XAI Octagon Trust Announces Monthly Share Distribution Update

Overview of XAI Octagon Floating Rate & Alternative Income Trust

XAI Octagon Floating Rate & Alternative Income Trust has declared a monthly distribution amounting to $0.077 per common share, which is a notable variation from the previous month's distribution of $0.085 per share. This adjustment indicates a decrease of 9.41%. It's essential for shareholders to stay informed about these distribution changes as they reflect the Trust's current financial posture and investment strategy.

Investment Objectives and Portfolio

The Trust aims to achieve attractive total returns through a focus on income generation, primarily by investing in floating-rate credit instruments and structured credit investments. Recent trends in the economy, including decisions made by the Federal Reserve, have influenced interest rates, leading to adjustments in the income generated via floating rate securities. Consequently, the trust has experienced a decrease in net investment income, which may impact future distributions.

Impacts of Economic Changes

Changes in the economy deeply affect investment outcomes. Over the past quarter, the Federal Reserve’s decisions to reduce base rates have led to a 0.75% decline in the interest rates overall. Such economic adjustments challenge managers of floating rate securities as they navigate income generation in a fluctuating interest environment.

Understanding Share Distributions

Common share distributions may stem from various sources, such as net investment income, capital gains, or even a return of capital. Shareholders should not presume that distribution sources only represent net income. As the Trust works to clarify the specific tax implications of its distributions, documentation will be delivered to shareholders following the end of the financial year, ensuring compliance and transparency.

Webinar and Shareholder Engagement

The Trust has scheduled a quarterly webinar on December 6, with a focus on enhancing shareholder engagement and understanding investment strategies. Kevin Davis, the Managing Director at XA Investments, will lead the session alongside key members from their investment management team. This live event aims to address shareholder queries and elaborate on recent developments concerning the Trust's performance.

Future Considerations for Distributions

Looking ahead, the Trust's Board of Trustees considers several factors, including financial performance, compliance with senior securities covenants, and available cash when declaring future distributions. Shareholders should remain aware that there is no guarantee that future distributions will mirror current or past amounts, making it vital to stay informed.

Risk and Compliance Factors

As a registered investment company, the Trust is subject to regulations impacting its operational procedures. For instance, failure to distribute sufficient earnings by year's end could lead to an excise tax. Hence, the Trust's management must carefully assess its income and distribution trajectory to align with mandated compliance standards and uphold its solvency.

The Role of XAI as Investment Adviser

XA Investments LLC operates as the investment adviser for the Trust, utilizing a blend of dynamic market strategies within the private credit space. Established in 2016, XAI highlights the significance of providing individual investors access to institutional-grade investments, making financial avenues more broadly accessible.

About the Trust's Investment Strategies

The Trust is strategic in its focus on investing at least 80% of its Managed Assets in floating-rate instruments, allowing for adaptability amid market fluctuations. The underlying philosophies direct the Trust to enhance income generation capabilities through a diverse portfolio selection, aimed at maximizing shareholder value.

Frequently Asked Questions

What is the recent distribution amount declared by the Trust?

The Trust recently declared a distribution of $0.077 per common share.

What has contributed to the decrease in this month’s distribution?

A combination of reduced net investment income impacted by recent economic changes has resulted in this decrease.

How does the Trust maintain its investment strategy?

The Trust focuses on income generation through investments in floating-rate credit instruments, seeking stable returns across various credit cycles.

What can shareholders expect in future distributions?

Future distributions will be contingent on multiple factors, including the Trust’s financial health and adherence to compliance requirements.

Where can I find more information about XAI Investments?

For more details, shareholders can visit XAI’s official website to access the latest updates and resources.

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