OXLC - XFLT: Understanding How To Benefit From High-Yield CLO Funds

2024-05-10 14:18:45 ET

Summary

• XAI Octagon Floating Rate & Alternative Income Trust (XFLT) offers a high 14% dividend yield, with distributions issued monthly.
• The fund invests in floating rate credit instruments, primarily CLO equity and CLO debt.
• The combination of high inflation and a strong labor market means we are likely to see higher rates for longer.
• XFLT implements a dividend reinvestment benefit for shareholders that can essentially grant you an instant unrealized gain depending on the price action.
• The current premium to NAV is lower than its 3-year average, making this a better opportunity for entry.

Overview

XAI Octagon Floating Rate & Alternative Income Trust ( XFLT ) offers the opportunity to capture a high 14% dividend yield that's distributed out on a monthly basis. The fund operates as a closed end fund and has an objective to provide a total return that's mostly made up from income generation. More specifically, the fund invests in a portfolio of floating rate credit instruments within the private market. Typically, these instruments are either CLO Debt (collateralized loan obligation) or CLO Equity. The fund's inception dates back to 2017....

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