Board of First Trust Senior Floating Rate Income Fund II Approves Conversion into an ETF

Key Terms

closed-end fund financial

A closed-end fund is a pool of money collected from many investors to buy a diversified mix of stocks, bonds, or other assets, and it is managed by professionals. Unlike some investment options, its shares are bought and sold on stock exchanges at prices determined by supply and demand, which can be above or below the fund's actual value. This structure allows investors to buy or sell shares easily, but the value may fluctuate based on market conditions.

exchange-traded fund financial

An exchange-traded fund (ETF) is a type of investment fund that holds a collection of assets, such as stocks or bonds, and is traded on stock exchanges like individual stocks. It allows investors to buy and sell a diversified group of investments easily and efficiently, often at a lower cost. ETFs provide a simple way to gain exposure to a broad market or specific sectors without having to buy each asset separately.

net asset value financial

Net asset value is the total value of an investment fund's assets minus any liabilities, divided by the number of shares or units outstanding. It represents the per-share worth of the fund, similar to how the value of a house is determined by its total worth after debts are subtracted. Investors use it to gauge the true value of their holdings and to compare different investment options.

managed assets financial

Managed assets are the financial investments—such as stocks, bonds, cash, or real estate—that a professional firm or advisor oversees and makes decisions about on behalf of clients. They matter to investors because the amount and performance of these assets influence a manager’s revenue, reputation, and the client’s potential returns, much like the size and health of a garden reflect a gardener’s skill and likely harvest.

registration statement regulatory

A registration statement is a formal document that companies file with a government agency to offer new shares of stock to the public. It provides essential information about the company's finances, operations, and risks, helping investors make informed decisions. Think of it as a detailed product description that ensures transparency and trust before buying into a company.

proxy statement/prospectus regulatory

A proxy statement or prospectus is a document that companies send to shareholders to provide important information about upcoming decisions or investments, such as voting on company issues or offering new shares to the public. It helps investors understand the details and risks involved, enabling them to make informed choices about their ownership or involvement with the company.

broker-dealer financial

A broker-dealer is a licensed firm or individual that both executes trades on behalf of clients (acting as a broker) and buys or sells securities for its own account (acting as a dealer). Investors care because broker-dealers provide the plumbing of markets — they place orders, hold or move cash and securities, offer research or advice, and their stability and fees directly affect trade execution, costs, and the safety of client funds; think of them as a combined travel agent and taxi for your investments.

WHEATON, Ill.--(BUSINESS WIRE)-- First Trust Advisors L.P. (“FTA”) announced today that the Board of Trustees of First Trust Senior Floating Rate Income Fund II (NYSE: FCT), a closed-end fund managed by FTA, approved the reorganization (the “Reorganization”) of FCT into First Trust Flexible Income ETF, a newly created exchange-traded fund (“ETF”) that will be traded on the NYSE and will be an actively managed ETF managed by FTA.

Under the terms of the Reorganization, which is expected to be tax‑free, the assets of FCT would be transferred to, and the liabilities of FCT would be assumed by, the new ETF, and shareholders of FCT would receive shares of the new ETF with a value equal to the aggregate net asset value of the FCT shares held by them. It is currently expected that the Reorganization will be consummated during 2026, subject to requisite approval by the shareholders of FCT and satisfaction of applicable regulatory requirements and approvals and customary closing conditions. There is no assurance when or whether such approvals, or any other approvals required for the Reorganization, will be obtained. More information on the Reorganization will be contained in a registration statement and/or proxy materials that will be filed with the SEC in the coming weeks.

FCT is a diversified, closed‑end management investment company that seeks to provide a high level of current income with a secondary focus to preserve capital. Under normal market conditions, FCT pursues its investment objectives by investing at least 80% of its Managed Assets in a diversified portfolio of senior secured floating-rate corporate loans. Generally, at least 80% of FCT’s Managed Assets are invested in lower grade debt instruments, although from time to time all of FCT’s Managed Assets may be invested in such lower grade debt instruments. “Managed Assets” means the total asset value of FCT minus the sum of FCT’s liabilities, other than the principal amount of borrowings, if any.

FTA is a federally registered investment advisor and serves as the investment advisor of FCT. FTA and its affiliate First Trust Portfolios L.P. (“FTP”), a FINRA registered broker-dealer, are privately-held companies that provide a variety of investment services. FTA has collective assets under management or supervision of approximately $304 billion as of October 31, 2025 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separately managed accounts. FTA is the supervisor of the First Trust unit investment trusts, while FTP is the sponsor. FTP is also a distributor of mutual fund shares and exchange-traded fund creation units. FTA and FTP are based in Wheaton, Illinois.

Additional Information about the Proposed Reorganization and Where to Find It

This press release is not intended to, and shall not, constitute an offer to purchase or sell shares of FCT or the new ETF; nor is this press release intended to solicit a proxy from any shareholder of FCT. The solicitation of the purchase or sale of securities or of proxies to effect the Reorganization may only be made by a final, effective Registration Statement that includes a definitive Proxy Statement/Prospectus.

This press release references a Registration Statement, which includes a Proxy Statement/Prospectus, to be filed by the new ETF. This Registration Statement has yet to be filed with the SEC. After the Registration Statement is filed with the SEC, it may be amended or withdrawn and the Proxy Statement/Prospectus will not be distributed to shareholders of FCT unless and until the Registration Statement is declared effective by the SEC.

FCT, the new ETF, FTA, FTP and their respective trustees, officers and employees, and other persons may be deemed to be participants in the solicitation of proxies with respect to the proposed Reorganization. Investors and shareholders may obtain more detailed information regarding the direct and indirect interests of FCT’s, the new ETF’s, FTA’s and FTP’s respective directors, trustees, officers and employees by reading the Proxy Statement/Prospectus regarding the proposed Reorganization when it is filed with the SEC.

Investors and security holders of FCT are urged to read the Proxy Statement/Prospectus and other documents filed with the SEC carefully in their entirety when they become available because they will contain important information about the proposed Reorganization. Investors should consider the investment objectives, risks, charges and expenses of FCT and the new ETF carefully. The Proxy Statement/Prospectus will contain information with respect to the investment objectives, risks, charges and expenses, and other important information about FCT and the new ETF. The Proxy Statement/Prospectus will constitute neither an offer to sell securities, nor will it constitute a solicitation of an offer to buy securities, in any state where such offer or sale is not permitted.

Investors may obtain free copies of the Registration Statement and Proxy Statement/Prospectus and other documents (when they become available) filed with the SEC at the SEC’s web site at www.sec.gov. In addition, free copies of the Proxy Statement/Prospectus and other documents filed with the SEC may also be obtained after the Registration Statement becomes effective by calling FTA toll-free at (800) 621-1675.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA and the Internal Revenue Code. First Trust has no knowledge of and has not been provided any information regarding any investor. Financial advisors must determine whether particular investments are appropriate for their clients. First Trust believes the financial advisor is a fiduciary, is capable of evaluating investment risks independently and is responsible for exercising independent judgment with respect to its retirement plan clients.

Forward Looking Statements

Certain statements made in this press release that are not historical facts are referred to as “forward‑looking statements” under the U.S. federal securities laws. Actual future results or occurrences may differ significantly from those anticipated in any forward‑looking statements due to numerous factors. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward‑looking statements, which generally are not historical in nature. Forward‑looking statements are subject to certain risks and uncertainties that could cause actual results to differ from those anticipated in any forward-looking statements. You should not place undue reliance on forward‑looking statements, which speak only as of the date they are made. FTA, FCT and the new ETF undertake no responsibility to update publicly or revise any forward‑looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251209358029/en/

Jeff Margolin – (630) 517-7643

Daniel Lindquist – (630) 765-8692

Chris Fallow – (630) 517-7628

Source: First Trust Advisors L.P.