AFT - FCT: Finances Look A Bit Weak But A Decent Floater Fund For Risk-Averse Investors

2024-05-10 13:11:49 ET

Summary

• First Trust Senior Floating Rate Income Fund II offers a current yield of 11.17%, higher than most other assets in the market.
• The FCT closed-end fund compares well with other CEFs that invest in floating-rate leveraged loans in terms of yield.
• The fund's net asset value has remained relatively stable over the past year, and it has fully covered its distributions with investment profits.
• FCT's long-term history is a bit spottier, and there has been some NAV destruction since 2021. The fund is also failing to cover the distributions with NII.
• The valuation is decent, but the fund's finances look a bit weaker than some of its peers that are fully covering the distribution with investment income.

The First Trust Senior Floating Rate Income Fund II ( FCT ) is a closed-end fund, or CEF, that income-focused investors can purchase as a method of achieving their goals. Overall, the fund manages to do pretty well at the provision of income, as its 11.17% current yield is considerably higher than most other assets that currently trade in the market. In fact, about the only other things that have comparable yields are other closed-end funds that invest in floating-rate leveraged loans. The First Trust Senior Floating Rate Income Fund II compares fairly well with most of these funds in terms of yield:

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