# First Trust Senior Floating Rate Income Fund II

First Trust Senior Floating Rate Income Fund II is a Fund of Funds based in Wheaton, United States.

## Overview

- **Organization type:** Fund of Funds
- **Headquarters:** Wheaton, United States
- **Region:** North America
- **Address:** Wheaton, IL, United States
- **Founded:** 2004
- **Assets under management:** Undisclosed
- **Website:** ftportfolios.com

## Regulatory record

- **Reports private funds:** No

## About

First Trust Advisors launched this closed-end fund in 2004 as a yield-oriented vehicle targeting institutional and retail allocators seeking income uncorrelated to Treasury duration. The fund purchases first-lien senior secured bank loans, typically extended to below-investment-grade corporate borrowers, where floating-rate coupons reset quarterly against a SOFR spread. These instruments sit at the top of the capital structure, offering structural protection through collateral claims and tight covenant packages that other creditor classes lack. The portfolio concentrates on broadly syndicated and middle-market senior loans across a diversified issuer set. Holdings historically span sectors including healthcare, technology, business services, and manufacturing. The floating-rate mechanism served as a crucial hedge during the 2022–2023 Federal Reserve tightening cycle, when fixed-income funds suffered mark-to-market losses while floating-rate vehicles captured rising base rates directly in their distribution yields. The fund distributes income monthly, a structure that attracts income-oriented allocators but historically compresses its net asset value during credit-spread widening events. The fund operates under the umbrella of First Trust Advisors, a Wheaton, Illinois-based investment manager overseeing a vast family of exchange-traded funds, closed-end funds, and unit investment trusts. First Trust's closed-end fund platform includes a stable of similar credit-income vehicles, each targeting a discrete niche — senior loans, high-yield bonds, or mortgage securities — allowing the firm to cross-sell into wirehouse and RIA distribution channels. The advisor earns a management fee based on average weekly managed assets, a standard closed-end fund compensation model that aligns fees with investment-company-level asset value rather than public-market share price. Structurally, the fund is a permanent-capital vehicle: as a closed-end fund, it does not face redemption pressure during market dislocations, distinguishing it from open-end bank-loan mutual funds that were forced to gate or sell into distressed markets. That structural permanence allows the portfolio management team, led by senior credit analysts within First Trust's taxable fixed-income group, to hold loans through temporary price dislocations — a genuine advantage when bank-loan secondary markets seize, as they did most notably in March 2020 and, before that, during the global financial crisis.

## Sectors

- Private Credit
- Secondaries & Special Situations

## Questions

### What differentiates FCT's mandate from open-end bank-loan mutual funds?

As a closed-end fund, FCT does not face daily shareholder redemptions. Open-end bank-loan funds must maintain liquidity buffers and can be forced to sell assets into a declining secondary market when investors withdraw capital. FCT's permanent-capital structure allows the portfolio managers to hold loans through credit-cycle troughs without being a forced seller — a structural edge that mattered during the March 2020 loan-market dislocation.

### What credit quality does the fund's portfolio typically hold?

The fund historically concentrates in below-investment-grade issuers, primarily single-B and double-B rated loans in the broadly syndicated market. These borrowers carry elevated default risk relative to investment-grade credits, but the loans themselves are senior secured with first-lien claims on the borrower's collateral, which historical recovery studies suggest recovers meaningfully more than unsecured high-yield bonds in default scenarios.

## Related profiles

- [Hackett Group](https://altss.com/profile/hackett-group-inc)
- [Anavex Life Sciences](https://altss.com/profile/anavex-life-sciences-corp)

---

Last updated: 2026-06-03T20:00:00.000Z

Canonical page: https://altss.com/profile/first-trust-senior-floating-rate-income-fund-ii

Maintained by Altss — https://altss.com — methodology: https://altss.com/methodology