The fee waiver is a modest sweetener for FCT shareholders voting on the reorganization, but does not alter the core economics or timeline. Monitor the shareholder vote outcome and closing date; the primary catalyst remains the reorganization's completion and the resulting structural shift from a leveraged closed-end fund to an unlevered ETF.
Price Chart
Executive Summary
First Trust Senior Floating Rate Income Fund II (FCT) filed additional definitive proxy soliciting materials supplementing its proxy statement for the proposed reorganization into First Trust Flexible Income ETF. The key update is that First Trust has agreed to waive 0.10% of its annual unitary management fee for the Acquiring Fund through the twelve-month anniversary of closing, reducing the pro forma total expense ratio to 0.65% (from the Target Fund's 2.17% on net assets). This supplemental filing is routine soliciting material updating fee disclosures and does not change the fundamental terms of the reorganization vote.
Key Financial Metrics
Key Facts
- First Trust agreed to a 0.10% fee waiver on the Acquiring Fund's unitary management fee through the twelve-month anniversary of the closing date.
- Pro forma Acquiring Fund total annual operating expenses after fee waiver: 0.65% on net assets, vs. Target Fund's 2.17% on net assets as of March 31, 2026.
- Target Fund's total expense ratio on managed assets was 1.83% as of March 31, 2026.
- The fee waiver applies only to the annual unitary management fee, not to acquired fund fees or extraordinary expenses.
- During the fee waiver period, the Acquiring Fund will not be eligible for breakpoint discounts on management fees.
- The filing supplements the existing proxy statement/prospectus for the reorganization of FCT into First Trust Flexible Income ETF.
Financial Impact
Expected expense reduction of 1.18% on managed assets (1.52% on net assets) for the first twelve months post-closing due to the fee waiver, based on March 31, 2026 expense levels.
Risk Factors
- Reorganization may not receive shareholder approval.
- Fee waiver is temporary (12 months); post-waiver expenses revert to 0.75% unitary fee.
- Acquiring Fund has not yet commenced operations; pro forma expense estimates may differ from actual.
Market Snapshot
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| DEFA14A Filing (Primary) | 0001445546-26-004302 |
| Document: 0001445546-26-004302-index-headers.html | 0001445546-26-004302 |
| Document: 0001445546-26-004302-index.html | 0001445546-26-004302 |
| Document: 0001445546-26-004302.txt | 0001445546-26-004302 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 10, 2026 11w ago | 25-NSE | $9.67 | awaiting T+20 | — | — |
Aug 10, 2026 11w ago | 8-K | $9.67 | awaiting T+20 | — | — |
Jun 25, 2026 17w ago | 8-K | $9.70 $9.63 | ▼ −0.72% | ▼ −1.98% | — |
Jun 16, 2026 19w ago | DEFA14A | $9.59 $9.61 | ▲ +0.21% | ▲ +0.01% | — |
Jun 9, 2026 19w ago | DEFA14A | $9.57 $9.60 | ▲ +0.31% | ▼ −3.31% | — |
Jun 9, 2026 19w ago | DEFA14A | $9.57 $9.60 | ▲ +0.31% | ▼ −3.31% | — |
May 29, 2026 21w ago | DEFA14A | $9.66 $9.61 | ▼ −0.52% | ▲ +1.28% | — |
May 14, 2026 23w ago | 8-K | $9.66 $9.60 | ▼ −0.64% | ▼ −2.76% | — |
US Market Status
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