I've recently published two articles estimating net effective yields and expected shareholder returns for funds investing in collateralized loan obligations, or CLOs, some of the highest-yielding fixed-income securities available in the market today. An interested reader wanted me to extend that analysis to XAI Octagon Floating Rate & Alternative Income Term Trust (XFLT), a fixed-income CEF investing in several different asset classes, including CLOs. In this article, I'll be doing just that.
XFLT's shareholder returns should closely track the fund's net investment income, equivalent to the fund's underlying generation of income net of