XFLT: Rare Setup For 14.3% Yielder
XFLT's total returns have been disappointing since we first starting covering it. The fund has grown significantly through new share issuance, and leverage remains high, posing risks in today's market. We go over why we are buying a small position.
XFLT: Could Start To See The Dividend Consistently Reduced (Rating Downgrade)
XAI Octagon Floating Rate & Alternative Income Trust (XFLT) faces challenges due to interest rate cuts, which will reduce net investment income and reduce the dividend payouts. XFLT's strategy focuses on floating rate debt investments, benefiting from higher rates but also facing risks from potential borrower defaults and leverage costs. If rates remain higher for longer, there's a chance that we can see a greater amount of borrower defaults. This would deteriorate the overall portfolio quality and earnings potential.
XAI Octagon Floating Rate & Alternative Income Trust Makes Sense As Tactical Year-End Buy
XAI Octagon Floating Rate & Alternative Income Trust trades at a premium due to high monthly distributions, but recently cut its distribution yield to 13.71%. Despite skepticism about long-term sustainability, XFLT's premium is now closer to similar funds, prompting an upgrade from hold to buy. Leverage stacking in XFLT's strategy poses significant risk, but current market conditions and seasonality trends make it a reasonable short-term hold.
XFLT.PR.A: An Attractive Security To Hold
XFLT.PR.A preferred shares offer a stable 6.4% yield unaffected by lower Fed Funds, making them an attractive hold in today's monetary easing environment. The CEF portfolio includes leveraged loans, CLO debt, and CLO equity, providing diversified exposure and reduced volatility compared to pure CLO Equity CEFs. Preferred shares, characterized as liabilities, have a fixed maturity in March 2026, ensuring minimal price volatility and stable quarterly dividends.
XFLT: Distribution Trim As Rates Come Down
The XAI Octagon Floating Rate & Alternative Income Trust offers an enticingly high yield, but recently cut its monthly payout, sending the shares lower. XFLT's portfolio primarily consists of floating-rate instruments, making it sensitive to interest rate changes, and that includes the downside of it when the Fed is cutting rates. Despite the distribution cut, it is still a fairly attractive higher-risk investment option for income investors as the premium came down.
XFLT: Floating Rate Debt Is Now At 16% Yield
The XAI Octagon Floating Rate & Alternative Income Trust is a high-yield, high-risk closed-end fund primarily invested in senior secured debt and CLO equity. XFLT offers a 16% yield driven by floating rate assets, benefiting from rate hikes but exposed to volatility and market beta. Key risks include high expense ratios, trading at a premium, and significant volatility compared to similar CEFs.
A Fat 15% Yield With Monthly Income For My Retirement Portfolio: XFLT
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XFLT Strongly Beats Loan And Bond Funds, Yields 15%
Stop using weaker passive peers and unlock higher returns and income from actively managed funds. XAI Octagon Floating Rate & Alternative Income Trust offers income to the tune of 15% paid in monthly distributions. Get cash, and use it as you desire!
XFLT: Interest Rate Cuts May Be A Positive Growth Catalyst
XAI Octagon Floating Rate & Alternative Income Trust provides diverse exposure to varying debt investments to below-investment-grade borrowers. XFLT has a high dividend yield of 14.9% and can be a valuable income producer. Net investment continues to support the distribution. Future interest rate cuts can provide relief to current borrowers, which will reduce defaults. Lower rates can also support higher valuation growth.
Farming For Income With 14.3% Yield: XFLT
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XFLT: 14.3% Income Yield Continues To Flow
XAI Octagon Floating Rate & Alternative Income Trust continues to generate a high yield for income-focused investors as the yield comes in around 14.3%. The fund is on track to deliver higher net investment income compared to last year, which has provided strong coverage for the monthly distribution to investors. The fund benefits from a resilient economy and higher rates that have continued to lead to that higher cash flow the fund has been able to generate.
XFLT.PR.A: With The Shares Close To Par, This Is A Hold Now (Rating Downgrade)
XFLT.PR.A term preferred shares have been downgraded to Hold due to the security trading close to par and tight overall spreads in the credit markets. The current yield of the preferred shares is too low to buy, at only 6.6%, making it less attractive compared to other options. As the preferred shares near their maturity date in March 2026, they will become more of a cash parking vehicle with low duration, offering stability and predictability for investors.
