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 811-22080
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First Trust Active Dividend 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.
1120 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: November 30
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Date of reporting period: May 31, 2009
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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.

[LOGO OMITTED] FIRST TRUST
[GRAPHIC OMITTED]

SEMI-ANNUAL
REPORT

For the Six Months Ended
May 31, 2009

FIRST TRUST
ACTIVE DIVIDEND
INCOME FUND

[LOGO OMITTED] AVIANCE
CAPITAL MANAGEMENT

Front Cover

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TABLE OF CONTENTS
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First Trust Active Dividend Income Fund (FAV)
Semi-Annual Report
May 31, 2009

Shareholder Letter 1
At A Glance 2
Portfolio Commentary 3
Portfolio of Investments 8
Statement of Assets and Liabilities 12
Statement of Operations 13
Statements of Changes in Net Assets 14
Financial Highlights 15
Notes to Financial Statements 16
Additional Information 20

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 Aviance Capital Management, LLC ("Aviance" or
the "Sub-Advisor") and their respective representatives, taking into account the
information currently available to them. Forward-looking statements include all
statements that do not relate solely to current or historical fact. For example,
forward-looking statements include the use of words such as "anticipate,"
"estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or
other words that convey uncertainty of future events or outcomes.

Forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
First Trust Active Dividend 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 objectives. 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 investing in the Fund. See "Risk Considerations" in the Notes to
Financial Statements for a discussion of 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
Aviance 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 regulatory filings.

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SHAREHOLDER LETTER
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First Trust Active Dividend Income Fund (FAV)
Semi-Annual Report
May 31, 2009

Dear Shareholders:

2008 brought all sorts of challenges to investors. Throughout the year, the
financial sector was plagued with failures in banking, insurance and brokerage
firms. By year's end, after a meltdown in the credit markets, historically high
levels of volatility in the stock market, and the resulting turmoil to the
overall economy, the Dow Jones Industrial Average's total return was -31.92% (as
of 12/31/08). In fact, 2008 was the Dow's third worst calendar year since its
inception in 1896. For the year, the negative total return performance of the
Dow was surpassed only by 1931 and 1907, two years in which the U.S. was also
enduring a major banking crisis. Of the thirty stocks in the Dow, only two were
up in 2008. However, many economists believe the recession that began in
December, 2007 ended in March, 2009. In fact, the Dow's total return from March
9 (the statistical end of the bear market) to May 31, 2009, was 30.83%. Of
course, no one can predict that this trend will continue.

Yet, regardless of the market, First Trust Advisors L.P. ("First Trust") has
always believed that in order to be successful in reaching your financial goals,
you should be invested for the long term. A long-term investor understands that
the market, from a historical perspective, has always experienced ups and downs.
But history has shown that the patient investor is typically rewarded over the
long term. While no one has the ability to predict when the markets will
recover, we believe that staying invested in quality products and having a
long-term perspective can help investors reach their financial goals.

The report you hold contains detailed information about your investment in First
Trust Active Dividend Income Fund (the "Fund"). It contains a portfolio
commentary from the Fund's portfolio management team that provides a market
recap for the period, a performance analysis and a market and Fund outlook.
Additionally, the report provides the Fund's financial statements for the period
covered by the report. I encourage you to read this document and discuss it with
your financial advisor.

First Trust has been through many types of markets and remains committed to
bringing you quality investment solutions regardless of the inevitable ups and
downs experienced in the market. We offer a variety of products that may fit
many financial plans to help those investors seeking long-term investment
success. As well, we are committed to making available up-to-date information
about your investments so you and your financial advisor have current
information on your portfolio.

We continue to value our relationship with you, and we thank you for the
opportunity to assist you in achieving your financial goals.

Sincerely,

/s/ James A. Bowen

James A. Bowen
President of First Trust Active Dividend Income Fund

Page 1

First Trust Active Dividend Income Fund
"AT A GLANCE"
As of May 31, 2009 (Unaudited)

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Fund Statistics
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Symbol on New York Stock Exchange FAV
Common Share Price $9.99
Common Share Net Asset Value ("NAV") $9.86
Premium (Discount) to NAV 1.32%
Net Assets Applicable to Common Shares $71,144,707
Current Quarterly Distribution per Common Share (1) $0.4600
Current Annualized Distribution per Common Share $1.8400
Current Distribution Rate on Closing Common Share Price (2) 18.42%
Current Distribution Rate on NAV (2) 18.66%
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Common Share Price & NAV (weekly closing price)
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[CHART OMITTED]

[DATA POINTS REPRESENTED IN CHART]

Common Share Price NAV
5/30/2008 $16.40 $17.68
6/6/2008 16.64 17.45
6/13/2008 16.70 17.24
6/20/2008 16.18 16.93
6/27/2008 15.00 16.41
7/3/2008 15.30 16.12
7/11/2008 14.80 16.02
7/18/2008 14.88 15.37
7/25/2008 14.44 15.19
8/1/2008 15.02 15.01
8/8/2008 14.73 15.44
8/15/2008 14.73 15.38
8/22/2008 13.52 15.20
8/29/2008 13.65 15.16
9/5/2008 13.12 14.71
9/12/2008 14.70 14.82
9/19/2008 13.40 15.02
9/26/2008 12.11 14.19
10/3/2008 11.68 12.88
10/10/2008 7.59 11.14
10/17/2008 10.70 11.42
10/24/2008 8.75 10.12
10/31/2008 9.33 10.96
11/7/2008 8.81 10.74
11/14/2008 8.15 10.18
11/21/2008 6.63 9.46
11/28/2008 8.03 10.61
12/5/2008 8.48 10.58
12/12/2008 9.20 10.44
12/19/2008 8.73 10.49
12/26/2008 10.20 10.39
1/2/2009 10.11 10.47
1/9/2009 10.70 10.13
1/16/2009 9.66 9.61
1/23/2009 9.16 9.28
1/30/2009 9.82 9.04
2/6/2009 10.09 9.47
2/13/2009 9.24 9.10
2/20/2009 7.40 8.60
2/27/2009 7.55 8.28
3/6/2009 6.25 7.81
3/13/2009 7.47 8.50
3/20/2009 7.90 8.71
3/27/2009 8.77 9.15
4/3/2009 8.92 9.50
4/9/2009 9.66 9.60
4/17/2009 10.13 9.80
4/24/2009 9.15 9.33
5/1/2009 9.38 9.37
5/8/2009 9.38 9.86
5/15/2009 9.48 9.32
5/22/2009 9.68 9.46
5/31/2009 9.99 9.86

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Performance
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Average Annual
Total Return
6 Months Ended One Year Ended Inception (9/20/2007)
5/31/2009 5/31/2009 to 5/31/2009
FUND PERFORMANCE
NAV (3) 2.23% -33.83% -21.28%
Market Value (4) 36.85% -27.72% -22.80%

INDEX PERFORMANCE
Russell 1000 Value Index -0.79% -35.35% -41.96%
S&P 500 Index 4.05% -32.57% -24.12%
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% of Total
Top 10 Holdings Investments
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McDonald's Corp. 5.2%
QUALCOMM, Inc. 3.8
BHP Billiton Ltd. 3.7
Merck & Co., Inc. 3.2
Schlumberger Ltd. 2.9
MetLife, Inc. 2.8
NIKE, Inc., Class B 2.5
PepsiCo, Inc. 2.5
Praxair, Inc. 2.5
General Electric Co. 2.4
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Total 31.5%
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% of Total
Sector Allocation Investments
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Financials 26.4%
Information Technology 15.1
Energy 13.1
Consumer Discretionary 12.1
Materials 11.3
Consumer Staples 8.0
Industrials 6.7
Health Care 4.1
Telecommunication Services 1.9
Utilities 1.3
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Total 100.0%
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(1) Most recent distribution paid or declared through 5/31/2009. 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 5/31/2009.
(3) Total return based on NAV is the combination of reinvested dividend
distributions and reinvested capital gain distributions, if any, at prices
obtained by the Dividend Reinvestment Plan and changes in NAV per share and
does not reflect sales load. Past performance is not indicative of future
results.
(4) Total return based on market value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan and changes in Common
Share price. Past performance is not indicative of future results.

Page 2

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PORTFOLIO COMMENTARY (Unaudited)
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First Trust Active Dividend Income Fund (FAV)
Semi-Annual Report

Sub-Advisor

Aviance Capital Management, LLC ("Aviance"), a registered investment advisor, is
the Sub-Advisor to the Fund. Aviance is an asset management firm focused on
managing multi-cap value and growth portfolios. Aviance was founded, and is
currently managed, by Christian C. Bertelsen, Michael J. Dixon, and Edward C.
Bertelsen, who are all Founding Members of the firm. Aviance is responsible for
the day-to-day management of the Fund's portfolio utilizing a team led by
Christian C. Bertelsen and Mark Belanian. Mr. Bertelsen and Mr. Belanian have
approximately six years of experience working together and approximately 50
years of cumulative industry experience.

Portfolio Management Team

Effective July 16, 2009, there was a change in Aviance's portfolio management
team for the Fund. Gary T. Dvorchak, who was on the portfolio management team
for the Fund since the Fund's inception, is no longer with the firm. The Fund's
investment objective, philosophy and portfolio construction process will remain
as they have been since the Fund's inception. Furthermore, Mr. Bertelsen and Mr.
Belanian will remain responsible for the day-to-day management of the Fund's
portfolio. They have been joined on the Fund's portfolio management team by
James R. Neel, CFA. Mr. Neel joined Aviance in January 2009 and has 30 years of
investment management experience.

CHRISTIAN C. BERTELSEN, Chief Investment Officer and Senior Portfolio Manager

Christian C. Bertelsen has over 41 years of investment experience. Since
November 2004, he was Chief Investment Officer at Global Financial Private
Capital ("GFPC"), the incubator company of Aviance. From July 1997 to December
2003, Mr. Bertelsen was director of the value equity group for Phoenix
Investment Counsel, during which time he was responsible for developing
strategies that focused on the analysis of dividends as a means of identifying
undervalued companies and generating income. He served as Chief Investment
Officer at Dreman Value Advisors between January 1996 and July 1997, and was a
Senior Vice President with Eagle Asset Management between April 1993 and January
1996. From June 1986 to April 1993, Mr. Bertelsen headed the equity investment
department at Colonial Advisory Services, Inc., and managed the Colonial Fund.
Prior to 1986, he held positions with Batterymarch Financial Management and
State Street Bank & Trust Company. Mr. Bertelsen holds an M.B.A. and a B.A. in
Economics and History from Boston University.

GARY T. DVORCHAK, CFA, Portfolio Manager - Quantitative Dividend Analyst

Gary T. Dvorchak, CFA, has over 16 years of experience in the institutional
investment management business. Before joining Aviance, Mr. Dvorchak founded
Channel Island Partners, a hedge fund investment advisor. From January 2004 to
October 2005, Channel Island Partners managed the Systematic Income Fund, an
income-oriented, dividend capture fund. The fund was closed and the partners
moved their assets into Aviance's dividend strategy upon the merger of Channel
Island Partners into GFPC. From May 1998 to November 2001, Mr. Dvorchak was a
senior portfolio manager at Provident Investment Counsel, a Pasadena-based
institutional asset manager with $20 billion of assets under management. Between
April 1993 and April 1998, Mr. Dvorchak was a senior analyst and member of the
investment committee at Sit Investment Associated, an institutional manager
based in Minneapolis. Mr. Dvorchak earned an M.B.A. in 1992 from the Kellogg
Graduate School of Management at Northwestern University. He graduated Phi Beta
Kappa in 1986 from the University of Iowa and earned the Chartered Financial
Analyst designation in 1996.

MARK BELANIAN, Portfolio Analyst

Mark Belanian has over 9 years of investment industry experience. Mr. Belanian
joined GFPC/Aviance in February 2006 from Merrill Lynch's Global Private Client
Group in Sarasota, Florida, where he had worked since February 2005. Mr.
Belanian worked with Christian Bertelsen as a portfolio analyst at Phoenix
Investment Counsel. Mr. Belanian graduated from Trinity College with a B.A. in
Modern Language.

JAMES R. NEEL, CFA, Portfolio Manager

James R. Neel, CFA, has over 30 years of experience in investment management.
While managing equity mutual funds for Kemper in the 1990s, Mr. Neel won a
Lipper Award in the Growth and Income category. Mr. Neel also served as the
portfolio strategist for Kemper Financial Services, CEO of Dreman Value
Advisors, where he worked with Christian Bertelsen, and Partner at Loomis
Sayles. Mr. Neel is a graduate of Michigan State University, where he received a
B.A. in 1965. He received an M.B.A. from Michigan State University in 1966. Mr.
Neel earned the Chartered Financial Analyst designation in 1976. Mr. Neel also
served four years as a U.S. Navy officer.

Page 3

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PORTFOLIO COMMENTARY (Unaudited) (Continued)
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Commentary

First Trust Active Dividend Income Fund

The primary investment objective of First Trust Active Dividend Income Fund
("FAV" or the "Fund") is to seek a high level of current income. Its secondary
objective is capital appreciation. The Fund pursues its investment objectives by
investing at least 80% of its managed assets in a diversified portfolio of
dividend-paying, multi-cap equity securities of both U.S. and non-U.S. issuers
that the Fund's Sub-Advisor believes offer the potential for attractive income
and/or capital appreciation. There can be no assurance that the Fund's
investment objectives will be achieved.

Market Recap

This section discusses the primary factors which impacted FAV's two integrated
activities throughout the six months ended May 31, 2009. In our 2008 annual
report, we described the year as two distinct periods: a year of two halves.
During the six months covered by this report, equity markets exhibited similar
schizophrenic behavior. The period from December 1, 2008 to March 9, 2009 saw
the Standard & Poor's 500 Index ("S&P 500") drop by approximately 20%. From
March 9, 2009 to May 31, 2009, the S&P 500 gained approximately 28%.

For the first two months of 2009, the financial markets as we know them teetered
on the edge of disaster. Confidence was non-existent and no prediction of doom
could to be discounted. Then, on March 10th, as if by magic and with scant
fundamental support, market psychology changed and the S&P 500 jumped by over
6%.

On March 18th, the Federal Reserve's Open Market Committee ("FOMC") announced a
surprise move to purchase up to $1 trillion of U.S. government and agency debt.
The announcement ignited an immediate rally in Treasuries and the stock market,
with 30-year yields dropping 35 basis points and the S&P 500 gaining 2.75% on
that day alone. Although an equity recovery had already begun, this event
established a perceived bottom to many fear factors, including the inexorable
decline of equities. Trough to peak, the S&P 500 moved from 676.53 to 832.86
during March 2009, a rise of 23%, which caught many investors by surprise.

How Was the Fund Affected during the Period?

In late February, 2009, we became bullish on short-term prospects for equities;
in early April, following the modification of Mark-to-Market (which refers to
the accounting standards of assigning a value to a position held in a financial
instrument based on the current fair market price for the instrument or similar
instruments), our conviction in recovery increased. On both occasions, we
modified the Fund's allocations accordingly and increased our willingness to
raise the beta of the Fund's portfolio.

This resulted in the higher financials sector exposure of the Fund than the S&P
500; a higher weighting than the Fund has normally maintained. The Fund also
maintained an overweight position in basic materials, since we felt the
perception of an economic recovery would lead to renewed demand for commodities.

What Drove the 2009 Rally?

The following data illustrates the type of company that drove the 2009 rally:
smaller caps and lower quality stocks.

The table below sorts the broad universe of U.S. stocks (about 4,000 names) into
decile groups based on their market capitalization. Next to each decile group is
the weighted average return.

Market Capitalization Influence on Returns

Decile Group by
Market Cap. Market Cap. ($ Millions) Return from Bottom

1 $102,098 22%
2 $18,400 29%
3 $11,788 26%
4 $8,212 30%
5 $5,581 36%
6 $4,165 26%
7 $3,410 31%
8 $2,487 36%
9 $1,632 51%
10 $853 70%

Source: Bloomberg

Page 4

Clearly, the smallest stocks are posting largest gains, while the largest caps
are lagging. It's no surprise to see smaller cap stocks leading the start of a
recovery, just as they have done in previous rallies. Note that the Fund invests
primarily in stocks with a market cap of $5 billion or higher.

Quality Fundamentals

More importantly to FAV, the companies with the worst fundamentals coming into
the bottom of the market are leading the way out, from a performance
perspective. Our next table ranks decile groups based on the change in 2009
earnings estimate over the previous six months. In this way, we are using
earnings estimate improvement as an approximate proxy for quality. (FAV seeks to
invest in companies with "quality" fundamentals.)

Estimate Change Influence on Returns

Decile Group by
Estimate Change Estimate Change Return from Bottom

1 -85% 108%
2 -65% 67%
3 -60% 51%
4 -53% 42%
5 -33% 36%
6 -27% 29%
7 -28% 24%
8 -19% 19%
9 -19% 12%
10 -8% 3%

Source: Bloomberg

Clearly, the more earnings collapsed since the panic began in the fall of 2008,
the stronger the return from the bottom, indicating quality companies are not
leading this rally. In other words, the rally is being led by stocks that are
rebounding because they dropped so far during the months the U.S. was in
recession. In Aviance's opinion, the rally is not sustainable with this group of
stocks leading the "rebound." Additionally, the quality measures shown below,
while less compelling, support the idea that "junkier" companies are leading the
way.

The table below sorts companies into decile groups based on debt load (as
measured by debt/total capital). Generally speaking, the more debt a company
carried, the better the stock performance over the last few months. Or, at
least, there is no performance penalty for being debt-laden.

Debt Load Influence on Returns

Decile Group by
Debt Load Debt/Capital Ratio Return from Bottom

1 70% 39%
2 47% 30%
3 35% 29%
4 27% 26%
5 18% 27%
6 12% 30%
7 5% 23%
8 1% 29%
9 0.5% 21%
10 0% 31%

Source: Bloomberg

Free Cash Flow is one of the Fund's primary investment parameters as we seek to
determine a company's ability to cover their dividend payment. The table below
shows those companies with collapsing free cash flow towards the end of the
credit crunch were not punished for this during the recent rally.

Page 5

Free Cash Flow Influence on Returns

Decile Group by
FCF Change in Free Cash Flow Return from Bottom

1 -639% 32%
2 -187% 34%
3 -91% 26%
4 -46% 19%
5 -13% 28%
6 28% 27%
7 72% 26%
8 122% 28%
9 246% 28%
10 2,062% 28%

Source: Bloomberg

Government Influence

Governmental efforts to avert a global financial meltdown, re-inflate our
domestic economy and avoid crippling inflation and devaluation thereafter are
now taking effect after an initial lag. We also felt that the Obama
Administration's approach to healthcare would probably hurt many companies
operating within the U.S. healthcare industry. Therefore, healthcare was our
primary underweight sector during the reporting period.

Dividend Recap

For the Fund, the reporting period was dominated by the need to capture enough
income to meet the April dividend. At an NAV low of $7.71, the $0.46 per share
dividend payment represented approximately 24% annualized dividend income.
Accordingly, the Fund prioritized the maintenance of its dividend above capital
return, and achieved this goal.

Media headlines had claimed during the period that dividends are disappearing
fast. However, in reality, dividends remained in good supply and at yield levels
sufficient to maintain FAV's dividend payment. While the number of companies
cutting their dividend increased to a record level, it should be noted that of
the 7,000 publicly-owned companies that reported dividend information to S&P in
the first quarter of 2009, 367 cut dividends during the first quarter and 283
companies announced plans to increase dividends. In our view this supports the
thesis that dividends are exceptionally robust in a recession; it certainly
doesn't foretell the end of dividends, in our opinion.

The above statistics demonstrate one of the Sub-Advisor's main value
philosophies: revenues may fall further and the economy may take a long time to
recover, but we do not underestimate the ability of "quality" companies to
generate free cash flows in spite of the recession. These are the type of
companies the Sub-Advisor aims to include in the Fund's holdings.

Performance Analysis

The net asset value ("NAV") total return1 of the Fund for the six months ended
May 31, 2009 was 2.23%. Over the same period, the total return of the S&P 500
Index, the Fund's primary benchmark index, was 4.05%, while the Fund's secondary
benchmark indices, the Russell 1000 Value and the DJ Select Dividend Index,
returned -0.79% and -13.88% respectively.

The Fund's market value total return2 for the six months ended May 31, 2009 was
36.85%.

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1 Total return based on NAV is the combination of reinvested dividend
distributions and reinvested capital gain distributions, if any, at prices
obtained by the Dividend Reinvestment Plan and changes in NAV per share and
does not reflect sales load.

2 Total return based on market value is the combination of reinvested dividend
distributions and reinvested capital gains distributions, if any, at prices
obtained by the Dividend Reinvestment Plan and changes in Common Share price.

Page 6

NAV Performance

The performance of the Fund's NAV over the reporting period was well correlated
to the S&P 500 and Russell 1000 Value indices, with a slight lag behind the
former and a slight outperformance of the latter. The large underperformance of
the DJ Select Dividend Index supports the data tables displayed previously in
that quality balance sheet companies generating consistent free cash flows have
yet to be fully rewarded during the rally, even though they were severely
punished in the down market. The Fund's overweight in financials and basic
materials performed much better than its benchmarks. Conversely, the Fund's
underweight in healthcare detracted from performance versus the indices.

Due to the lack of dividends produced by technology companies, the sector is a
traditional underweight for the Fund. During the reporting period, this hurt the
NAV compared to the benchmarks as technology experienced strong gains. This is
expected from a sector which features growth potential and is not as focused on
balance sheet fundamentals. Although the Fund held market weight in industrials,
a number of ill-timed dividend captures meant this sector underperformed the
market.

Market and Fund Outlook

As the Fund's Sub-Advisor, we continually ask ourselves: is the recent recovery
in equity prices predicated on hard economic data or just a correction of an
oversold market during the build up to March? At the end of May, we could either
take the pessimistic view that the S&P 500 is up 2% for the year without a great
deal of absolute positive data (and therefore had nowhere to go from there), or
we could be optimistic and see an index which is over 40% off its 2007 peaks
(and therefore has much room for further gains).

In our opinion, all our primary data is currently pointing to a meaningful
pullback before any form of continued rally can recommence. The tables we have
included show the current rally is not based on larger, quality companies and
may not be sustainable. Although the global financial meltdown has now largely
passed, the great debt and derivative unwind still has a way to run, primarily
consumer de-leveraging.

Consumers still have little to be confident about with unemployment running
high, commodity prices rising and credit available only to those who probably
don't need it. Moreover, we have yet to see a clear bottom to the housing
price/foreclosure spiral in many areas.

When a retrenchment is complete and confidence returns, liquidity (cash sitting
on the sidelines) also returns, as measured by factors such as the liquidity
base and the ratio of cash in circulation to stock market value. To be
sustainable, any rally should be led by more fundamentally sound companies; the
type of companies FAV tends to invest in.

Fundamentals have to improve from here, in our opinion. The "relief rally" may
be fully priced in. For continued advancement, we need to see clear proof of
economic strength. Rallies can be driven by sentiment in the short run, but must
be supported by fundamentals in the long run.

Page 7

First Trust Active Dividend Income Fund
Portfolio of Investments (a)
May 31, 2009 (Unaudited)

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

COMMON STOCKS - 84.9%

AEROSPACE & DEFENSE - 2.2%
5,000 Honeywell International, Inc. $ 165,800
30,000 Northrop Grumman Corp. 1,428,600
----------------
1,594,400
----------------
AUTO COMPONENTS - 1.3%
45,000 Johnson Controls, Inc. 896,850
----------------
BEVERAGES - 3.8%
21,000 Coca-Cola (The) Co. 1,032,360
32,500 PepsiCo, Inc. 1,691,625
----------------
2,723,985
----------------
CAPITAL MARKETS - 3.5%
11,000 Goldman Sachs Group (The), Inc. 1,590,270
50,000 Schwab (Charles) Corp. 880,000
----------------
2,470,270
----------------
CHEMICALS - 4.8%
11,000 Air Products and Chemicals, Inc. 712,580
25,000 Eastman Chemicals Co. 1,036,000
23,000 Praxair, Inc. 1,683,600
----------------
3,432,180
----------------
COMMERCIAL BANKS - 2.2%
27,000 Canadian Imperial Bank of Commerce 1,346,490
12,000 U.S. Bancorp 230,400
----------------
1,576,890
----------------
COMMUNICATIONS EQUIPMENT - 6.3%
65,000 Cisco Systems, Inc. 1,202,500
20,000 Harris Corp. 621,600
2,484 Harris Stratex Networks, Inc. 11,849
60,000 QUALCOMM, Inc. 2,615,400
----------------
4,451,349
----------------
COMPUTERS & PERIPHERALS - 1.1%
2,500 International Business Machines Corp. 265,700
50,000 NCR Corp. (b) 537,000
----------------
802,700
----------------
CONSTRUCTION & ENGINEERING - 1.0%
15,000 Fluor Corp. 704,700
----------------
DIVERSIFIED FINANCIAL SERVICES - 2.9%
120,000 Bank of America Corp. 1,352,400
19,000 JPMorgan Chase & Co. 701,100
----------------
2,053,500
----------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.8%
26,000 AT&T, Inc. 644,540
23,000 Verizon Communications, Inc. 672,980
----------------
1,317,520
----------------
ELECTRIC UTILITIES - 1.0%
5,000 FPL Group, Inc. 282,650
40,000 NV Energy, Inc. 400,000
----------------
682,650
----------------

Page 8 See Notes to Financial Statements

First Trust Active Dividend Income Fund
Portfolio of Investments (a) (Continued)
May 31, 2009 (Unaudited)

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

COMMON STOCKS - (Continued)

ENERGY EQUIPMENT & SERVICES - 3.2%
35,000 Schlumberger Ltd. $ 2,003,050
5,000 Tidewater, Inc. 238,350
----------------
2,241,400
----------------
FOOD & STAPLES RETAILING - 0.1%
4,000 Sysco Corp. 95,840
----------------
FOOD PRODUCTS - 0.7%
3,000 Kraft Foods, Inc., Class A 78,330
30,000 Sara Lee Corp. 269,700
5,000 Unilever N.V. 119,700
----------------
467,730
----------------
HEALTH CARE EQUIPMENT & SUPPLIES - 0.1%
2,000 Baxter International, Inc. 102,380
----------------
HOTELS, RESTAURANTS & LEISURE - 5.0%
60,000 McDonald's Corp. 3,539,400
----------------
HOUSEHOLD PRODUCTS - 1.8%
25,000 Kimberly-Clark Corp. 1,297,250
----------------
INDUSTRIAL CONGLOMERATES - 2.3%
120,000 General Electric Co. 1,617,600
----------------
INSURANCE - 3.8%
1,000 ACE Ltd. 43,990
15,000 Allstate (The) Corp. 385,950
25,000 Hartford Financial Services Group (The), Inc. 358,500
60,000 MetLife, Inc. 1,890,000
----------------
2,678,440
----------------
INTERNET SOFTWARE & SERVICES - 0.7%
1,250 Google, Inc., Class A (b) 521,537
----------------
MEDIA - 1.3%
80,000 News Corp., Class B 898,400
----------------
METALS & MINING - 6.0%
26,000 Allegheny Technologies, Inc. 920,660
45,000 BHP Billiton Ltd. - ADR 2,530,800
40,000 Southern Copper Corp. 837,200
----------------
4,288,660
----------------
MULTI-UTILITIES - 0.3%
10,000 Ameren Corp. 232,600
----------------
OIL, GAS & CONSUMABLE FUELS - 9.4%
30,000 Anadarko Petroleum Corp. 1,433,400
10,000 BP Amoco PLC - ADR 495,000
20,000 ConocoPhillips 916,800
5,000 Devon Energy Corp. 316,200
125,000 El Paso Corp. 1,218,750
10,000 EnCana Corp. 554,300
10,000 Frontline Ltd. 233,800
2,000 Kinder Morgan Energy Partners, L.P. 102,280
5,000 Murphy Oil Corp. 295,050
20,000 Nordic American Tanker Shipping Ltd. 670,800

See Notes to Financial Statements Page 9

First Trust Active Dividend Income Fund
Portfolio of Investments (a) (Continued)
May 31, 2009 (Unaudited)

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

COMMON STOCKS - (Continued)

OIL, GAS & CONSUMABLE FUELS - (Continued)
10,000 Tesoro Corp. $ 169,400
5,000 TOTAL S.A. - ADR 288,250
----------------
6,694,030
----------------
PHARMACEUTICALS - 3.8%
25,000 Bristol-Myers Squibb Co. 498,000
80,000 Merck & Co., Inc. 2,206,400
----------------
2,704,400
----------------
REAL ESTATE INVESTMENT TRUSTS (REITs) - 2.1%
90,000 Annaly Capital Management, Inc. 1,254,600
5,000 Boston Properties, Inc. 241,600
----------------
1,496,200
----------------
ROAD & RAIL - 0.9%
20,000 CSX Corp. 635,200
----------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.2%
25,000 Analog Devices, Inc. 610,250
30,000 Intel Corp. 471,600
30,000 Maxim Integrated Products, Inc. 486,900
95,000 Taiwan Semiconductor Manufacturing Co. Ltd., ADR 1,039,300
18,000 Texas Instruments, Inc. 349,200
----------------
2,957,250
----------------
SOFTWARE - 2.1%
55,000 Microsoft Corp. 1,148,950
10,000 Salesforce.com 379,500
----------------
1,528,450
----------------
SPECIALTY RETAIL - 1.6%
50,000 Home Depot (The), Inc. 1,158,000
----------------
TEXTILE, APPAREL & LUXURY GOODS - 2.4%
30,000 NIKE, Inc., Class B 1,711,500
----------------
TOBACCO - 1.2%
50,000 Altria Group, Inc. 854,500
----------------

TOTAL COMMON STOCKS - 84.9% 60,427,761
(Cost $57,950,537) ----------------

INVESTMENT COMPANIES - 8.9%

ASSET MANAGEMENT & CUSTODY BANKS
30,000 India Fund, Inc. 881,400
25,000 iShares MSCI Brazil Index Fund 1,379,500
25,000 iShares MSCI South Korea Index Fund 902,250
90,000 iShares MSCI Taiwan Index Fund 1,015,200
38,500 iShares FTSE/Xinhua China 25 Index Fund 1,437,590
40,000 ProShares UltraShort Oil & Gas 688,000
---------------
TOTAL INVESTMENT COMPANIES 6,303,940
(Cost $5,392,911) ---------------

Page 10 See Notes to Financial Statements

First Trust Active Dividend Income Fund
Portfolio of Investments (a) (Continued)
May 31, 2009 (Unaudited)

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

MASTER LIMITED PARTNERSHIP - 1.9%

CAPITAL MARKETS
125,000 Blackstone Group (The) L.P. $ 1,368,750
(Cost $1,426,168) ----------------

TOTAL INVESTMENTS - 95.7% 68,100,451
(Cost $64,769,616) (c)

NET OTHER ASSETS AND LIABILITIES - 4.3% 3,044,256
----------------
NET ASSETS - 100.0% $ 71,144,707
================

- ------------------
(a) All percentages shown in the Portfolio of Investments are based on net
assets.
(b) Non-income producing security.
(c) Aggregate cost for financial reporting purposes, which approximates the
aggregate cost for federal income tax purposes. As of May 31, 2009, the
aggregate gross unrealized appreciation for all securities in which there
was an excess of value over tax cost was $3,844,091 and the aggregate gross
unrealized depreciation for all securities in which there was an excess of
tax cost over value was $513,256.

ADR - American Depositary Receipt

Valuation Inputs

A summary of the inputs used to value the Fund's investments as of May 31, 2009
is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial
Statements):

Valuation of Inputs Investments
-------------------------------------------------- -------------
Level 1 - Quoted Prices $68,100,451
Level 2 - Other Significant Observable Inputs --
Level 3 - Significant Unobservable Inputs --
-------------
Total $68,100,451
=============

See Notes to Financial Statements Page 11

First Trust Active Dividend Income Fund
Statement of Assets and Liabilities
May 31, 2009 (Unaudited)

ASSETS:
Investments, at value
(Cost $64,769,616) $ 68,100,451
Cash 1,056,087
Prepaid expenses 22,372
Receivables:
Investment securities sold 13,176,073
Dividends 916,860
Interest 63
----------------
Total Assets 83,271,906
----------------

LIABILITIES:
Payables:
Investment securities purchased 12,002,684
Investment advisory fees 58,559
Audit and tax fees 21,650
Legal fees 17,126
Custodian fees 12,991
Printing fees 8,667
Administrative fees 4,261
Transfer agent fees 819
Accrued expenses and other liabilities 442
----------------
Total Liabilities 12,127,199
----------------
NET ASSETS $ 71,144,707
================

NET ASSETS consist of:
Paid-in capital $137,324,801
Par value 72,156
Accumulated net investment income (loss) 2,191,988
Net unrealized appreciation (depreciation) on investments 3,330,835
Accumulated net realized gain (loss) on investments (71,775,073)
----------------
NET ASSETS $ 71,144,707
================

NET ASSET VALUE, per Common Share (par value $0 01 per Common Share) $ 9 86
================

Number of Common Shares outstanding (unlimited number of Common Shares has been authorized) 7,215,625
================

Page 12 See Notes to Financial Statements

First Trust Active Dividend Income Fund
Statement of Operations
For the Six Months Ended May 31, 2009 (Unaudited)

INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $106,239) $ 8,253,614
Interest 416
---------------
Total investment income 8,254,030
---------------

EXPENSES:
Investment advisory fees 339,437
Custodian fees 36,428
Legal fees 35,150
Administrative fees 25,063
Audit and tax fees 21,400
Trustees' fees and expenses 20,508
Printing fees 16,229
Transfer agent fees 11,427
Other 15,331
---------------
Total expenses 520,973
---------------
NET INVESTMENT INCOME (LOSS) 7,733,057
---------------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments (6,675,289)
Net change in unrealized appreciation (depreciation) on investments 167,196
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) (6,508,093)
---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,224,964
===============

See Notes to Financial Statements Page 13

First Trust Active Dividend Income Fund
Statements of Changes in Net Assets

Six Months
Ended Year
5/31/2009 Ended
(Unaudited) 11/30/2008
--------------- ----------------

OPERATIONS:
Net investment income (loss) $ 7,733,057 $ 12,824,886
Net realized gain (loss) on investments (6,675,289) (62,037,019)
Net change in unrealized appreciation (depreciation) on investments 167,196 4,507,917
---------------- ---------------
Net increase (decrease) in net assets resulting from operations 1,224,964 (44,704,216)
---------------- ---------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (6,633,596) (14,173,245)
Net realized gain -- (1,782,751)
---------------- ---------------
Total distributions to shareholders (6,633,596) (15,955,996)
---------------- ---------------

CAPITAL TRANSACTIONS:
Proceeds from sale of Common Shares reinvested 96,929 --
---------------- ---------------
Net increase (decrease) in net assets resulting from capital transactions 96,929 --
---------------- ---------------

Total increase (decrease) in net assets (5,311,703) (60,660,212)

NET ASSETS:
Beginning of period 76,456,410 137,116,622
---------------- ---------------
End of period $ 71,144,707 $ 76,456,410
================ ===============
Accumulated net investment income (loss) at end of period $ 2,191,988 $ 1,092,527
================ ===============

CAPITAL TRANSACTIONS were as follows:
Common Shares at beginning of period 7,205,236 7,205,236
Common Shares issued as reinvestment under the Dividend Reinvestment Plan 10,389 --
---------------- ---------------
Common Shares at end of period 7,215,625 7,205,236
================ ===============

Page 14 See Notes to Financial Statements

First Trust Active Dividend Income Fund
Financial Highlights
For a Common Share outstanding throughout each period

Six Months
Ended Year Period
5/31/2009 Ended Ended
(Unaudited) 11/30/2008 11/30/2007 (a)
---------------- ---------------- ----------------

Net asset value, beginning of period $ 10.61 $ 19.03 $ 19.10 (b)
---------------- ---------------- ----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (g) 1.07 1.78 0.52
Net realized and unrealized gain (loss) (0.90) (7.99) (0.55)(h)
---------------- ---------------- ----------------
Total from investment operations 0.17 (6.21) (0.03)
---------------- ---------------- ----------------
DISTRIBUTIONS PAID TO SHAREHOLDERS FROM:
Net investment income (0.92) (1.97) --
Net realized gain -- (0.24) --
---------------- ---------------- ----------------
Total distributions (0.92) (2.21) --
---------------- ---------------- ----------------
Common Shares offering costs charged to paid-in capital -- -- (0.04)
---------------- ---------------- ----------------
Net asset value, end of period $ 9.86 $ 10.61 $ 19.03
================ ================ ================
Market value, end of period $ 9.99 $ 8.03 $ 17.78
================ ================ ================
TOTAL RETURN BASED ON NET ASSET VALUE (c) (d) 2.23% (34.64)% (0.37)%
================ ================ ================
TOTAL RETURN BASED ON MARKET VALUE (d) (e) 36.85% (47.00)% (11.10)%
================ ================ ================
- -----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $ 71,145 $ 76,456 $ 137,117
Ratio of total expenses to average net assets 1.53% (f) 1.31% 1.44%(f)
Ratio of net investment income to average net assets 22.78% (f) 11.34% 13.87%(f)
Portfolio turnover rate 1,044% 1,722% 178%
- -----------------------------------------------------
<FN>
(a) Initial seed date of July 19, 2007. The Fund commenced operations on
September 20, 2007.
(b) Net of sales load of $0.90 per share on initial shares issued.
(c) Total return based on net asset value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan and changes in net
asset value per share and does not reflect sales load.
(d) Total return is not annualized for periods less than one year.
(e) Total return based on market value is the combination of reinvested
dividend distributions and reinvested capital gains distributions, if any,
at prices obtained by the Dividend Reinvestment Plan and changes in Common
Share price.
(f) Annualized.
(g) Based on average shares outstanding.
(h) During the period ended November 30, 2007, the Fund recorded a receivable
due from the Advisor of $3,067 in connection with a trade error. This
reimbursement from the Sub-Advisor represents less than $0.01.
</FN>

See Notes to Financial Statements Page 15

- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

First Trust Active Dividend Income Fund
May 31, 2009 (Unaudited)

1. Fund Description

First Trust Active Dividend Income Fund (the "Fund") is a diversified,
closed-end management investment company organized as a Massachusetts business
trust on June 14, 2007 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 FAV on the New York Stock
Exchange ("NYSE").

The Fund's primary investment objective is to seek a high level of current
income. It has a secondary objective of capital appreciation. The Fund seeks to
achieve its objectives by investing at least 80% of its Managed Assets (as
defined below) in a diversified portfolio of dividend-paying, multi-cap equity
securities of both U.S. and non-U.S. issuers that Aviance Capital Management,
LLC ("Aviance" or the "Sub-Advisor") believes offer the potential for attractive
income and/or capital appreciation. Managed Assets are defined as the value of
the securities and other investments the Fund holds plus cash and other assets,
including dividends accrued but not yet received, minus accrued liabilities
other than the principal amount of any borrowings. There can be no assurance
that the Fund's investment objectives will be achieved.

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 Fund's Common Shares 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. 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 dividends), less all
liabilities (including accrued expenses, dividends declared but unpaid and any
borrowings of the Fund) by the total number of Common Shares outstanding.

The Fund's investments are valued daily at market value or, in the absence of
market value with respect to any portfolio securities, at fair value according
to procedures adopted by the Fund's Board of Trustees. A majority of the Fund's
assets are valued using market information supplied by third parties. In the
event that market quotations are not readily available, the pricing service does
not provide a valuation for a particular asset, or the valuations 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
and investments. Additionally, if events occur after the close of the principal
markets for particular securities (e.g., domestic debt and foreign securities),
but before the Fund values its assets, that could materially affect NAV, First
Trust may use a fair value method to value the Fund's securities and
investments. The use of fair value pricing by the Fund is governed by valuation
procedures adopted by the Fund's Board of Trustees, and in accordance with the
provisions of the 1940 Act.

Portfolio securities listed on any exchange other than the NASDAQ National
Market ("NASDAQ") are valued at the last sale price on the business day as of
which such value is being determined. If there has been no sale on such day, the
securities are valued at the mean of the most recent bid and asked prices on
such day. Securities traded on the NASDAQ are valued at the NASDAQ Official
Closing Price as determined by NASDAQ. Portfolio securities traded on more than
one securities exchange are valued at the last sale price on the business day as
of which such value is being determined at the close of the exchange
representing the principal market for such securities. Portfolio securities
traded in the over-the-counter market, but excluding securities trading on the
NASDAQ, are valued at the closing bid prices. Short-term investments that mature
in less than 60 days when purchased are valued at amortized cost.

In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
("FAS 157"), effective for fiscal years beginning after November 15, 2007. This
standard clarifies the definition of fair value for financial reporting,
establishes a framework for measuring fair value and requires additional
disclosures about the use of fair value measurements. The three levels of the
fair value hierarchy under FAS 157 are described below:

o Level 1 - quoted prices in active markets for identical securities

o Level 2 - other significant observable inputs (including
quoted prices for similar securities, interest rates, prepayment
speeds, credit risk, etc.)

o Level 3 - significant unobservable inputs (including the Fund's
own assumptions in determining the fair value of investments)

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 May 31, 2009 is
included in the Fund's Portfolio of Investments.

Page 16

- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - (Continued)
- --------------------------------------------------------------------------------

First Trust Active Dividend Income Fund
May 31, 2009 (Unaudited)

In April 2009, FASB issued FASB Staff Position No. 157-4, "Determining Fair
Value when the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP
157-4"). FSP 157-4 is effective for fiscal years and interim periods ending
after June 15, 2009. FSP 157-4 provides additional guidance for estimating fair
value in accordance with FAS 157, when the volume and level of activity for the
asset or liability have significantly decreased. FSP 157-4 also includes
guidance on identifying circumstances that indicate a transaction is not
orderly. Management is currently evaluating the impact the implementation of FSP
157-4 will have on the Fund's financial statement disclosures, if any.

B. Securities Transactions and Investment Income:
Securities transactions are recorded as of the trade date. Realized gains and
losses from securities transactions are recorded on the identified cost basis.
Dividend income is recorded on the ex-dividend date. Interest income, if any, is
recorded on the accrual basis.

Distributions received from the Fund's investments in Master Limited
Partnerships ("MLPs") generally are comprised of return of capital from the MLP
to the extent of the cost basis of such MLP investments. Cumulative
distributions received in excess of the Fund's cost basis in an MLP generally
are recorded as dividend income.

C. Dividends and Distributions to Shareholders:
Level dividend distributions are declared and paid quarterly to Common
Shareholders after the payment of interest and/or dividends in connection with
leverage. The level dividend rate may be modified by the Board of Trustees from
time to time. Distributions of any net long-term 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 capital gains are determined in accordance with
income tax regulations, which may differ from accounting principles generally
accepted in the United States of America. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund, timing differences and differing characterization of distributions
made by the Fund.

The tax character of distributions paid during the fiscal year ended November
30, 2008 was as follows:

Distributions paid from:
Ordinary Income $15,925,846
Long-Term Capital Gain 30,150

As of November 30, 2008, the components of distributable earnings on a tax basis
were as follows:

Undistributed Ordinary Income...................... $ 1,092,527
Net Unrealized Appreciation (Depreciation)......... (7,974,209)
Accumulated Capital and Other Losses............... (53,961,936)

D. 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.

Certain capital losses realized after October 31 may be deferred and treated as
occurring on the first day of the following fiscal year. For the fiscal year
ended November 30, 2008, the Fund elected to defer capital losses occurring
between November 1, 2008 and November 30, 2008 in the amount of $9,874,100.

The Fund intends to utilize provisions of the federal income tax laws, which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such loss against any future realized capital gains.
At November 30, 2008, the Fund had available realized capital losses of
$44,087,926 to offset future net capital gains through the fiscal year 2016.

In June 2006, FASB issued Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes" ("FIN 48"). FIN 48 establishes the 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, and is effective for the Fund's current
fiscal year. As of May 31, 2009, management has evaluated the application of FIN
48 to the Fund, and has determined that no provision for income tax is required
in the Fund's financial statements.

E. Expenses:
The Fund pays all expenses directly related to its operations.

Page 17

First Trust Active Dividend Income Fund
May 31, 2009 (Unaudited)

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

First Trust is a limited partnership with one limited partner, Grace Partners of
DuPage L.P., and one general partner, The Charger Corporation. First Trust
serves as investment advisor to the Fund pursuant to an Investment Management
Agreement. First Trust is responsible for the ongoing monitoring of the Fund's
investment portfolio, managing the Fund's business affairs and providing certain
administrative services necessary for the management of the Fund. For these
services, First Trust is entitled to a monthly fee calculated at an annual rate
of 1.00% of the Fund's Managed Assets.

Aviance serves as the Fund's sub-advisor and manages the Fund's portfolio
subject to First Trust's supervision. The Sub-Advisor receives a monthly
portfolio management fee calculated at an annual rate of 0.50% of Managed Assets
that is paid by First Trust out of its investment advisory fee.

In accordance with certain fee arrangements, JPMorgan Investor Services Co.
served as the Fund's Administrator and Fund Accountant, JPMorgan Chase Bank,
National Association served as the Custodian and American Stock Transfer & Trust
Company served as the Transfer Agent. Effective May 18, 2009, PNC Global
Investment Servicing (U.S.) Inc. ("PNC"), an indirect, majority-owned subsidiary
of The PNC Financial Services Group, Inc., serves as the Fund's Administrator
and Fund Accountant in accordance with certain fee arrangements. PFPC Trust
Company, also an indirect, majority-owned subsidiary of The PNC Financial
Services Group, Inc., serves as the Fund's Custodian as of such date in
accordance with certain fee arrangements. Effective May 25, 2009, PNC also
serves as the Fund's Transfer Agent in accordance with certain fee arrangements.
PNC continues to provide certain administrative services to the Fund in
connection with the Board's meetings and other related matters.

Each Trustee who is not an officer or employee of First Trust, any sub-advisor
or any of their affiliates ("Independent Trustees") 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 are 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 ending December
31, 2009, before rotating to serve as a chairman of another committee or as Lead
Independent Trustee. The officers and the "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 securities, other than U.S.
government obligations and short-term obligations, for the six months ended May
31, 2009, were $664,147,624 and $658,049,560, respectively.

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 equity market, 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.

Page 18

First Trust Active Dividend Income Fund
May 31, 2009 (Unaudited)

The Fund's performance was adversely impacted by the weakness in the credit
markets and broad stock market that occurred beginning in late 2008, and may
continue to be adversely affected if the weakness in the credit and stock
markets continue. In response to the financial crises affecting the banking
system and financial markets, the U.S. and foreign governments have intervened
to an unprecedented degree in the financial and credit markets. Among other
things, U.S. government regulators have encouraged, and in some cases structured
and provided financial assistance for, banks, securities firms, insurers and
other financial companies. Additional intervention programs have been adopted
and proposed which will have a further impact on the securities markets. Many of
the recently enacted or proposed government measures are far-reaching and
without historical precedent. Furthermore, the U.S. government has stated its
willingness to implement additional measures as it may see fit to address
changes in market conditions. There can be no assurance that any or all of these
measures will succeed in stabilizing and providing liquidity to the U.S.
financial markets, including the extreme levels of volatility currently being
experienced. Such continued volatility could materially and adversely affect the
financial condition of the Fund.

Dividend Strategy Risk: The Sub-Advisor may not be able to anticipate the level
of dividends that companies will pay in any given timeframe. The Fund's
strategies require the Sub-Advisor to identify and exploit opportunities such as
the announcement of major corporate actions that may lead to high current
dividend income. These situations are typically not recurring in nature or the
frequency may be difficult to predict and may not result in an opportunity that
allows the Sub-Advisor to fulfill the Fund's investment objectives. In addition,
the dividend policies of the Fund's target companies are heavily influenced by
the current economic climate.

Qualified Dividend Tax Risk: There can be no assurance as to what portion of the
distributions paid to the Fund's Common Shareholders will consist of
tax-advantaged qualified dividend income. For taxable years beginning before
January 1, 2011, certain distributions designated by the Fund as derived from
qualified dividend income will be taxed in the hands of non-corporate Common
Shareholders at the rates applicable to long-term capital gain, provided certain
holding period and other requirements are satisfied by both the Fund and the
Common Shareholders. Additional requirements apply in determining whether
distributions by foreign issuers should be regarded as qualified dividend
income. Certain investment strategies of the Fund will limit the Fund's ability
to meet these requirements and consequently will limit the amount of qualified
dividend income received and distributed by the Fund. A change in the favorable
provisions of the federal tax laws with respect to qualified dividends may
result in a widespread reduction in announced dividends and may adversely impact
the valuation of the shares of dividend-paying companies.

Page 19

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

First Trust Active Dividend Income Fund
May 31, 2009 (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 PNC
Global Investment Servicing (U.S.) 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 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 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 (800) 334-1710, 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 noncertificated 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 PNC Global Investment
Servicing (U.S.) 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 securities during the most recent 12-month period ended June 30 will
be 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 website located at http://www.sec.gov.

Page 20

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION - (Continued)
- --------------------------------------------------------------------------------

First Trust Active Dividend Income Fund
May 31, 2009 (Unaudited)

Portfolio Holdings

The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("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.

Submission of Matters to a Vote

The Joint Annual Meeting of Shareholders 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 Specialty
Finance and Financial Opportunities Fund and First Trust Active Dividend Income
Fund was held on April 16, 2009. At the Annual Meeting, Independent Trustees
Richard E. Erickson and Thomas R. Kadlec were elected by the holders of Common
Shares of the Fund as Class II Trustees for three-year terms expiring at the
Fund's annual meeting of shareholders in 2012. The number of votes cast in favor
of Dr. Erickson was 6,674,261, the number of votes against was 383,019 and the
number of abstentions was 147,956. The number of votes cast in favor of Mr.
Kadlec was 6,671,376, the number of votes against was 385,904 and the number of
abstentions was 147,956. James A. Bowen, Robert F. Keith and Niel B. Nielson are
the current and continuing Trustees.

Advisory and Sub-Advisory Agreements

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

The Board of Trustees of First Trust Active Dividend Income Fund (the "Fund"),
including the Independent Trustees, unanimously approved the continuation of the
Investment Management Agreement (the "Advisory Agreement") between the Fund and
First Trust Advisors L.P. (the "Advisor") and the Investment Sub-Advisory
Agreement (the "Sub-Advisory Agreement" and together with the Advisory
Agreement, the "Agreements") among the Fund, the Advisor and Aviance Capital
Management, LLC (the "Sub-Advisor"), at a meeting held on March 1-2, 2009. The
Board determined that the terms of the Agreements are fair and reasonable and
that the Agreements continue to be in the best interests of the Fund.

To reach this determination, the Board considered its duties under the
Investment Company Act of 1940, as amended (the "1940 Act"), as well as under
the general principles of state law in reviewing and approving advisory
contracts; the requirements of the 1940 Act in such matters; the fiduciary duty
of investment advisors with respect to advisory agreements and compensation; the
standards used by courts in determining whether investment company boards have
fulfilled their duties; and the factors to be considered by the Board in voting
on such agreements. To assist the Board in its evaluation of the Agreements, the
Independent Trustees received a separate report from each of the Advisor and the
Sub-Advisor in advance of the Board meeting responding to a request for
information from counsel to the Independent Trustees. The reports, 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. The
Independent Trustees also met separately with their independent legal counsel to
discuss the information provided by the Advisor and the Sub-Advisor. The Board
applied its business judgment to determine whether the arrangements between the
Fund and the Advisor and among the Fund, the Advisor and the Sub-Advisor are
reasonable business arrangements from the Fund's perspective as well as from the
perspective of shareholders.

In reviewing the Agreements, the Board considered the nature, quality and extent
of services provided by the Advisor and the Sub-Advisor under the Agreements.
The Board considered the Advisor's statements regarding the incremental benefits
associated with the Fund's advisor/sub-advisor management structure. With
respect to the Advisory Agreement, the Board considered that the Advisor is
responsible for the overall management and administration of the Fund, including
the oversight of the Sub-Advisor. The Board noted the compliance program that
had been developed by the Advisor and considered that the compliance program
includes policies and procedures for monitoring the Sub-Advisor's compliance
with the 1940 Act and the Fund's investment objectives and policies. The Board
also noted the enhancements made by the Advisor to the compliance program in
2008. With respect to the Sub-Advisory Agreement, the Board received a
presentation from representatives of the Sub-Advisor discussing the services
that the Sub-Advisor provides to the Fund and how the Sub-Advisor manages the
Fund's investments. In light of the information presented and the considerations
made, the Board concluded that the nature, quality and extent of services
provided to the Fund by the Advisor and the Sub-Advisor under the Agreements
have been and are expected to remain satisfactory and that the Sub-Advisor,
under the oversight of the Advisor, has managed the Fund consistent with its
investment objectives and policies.

Page 21

First Trust Active Dividend Income Fund
May 31, 2009 (Unaudited)

The Board considered the advisory and sub-advisory fees paid under the
Agreements. The Board considered the advisory fees paid to the Advisor by
similar funds, and 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 information provided by the Sub-Advisor as to the fees it
charges to other clients, noting that the sub-advisory fee rate is lower than
the fee rate charged by the Sub-Advisor to its other clients. In addition, the
Board received data prepared by Lipper Inc. ("Lipper"), an independent source,
showing the management fees and expense ratios of the Fund as compared to the
management fees and expense ratios of a combined peer group selected by Lipper
and the Advisor. The Board discussed with representatives of the Advisor the
limitations in creating a relevant peer group for the Fund, including that (i)
most peer funds do not employ an advisor/sub-advisor management structure; (ii)
the peer funds may not have the same fiscal year as the Fund, which may cause
the expense data used by Lipper to be measured over different time periods;
(iii) many of the peer funds are larger than the Fund; and (iv) many of the peer
funds have an inception date prior to the Fund's inception date and their fee
and expense structures may not reflect newer pricing practices in the market.
The Board reviewed the Lipper materials, but based on its discussions with the
Advisor, the Board determined that the Lipper data was of limited value for
purposes of its consideration of the renewal of the Agreements.

The Board also considered performance information for the Fund, noting that,
similar to almost all other funds, the Fund's performance was impacted by the
severe market downturn in 2008. The Board noted that the performance information
included the Fund's quarterly performance report, which is part of the process
that the Board has established for monitoring the Fund's performance on an
ongoing basis. The Board determined that this process continues to be effective
for reviewing the Fund's performance. In addition to the Board's ongoing review
of performance, the Board also received data prepared by Lipper comparing the
Fund's performance to the combined peer group selected by Lipper and the
Advisor, as well as to a larger group and to a benchmark. The Board reviewed the
Lipper materials, but for similar reasons to those described above, the Board
determined that the performance data provided by Lipper was of limited value. In
addition, the Board considered the market price and net asset value performance
of the Fund since inception, and compared the Fund's premium/discount to the
average and median premium/discount of the combined peer group, noting that the
Fund's premium/discount was generally indicative of the asset class and market
events. Based on the information provided and the Board's ongoing review of the
Fund's performance, and taking into account the historic market events of 2008,
the Board concluded that the Fund's performance was reasonable.

On the basis of all the information provided on the fees, expenses and
performance of the Fund, the Board concluded that the advisory and sub-advisory
fees were reasonable and appropriate in light of the nature, quality and extent
of services 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 had noted that the advisory fee is not structured to pass the
benefits of any economies of scale on to the shareholders as the Fund's assets
grow. The Board concluded that the management fee reflects an appropriate level
of sharing of any economies of scale. The Board also considered the costs of the
services provided and profits realized by the Advisor from serving as investment
manager to closed-end funds for the twelve months ended December 31, 2008, as
set forth in the materials provided to the Board. The Board noted the inherent
limitations in the profitability analysis, and concluded that the Advisor's
profitability appeared to be not excessive in light of the services provided to
the Fund. In addition, the Board considered and discussed any ancillary benefits
derived by the Advisor 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 concluded that any other fall out benefits received by the Advisor or
its affiliates would appear to be limited.

The Board noted that the Sub-Advisor did not identify any economies of scale
realized in connection with providing services to the Fund and represented that
the Sub-Advisor was providing sub-advisory services to the Fund at a loss. The
Board considered the Advisor's representation that First Trust Portfolios L.P.,
an affiliate of the Advisor, had committed to provide any necessary financing
for the Sub-Advisor. The Board noted that the Sub-Advisor does not maintain any
soft-dollar arrangements and that the Sub-Advisor indicated that it does not
receive any material fall out benefits from its relationship to the Fund.

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

Page 22

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Page 23

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Page 24

[LOGO OMITTED]

FIRST TRUST

INVESTMENT ADVISOR
First Trust Advisors L.P.
120 E. Liberty Drive, Suite 400
Wheaton, IL 60187

INVESTMENT SUB-ADVISOR
Aviance Capital Management, LLC
2080 Ringling Boulevard
Sarasota, FL 34237

ADMINISTRATOR,
FUND ACCOUNTANT &
TRANSFER AGENT
PNC Global Investment Servicing (U.S.) 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

Inside Back Cover

[BLANK BACK COVER]

ITEM 2. CODE OF ETHICS.

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF 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.

Not applicable.

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

(a) Not applicable.

(a)(1) Identification of Portfolio Manager(s) or Management Team Members and
Description of Role of Portfolio Manager(s) or Management Team Members

Aviance Capital Management, LLC, ("Aviance") a registered investment advisor,
serves as the investment sub-advisor to the Registrant. Effective July 16, 2009,
there was a change in Aviance's portfolio management team for the Fund. Gary T.
Dvorchak, who was on the portfolio management team for the Fund since the Fund's
inception, is no longer with the firm. Mr. Bertelsen and Mr. Belanian will
remain responsible for the day-to-day management of the Fund's portfolio. They
have been joined on the Fund's portfolio management team by James R. Neel, CFA.
Mr. Neel joined Aviance in January 2009 and has 30 years of investment
management experience.

CHRISTIAN C. BERTELSEN, Chief Investment Officer and Senior Portfolio Manager
Christian C. Bertelsen has over 41 years of investment experience. Since
November 2004, he was Chief Investment Officer at Global Financial Private
Capital ("GFPC"), the incubator company of Aviance. From July 1997 to December
2003, Mr. Bertelsen was director of the value equity group for Phoenix
Investment Counsel, during which time he was responsible for developing
strategies that focused on the analysis of dividends as a means of identifying
undervalued companies and generating income. He served as Chief Investment
Officer at Dreman Value Advisors between January 1996 and July 1997, and was a
Senior Vice President with Eagle Asset Management between April 1993 and January
1996. From June 1986 to April 1993, Mr. Bertelsen headed the equity investment
department at Colonial Advisory Services, Inc., and managed the Colonial Fund.
Prior to 1986, he held positions with Batterymarch Financial Management and
State Street Bank & Trust Company. Mr. Bertelsen holds an M.B.A. and a B.A. in
Economics and History from Boston University.

MARK BELANIAN, Portfolio Analyst
Mark Belanian has over 9 years of investment industry experience. Mr. Belanian
joined GFPC/Aviance in February 2006 from Merrill Lynch's Global Private Client
Group in Sarasota, Florida, where he had worked since February 2005. Mr.
Belanian worked with Christian Bertelsen as a portfolio analyst at Phoenix
Investment Counsel. Mr. Belanian graduated from Trinity College with a B.A. in
Modern Language.

JAMES R. NEEL, CFA, Portfolio Manager
James R. Neel, CFA, has over 30 years of experience in investment management.
While managing equity mutual funds for Kemper in the 1990s, Mr. Neel won a
Lipper Award in the Growth and Income category. Mr. Neel also served as the
portfolio strategist for Kemper Financial Services, CEO of Dreman Value
Advisors, where he worked with Christian Bertelsen, and Partner at Loomis
Sayles. Mr. Neel was a portfolio manager for Gibraltar Bank in Florida from 2001
to May 2005 and at YHB Investment Advisors, Inc. from May 2005 until January,
2009, when he started at Aviance. Mr. Neel is a graduate of Michigan State
University, where he received a B.A. in 1965. From 2001 to May 2005, he was a
portfolio manager He received an M.B.A. from Michigan State University in 1966.
Mr. Neel earned the Chartered Financial Analyst designation in 1976. Mr. Neel
also served four years as a U.S. Navy officer.

Other Accounts Managed by Portfolio Managers or Management Team Member as of
May 31, 2009

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

Christian C. Bertelsen Registered Investment 0 $0 0 $0
Companies:
Other Pooled Investment 0 $0 0 $0
Vehicles:
Other Accounts: 63 $145 M 0 $0
Mark Belanian Registered Investment 0 $0 0 $0
Companies:
Other Pooled Investment 0 $0 0 $0
Vehicles:
Other Accounts: 0 $0 0 $0
James R. Neel Registered Investment 0 $0 0 $0
Companies:
Other Pooled Investment 0 $0 0 $0
Vehicles:
Other Accounts: 0 $0 0 $0

Potential Conflicts of Interests

Aviance believes there are not any material conflicts of interest that may arise
in connection with the Portfolio Manager's management of the Registrant's
investments.

Compensation Structure of Portfolio Managers or Management Team Members

The members of the portfolio management team are paid a monthly salary capped at
a level which can rise annually with inflation. Additional bonuses are based on
the overall profitability of the firm. Aviance employees are offered
health/dental insurance through the firm's group policy. The members of the
portfolio management team are paid at the annual salary cap amount. At this
time, the cash flow of the company does not support the full amount of salaries,
therefore, the three members are paid at a discounted level, as cash flow
allows.

Disclosure of Securities Ownership

Information provided as of May 31, 2009
Dollar Range of Registrant
Name Shares Beneficially Owned
Christian C. Bertelsen $0
Mark Belanian $0
James R. Neel $0

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 trustees, 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) Not applicable.

(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 Active Dividend 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 July 23, 2009
-----------------------

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 July 23, 2009
-----------------------

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

Date July 23, 2009
-----------------------

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