Should I buy XAI stock in 2025?

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At HelloSafe, our experts have been monitoring the performance of XAI for over three years. Every month, hundreds of thousands of Canadians trust us to analyze market trends and highlight the best investment opportunities. Our insights are provided for informational purposes only and should not be considered investment advice. In line with our ethical standards, we have never received, and will never accept, compensation from XAI.

What is XAI?

How much is XAI stock?

The price of XAI stock is declining this week. As of today, XAI is trading at $5.67 USD, with a 24-hour increase of 0.53% but a negative weekly change of -1.07%. The fund's market capitalization stands at $390.49 million, and average daily volume over the past three months is approximately 541,700 shares.

Given its high dividend and recent volatility, XAI presents both substantial income potential and notable risk for Canadian investors.

Our full analysis on XAI stock

Having rigorously reviewed the most recent financial results and three-year stock performance of XAI Octagon Floating Rate & Alternative Income Trust (XFLT), we have synthesized a multifaceted perspective on the stock by leveraging up-to-date financial indicators, technical signals, real-time market intelligence, and comparative competitor data—integrated through our proprietary analytic frameworks. The question that reasonably follows is: Why might XAI be poised to re-emerge as a strategic entry point into the alternative income asset management sector for Canadian investors in 2025?

Recent Performance and Market Context

XAI Octagon Floating Rate & Alternative Income Trust currently trades at $5.67 per share, representing a slight 0.53% increase over the past 24 hours, and stands at a -1.07% change for the week. On a longer timeline, the fund has experienced a -17.59% decline over six months and a -19.46% drop over one year—movements consistent with sector volatility and the wider turbulence in high-yield credit markets during this period.

Importantly, through these headwinds, XAI has preserved its monthly distribution rate, maintaining a forward yield of 16.3%. This move demonstrates strong income commitment, especially amid widespread rate and credit risk-sensitive repricing in the sector. The fund’s focus—senior secured loans, CLO (collateralized loan obligation) securities, and other floating-rate credit instruments—positions XAI for relative stability and improved risk-adjusted returns if interest rates remain elevated or continue on a plateau, a scenario increasingly supported by North American monetary policy signals.

Within the North American asset management landscape, few closed-end trusts offer such a compelling mix of alternative credit exposure, robust income generation, and active management expertise. In this context, XAI’s competitive standing is further reinforced for Canadian investors seeking diversification away from traditional fixed-rate and equity income vehicles.

Technical Analysis

The technical structure of XAI currently conveys a blend of stabilization and potential inflection. The 14-day Relative Strength Index (RSI) stands at 39.39—well within neutral territory and approaching ‘oversold’ levels historically associated with medium-term mean reversion opportunities. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator at -0.20 signals neutral-to-cautious, with negative momentum abating and the possibility of upside crossovers should volume and sentiment improve.

Short-term moving averages indicate nearby support at current price levels, specifically converging near the recent $5.25 swing low established in early April 2025. Long-term moving averages are clustered around $5.74, which forms an initial technical resistance. Notably, a move above this threshold—reinforced by renewed volume and cash inflows—may confirm a nascent bullish reversal pattern, targeting the psychologically significant $6.00 barrier.

In sum, XAI’s current technical structure supports the thesis of a developing base. With the stock trading close to both key support and a moderate discount to NAV, the risk/reward profile for entry appears increasingly attractive within the context of an income-oriented strategy.

Fundamental Analysis

From a fundamental perspective, XAI presents a suite of data points that clearly underscore underlying strength and resilience:

• Revenue Generation & Profitability: The trust’s 16.3% forward yield is a headline figure, underscoring high income generation from its core assets. Recent portfolio performance reveals a one-year NAV return of 1.69% and a three-year return of 6.90%, demonstrably outpacing comparable high-yield alternatives.
• Valuation: At a Price-to-Earnings (P/E) ratio of 5.61 and Price-to-Book (P/B) ratio of 0.85, XAI trades at a fundamental discount to both its historical averages and to peers in the space. The current 1.73% discount to NAV additionally offers intrinsic value for buyers, departing from often observed sector premiums.
• Portfolio Structure and Diversification: The fund’s 551 holdings span senior secured first lien loans (48.26%), CLO equity (38.57%), and CLO debt (10.62%), with a weighted average maturity of 8 years. This diversification materially reduces single-issuer risk and anchors the portfolio against isolated credit shocks.
• Strategic Management: The Octagon Credit Investors team brings over 25 years of credit market proficiency, complemented by XA Investments’ seasoned advisory oversight—two names synonymous with disciplined, innovative portfolio construction in the alternative credit universe.

Taken collectively, these structural elements buttress a strong investment case on both income and value grounds, suggesting renewed fundamental investor interest in XAI is justified.

Volume and Liquidity

XAI is characterized by robust and consistent liquidity, with average 3-month daily trading volumes of approximately 541,700 shares. Such sustained turnover reflects a high degree of market confidence, enabling efficient entry and exit points for both retail and institutional players. The current market capitalization of $390 million and a float composed of more than 76 million common shares provide substantial depth, mitigating concerns over slippage or trading inefficiencies.

Importantly, the ability to transact near NAV, thanks to this liquidity, supports dynamic portfolio rebalancing strategies sought by active Canadian investors. The healthy float and absence of significant market friction underpin an environment supportive of price discovery and responsive capital flows.

Catalysts and Positive Outlook

Several forward-looking catalysts may catalyze renewed upward momentum in XAI throughout 2025 and beyond:

• Sustained High Income: The fund’s monthly distribution, anchored at an annualized 16.3%, appeals strongly in an era where traditional income streams are constrained by central bank policy stances and flat yield curves.
• Floating-Rate Advantage: With over 48% of the portfolio in senior secured floating-rate credit, XAI stands to benefit if monetary tightening persists, as floating-rate assets typically see income ratchet higher in parallel with rates.
• Discount to NAV: The current trading price at a 1.73% discount versus NAV represents a structural opportunity for new capital, with the probability of mean reversion as investor risk appetite rebounds.
• Experienced Management and ESG Practices: Octagon’s rigorous, ESG-aware credit processes and policy engagement offer a layer of governance that increasingly attracts institutional flows, a trend likely to intensify given Canada’s ESG-focused regulatory climate.
• Potential Macro Tailwinds: A more stable credit backdrop, coupled with easing inflationary pressures and reduced recession risk projections, may catalyze institutional and global capital flows back into alternative and structured credit, directly benefitting XAI’s asset class.

Investment Strategies

Canadian investors considering tactical or strategic allocation to XAI have a suite of compelling entry scenarios:

• Short-Term: A technical entry at or just above the $5.25 support zone—confirmed by reversal signals—offers an appealing risk/reward setup as the fund rebounds towards resistance at $5.74 and potentially $6.00, especially if volume accelerates on positive news.
• Medium-Term: Positioning ahead of quarterly portfolio rebalancing, seasonal performance cycles, or upcoming macroeconomic data prints can capture both NAV convergence and yield flows. XAI’s attractive discount and monthly income profile can serve as a buffer against interim volatility while investors await revaluation by the broader market.
• Long-Term: For income-oriented and capital preservation investors, XAI’s yield, seasoned management, and broad diversification make it a potent add-in to diversified portfolios. With the fund having delivered strong three-year returns and demonstrating resilience through periods of credit stress, patient capital may be well-placed to benefit from embedded value and income compounding as credit markets normalize.

Flexibility in scaling allocations, and periodic rebalancing around key NAV and discount bands, further enhance risk-adjusted return potential for the disciplined investor.

Is It the Right Time to Buy XAI?

In summary, XAI Octagon Floating Rate & Alternative Income Trust demonstrates a confluence of strengths: attractive discounted valuation, sustainable and high income distribution, portfolio diversification, tactical positioning within the rising-rate regime, and the stewardship of a respected management team with a proven track record.

While short-term price action has reflected broader sector volatility, the fundamental attributes—including a robust monthly yield, discounted entry versus NAV, and the uplift potential inherent in floating-rate credit instruments—appear to set the stage for a new bullish phase. The market’s broad re-rating of alternative credit assets, paired with XAI’s high liquidity and seasoned portfolio management, further reinforce a constructive medium- to long-term outlook.

For investors seeking resilient, high-current income with smart risk control and the potential for price appreciation as market sentiment shifts, XAI seems to represent an excellent opportunity worthy of serious consideration. As the evolving macroeconomic backdrop favours floating-rate and alternative credit solutions, XAI may yet distinguish itself as a portfolio cornerstone for 2025 and beyond—affirming its role as a dynamic, value-laden proposition in the Canadian investment universe.

In a landscape where both income and diversification are prized, XAI’s unique characteristics offer a timely and compelling case for those looking to participate in the next chapter of the alternative income story.

How to buy XAI stock in Canada?

Buying XAI (XFLT) stock online is both straightforward and secure when you use a regulated broker in Canada. Today, investors can choose between two primary methods: spot buying—where you directly purchase actual shares, becoming a shareholder, or trading contracts for difference (CFDs)—allowing exposure to price movements without owning the shares themselves. Each approach has its own advantages and considerations regarding fees, leverage, and risk. To find the best fit for your needs, you'll want to compare the leading brokers available in Canada; you'll find our detailed comparison further down the page.

Spot Buying

A cash (or spot) purchase of XAI (XFLT) stock means buying actual shares, making you a direct shareholder with rights to any dividends and potential capital gains. Most Canadian online brokers charge a fixed commission per order—typically between $5 and $10 CAD.

Example of Spot Buying

With the current XFLT share price at approximately $5.67 USD (about $7.70 CAD based on recent exchange rates), a $1,000 CAD investment (including a $5 brokerage fee) would allow you to buy around 129 shares.
✔️ Gain Scenario:
If the share price rises by 10%, your position would be worth $1,100 CAD.
Result: That’s a +$100 gross gain, or +10% on your initial investment, before taxes and any currency conversion costs.

Trading via CFD

CFD trading on XAI (XFLT) shares involves speculating on price movements through a contract with your broker, rather than owning the underlying shares. CFD brokers in Canada typically charge a spread (the difference between buy and sell prices) and, if your position is held overnight, a small daily financing fee. CFDs also enable the use of leverage, increasing your potential exposure relative to your invested capital.

Example of CFD Trading

If you open a $1,000 CAD CFD position on XFLT with 5x leverage, your market exposure jumps to $5,000 CAD.
✔️ Gain Scenario:
Should the share price rise by 8%, your position would gain 8% × 5 = 40%.
Result: That's a $400 gain on a $1,000 stake (excluding fees and currency effects), demonstrating the power—and risk—of leverage.

Final Advice

Before you buy XAI (XFLT) stock, it's essential to compare the fees, offered services, and trading platforms of various brokers. Your decision should align with your investment objectives and risk profile: spot buying suits long-term investors seeking dividends and direct ownership, while CFD trading can attract those looking for flexibility and the potential to use leverage, but comes with higher risk. Explore our broker comparison below to find the ideal solution for your XAI (XFLT) investment journey in Canada.

Platforms

Minimum Deposit

Discover

#1

Tier 1 regulation, including ASIC and FSA

#1

Star Trader

4.9

Minimum Deposit

$50

Discover

with our partner Star Trader

#2

Broker specializing in Forex and CFDs

#2

IFC Markets

4.8

Minimum Deposit

$1

Discover

with our partner IFC Markets

#3

Broker regulated since 2006

#3

Avatrade

4.8

Minimum Deposit

$100

Discover

with our partner Avatrade

Our 7 tips for buying XAI stock

The latest news about XAI

XAI Octagon Floating Rate & Alternative Income Trust (XFLT) maintains a notably high monthly distribution yield of 16.30% amid market uncertainties. This level of income generation continues to appeal to Canadian income-focused investors, particularly in a climate where domestic high-yield alternatives remain limited. Despite the recent volatility and negative price momentum over the past six months, the fund’s commitment to maintaining its distribution has positioned it as a resilient source of USD-denominated income for Canadians seeking exposure to U.S. credit markets.

The fund currently trades at a slight discount to its net asset value (NAV), offering potential value for new investors. As of May 2, 2025, XFLT’s price sits 1.73% below its NAV, which is historically an attractive entry point for closed-end fund buyers. For Canadians diversifying into cross-border investments, this dynamic enhances the appeal of XFLT, as it combines regular income with the potential for price appreciation should the discount narrow, especially given the support levels identified near $5.25.

Strategic portfolio allocation to floating-rate and senior secured loans provides some insulation from rising interest rates, aligning well with current market trends. With almost half the portfolio in senior secured first lien loans and a substantial portion in CLO equity and debt, XFLT benefits when rates remain elevated or continue to rise—a scenario that is particularly relevant as North American central banks, including the Bank of Canada, have signaled caution around easing monetary policy. These portfolio characteristics make XFLT an attractive option for Canadians seeking to mitigate interest rate risk in their income allocations.

XFLT stands out for its strong diversification and experienced management through the sub-adviser Octagon Credit Investors, which manages over $33 billion in assets. The fund holds more than 550 distinct positions, significantly reducing single-issuer risk, and leverages the expertise of an institutional manager with a longstanding track record in credit markets. For Canadian investors wary of concentrated exposures or unfamiliar platforms, this depth and governance may provide an additional layer of confidence.

The fund’s listing on the NYSE and U.S. jurisdiction entails tax considerations for Canadian investors, but monthly cash distributions—potentially including return of capital—support portfolio flexibility and cash flow planning. While U.S. withholding taxes and distinct reporting requirements (Form 1099) apply, many Canadian investors with registered plans (like RRSPs) can benefit from tax treaties, reducing or eliminating the withholding tax on dividends. The regular, predictable nature of the distributions adds utility for investors managing cross-border portfolios, particularly those focused on monthly income generation.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.