First Trust Senior Floating Rate Income Fund II (NYSE: FCT) is a diversified, closed-end management investment company that seeks to generate current income while preserving capital by primarily investing in senior floating-rate bank loans. The fund employs a flexible investment strategy, leveraging the advantages of floating interest rates to mitigate interest rate risk and offering investors the potential for higher yields compared to traditional fixed-rate debt instruments.
The fund’s portfolio is composed predominantly of senior secured loans issued by corporate borrowers, with an emphasis on credits rated investment grade or below investment grade. In addition to its core allocation in floating-rate loans, FCT may also allocate a portion of its assets to high-yield bonds, mezzanine debt and, in limited amounts, preferred securities. This diversified approach allows the fund to balance income generation with credit quality considerations and liquidity management.
First Trust Senior Floating Rate Income Fund II was launched in 2008 and is advised by First Trust Advisors L.P., a subsidiary of First Trust Portfolios L.P., which brings decades of experience in fixed income and alternative credit strategies. The fund’s investment team is led by seasoned portfolio managers who employ rigorous credit analysis, ongoing risk monitoring and a disciplined approach to portfolio construction. The fund’s board of trustees provides oversight to ensure alignment with shareholders’ interests.
While the majority of its investments are focused on U.S. corporate issuers, the fund may opportunistically pursue senior floating-rate loans in developed markets outside North America. FCT serves a broad base of retail and institutional investors seeking a floating-rate income solution, offering daily liquidity in the secondary market through its listing on the New York Stock Exchange.
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