XFLT: We May Not Have Found The Bottom Yet In This High-Yield CEF
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Damon JuddInvesting GroupFollow5ShareSavePlay(14min)Comments(3)SummaryXAI Octagon Floating Rate & Alternative Income Trust 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.Leverage remains high at 38.66%, but management is actively reducing leverage costs and optimizing CLO manager selection to manage portfolio risk. AlexLMX/iStock via Getty Images In my continuing search for income investments that are appropriate for retirees or someone approaching retirement, I am constantly on the lookout for opportunities to take advantage of tactical buying situations in high-yield income funds. Back inThis article was written byDamon Judd8.32K FollowersFollowNow retired, I am an income-oriented investor seeking high yield income to support my lifestyle in retirement.I became deeply interested in the stock market beginning in late 2007 (bad timing for me but worse for my uncle) when I received an unexpected inheritance. Since that time I have done considerable research and vowed to make smarter long-term investing decisions after suffering through the Great Recession with minimal losses to my inherited portfolio, after firing my financial advisor.I look for mostly dividend paying income stocks and funds (BDCs, REITs, CEFs, ETFs) that offer high yield income to increase my retirement income beyond my pension and Social Security. I also enjoy reading investment/financial and business information and following trends in technology and markets. The human psychology of markets is as fascinating and inscrutable to me as the financial side. I am not a financial advisor so please do your own due diligence before making any buy or sell decisions.“The race is not always to the swift, nor the battle to the strong, but that's the way to bet.” Damon RunyonAnalyst’s Disclosure:I/we have a beneficial long position in the shares of XFLT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You