Schwab has added the Octagon XAI CLO Income Fund (OCTIX) to its suite of alternative investment products available to advisers who clear or custody through the Schwab platform. The fund is listed under the ticker OCTIX for Class I shares and OCTAX for Class A shares, and it is an evergreen interval vehicle that delivers monthly distributions and quarterly repurchases.
The fund’s core strategy is to invest at least 80 % of its assets in collateralized loan obligation (CLO) securities, including both debt tranches and equity. OCTIX began trading on November 4 2024, while OCTAX launched on December 2 2024. The gross expense ratio for Class I shares is 3.42 % and the net ratio is 2.18 %; for Class A shares the gross ratio is 3.70 % and the net ratio is 2.53 %. As of January 5 2026, the fund’s assets under management totaled $52.66 million, and the current distribution rates were 8.16 % for Class I and 7.81 % for Class A shares.
Schwab’s alternative investment platform, which opened to eligible retail clients with more than $5 million in household assets in April 2025, now includes this CLO product. The platform already offers private equity, hedge funds, private credit, and real‑estate funds, and the addition of a CLO income fund broadens the income‑generating alternatives available to advisers and their clients. Octagon Credit Investors, the sub‑advisor, brings a long track record in below‑investment‑grade credit, while XA Investments provides institutional‑caliber access to alternative managers.
The launch positions Schwab to capture a growing share of the CLO market, which was valued at roughly $1.1 trillion in 2025 and is projected to reach $22.2 billion by 2033. By offering a high‑yield, floating‑rate vehicle, Schwab can attract advisory clients seeking diversification beyond traditional fixed‑income and equities, potentially increasing advisory fee revenue and deepening client relationships. The move also signals Schwab’s commitment to expanding its alternative investment footprint in a market that is increasingly attractive to high‑net‑worth and ultra‑high‑net‑worth investors.
Like all interval funds, OCTIX provides limited liquidity through quarterly repurchases, and CLO investments carry inherent credit risk, including the potential loss of principal. The fund’s operating history is relatively short, so investors should consider the liquidity constraints and credit exposure when allocating capital. Schwab’s custody and clearing infrastructure, however, offers advisers a familiar platform to manage these alternative assets.
Overall, Schwab’s addition of the Octagon XAI CLO Income Fund underscores its strategy to become a one‑stop platform for a wide range of investment solutions, while giving advisers a new source of high‑income exposure that complements its existing alternative investment offerings.
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