First Trust Senior Loan Fund

First Trust Senior Loan Fund (FTSL) is an actively managed ETF. It holds mostly floating-rate, first-lien loans to companies rated below investment grade, plus some high-yield bonds. Because the interest on these loans resets with short-term rates, the fund is much less sensitive to rate changes than most bond funds. It paid a 6.92% trailing yield monthly as of October 27, 2026. The trade-off is cost: its 0.70% expense ratio is double the 0.35% peer average.

• Over the year to Oct 27, 2026, FTSL returned +4.1%, 1st of 8 among similar funds.
• Its 5-year annualized return was +5.3% and its 10-year +4.5%.
• In the 2020 COVID crash it fell 22.5% and regained its old high 7.6 months after the low.
• Its worst full calendar year was 2022 (-2.5%); its best was 2023 (+11.7%).
• The deepest fall in its price history was 22.7% (Jan 29, 2020 to Mar 23, 2020), recovered by Nov 9, 2020.

As of Jul 31, 2026, the fund held 378 securities; the ten largest made up 11.75% of assets, and 9.45% sat in cash and money-market holdings.

The bonds mature in 4.8 years on average (weighted by size), with an average coupon of 5.99%.

• Over the three months to Jul 31, 2026, investors added a net $47.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.28%, -0.02%, +0.64%.

FTSL does not track an index. Its adviser, First Trust Advisors L.P., picks investments using company-by-company credit analysis, relative value and a top-down view of the economy, and it decides how much to hold of each. At least 80% of net assets go into first-lien senior loans. A senior loan is money that banks lend to a company at a set premium above a base rate such as SOFR (the Secured Overnight Financing Rate). "First lien" means the lender is first in line to be repaid from the company's pledged assets in a bankruptcy, though taxes and some other claims can still come first.

Most of the loans are below investment grade, often called "junk." The prospectus expects substantially all of them to be "covenant-lite," meaning they have few or none of the usual lender protections, which can reduce what lenders recover in a default. The fund can put up to 20% in other bonds, stocks or other funds, and up to 15% in distressed or defaulted loans. As of July 31, 2026, loans made up 80.78% of the fund, bonds 14.59% and cash 9.45%, spread across 378 holdings.

Loan rates reset often, so the portfolio's duration (its sensitivity to rate changes) is often under 90 days. Rate floors on some loans can stretch it longer. Turnover was 127%. The fund handles some creations and redemptions in cash, so it may be less tax-efficient than ETFs that do this in kind.

• FTSL charges 0.7% a year, versus an average of 0.35% for the similar funds below (7th of 8, cheapest first).
• Of that, 0.69% is the management fee; the rest covers other fund expenses.

FTSL pays monthly income from floating-rate corporate loans, and those payments adjust with short-term interest rates.

FTSL could add monthly income with little sensitivity to interest rates. Its trailing 12-month yield was 6.92% as of October 27, 2026. But protection from rate changes is not protection from credit risk. In the 2020 COVID crash, the fund fell 22.5% between February 19 and March 23, and it didn't recover until November 9, 2020, 7.6 months later. In 2022 it fell 7% to a July low and recovered by February 2023. In the prospectus, its worst calendar year was 2022, at -1.51%. Someone who had to sell in a panic like spring 2020 would have locked in a deep loss. The fund launched in 2013, so it has no record from 2008. Its 0.70% expense ratio takes a noticeable bite out of the income. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).