When is the ideal Growth Fund actually an Income Fund?
When the compounded distributions of an Income Fund over time potentially outstrips traditional growth alternatives.
Growth. Every astute investor knows that growing your capital base is one of the keys to wealth. Save money, invest it well, make it grow. Pick the right asset class at the right time and you’ll do well.
In the decade affectionately known as the ‘Naughties” (2000-2010), it seemed that above average growth was available to anyone with a share trading account and a hot tip. It was simple – in the early 2000’s – buy a stock with “.com” in the name and you doubled your money!
In 2001 buy inner city residential property and hold on. In the bull run of ’03 to ‘07, the mantra was simple – leverage up and press the BUY button!
In the post-GFC era, times have now changed. No longer are markets simply rising 20% year after year. The strategies of ‘hot tips’ and high leveraged investing for most people are no longer appropriate vehicles for growth. Looking forward though, the growth investment landscape appears to be altered.
For astute investors potentially exciting Growth is still available
Investors who are seeking Growth are delighted to find the Accelerator fund is a vehicle that:
- Is not dependant only on the market doing the work for you
- Can produce growth even if the overall market is stagnant or flat
- Potentially produces growth even if the market goes down
- Helps to protect your capital if the markets experience a downturn
- Gives you the freedom to ‘set and forget’ – not be chained to the computer forced to watch every movement of the market
Monthly income can be compounded for superior growth over time
The Accelerator Fund is an equity income fund that invests in Australian Blue Chip shares and generates income using the Buy Write Strategy. And for investors who recognise the enormous power of compounding, the Accelerator Fund is serving as the ideal vehicle to achieve excellent growth.
Primarily an Income Fund, the Accelerator Fund aims to produce in excess of 1% per month (12%pa) on average in income distributions.*
Investors who choose to reinvest these monthly distributions can compound them monthly to enhance growth. This means you can use the Accelerator Fund (an income fund) as a vehicle for compounding growth that can produce superior returns to the blue chip shares alone.*
And perhaps best of all, the Accelerator Fund is able to achieve this by investing in some of the largest, most recognisable companies listed on the ASX (Australian Securities Exchange) – that’s companies like mining giants BHP and Rio Tinto, banking heavyweights Westpac and Commonwealth Bank and retailers including Woolworths.
Employing the Buy Write strategy, the Accelerator Fund invests in such companies and is able to produce a monthly income.
If you choose to reinvest this monthly income, the Accelerator Fund offers investors the ability to compound returns – 12 times per year.
How the Accelerator Fund generates monthly income from Blue Chip Shares and gives you the opportunity to reinvest it for growth.
The underlying strategy of the Accelerator Fund is the Buy-Write Strategy.
In brief, the Fund Manager purchases a parcel of shares at the beginning of the month, and then at the same time sells the option (or promise) to sell those shares to a 3rd party at a higher price at the end of the month, if they reach that price.
In return, the Accelerator Fund is paid an income called premium.
On carefully selected Blue Chip Shares, that premium can be up to between 1 and 2%. This Buy Write Strategy (buy the shares, write or sell the option or promise) is how the Accelerator Fund is able to generate regular income each month investing in Blue Chip shares.
If you’re curious, learn more about how the Buy Write Strategy works
The Buy Write: normally out of reach to the average investor, now available in the Accelerator Fund
If you’re not familiar with the Buy-Write Strategy this can sound a little strange; someone agreeing to buy your shares from you at a higher price than you paid for them – and paying you cash income for that option!
Yet it happens each and every month, month after month. In the 2010 calendar year there were over $26 BILLION dollars worth of options traded in the Australian Options Market. (1)
The Buy-Write Strategy has been in existence in Australia since 1976. However, because it requires a degree of skill and several hundred thousand dollars to trade effectively, it’s normally reserved for high net worth investors and large institutional investing divisions (like banks) trading their in-house funds.
Well now the Buy-Write is available to everyday Australian investors, professionally managed through the Accelerator Fund.
By pooling your capital with other investors, you can now take advantage of the regular income the Buy Write strategy offers.
The Accelerator Fund can potentially deliver superior income distributions, and when that is reinvested, potential superior growth.
Like any investment it also carries risk, however the great benefit of the Buy Write strategy is the risk is generally no greater than investing your money in Blue Chip shares.
Indeed, the ASX states the Buy Write actually reduces the risk of holding shares alone. (2) (For more information about the risks, read the PDS or this explanation of the Buy Write Strategy.)
The Accelerator Fund: Monthly Compounded Growth just waiting for you
If you are seeking growth in your portfolio that:
- Sees your money work harder for you by compounding on a monthly not annual basis
- Can produce growth even in stagnant, flat, sideways trending markets
- Can lower or neutralise capital losses in falling markets
- Is professionally managed by experts with decades of personal experience with the underlying strategy
- Is ‘set and forget’ – you invest your money and then simply elect to reinvest the monthly income to exploit the ‘growth on growth’ concept
Then the Accelerator Fund could be the choice for you.
Accelerator Application Form
Take advantage of the Accelerator compounded income opportunity by downloading the PDS and completing the included application form. Click on "Free Your Future" to get started.
(1) Source ASX - www.asx.com.au
(2) ASX Buy Write Fact Sheet
Important Information
The Excela Australian Equity Income Accelerator Fund aims to produce in excess of 1% per month (or 12%p.a.) on average in premium income distributions.
A realistic expectation of income distributions from the Fund could be up to between 0.8% - 1.5% per month on average.
The capital value of the Fund can rise and fall with changes in market conditions and sentiment. Payments of distributions can have a negative effect on the unit price of the Fund.
Percentage monthly income distribution figures were calculated using the distribution amount against the average balance of the fund for that month.
The fund does not guarantee any particular return or that distributions will be paid monthly (however it aims to do so).
Investments can go up and down. Past performance is not necessarily indicative of future performance. To fully understand the potential returns and risks associated with the investment please refer to the PDS.
For the current performance of the Accelerator Fund please go to Historical Performance.
This information has been prepared without taking into account your investment objectives, financial situation, or needs. Before making an investment decision you should consider the appropriateness of the information having regard to these matters. Before you invest it is important that you read and understand the terms set out in the Accelerator™ Product Disclosure Statement ("PDS"). In particular, it is important that you understand the risks associated with an investment in Accelerator™ set out in the PDS.
Fundhost Limited ABN 69 092 517 087 AFSL 233 045 ("Fundhost") as the Responsible Entity is the issuer of the Excela Australian Equity Income Accelerator Fund ("Accelerator™") ARSN 139 641 946. Excela Funds Management Pty Limited ABN 25 124 028 244 ("Excela") is the Investment Manager for Accelerator™. Excela is a Corporate Authorised Representative of Excela Equities Limited ABN 17 010763041 which is the holder of an Australian Financial Services Licence (246510) and a Market Participant of the Australian Securities Exchange ("ASX").
^ Borrowing to invest: It is possible to borrow up to 70% of the value of your investment in the Accelerator Fund (gearing or margin) if you wish to. Please be aware returns from a leveraged investment are more volatile than returns from the same investment which are not leveraged. The greater the level of gearing the greater the potential for both significant investment gains and losses. If you are thinking about borrowing to invest we recommend you seek professional financial advice.
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