FTSL vs PFRL

FTSLCFirst Trust Senior Loan Fund

PFRLDPGIM Floating Rate Income ETF

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.

PFRL Senior bank loans in ETF form, actively picked by PGIM's credit desk instead of cloned from an index. Coupons float with short-term rates, income lands monthly, and the fee sits right at the category median.

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.

PFRL The Fund seeks to maximize current income, with capital appreciation as a secondary objective. It primarily invests in senior floating-rate loans.

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.

• PFRL Loan coupons reset with short-term rates, so the portfolio carries far less interest-rate sensitivity than a fixed-coupon bond fund. Income is paid monthly.
• The 0.72% expense ratio lands exactly at the median for bank-loan ETFs, and a hair under PIMCO's LONZ at 0.73%.
• Actively run against the S&P UBS Leveraged Loan Index rather than copying it: a focused book of roughly 150 loans chosen by PGIM's credit team.

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

• PFRL Trading is thin next to the category's biggest loan funds, which can mean wider bid-ask spreads, particularly on larger orders.
• Cheaper doors into the same asset exist: Franklin's FLBL runs 0.45%. On overall build, PFRL sits in the lower half of its six-fund peer group.
• Leveraged loans are below-investment-grade credit, and floating coupons cut both ways: payouts shrink when short-term rates fall.

Full FTSL profile⁠

Full PFRL profile⁠