The fund’s investment objective is to provide income with potential for capital growth primarily through investment in equity and equity related securities of UK companies. The fund will also use derivative instruments to generate additional income. The manager may selectively sell short dated call options over securities or portfolios of securities held by the fund or indices, in order to generate additional income by setting target 'strike' prices at which those securities may be sold in the future. The manager is also permitted to sell put options on securities or portfolios of securities which are not held by the fund, or indices, at target prices that are pre-set below the current market level. The manager may also, for the purpose of efficient management, use derivative instruments which replicate the performance of a basket of short dated call options or a combination of equity securities and short dated call options. Investment will be in directly held transferable securities. The fund may also invest in collective investment schemes, derivatives, cash, deposits, warrants and money market instruments.
They will also tend to be high yielding stocks - shares that offer a generous dividend payment as well as the ability to grow that dividend over time. The income that these stocks generate is then topped up (to reach the 7% target) by selling options on the holdings. These are derivatives that enable us to receive a premium in return for sacrificing some of the potential capital growth on the underlying stocks.By taking this approach investors are still able to gain access to equity markets and the potential for some share price growth, but with the added security of a regular income and lower volatility than a similar fund without the option overlay.
136.50p
