Direct Invest through Accelerator
Excela’s Accelerator Fund is a “direct invest” fund, meaning it invests directly in equities rather than in a portfolio of other managed funds. Accelerator is designed to produce a regular distribution by implementing the Buy Write Strategy, investing directly in a portfolio of Blue Chip shares.
Portfolio Selection
Accelerator Fund
Income shares are selected on the basis of their ability to produce cash returns through the process of using derivatives to write calls against the stock.
Writing calls is selling the right to purchase shares at an agreed price on or before a date in the future. In return for this a premium is received.
When writing a call the investor ‘profits’ when:
- the share price goes up because they receive the premium and the increase in the value of the share up to the strike price;
- the share price goes sideways because they keep the premium; and
- the share price goes down less than the original amount of the premium they were paid.
When writing a call the investor ‘loses’ when the share price goes down more than the original amount of the premium they were paid.
Excela implements an approach based on the Investment Manager’s Buy Write strategy.
Options are selected that:
- Are out of money (strike price above the current share price)
- Expire at the end of the month or an appropriate longer date of expiry
Advantages of Direct Investing through Accelerator:
- Access the Buy-Write Strategy
- Professional Management
- Income Distributed Monthly
- Diversification
- Low Initial Investment Cost
- Minimal Paperwork and Administration
Access the Buy-Write Strategy
The buy – write strategy is popular amongst investors wanting to increase the yield and decrease the risk of share market investing without resorting to complex strategies. The strategy produces regular monthly option premium income, can take advantage of possible dividends and franking credits, and reduces downside in falling markets by supplementing falls in share prices with option premiums.
Professional Management
Individual investors may not have the time, expertise or interest in managing their own strategy. Excela retains professional managers with extensive experience in the buy-write strategies to manage the investments on your behalf.
Income Distributed Monthly
Income will be distributed to investors monthly.
Diversification
Pooling your funds with other investors enables Excela to invest in a greater variety of shares than most individual investors are able to. This has the effect of reducing your exposure to loss from a single share or sector.
Low Initial Investment Cost
Generally individual investors need a large amount of capital to successfully trade a buy-write strategy. Investing in Accelerator allows the investor to start with the relatively small amount.
Minimal Paperwork and Administration
Individual investors in the share market using a buy-write strategy have to manage all the activities of their portfolio including rights issues, dividends, written and taken call and put positions, margins and collateral requirements of the Australian Clearing House Corporation, voting at annual general meetings and extraordinary general meetings and many other administrative activities – Excela take care of this for you. You will be provided with one simple regular statement for your ease of reference.
Accelerator Fund for Income | Accelerator Fund for Growth
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