XFLT: Floating Rate Debt Is Now At 16% Yield
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The XAI Octagon Floating Rate & Alternative Income Trust (XFLT) is a high-yield, high-risk closed-end fund with a 16% yield, primarily invested in senior secured debt and CLO equity. It benefits from rate hikes but is exposed to volatility and market beta. Key risks include high expense ratios, trading at a premium, and significant volatility compared to similar CEFs.
November 07, 2024 | 3:45 am
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XAI Octagon Floating Rate & Alternative Income Trust (XFLT) offers a 16% yield, benefiting from rate hikes but faces high expense ratios and significant volatility.
XFLT's 16% yield is attractive due to rate hikes, but the fund's high expense ratios and volatility pose risks. Trading at a premium adds to the risk, making the short-term impact neutral as benefits and risks balance each other.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100