Credit Spreads Widen, Opportunity Closes: Time To Exit XFLT
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XAI Octagon Floating Rate & Alternative Income Trust (XFLT) offers a high distribution rate but carries significant risks due to leverage and CLO equity exposure. Trading at a 0% discount to NAV, its valuation is reasonable, but high fees and economic downturn risks make it a risky investment.
March 06, 2025 | 11:45 pm
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XAI Octagon Floating Rate & Alternative Income Trust (XFLT) offers a high distribution rate but carries significant risks due to leverage and CLO equity exposure. Trading at a 0% discount to NAV, its valuation is reasonable, but high fees and economic downturn risks make it a risky investment.
XFLT's high distribution rate is attractive, but its reliance on leverage and CLO equity exposure increases risk, especially in economic downturns. Trading at a 0% discount to NAV suggests a fair valuation, but high fees and market conditions could negatively impact its price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100