Institutional Access to
|Investor and Advisor Goals||Why XOCT?|
|Income||Opportunity for higher levels of income than traditional fixed income|
|Growth of principal||Secondary objective of capital appreciation|
|Diversification from stocks and bonds||CLOs exhibit low-to-moderate historical correlations to stocks and bonds|
|Direct access to institutional alternatives||Access to Octagon’s institutional credit capabilities|
|Ease of tax reporting||1099 tax form;
|Risk management||Strategy limits interest-rate sensitivity|
|Competitive fees||No sales load and full management fee waiver1|
Fund details (as of 9/17/18)
|Adviser||XA Investments LLC|
|Sub-Adviser||Octagon Credit Investors, LLC2|
Primary investment objective to generate high current income, with a secondary objective of capital appreciation.5
|Share Repurchase Program
Quarterly; up to 5% of shares outstanding6
1The Adviser has contractually agreed to waive the entire investment advisory fee until the earlier of (i) six months from the date of effectiveness of the Trust’s registration statement or (ii) the occurrence of a Listing Event.
2$19.7 billion in assets under management as of 6/30/18.
3Under normal market conditions, the Trust will invest at least 80% of its Managed Assets in Collatarelized Loan Obligation (CLO) debt and subordinated (i.e. residual or equity) securities.
4During its continuous offering, the Trust will strike a daily NAV. Thereafter, the Trust will strike a monthly NAV.
5There can be no assurance that the Trust will achieve its investment objective, and you could lose some or all of your investment.
6If the Trust does not list its common shares on an exchange within six months of the initial closing date, the Trust intends to conduct quarterly tender offers in the sole discretion of the Board of Trustees. The Trust, however, is not obligated to conduct such tender offers and there may be periods during which no tender offer is made. If a tender offer is not made, Common Shareholders may not be able to sell their Common Shares as it is unlikely that a secondary market for Common Shares will develop prior to a listing.
Octagon Credit Investors, LLC
Octagon serves as the Trust’s sub-adviser and is responsible for portfolio management. Octagon is a leading institutional credit investor with $23.1 billion of assets under management as of 6/30/19 and a more than 24-year track record of managing institutional client credit portfolios.
- Top CLO Manager: Octagon is a top 10 U.S. CLO manager.7
- Team: Cohesive, experienced, cycle-tested team of 30 investment team members.
- Investment Philosophy: Relative value focus and active portfolio management.
- Investment Focus: Deep understanding of fundamental credit analysis, enhanced by a process focused on optimizing returns against target risk profiles.
- Process: Repeatable and scalable credit selection and investment process.
7Thomson Reuters LPC, 2015/2016/2017/2018, ranked by issuance volume in each calendar year.
Innovating to be better
XAI is the innovator of distinctive, demand-driven alternative investments. XAI is a pioneering firm that has created a better way to bring institutional alternatives to financial advisors and their clients. We’re not innovating simply to be different; we’re innovating to be better. We are committed to building better products to give you better outcomes.
Investors: Contact your advisor for
The information herein and in the preliminary prospectus and investor brochure is not complete and may be amended or changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but is not yet effective. The securities may not be sold until the registration statement is effective. This information is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. This is not an offering, which can only be made by a final prospectus.
The Trust may not achieve its investment objective. An investment in Common Shares of the Trust is subject to investment risk, including possible loss of the entire principal amount that you invest. The Trust is designed as a long-term investment and not as a trading vehicle. The Trust is not intended to be a complete investment program. The Trust’s performance and the value of its investments will vary in response to changes in interest rates, inflation and other market factors.
The Trust is a newly-organized, non-diversified, closed-end management investment company with no history of operation.
Following completion of this offering, the Trust intends to seek to conduct an offering through a firm commitment underwriting that would allow the Trust to meet the initial listing standards of a national securities exchange and to apply to list its common shares on an exchange upon the completion of that public offering (a “Listing Event”). There can be no assurance as to whether, or at what time, the Trust will complete an underwritten offering, the success of any such offering or the amount of proceeds that the Trust will raise in any such offering. Prior to the occurrence of a Listing Event, common shares of the Trust will not be listed for trading on any securities exchange. Common shares will not be redeemable at a shareholder’s option. Accordingly: no secondary market for common shares is expected to exist prior to a Listing Event; your investment in common shares should be considered illiquid; you should not expect to be able to sell your common shares regardless of how the Trust performs and, as a result, you may be unable to reduce your exposure during any market downturn; and if you are able to sell your common shares, you may receive more or less than your original investment. You should consider that you may not have access to the money you invest until the occurrence of a Listing Event, and may never recover your entire initial investment in the Trust. The Trust is designed primarily for long-term investors who are prepared to hold common shares for an indeterminate time. An investment in common shares is appropriate only for investors who can tolerate a high degree of risk and do not require a liquid investment and is not suitable for investors who need access to the money they invest. There can be no assurance that a secondary market will develop for common shares following a Listing Event. Because shares of listed closed-end funds frequently trade at a discount to net asset value, even if investors are able to sell their common shares following a Listing Event, they may receive more or less than their purchase price and the then current net asset value per share. This risk may be more pronounced in the period shortly following the Trust’s listing.
Consider the investment objective, risks, charges and expenses of the Trust carefully before investing. An investment in the Trust involves risks and is not appropriate for all investors and is not intended to be a complete investment program. The preliminary prospectus contains this and other relevant information. Please read the preliminary prospectus carefully before investing.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
CLOs often involve risks that are different from or more acute than risks associated with other types of credit instruments. CLO subordinated (i.e., residual or equity) notes are junior in priority of payment and are subject to greater risk that the senior notes issued by the CLO. Securities of below investment grade quality are considered predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal when due and involve substantial risk of loss. Use of leverage creates an opportunity for increased income but, at the same time, creates special risks. Leverage is a speculative technique that exposes the Trust to greater risk and increased costs than if it were not implemented. For additional information regarding these and other risks associated with an investment in the Trust, please see the “Risks” section of the [preliminary] prospectus.