XAI Octagon Floating Rate & Alternative Income Term Trust (XFLT)

XAI Octagon Floating Rate & Alternative Income Trust (XFLT) is rated Hold as it trades at a -15% discount to NAV after a -20% one-year total return. XFLT's NAV decline is driven by CLO Equity underperformance and compressed spreads, though senior loan allocations have outperformed benchmarks. Further Fed rate cuts could pressure XFLT's distributions and market price, but increased M&A activity in Q1 2026 may help widen spreads and stabilize NAV.

My portfolio goal is sustainable, stress-free income—prioritizing safety over chasing high yields. Even though it might be very tempting, tilting investments towards 10%+ yields is not the smartest thing to do. The historical stock market annual return figure is around 10%, which is very difficult to meet for income investors, who are usually concentrated into fixed income factor (lower return potential).

XAI Octagon Floating Rate & Alternative Income Trust (XFLT) Q3 2025 Earnings Call Transcript

CHICAGO, Dec. 01, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the “Trust”) has declared its regular monthly distribution of $0.070 per share on the Trust's common shares (NYSE: XFLT), payable on December 31, 2025, to common shareholders of record as of December 15, 2025, as noted below. The amount of the distribution represents no change from the previous month's distribution amount of $0.070 per share.

CHICAGO, Nov. 20, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (NYSE: XFLT) (the “Trust”) today announced that it plans to host the Trust's Quarterly Webinar on December 2, 2025, at 12:00 pm (Eastern Time). Kevin Davis, Managing Director at XA Investments (“XAI”) will moderate the Q&A style webinar with Kimberly Flynn, President at XAI, and Lauren Law, Senior Portfolio Manager at Octagon Credit Investors.

The broader equity indexes continue to look strong, led by mega-cap tech, which has helped push the markets to all-time highs. With hitting new all-time highs, I continue to allow my cash pile to build up instead of putting it all to work at what looks like elevated levels. That said, I make some purchases every month to help grow cash flow over time and to capitalize on pockets of opportunity.

CHICAGO, Nov. 03, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the “Trust”) has declared its regular monthly distribution of $0.070 per share on the Trust's common shares (NYSE: XFLT), payable on December 1, 2025, to common shareholders of record as of November 17, 2025, as noted below. The amount of the distribution represents no change from the previous month's distribution amount of $0.070 per share.

XFLT offers a compelling ~17% yield, which has remained largely stable since the Fund's inception in 2017. Yet, XFLT's total return since inception is only ~26%, lagging behind other high-yield credit assets, such as BDCs or fixed income CEFs. While the past performance is not indicative of future results, after looking under the hood of XFLT, I don't see a reason for any change.

Closed-end funds provide a unique opportunity due to their structure to invest at deep discounts to the actual underlying value of the holdings. An absolute discount isn't the best measuring stick for a worthwhile investment, but the relative discounts to historical levels often are. We take a look at two different CEFs today, both trading at attractive discount levels, but they are actually quite different from each other.

XAI Octagon Floating Rate & Alternative Income Trust will redeem its Series A preferred. XFLT.PR.A has been a reliable dry-powder holding, offering stability and attractive yield during market volatility, supporting tactical income strategies. CLO fund senior securities, including preferreds and baby bonds, offer compelling risk/reward, low duration, and unique redemption features versus common shares.

CHICAGO, Oct. 20, 2025 (GLOBE NEWSWIRE) -- XA Investments (“XAI”) today announced that it plans to host a Webinar on October 23, 2025, at 4:30 pm (Eastern Time) to discuss recent developments in the CLO and leveraged loan market. Kevin Davis, Managing Director at XAI will moderate the webinar with Kimberly Flynn, President at XAI and Ben McCulloch, Managing Director at XAI. XAI serves as the investment advisor for both XAI Octagon Floating Rate & Alternative Income Trust (NYSE: XFLT) and Octagon XAI CLO Income Fund (Ticker: OCTIX, an interval fund).

Interval and Tender Offer Fund Market Reaches New Milestones, Sees Interval Fund Dominance and Shift Toward Greater Investor Accessibility Interval and Tender Offer Fund Market Reaches New Milestones, Sees Interval Fund Dominance and Shift Toward Greater Investor Accessibility

CHICAGO, Oct. 01, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the “Trust”) (NYSE: XFLT), a diversified, closed-end management investment company with an investment objective to seek attractive total return with an emphasis on income generation across multiple stages of the credit cycle, has reached an agreement with certain institutional investors for the purchase and sale of 7,300,000 shares of the Trust's 5.92% Series A Mandatory Redeemable Preferred Shares due January 31, 2031 (the “Mandatory Redeemable Preferred Shares”), liquidation preference $10.00 per share. The Trust expects to receive net proceeds (before expenses) from the sale of the Mandatory Redeemable Preferred Shares of approximately $71.5 million. The investors have agreed to purchase the Mandatory Redeemable Preferred Shares, at one or more closings on or before December 18, 2025.

CHICAGO, Oct. 01, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the “Trust”) has declared its regular monthly distribution of $0.070 per share of the Trust's common shares (NYSE: XFLT). The Trust also declared preferred dividends for the quarter of $0.40625 per share of the Trust's 6.50% Series 2026 Term Preferred Shares (NYSE: XFLTPRA).

XAI Octagon Floating Rate & Alternative Income Term Trust offers a high yield but sustains distributions by issuing new units, not from profits. XFLT's portfolio is heavily weighted toward risky CLO equity and consistently pays out more than it earns, resulting in significant aggregate losses. Despite diversification and some safe assets, XFLT has underperformed the market, with a 2% loss versus a 47.5% S&P 500 gain since November 2023.

For income investors, closed-end funds remain an attractive investment class that covers various asset classes and promises high distributions and reasonable total returns. Closed-end funds, or CEFs, are generally characterized by higher volatility and deeper drawdowns than the broader market. For these reasons, they are not suited for everyone. In this monthly series, we highlight the ten best CEFs with solid track records that pay high distributions and offer "excess" discounts. We try to separate the wheat from the chaff using our filtering process to select 10 CEFs every month from around 500 closed-end funds.