First Trust Senior Loan Fund

FTSL holds senior floating rate bank loans from firms around the globe. The actively managed fund can hold up to 20% of assets in non-senior loans, including high-yield bonds and equities.

Floating rate bank loans, like those in the First Trust Senior Loan Fund (FTSL), are attractive in a high-interest-rate environment due to their high yield and risk/return profile. FTSL is actively managed, allowing it to capitalize on market mispricings and adapt to changing conditions better than passive funds. The fund is well-diversified with 222 positions, a 30-Day SEC Yield of 7.76%, and a weighted effective duration of 0.58 years.

FTSL: In Case The Fed Keeps Rates Here

FTSL is a simple senior loan ETF, with an above-average 7.7% dividend yield. Senior loans were one of the best-performing income investments of 2022 and 2023, with FTSL outperforming most of its peers. Outperformance has diminished these past few months. Fed hikes and narrow credit spreads could pressure senior loans and FTSL further.

FTSL: Senior Loan ETF, Good Dividend Yield, Below-Average Performance, And High Expense Ratio

The First Trust Senior Loan Fund ETF is used as a prime example of a "Hold" investment, emphasizing its stable dividend yield and low volatility. The thesis discusses potential downside risks, such as rising default rates and interest rate hikes, and outlines scenarios that could lead to a "Sell" rating. The article clarifies the distinction between "Hold" and "Sell" ratings in investment analysis, focusing on dividend-paying securities with limited upside potential.

FTSL: When A Hold Is A Hold

Invesco Senior Loan ETF

Eaton Vance Floating-Rate ETF

 SPDR Blackstone Senior Loan ETF

Morgan Stanley Investment Management's active senior loan ETF is a compelling offering in the current environment. Investors have increasingly looked to senior loan ETFs in recent history instead of high yield bonds.

MSIM's Active Senior Loan ETF Beats Competitors on Cost

First Trust Senior Loan Fund ETF is an exchange-traded fund that invests in leveraged loans. Despite rising interest rates, leveraged loans have delivered robust returns in the past year due to their floating-rate nature. The fund has gained over 6.5% since our last rating, with low volatility, and currently offers a 30-day SEC yield in excess of 8%.

FTSL: Not A Good Entry Point, But An Attractive Hold (Rating Downgrade)

When the Exchange conference starts on Monday, advisors will have a new active floating rate bond ETF to learn about. It's one that's backed by a firm with a rich heritage in the investment style.

Eaton Vance Loans Expertise to the ETF Market

Franklin Senior Loan ETF

Virtus Seix Senior Loan ETF

Amid the prospect of higher interest rates for a longer-than-expected period, investors are flocking to bank loan ETFs.

5 Bank Loan ETFs to Capitalize on Higher Rates

FTSL focuses on senior loans, offers a 7.0% dividend yield, and has low interest rate risk. The fund has above-average credit risk and an expense ratio of 0.86%. There are other senior loan ETFs with lower expense ratios and higher dividend yields, making FTSL a less attractive investment opportunity.

FTSL: Senior Loan ETF With Growing 7.0% Dividend Yield, Low Rate Risk

Senior loan ETFs can offer protection against rising interest rates.

An Introduction to Senior Loan ETFs

Investing in a bank loan ETF can offer a compelling yield while helping maintain defensive portfolio positioning. In the current environment, investors who want to generate as much yield as possible might look to bank loans instead of high yield bonds.

Invesco's Bank Loan ETF Offers High Yield, Outpaces Active Peers

The First Trust Senior Loan Fund is an actively managed ETF that primarily invests in first lien senior floating-rate bank loans, with a current yield of 8.4%. The fund has low market risk due to its floating rate nature and low duration, but it does carry credit risk, as market sell-offs can widen spreads on underlying loans. The transition from LIBOR to SOFR in the leveraged loan market has been slow, potentially leading to higher yields for FTSL if issuers have to start paying an Alternative Base Rate.

FTSL: Unleveraged Floating Rate Loans, 8.4% Yield

Leveraged loan defaults are heading for the third-worst year in history as Federal Reserve interest rate hikes take a toll, according to Goldman Sachs.

Leveraged loan defaults hit $25 billion, head for third worst year in history, Goldman

iShares Core U.S. Aggregate Bond ETF

iShares iBoxx High Yield Corporate Bond ETF

Demand for actively managed senior loan ETFs has skyrocketed in the past year, helping State Street Global Advisors and First Trust fill their coffers. Indeed, the two firms have pulled nearly $9 billion combined into these less interest rate-sensitive, yet higher-yielding fixed income securities.

BlackRock Sets Stage for Own Active Senior Loan ETF

For the flows week, investors injected net new money into taxable fixed income funds and municipal bond funds. On the tax-exempt side, municipal bond funds attracted their third largest weekly net inflows on record and largest since June 10, 2020.

News for First Trust Senior Loan Fund ETF (FTSL)