salary.
Industry benchmarking is utilized by the Compensation Committee on an annual
basis.

Annual bonuses are determined by the Compensation Committee based on a number of
factors. The primary factor is a performance-based compensation schedule that is
applied to all accounts managed by a portfolio manager within a particular
investment product, and is not specific to any one account. The bonus is
calibrated based on the gross composite performance of such accounts versus the
appropriate benchmark and peer group rankings. Portfolio construction, sector
and security weighting, and performance are reviewed by the Compliance Committee
and Compensation Committee to prevent a manager from taking undue risks.
Additional factors used to determine the annual bonus include the portfolio
manager's contribution as an analyst, product team management, and contribution
to the strategic planning and development of the investment group as well as the
firm.

Ownership distributions are paid to a portfolio manager and analyst based on the
portfolio manager's and analyst's ownership interest, or percentage limited
partnership interest, in Chartwell multiplied by total net cash

distributions paid during the year.

(a)(4) DISCLOSURE OF SECURITIES OWNERSHIP

INFORMATION PROVIDED AS OF DECEMBER 31, 2010:

Name of Portfolio Manager or Dollar Range of Fund Shares
Team Member Beneficially Owned
----------- -------------------

Bernard P. Schaffer $0
Kevin A. Melich $0
Douglas W. Kugler $0

(b) Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

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 11. CONTROLS AND PROCEDURES.

(a) The registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the "1940
Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days
of the filing date of the report that includes the disclosure required by
this paragraph, based on their evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's second fiscal quarter
of the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control
over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes- Oxley Act of 2002 are attached hereto.

SIGNATURES

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.

(registrant) First Trust Enhanced Equity Income Fund
-----------------------------------------------------------------

By (Signature and Title)* /s/ James A. Bowen
-----------------------------------------------------
James A. Bowen, Chairman of the Board, President and
Chief Executive Officer
(principal executive officer)

Date February 23, 2011
----------------------

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.

Date February 23, 2011
----------------------

By (Signature and Title)* /s/ Mark R. Bradley
-----------------------------------------------------
Mark R. Bradley, Treasurer, Chief Financial Officer
and Chief Accounting Officer
(principal financial officer)

Date February 23, 2011
----------------------

* Print the name and title of each signing officer under his or her signature.