Steven Perry, vice president at XA Investments -- where he oversees product management on the XAI Octagon Floating Rate and Alternative Income Trust, -- discusses the benefits and risks associated with leverage in closed-end funds during a rising-rate environment, noting that for the closed-end fund market at the end of 2022, the levered market yield on net asset value was about 7.8 percent, compared to 6.4 percent on unlevered yield. Perry says it is important to watch how managers respond to what the Federal Reserve is doing, noting that managers who don't 'get creative with how the leverage is going to be structured might miss out on opportunities.'