The **XAI Floating Rate & Alternative Income Trust (XFLT)**, launched in 2017, offers a yield of **15.3%** but has underperformed significantly, achieving only a **0.57% annualized total return**—less than many high-yield savings accounts. As of now, an investor who invested **$100,000** at launch would be down **$65,530** on price, despite receiving about **$75,000** in dividends, highlighting a lack of reliable income despite the high yield.
XFLT’s management is undergoing a change, with a shareholder vote scheduled for **July 30** to potentially replace its advisor, Octagon Credit Investors, with a subsidiary of King Street Capital Management, which manages **$30 billion** in assets. This introduces further uncertainty regarding the fund’s management quality. Currently, XFLT is trading at a **22% discount** to its net asset value (NAV), but the risk remains high, making it advisable for investors to explore alternative funds.
In contrast, **Barings Corporate Investors (MCI)** has shown a total return **10 times better** than XFLT since its IPO. MCI, offering a **9.5% yield**, reports a sustainable income stream with a robust track record of payout hikes. It presents a more attractive option for investors seeking solid returns with lower risk compared to XFLT.
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