First Trust on Thursday listed a new exchange traded fund for senior bank loans that will compete against three existing ETFs in the hot sector.

First Trust Senior Loan Fund (NasdaqGM: FTSL) will be actively managed.

PowerShares Senior Loan Portfolio (NYSEArca: BKLN) is by far the largest ETF in the category with assets of $3.8 billion. It is also the oldest in the group, launching in March 2011. BKLN charges an expense ratio of 0.66% and is paying a 12-month yield of 4.73%.

Bank loan ETFs have been extremely popular with investors searching for yield but with some protection against rising interest rates. Some investors also view the sector as alternative to high-yield corporate bond ETFs that could be overvalued after such a strong rally. [Why Bank Loan ETFs are Booming]

For example, BKLN is one of the best-selling ETFs in 2013 with net inflows of $2.3 billion, according to IndexUniverse data. On Wednesday, the ETF reported its biggest trade of the year with 2 million shares changing hands in the afternoon, Bloomberg reports.

FTSL, the First Trust fund, will square off directly against SPDR Blackstone/GSO Senior Loan ETF (NYSEArca: SRLN), which is also actively managed. SRLN has a 0.90% expense ratio. FTSL has an expense ratio of 0.85%.

Highland/iBoxx Senior Loan ETF (NYSEArca: SNLN) rounds out the group. Like BKLN, it takes an indexed approach. SNLN levies an expense ratio of 0.55%.

Next page: Breaking down the new First Trust Senior Loan Fund

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