XAI Madison Equity Premium Income Fund (MCN) Q2 FY2025 Earnings Call Transcript & Summary

Hello, everyone, and welcome to the XAI Madison Equity Premium Income Fund Informational Webinar. Thank you for joining us today. We will be covering the second quarter of the fund. Before we get started, I do have some disclosures. We may reference performance throughout the presentation. Certainly, past performance does not guarantee future results, and future performance may be higher or lower than the performance quoted. Additionally, the fund and the materials or discussion may contain forward-looking statements. Investors should not place undue reliance on forward-looking statements. Before we begin, we do want to hear from you. If you have any questions about the fund, please enter them into the Q&A box below and we will do our best to address them at the end of the presentation. Lastly, please check out our website at xainvestments.com for more information about XA Investments and MCN. I'm excited to introduce you to today's speakers. Ray Di Bernardo is a Portfolio Manager and Analyst on MCN. He joined Madison Investments in 2003 and has managed MCN since its inception in 2004. He is also responsible for managing all other options-related mandates at Madison Investments. Kimberly Flynn is the President of XA Investments and is responsible for all product and business development activities at the firm. This includes the firm's proprietary fund platform and consulting practice. My name is Jared Hagen, I'm a Vice President at XA Investments focused on product management and development for our proprietary fund platform. As I mentioned before, the XAI Madison Equity Premium Income Fund is managed by Ray Di Bernardo and Drew Justman, both are joining us on this webinar today. As mentioned previously, Ray has managed the fund since its inception in 2004 and Drew has been with Madison Investments since 2005. MCN recently celebrated its 20-year anniversary and was one of the first covered call strategies in the closed-end fund market. The portfolio management team is supported by over 15 equity research analysts that span market caps and sectors. As a reminder, XA Investments took over as adviser to MCN in December of 2024. Madison Investments is now the fund sub-adviser and has been managing the fund since 2004. The fund strategy and objective remains the same and the fund continues to trade on the New York Stock Exchange under the ticker MCN.

Ray, diving into the fund's performance, the fund performed well both on price and NAV over the previous quarter and year-to-date compared to the CBOE S&P BuyWrite Index. What are some of the specific factors that have helped drive that performance?

Yes. Good morning, Jared. Good morning, everybody. Thanks for listening in. It was a quarter that gave us a little bit of everything. We had some panic early on in April and then we had some mania following that as the market rallied pretty dramatically through the end of the quarter. So in talking about what happened in the quarter, let me just step back and kind of go a little bit further back into the past. The market has been rallying for a couple of years pretty heavily in '23 and '24, very much a narrow rally with the mega cap growth stocks, the Magnificent 7, if you will, really dominating performance, particularly in 2024. The trend of outperformance continued early this year. Although MAG7 stocks were not the driving force in January and early February, it was more of a broader-based rally, but the market did move to all-time highs by mid-February. And at that time, it appears that the threat of a new tariff regime started to seep into the thinking of investors. We all knew tariffs were coming, but in mid-February, with markets at all-time highs, it appears that investors started to get more concerned about the potential impact. And will they be inflationary? Could that keep rates higher for longer, for example? If companies swallow the tariff, they increase costs, will that impact corporate earnings and cause earnings growth to falter, impacting the market. And of course, when the market is very, very at a high valuation, any little slip up can cause a significant contraction in multiples. So the worries began in mid-February. So the fund lagged early as the market rallied, continued to rally. And then as the market started to drift lower from mid-February through the end of the first quarter, we caught up and then surpassed the market. So we ended up having a -- even though the market was down significantly and the fund was down a little bit, we outperformed both the S&P and the S&P BuyWrite Index in the first quarter. Then the first week of April happened and we had Liberation Day on April 2. The day everyone was waiting for, the concerns were all there. And the announcement about tariffs was broader and larger than people had expected. So we had 4 days of a significant sell-off. 12% down in the market over just 4 days. And then we had delays, we had tweets, we had renegotiations, et cetera, and the market rebounded very, very quickly. So 1 month following Liberation Day by earlier -- very early in May, the market had recouped that 12% decline and then continued going higher for the rest of the quarter. So it was a very, very sharp short-term decline followed by a very steady and very robust rally at 25% off of the bottom in early April. The big change in that rally was MAG7 stocks became dominant once again. And MAG7 was up 37% over that early April to end of quarter period. NASDAQ up 33%. So it was very much a mega cap rally, just similar to what we saw in 2024. So that works somewhat against the fund as we don't really have a great deal of exposure to those mega cap names because of valuation concerns. But the fund did very well over this very volatile period. We protected on the way down somewhat in very, very sharp downward rallies. Covered writing doesn't offer as much protection as many might think, it typically provides very, very good protection over an extended downturn. But when you have these very sharp rallies, the hedging characteristics of the options disappear pretty quickly. Now what we did during that initial part of April is we were buying back a lot of options for pennies on the dollar. So we were -- the hedges has essentially subsided. We bought the options back, but we did not necessarily recover the underlying stocks immediately because of the concern that we could get whip side if the market rallied fairly quickly, which it did. So as the market rallied through May and early -- or the rest of April and May, then we started to get recovered on the underlying positions at higher strike prices than we would have had we done this in early April. So we ultimately then participated more than we might normally do in the immediate upswing in the market. So if you look at the charts that are on Page, I believe, 8 and 9, you can see as the market recovered very strongly, we tracked it pretty well. And it really wasn't until the middle of June when the market just continued to move higher toward new all-time highs, we were getting much more defensive because valuations have become very rich again. And ultimately, we got the -- the fund became 93% covered by the end of June. And in that last 2-week period in June with the market moving significantly higher, we lagged a little bit there. So most of the lag in the quarter to the S&P occurred really late in the quarter. But against the S&P BuyWrite Index, which is the primary benchmark that we look at, we outperformed it pretty handily over the quarter. So I'm pretty pleased with how we did on the way down and very pleased with how we managed the process on the way up as we saw that very quick rebound and then got ourselves to be very defensively positioned going forward into the second half of the year. So all in all, year-to-date and for the quarter, we're pretty pleased with how the fund has responded.

That's great. Can you explain a little bit -- there's been obviously a lot of volatility that you mentioned in the second quarter amid continued tariffs and geopolitical tensions. What's your outlook for the second half of 2025?

Well, as I noted, we -- by the -- as we move through the end of June, we became much more cautious going forward, primarily on valuation concerns. And at 93% covered, it's a very, very defensively positioned portfolio. So we are cautious going into the second half of the year. The 2 primary things that we focus on, first of all, is earnings. And we did see earnings -- the consensus earnings expectations looking out 12 months, early in the quarter, they did come down. So we have not been in an environment where the market is ramping up to all-time highs. It's not being driven by an explosion in earnings expectations. To the contrary, earnings expectations have drifted lower. Although they plateaued later in the quarter and they inched up slightly, but they're still lower than they were at the beginning of the quarter. So we haven't had kind of a renaissance in earnings growth or no meaningful upward adjustment in earnings expectations. So earnings really weren't the driver of the market. It was all PE multiple expansion. So if we look at valuation, which is the second concern that we have is that the market is now trading above 22x forward earnings and that's historically very expensive. If we look back in recent history, aside from a very short period during COVID when there weren't really very many earnings to speak of as the economy shut down, you have to go back to the late 1990s during the tech and telecom bubble to get a valuation that is this high. And that occurred in late 1998, so September-ish 1998. And if you equate the environment we're in now to what the environment looked like back then, back then, we had very much a revolutionary type of environment with the advent of -- the accessibility of the Internet. So not only did you have Internet companies booming, but you had the telecom equipment companies, Cisco, Lucent, Nortel, those -- the companies that gave you a gateway to the Internet and broadened out the general public's availability to get access to the Internet. It was quite a revolutionary period, really kind of the advent of the big push into the Internet. You can kind of equate that to artificial intelligence today. Not quite sure if AI right now, we can say is as big of a revolutionary or transformative technology as the initial move into the Internet was, but the market is acting very similarly and it's similarly valued. The issue right now looking forward is, back in 1998, the market continued to move higher for another 18 months before it peaked and it got to about 25x earnings. So roughly 13% or 14% higher than the 22x earnings that we're at now. Potentially, that could happen in the current environment. But ultimately, the weight of the market, the weight of the valuations, particularly if we don't see any type of regrowth in earnings, the market -- the valuation weight causes the market to tip over. And we saw, obviously, a very significant decline in 2001 and in 2002. So the higher we get in terms of valuation now, the more potential pain we might feel when the market does roll over. So if we were to equate where we are now as a kind of a baseball game, what inning are we in, in this rally, I would almost wager that we're -- not only are we late in the game, we might be in extra innings right now. And in extra innings, the game could end quickly or it could drag on and become a 17 or 18 or 19 inning game. We don't know how long this can go, but it's very late in the cycle. And that's why we're so defensive, understanding that we might be a little early in being defensive and we're very comfortable with that. But we would rather be defensive and in case the game ends more quickly than is expected. But valuations are very, very high. It's much more difficult to find attractive opportunities to invest in at reasonable valuations today. And I think being cautious is really the best stance that we can take. Covered writing is a defensive equity strategy and we are going to maintain that discipline and we're not necessarily going to try and reach for that last 10% to 15% potential upside in the market. We'd rather be defensive and be more protective if and when that game ultimately ends.

Drew, switching to you, where are you finding opportunities in the equity markets for the fund? And how is that influencing your industry positioning? And maybe if you can explain some of your conviction behind some of those large holdings like American Tower.

Yes, that sounds good. Thank you, Jared. Good morning. Nice to be with everyone. Ray talked about our concerns about the broad market and its lofty valuation. So what we're trying to do is find high-quality stocks that have below average valuations, but good growth prospects. So some of the areas we're looking are areas that have been neglected over the past year -- 1 to 2 years. I'll mention healthcare, which is one of the most beaten down sectors. Over the past year, healthcare as a sector is down 10%, while the S&P 500 is up 23%. It's a massive performance differential there. And as a result, healthcare is now only 8% of the S&P 500. That's down from 15% at the start of the decade. So healthcare is really neglected and we think being overlooked. And we found some high-quality ideas within that sector. The most notable one, I think, is Johnson & Johnson, which is 1 of the 2 AAA-rated companies in the entire market by Standard & Poor's. And so it has a rock-solid balance sheet. The company has a diversified portfolio with a robust product pipeline and the company just increased its earnings guidance. Earnings estimates are moving higher. We think the stock can grow 10% a year or so going forward. And at the same time, the valuation is very attractive. It's only 15x earnings or 0.7x the S&P 500, which is about the cheapest it's ever been in history. At the same time, the company pays a 3% dividend yield and has increased its dividend for 63 straight years. So we think this is a very high-quality, resilient company. If the broad market does pull back, we expect Johnson & Johnson to hold up much better. Another sector we're finding some good opportunities in is in real estate, which has also trailed the broad market over the past few years. Within real estate, our top idea is American Tower, which owns and operates over 220,000 cell towers worldwide, and these cell towers are critical for wireless communication. We think the company has a structural competitive advantage due to its global scale, its network towers. There are high barriers to entry. You can't just build a tower in any neighborhood. It takes a lot of zoning and permitting. And so there's high barriers to entry for competitors. What we like about the American Tower business is that its portfolio is structured around long-term non-cancelable leases with built-in price escalators. So the company is able to raise price a few percent every year and this allows it to maximize revenue and grow earnings nicely. It has some really favorable secular tailwinds, including increased use of smartphones, more technology rollouts, including the 5G network. And so we're very positive on American Tower. It also has an attractive dividend yield at 3.4%. So we think American Tower is another way to help protect on the downside if the market pulls back, but it also should participate in the upside, in our view, if markets continue higher.

Very helpful. Ray, can you explain your conviction in some of your other largest holdings such as Las Vegas Sands and Barrick Mining?

Yes, I'll start off with the fund, currently, the largest position is in Las Vegas Sands. And typically, what we look for in companies is market leadership or near market leadership in whatever business or businesses they're involved with, free cash flow generation, good balance sheets and potentially growing subsector that they participate in. And Las Vegas Sands is one of those companies that really ticks off all the boxes. But it hasn't always been that way. Interesting enough, for those that don't know the company, it's a gaming hotel company. But unlike the name, it doesn't have anything to do with Las Vegas anymore. In 2002, they sold off their Las Vegas properties and focused on the Asian market. And they are the largest player in the world's most prolific gaming market, which Macau. They have over 30% market share in Macau. They run and own a number of properties, so not just casino, but hotel, retail. In Macau's case, they have -- they run a ferry to the mainland as well. But they have -- they cover both high-end and mid-range or mid-market gaming and hotel properties. So they've got high end. They run the Four Seasons and the Plaza. The Londoner is one of their newer, more newly renovated properties, but they have the Venetian, the Parisian and then the Sands Macau. So they have a number of individual properties. If you've been to Vegas on the strip, it's kind of similar to that. They're all connected by walkways or tunnels, massive complexes. In fact, the Londoner has 5 hotel complexes in the whole resort area. It's quite fascinating. Of course, COVID shut down gambling and vacationing, not only in most of the world, but primarily in Asia. And they -- the primary visitors to Macau are wealthy Chinese and Singaporeans and that clearly shut down. We got involved as COVID restrictions were starting to be lifted and they got lifted later in China than they did in the U.S. So it took a while for that population to come back to the market. But over the period of time, since Las Vegas Sands has been operating in Macau for over 20 years and they spent upwards of $15 billion over the years in building their properties and renovating, most of the capital expenditures are in the past. And the last big one was in renovating the Londoner, which just finished in the first quarter of this year. So there's not a lot of capital spending going forward other than maintenance capital and that frees up a lot of cash flow. So the free cash flow is going to start to flow through pretty dramatically. So Macau is really approximately 60% of Las Vegas Sands' business. The other 40% is in Singapore, which is the second largest gambling operation in Asia and they operate the Marina Bay Sands Resort, which is a massive resort in Downtown Singapore. And they control over 60% of the gaming market in Singapore. So their vast market leadership in two of the largest and most quickly growing gaming areas of the world. The balance sheet, because they sold their Las Vegas properties in 2021 and '22, that help clean up their balance sheet. They don't have a lot of capital to be spending going forward. So the cash flow characteristics look great. The balance sheet looks great. The market leadership is almost second to none, and it meets all of our expectations. On top of that, it's still a relatively cheap stock. And a lot of that is due to the -- some of the macro issues that we have around China and tariffs and the uncertainty that goes along there. But generally, many of those things leave Las Vegas Sands' properties relatively unscathed. So it's more psychological than anything else. So we're very positive on the company. It meets all of our criteria and then some. And we think it's going to continue to be a good investment going forward. The second one you mentioned was Barrick Mining. Barrick is a Canadian-based company, but it's really an international gold miner. They also have copper in their portfolio and probably 90% gold, 10% copper, but copper is going to become a much larger percentage of the overall mining production going forward. It's a very, very well-diversified company. Not only do they have operations in Canada and the U.S., but they have operations in South America, Chile, Peru, in Asia, one of their biggest new exploration projects is in Pakistan, all through Africa, so in Tanzania, Zambia, Congo, et cetera. And it's one of the top 3 gold mining companies in the world. So it's got scale, it's got diversity and the fact that the price of gold has been rising pretty steadily over the last 18 months has made it very attractive. We can't buy gold directly in the fund, but we can buy gold equities. And part of the reason for the attraction to one of the leading gold mining companies is that it does provide some countercyclicality to the market and is a very good diversifier. So it's done quite well in recent quarters, and its weighting in the portfolio has gone up simply because of market appreciation, and we're going to continue to hold that primarily as a good solid cash flow generating company, but as a good diversifier as well.

Kim, switching to you. The fund recently changed its distribution frequency from quarterly to monthly. Obviously, distributions are important to many closed-end fund investors. Can you describe why the fund changed its distribution frequency?

Sure. Thanks, Jared. Thanks to everybody for joining us today. So for investors in the listed closed-end fund market, one of the high priorities in making that investment is cash flow, regular cash flow. And with MCN having a quarterly distribution, we felt it would be important to switch a majority of the funds now in the listed closed-end fund market will pay monthly. So I think that advisers and investors prefer more frequent cash flows. And we have a similar distribution payout and policy on our other listed closed-end funds. And that really is just in line with the market preference. I think, Jared, I think you and the team did a good job communicating. We've tried to press release this the last 6 or 7 months just to make sure that people understood that there was a switch that was happening from quarterly to monthly. And I really think that it was well received, and we've avoided any potential confusion. So now going forward, it's helpful to have this monthly distribution in place. And that makes MCN sort of preferable, I think, to other funds that may still have a quarterly or less frequent distribution. I think we may have lost Jared for a moment. So let's give it a second. There you go. Back to you, Jared. That's okay. We were lost without you.

Ray, going back to you here. Covered Call Strategies perform differently in various equity market environments. Can you describe a little bit about the volatility, obviously, we've been experiencing, how that volatility influences the premiums that you are able to collect from writing calls?

Yeah. The -- clearly, we've been -- we've had some increase in volatility, particularly in the past quarter. Early in April, we had a spike in volatility. And then as the markets rallied, volatility came back to more of a normalized level. So in terms of option pricing, the higher the volatility, the higher the implied volatility, the higher the potential option price. So as we are sellers of call options, we benefit from higher volatility and selling at higher prices. But our strategy in terms of how we manage the option side of the portfolio is not really based on maximizing the premium. We want to get as high a premium as we can. But essentially, if your focus is just on the option premium and the option, you would essentially be focusing on the highest volatility underlying stocks in order to get the highest premium on the options. And that doesn't work for our strategy because the #1 line of defense in protecting in down markets is to have a high-quality underlying equity portfolio. And that doesn't mean you're going to have extremely high volatility stocks just to get higher premiums. So we're going to -- we start with the equity portfolio. We build the foundation, very high-quality companies. Drew mentioned Johnson & Johnson. You're not going to get huge volatility in the options of Johnson & Johnson, but you have a good dividend payer, a solid company, a AAA-rated balance sheet that provides you more downside protection in many cases than even adding an option on top of that. So it's critical for us to focus on the underlying portfolio. Once we have that set up, we're clearly looking to take advantage of periods where volatility is higher, where we can sell options on those strong underlying positions at reasonable valuations and reasonable premium. So we're looking at -- and volatility is an interesting thing. So for example, as a portfolio, we typically will have roughly double the volatility of the S&P 500 in terms of the underlying implied volatility. And that's normal because the S&P 500 is -- the volatility is somewhat diversified a way over 500 names. So the volatility is somewhat lower. So on a 60-day basis, the volatility of the market right now is around 14. Microsoft, which has been owned in the fund for a long time, it's not owned there now because we've allowed it to get called away, but it's got about a 20 volatility. So a pretty hefty premium to the overall market, even though it's a great company and has a lot of great characteristics, it has more volatility because it's a single name. AES, which is one of our top 10 holdings, which is a utility, you would expect to have lower volatility, has actually significantly higher volatility because there's been a lot going on in AES' markets recently. They have a lot of not only regulated utilities, but they have big generating capacity in wind and solar. And when the new administration took over and removed some of the subsidies to wind and solar, the stock came down significantly. That increases volatility. Recently, it's gone back up significantly because there's takeover talk that the stock has gotten so cheap that some big companies like BlackRock and Brookfield may consider taking the company out. So volatility has remained high on the upside. So even though it's a utility where you traditionally think volatility is lower, we're actually getting very, very strong option premiums out of an AES, stronger than we would even get out of a Microsoft. So we have to look at each situation on its own merits. We're always trying to maximize the premium that we can receive, but ultimately, it has to fit in with what we feel is the foundation of the portfolio, and that's -- those are the underlying equities. They are the #1 line of defense in any kind of market downturn.

Thank you, Drew. [Operator Instructions] Moving on, Kim, just looking at the rationale for Covered Call Strategies and why investors may look to invest in a Covered Call Strategy in the current market environment. Can you describe some of those reasons for the group?

Yeah, absolutely. I think that equity investors who appreciate the fact that you're going to get cash flow from a Covered Call Strategy. You also, I think, are talking about equity investors that might want to take some market beta off the table. I think as Ray describes the volatility in the marketplace, that can cause concern for income investors. And the protection of a defensive strategy is what MCN offers. It's what Covered Call Strategies offer and the approach that Madison Investments takes being both active on the equity selection, active on the option investing. That comes together in MCN. And this is an experienced team that's been delivering on that goal of reducing risk and generating cash flows over time. So that's why I think investors still consider Covered Calls to be an attractive diversifier for equity, but also as an income alternative.

Following up on that, Kim, it can satisfy a variety of portfolio needs. So how are we seeing advisers and investors positioning Covered Calls Strategies in their portfolio?

Yeah. I mean I think it's a complement. A long time, 20 years ago, I think that Covered Call Strategies are also used as sort of liquid alternatives, being viewed as an alternative to a long-only equity portfolio. And so this cover call strategy being the other in the asset mix is used to achieve a specific outcome that the investor is looking for. It might be taking risk off the table. It might be steady cash flow. And so for a lot of outcome-oriented investors, there's been a huge amount of growth in cover call ETFs just in the last 5 years. That category has expanded cover calls. Now you've got a lot of hedged equities, derivative-based strategies. And I think that my preference for MCN is driven by the transparency that Ray and Drew provide into the equity portfolio and the option portfolio. You know exactly what they're doing with the Covered Calls that they're selling. And so I think that while the product marketplace has seen a proliferation because there's a lot of different use cases in the portfolio. I think that there's always going to be a fit for an equity strategy that also produces cash flow and is providing some diversification potential. And so you could see it on the equity allocation, you could see it in the fixed income allocation. And I think now, Jared, with a lot of the work that we're doing with alternatives and private markets, people are using -- looking for different types of diversifiers. And there's a lot of conversation now around things like gold or crypto. So it's interesting to hear Ray speak about sort of the countercyclical nature of some of the gold equities that they're holding. So I think there's a lot of potential. So many Americans are overallocated to long-only equity portfolios. So that's why a Covered Call Strategy can be a nice diversifier.

Agreed, Kim. You mentioned briefly previously how Madison's approach differs compared to other Covered Call Strategies in the market. Can you just briefly kind of flesh that out for the audience how MCN's kind of active management approach and the advantages it may provide to investors?

Yeah. I mean, Jared, I think the main advantage is you know exactly what Ray and Drew are doing. You can see it in the holdings. You can see it in our financials. And it's this active approach where they're assessing the individual stocks and then they're being thoughtful about using single stock options. So they're not using index options. They're not using basket options. They're not using other types of derivatives. And I think some of the -- many of the hedged equity ETFs are using various types of derivatives, which is totally fine and maybe consistent with their strategy. It's just harder to understand and it's harder to explain to your clients what the positions are. And so I think that with an active stock, active option approach, there's transparency. You also understand sort of the mechanics. So this is why we like the Madison Investments approach. It's the approach that they've used consistently now for 20-plus years.

Thank you, Kim. Ray, as Kim was just mentioning, you guys are very active in the options portfolio and ensuring that the equity portfolio is covered by call options. Right now, as of the end of the quarter, the portfolio was 93% covered. Does this appropriately reflect your views on the equity market today? And can you explain the benefit that it provides to the fund and its investors?

Yeah. I think 93% covered is clearly very close to the maximum that we can get in the portfolio. Just kind of as a guideline, we're running a Covered Call Strategy, and we're always going to have a significant amount of the equity exposure covered with call options. So we're not going to try to be playing around and if we want to be more aggressive, be 40% covered and get more of the upside in the market or -- and try and speculate that way, we're always going to be significantly covered. So even as I mentioned earlier about what we were doing in that very volatile early April period where we were buying back options and not necessarily recovering immediately. We were still pretty heavily covered even after we were buying back some of these options. I would say you could expect us to be, on average, roughly 80% covered in most normal market environments. We're in an environment right now, however, that we think the market is exceedingly expensive, and we just feel that we want to be much more cautious, and that's why we're at 93% we were at as of the end of June. And the market has continued to move higher in July and so far in August, and we're looking to get even more covered. Now the benefits to that is that we're generating a lot more premium income in terms of having just more option coverage out there. We're taking in more option premium. And we're writing somewhat closer to the money, so the premiums are larger because of that as well. And that's just all a function of wanting to be more defensive in the current environment. So the income is positive but the hedge is significantly higher as we're getting the deltas on the option closer to 50%, where they typically -- if we're looking to typically be 3% to 5% out of the money, the deltas are 35-ish now they're getting closer to 50%, more like an at-the-money type of environment, which gives us just much more downside protection if and when the market does take a swoon here. So yeah, the 93% coverage is an indicator of how defensive we are and the benefits are that we get more protection and we get more income.

Thank you Ray. Kim, although the fund has relinquished its premium trading this year, the fund continues to trade well compared to its peers, as you can see on this slide. How does XA work to promote strong secondary trading in the market with its listed closed-end funds?

Yeah. I think that we have now had a history over the last 9 years of trying to do more in the secondary market to provide information. Today's webinar is a good example. There's a big community of followers, income investors, research analysts, and we also try to be in front of them and have opportunities to let them speak with Ray and Drew directly about the strategy. I think that MCN, much of last year was trading at a premium when the rest of the category of Covered Call closed-end funds was trading at a discount. And so now you still see an advantage while the fund is trading at a small discount, we're going to look for opportunities. You can't fight the broader market. I think there's been a lot of events in 2025, a lot of ups and downs. The good news is for the overall listed closed-end fund market, we just published our research on this that we've seen tightening across much of the listed closed-end fund market in terms of discounts. They've come in, which is terrific. Now obviously, we're not seeing very many new funds come to market. And so we obviously -- we do that research because we want to understand how the broader market is doing and opportunities to put a positive spotlight on MCN in the marketplace. Now this fund has a 20 -- now almost 21-year track record. And so I think that helps us find those opportunities when appropriate to talk about the fund, and we'll continue to support MCN in the marketplace. It's something that the team is very focused on. It is our #1 priority to support MCN, XFLT, and we'll continue to do that.

I don't see any additional questions. So we'll give it a moment here if anyone's been holding out. But always feel free to contact Kim or I. Our contact information is listed here if you have any questions on MCN, on XA Investments, we'd be happy to answer those for you. Thank you all for -- go ahead.

Jared, I was just going to mention, to the extent that in terms of the attendees, we've got a mixed group of investors and investment professionals in the industry. To the extent you're interested in our research that we do in the listed closed-end fund market, we share that with -- for free with all market participants. It's a very comprehensive report. So please let me or Jared know if you'd like a copy. We also do similar research in the interval fund market, and we'll share that. We have a trends report that we can share with you. So we just offer up those resources. Obviously, the registered closed-end fund space for our business is our entire focus, and we like to be a leader in the research that we do. So we're happy to share that with you.

Absolutely. Great points, Kim. Yes, feel free to reach out if you guys have any questions or need any of our research, we'd be happy to provide that to you. And thank you all for joining us for the second quarter MCN webinar. As always, for more information on MCN, please visit xainvestments.com. Thanks again, everyone, and have a great day.