XFLT - Why I Continue To Fade XFLT's Juicy 14.01% Distribution Rate
2024-06-05 15:06:11 ET
Summary
- XAI Octagon Floating Rate & Alternative Income Trust is a closed-end fund that focuses on income generation through investing in private credit.
- The fund trades at a 4.9% premium to net asset value and offers a distribution ratio of 14.01%.
- The fund has raised capital through share issuance and convertible preferred stock, but there are concerns about its leverage ratio and long-term performance.
XAI Octagon Floating Rate & Alternative Income Trust ( XFLT ) offers a total return tactic with an emphasis on income generation. This is quite common among closed-end funds, or CEFs, where income generation is a very popular theme. Octagon tries to achieve this goal by investing in private credit. A category that's been growing in popularity. Assets under management add up to $680 million (achieved with a 38% leverage ratio). The fund trades at a 4.9% premium to net asset value, and it offers an enticing distribution ratio of 14.01%....
Why I Continue To Fade XFLT's Juicy 14.01% Distribution Rate