The ATRAM Nasdaq Equity Income Feeder Fund aims to pay you monthly income while keeping you invested in the Nasdaq's technology giants. It does this using an options strategy that turns market volatility into cash flow. Here's how it works, who it suits, and how to invest through DragonFi.
What is the ATRAM Nasdaq Equity Income Feeder Fund?
It's an income-paying equity UITF structured as a feeder fund, which means it channels almost all of your money into a single larger fund. That fund holds companies from the Nasdaq-100, the index of the largest non-financial companies listed on the Nasdaq, and uses an options strategy to generate regular monthly income on top. It is managed by ATRAM.
What does it invest in?
Through its target fund, it invests in equity securities of companies primarily domiciled in, or carrying out the main part of their economic activity in, the United States, drawn from the Nasdaq-100. These are largely the technology and innovation-led companies you'd expect: software, semiconductors, and digital platforms.
How does it generate income?
This is what makes the fund unusual. Alongside holding the shares, the target fund uses a covered call strategy. In simple terms, it sells other investors the right to buy its shares at a set price in the future, and collects a fee, called a premium, for doing so. Those premiums are the source of the fund's monthly income. When markets are choppy, those premiums tend to be higher, which is why the fund is designed to turn volatility into cash flow rather than simply suffer from it.
What's the target fund?
At least 90% of the fund's assets are invested in the JPMorgan Nasdaq Equity Premium Income Active UCITS ETF, managed by J.P. Morgan Asset Management. For its current holdings and the full breakdown, see the fund's page in the DragonFi app.
Who is this fund for?
This fund may suit you if you:
- Want regular income while staying invested in leading technology companies
- Would rather have a steadier payout than chase the maximum possible growth
- Are comfortable with the ups and downs of the stock market
- Are investing for the medium to long term
It's less suitable if your goal is to capture the full upside of a technology rally, for the reason explained below.
What's the risk level?
This is an aggressive-risk fund, the highest of the three risk bands. It holds technology-heavy stocks, which can swing sharply, and because the underlying investments are in US dollars, exchange rate movements also affect your returns. The covered call strategy can soften some of the ride by bringing in income, but it does not protect you from falling markets: if the shares drop, the fund's value drops too. Returns are not guaranteed.
Can I hold this in a PERA or Regular account?
This fund is available through a Regular DragonFi account. It is not one of DragonFi's PERA-eligible funds.
What are the fees?
Like all UITFs, this fund charges a 1.5% per annum trust fee, already deducted from the fund before the daily price is calculated, so you don't pay it separately. Because it's a feeder fund, you also indirectly shoulder the small expenses of the underlying target fund. Fees can change over time, so for the exact current trust fee, check this fund's page in the DragonFi app.
What's the minimum investment?
You can start investing in this fund for as low as ₱1,000 on DragonFi, and you can add to it any time.
How do I invest in or add to this fund?
You can invest in or top up this fund directly in the DragonFi app in a few taps. You can also set up Auto Invest to invest a fixed amount on a regular schedule. For the full steps, the daily cut-off time, and how your buy-in price (NAVPU) is set, see the "How to invest in a fund" article by DragonFi. One thing to know about feeder funds: because the target fund is based overseas, your order may be priced with a slight delay compared with local funds.
How do I sell or redeem it?
You can redeem some or all of your investment in the app whenever you like, with no fixed lock-in period. Because this is a feeder fund, proceeds usually take a little longer to arrive than they would for a local fund, since the money comes from the overseas target fund. Proceeds are credited within 7 to 8 business days. For details, see the "How to sell or redeem a fund" article by DragonFi.
Where do I see the current NAVPU and returns?
The live price (NAVPU) and the latest returns are always shown on this fund's page in the DragonFi app. We don't list those figures here because they change every day, so the app is your most up-to-date source.
Good to know
- Pays income monthly. This fund aims to distribute income every month, drawn from the option premiums it collects. Payouts are not guaranteed and the amount varies with market conditions, since premiums rise and fall with volatility. Note that a distribution can cause an immediate dip in the NAVPU, since the income is paid out of the fund. For how distributions reach you on DragonFi, and whether they're paid in cash or reinvested, check the fund's page in the app.
- Income in exchange for some upside. This is the key trade-off. Because the fund sells others the right to buy its shares at a set price, it gives up part of the gain when those shares climb sharply. In a strong Nasdaq rally, expect it to lag a plain Nasdaq fund. In flat or choppy markets, the income can work in your favour.
- A newer fund. It launched recently, so it has a much shorter track record than most funds on the platform.
- Currency moves matter. The fund is in pesos while the target fund is in US dollars, so exchange rates affect your returns.
Access the fund page here:
ATRAM Nasdaq Equity Income Feeder Fund | DragonFi
This fund is not a deposit and is not insured by the Philippine Deposit Insurance Corporation (PDIC). Returns are not guaranteed. The fund's price (NAVPU) can rise and fall, so you may get back less than you invested, and past performance is not indicative of future results.