FCT: No Longer An Attractive Entry Point Into This Low Leverage CEF (Rating Downgrade)
Summary
- The First Trust Senior Floating Rate Income Fund II has performed well due to its floating rate collateral in a rising interest rate environment.
- However, with anticipated Fed rate cuts, the fund's performance is expected to slow down as floating rate assets become less attractive.
- The fund's historical performance in low interest rate environments is not impressive.
- The fund's discount to NAV has narrowed, making it less attractive for new investors.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.