Oxford Lane Capital (OXLC) is one of the few ways retail investors can profit from collateralized loan obligations, or high-yield low-risk fixed-income securities. A lot has been written about the company already, with most previous articles focusing on explaining some of the peculiarities of investing in CLOs, and on the company's cash flows. Something that I haven't seen is an attempt at estimating the company's long-term shareholder returns from the underlying yield of its holdings, something that shouldn't be all that hard for to do.
In this article, I'll explain why OXLC's long-term