FTSL vs LONZ

FTSLCFirst Trust Senior Loan Fund

LONZCPIMCO Senior Loan Active Exchange-Traded Fund

In short

FTSL Most funds in the high-yield aisle own fixed-coupon junk bonds. FTSL owns first-lien senior bank loans whose coupons float with short-term rates, chosen by a live credit team instead of an index rulebook, with income paid monthly.

LONZ PIMCO's credit desk in an ETF wrapper: an actively run book of senior secured floating-rate loans that pays monthly. Priced right at the middle of a small, specialized peer group, with a manager pick behind every position instead of an index.

Stated mandate

FTSL The fund seeks high current income and secondarily aims to preserve capital. It normally invests at least 80% of net assets in first-lien senior floating-rate bank loans, primarily to North American businesses.

LONZ The Fund primarily seeks floating-rate income by investing at least 80% of assets in a diversified portfolio of senior secured loans, including related derivatives.

Why people hold it

• FTSL First-lien senior floating-rate bank loans: the coupons reset with short-term rates, and the debt sits at the top of the borrower's capital structure.ftportfolios.com
• Actively managed, so a credit team picks the loans rather than following a bank-loan index, spread across roughly 220 positions.
• Trading since 2013 and now a multi-billion-dollar fund that pays monthly, with a track record spanning both rate hikes and cuts.
• The stated mission is plain: high current income first, capital preservation second. A different job than chasing total return.

• LONZ Actively run, not index-fed. PIMCO's team assembles roughly 100 loans, with at least 80% of assets in a diversified portfolio of senior secured loans and related derivatives.
• The coupons float. Senior loan rates reset off short-term benchmarks, so the income stream moves with rates rather than locking in at issue.
• Income arrives monthly, and the fund sits in the upper half of the handful of US senior loan ETFs on implementation quality.

Worth knowing

• FTSL At 0.70% a year it sits above the group's roughly 0.40% median and multiples of index rivals like SCYB and SPHY, putting it near the back of its high-yield peer group on cost.
• Floating coupons cut both ways: monthly income follows short-term rates up, and follows them back down.
• These are leveraged corporate loans, so borrower defaults, not interest-rate swings, do most of the damage to capital here.ftportfolios.com

• LONZ The 0.73% fee lands at the senior loan category median but well above indexed options like FLBL at 0.45%. Active credit selection is what the spread buys.
• Roughly 100 loans is a concentrated book. Senior secured ranks these claims high in a borrower's capital structure, but single-name credit trouble still lands harder here.
• Floating rate cuts both ways. The same reset mechanism that lifts income when short-term rates climb pulls it down when they fall.

Full FTSL profile⁠

Full LONZ profile⁠