Capital Gearing Trust: A Guide to Investment and Performance

Capital Gearing Trust is a type of investment trust that has been around since 1927. It was established to provide a steady income stream to investors.

The trust's investment strategy is focused on generating regular dividends, with a preference for dividend-paying stocks. This approach is designed to provide a relatively stable source of income for shareholders.

One of the key features of Capital Gearing Trust is its ability to gear its investments, which means it can borrow money to invest in other assets. This allows the trust to potentially generate higher returns, but also increases the risk of losses.

The trust's gearing ratio is typically around 30-40%, which is relatively modest compared to some other investment trusts.

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The Capital Gearing Trust has a straightforward ongoing charge of 0.55%. This is a relatively low fee compared to other investment trusts.

The trust does not have a performance fee, which means investors won't be charged extra if the trust performs well.

The trust's dividend yield is 2.08%, which is paid annually. This means investors can expect to receive a regular income from their investment.

Here's a summary of the trust's key facts:

The trust's total assets are £821m, and it has a market capitalisation of £804m, with 16.38 million shares in issue.

Capital Gearing Trust is designed to suit investors with a long-term investment horizon, who have an aversion to significant short-term losses, and a desire to generate returns ahead of inflation.

The trust's investment philosophy is centered around the idea of "tilting the asset allocation gradually over time towards the optimal position" based on the current economic cycle. This approach has allowed the trust to substantially outperform inflation with a consistently low level of drawdowns.

The trust's managers, CG Asset Management, have a proven track record of success, with only two down years since 1982. In both cases, the period was marked by rising bond yields. They also prefer to use index-linked bonds over nominal bonds, as they provide protection against inflation and financial repression.

Here's a breakdown of the trust's asset allocation over time:

The trust's liquidity is also noteworthy, with 81% of the portfolio able to be liquidated within one day and 94% in less than 15 days.

As an investor, understanding how a fund manager delivers value for money is crucial. The Value Assessment helps investors grasp this concept.

An investor needs to know if a fund manager is taking actions to improve performance. This is especially true if the fund has not delivered value for money or is not expected to do so.

The Fund Manager's explanation of their actions can make a significant difference in an investor's decision-making process. It's like getting a second opinion from a trusted expert.

A Fund Manager's transparency about their fund's performance is essential for investors. This helps investors make informed decisions about their investments.

CGT's investment philosophy is centered around generating returns ahead of inflation for investors with a long-term horizon. It's designed for those who can stomach significant short-term losses and are willing to hold on for the long haul.

The trust has a history of outperforming inflation with minimal drawdowns, with only two down years since 1982. This is a testament to the expertise of CG Asset Management, which has been responsible for CGT's portfolio since 1982.

CGAM's approach involves tilting asset allocation gradually over time to optimize returns based on economic phases. They use index-linked bonds to protect against inflation risk, which has historically outperformed nominal bonds.

The team at CGAM believes that investors consistently underestimate inflation rates, leading to higher returns. They've also noted that TIPS have outperformed Treasury Bills since 2000.

CGT's focus on total returns rather than income is reflected in its single annual dividend declaration. The trust has substantial reserves to support both dividends and share buybacks, with a special reserve of £842.9m at the end of March 2025.

Alastair Laing is a seasoned investment professional with a strong background in private equity and mergers and acquisitions.

He joined CGAM in 2011 and has co-managed the funds since then, bringing his expertise to the table.

Before joining CGAM, Alastair worked with HgCapital LLP, a pan-European private equity fund, where he likely gained valuable experience in evaluating investment opportunities.

Alastair was educated at Edinburgh University, a reputable institution in the UK, and was an MBA Scholar at London Business School, further honing his business acumen.

He is a member of the Chartered Institute of Accountants of Scotland, indicating his commitment to professional development and ethics in the field of finance.

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Dividends are an important consideration for investors, and CGT is no exception. The company's dividend history shows a significant increase of 30.8% in 2025 over 2024.

CGT declares a single annual dividend each year, which was fully covered by earnings for the financial year ended 31 March 2025. This suggests that the company has a solid financial foundation.

The dividend for 2025 was 102p, with 66p designated as an interest distribution, which may have tax advantages. This designation decreases the company's corporation tax liability.

CGT has substantial reserves, including a revenue reserve of £22.58m and a special reserve of £842.9m at the end of March 2025. These reserves can be used to support both dividends and share buybacks.

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The premium discount is a crucial aspect of investment trusts like CGT. The estimated NAV of CGT is 4,998.36p, while the latest actual NAV is 5,000.74p, as of 8 October 2025.

The premium or discount of CGT is currently at -2.07%, with a 12-month average of -2.05%. This means that investors can expect a discount on the current market price of the shares.

To mitigate the risk of an expanded discount, CGT operates a discount control policy, aiming to purchase or issue shares to ensure the shares trade close to NAV. This policy has been in place since 2015.

In bear markets, discounts to NAV tend to widen across the investment trust sector. However, investors in CGT are protected by this policy.

Here's a breakdown of the top 10 holdings of CGT, which may help you understand the company's investment strategy:

The top 10 sectors of CGT's portfolio are also worth noting, with Industrials holding the largest weight at 2.03%.

CGT has the lowest ongoing charges ratio of its immediate peer group, with an ongoing charges ratio of 0.47% for the financial year ended 31 March 2024.

CGT charges an annual fee of 0.60% on the first £120m of net assets, 0.45% on the next £380m, and 0.30% on the balance.

Additionally, CGT receives an annual fee of £150,000 for AIFM services, including investor relations and marketing.

Frostrow Capital LLP provides secretarial and administration services to the company, earning a fee of 0.11% on the first £150m of CGT’s market capitalisation and 0.05% of market capitalisation above £150m.

The notice period under the management agreement is six months, giving both parties time to adjust their plans.

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Capital Gearing Trust (CGT) has a solid track record of performance, with a five-year total annual dividend yield of 2.10% as of 31/03/2025. The dividend cover is 1.05, indicating a relatively stable dividend payout.

Over the past five years, CGT's underweight position to equities was a drag on performance, but the managers have outperformed in six of the seven separate asset classes in which they invest. This suggests that their diversified approach has been effective in navigating market fluctuations.

Here are some key performance metrics for CGT:

Over 10 years, CGT's NAV and share price have both strongly outperformed inflation, with a standard deviation of 6.2% compared to the MSCI UK Index's 17.1%.

CGT's Currency Exposure 2025 is a crucial aspect of their overall performance. As of 30 June 2025, the trust had a significant currency exposure.

The trust's currency exposure included several major currencies, notably AUD, CAD, CHF, and NOK.

Performance is a key aspect of any investment, and it's essential to understand how your money is growing over time. CGT's performance figures are based on the previous close price, and past performance is not an indication of future performance.

The data provided by Digital Look shows that CGT has paid out dividends over the past five years, with a total dividend paid of 102.00p in the year ended 31/03/2025. This represents a dividend yield of 2.10% and a dividend cover of 1.05.

CGT's underweight position to equities was a drag on performance, particularly in the US market, which rallied strongly. However, the managers still believe that the market is overvalued.

Here are some key performance metrics for CGT:

CGT's NAV total returns have been rising again since August 2023, surpassing the previous peak in November 2024.

Achieving real returns is a top priority for investors, and CGT has a unique approach to achieving this goal. The company's managers allocate between three core asset allocation pillars – dry powder, risk assets, and index-linked bonds – to mitigate against potential capital losses.

CGT's managers have spent a lot of time analyzing how different asset classes perform in different parts of the economic cycle, which informs their asset allocation decisions. This research has been summarized in Figure 2.

One distinctive feature of CGT's approach is its use of listed collective investment vehicles, including investment companies and ETFs, to gain exposure to equities, property, and alternative assets. This strategy allows CGT to profit from discount narrowing on investment companies as a way of generating additional alpha.

CGT's largest monthly drawdown was 4.9%, which compares to 13.4% for the MSCI UK Index and 10.6% for the MSCI World Index. This suggests that CGT's portfolio has been less volatile than those of the indexes.

Here is a summary of CGT's asset allocation range:

CGT's focus on delivering total returns rather than income is reflected in its single annual dividend declaration. For the financial year ended 31 March 2025, the dividend was fully covered by earnings.

The estimated Net Asset Value (NAV) of Capital Gearing Trust is £5,004.68, which is the same as the latest actual NAV. This value was last updated on 09 October 2025.

The trust has a market capitalization of £804.52 million and total assets of £820.88 million. This suggests that the trust has a significant amount of assets backing its shares.

The 12-month average premium/discount is -2.05%, indicating that the trust's shares have been trading at a slight discount to their NAV over the past year.

Here is a summary of the trust's key statistics:

The trust's shares have a beta of 0.4523, indicating a relatively low level of risk compared to the overall market.

When dealing with financial investments, it's essential to have a solid understanding of the documents involved. Before investing, please read the Key Information Document (KID).

This document is crucial in providing you with the necessary information to make an informed decision. It's a vital step in the investment process that you shouldn't overlook.

The KID typically includes essential details such as fees, risks, and benefits associated with the investment. This document is usually provided by the investment provider and is a standard requirement for all investments.

To keep track of your important documents, consider creating a dedicated folder or digital storage system. This will help you stay organized and easily accessible when needed.

Here's a list of some common documents you may encounter in the financial world:

The Board plays a crucial role in overseeing the company's financials.

Karl Sternberg has been the Chairman since 9/2024. He has a length of service of 0.5 years and an annual fee of £32,500.

The Board consists of several members with different roles and responsibilities.

Ravi Anand is the Chairman of the audit and risk committee, appointed in 8/2023. He has a length of service of 1.6 years and an annual fee of £40,000, with a shareholding of 4,430.

Wendy Colquhoun is the Senior independent director and chairman of the remuneration committee, appointed in 1/2021. She has a length of service of 4.2 years and an annual fee of £35,000.

Paul Yates is the Chairman of the management engagement committee, appointed in 12/2019. He has a length of service of 5.3 years and an annual fee of £32,500.

Here is a summary of the Board members:

Let's take a closer look at the largest underlying holdings in the funds/equities portfolio. The JPMorgan Japan ETF is the largest equity holding at 2.6% of the portfolio, while the JGB 0.60% 01/01/27 bond is the largest bond holding at 5.2% of the portfolio.

The Vanguard FTSE 100 ETF is the second-largest equity holding at 1.9%, while the US Index-linked 0.125% 15/10/26 bond is the second-largest bond holding at 2.7%.

Here's a breakdown of the top holdings in the portfolio:

PRS REIT is another notable holding at 1.1% of the portfolio, with a significant bond holding in the US Index-linked 0.125% 15/04/26 bond at 2.4%.

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The Net Asset Value (NAV) is a crucial metric for investors to understand. It represents the total value of a fund's assets minus its liabilities.

The estimated NAV of CGT is £4,998.36p, while the latest actual NAV is £5,000.74p. This indicates that the fund's assets are currently valued at a premium of -2.07% to the estimated NAV.

Here's a breakdown of the NAV frequency and the latest actual NAV date:

The fund's top holdings are:

This information provides a clear picture of the fund's holdings and their respective weights.

Understanding your income statement is key to making informed financial decisions. It's a snapshot of your company's financial health over a specific period, usually a quarter or year.

The income statement is tailored to specific country editions, which means the financial news and data you see will be relevant to your region. This ensures you're getting accurate and applicable information.

Selecting the right edition is crucial, as it will directly impact the data you receive. For example, if you're based in North America, you'll want to choose the NORTH AMERICA edition.

Your income statement will show you the revenues and expenses of your company, giving you a clear picture of your financial performance.

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The valuation of Capital Gearing Trust p.l.c is a complex topic, but let's break it down simply. The estimated NAV is 4,998.36p, with the latest actual NAV being 5,000.74p as of 8 October 2025.

Looking at the capitalization, we see a range of values, from 836M to 169B. The P/E ratio for 2024 was 83.1x, while for 2025 it was 26.6x. This significant drop in P/E ratio from 2024 to 2025 suggests a change in investor sentiment or market conditions.

The enterprise value also shows a range, from 793M to 161B. The EV/Sales ratio for 2024 was 45.6x, while for 2025 it was 20.4x. This decrease in EV/Sales ratio from 2024 to 2025 indicates a potential shift in market valuation.

Here's a summary of the valuation metrics:

The net asset value (NAV) of a fund is a crucial metric to understand its performance and valuation. The NAV is the total value of a fund's assets minus its liabilities, divided by the number of outstanding shares.

In the case of the funds we're looking at, the estimated NAV is £4,998.36p, while the latest actual NAV is £5,000.74p. This indicates a slight increase in the fund's value over time.

The NAV frequency is daily, which means the fund's value is updated regularly to reflect changes in the market. The premium/discount is currently -2.07%, indicating that the fund is trading at a slight discount to its estimated NAV.

Here's a breakdown of the fund's top 10 holdings, which account for a significant portion of its value:

The fund's top 10 sectors are also worth noting, as they provide insight into its overall composition:

The fund's country allocation is also significant, with the top 10 countries accounting for a substantial portion of its value:

CGT was trading at a premium until the end of 2022, but then moved to trading at a discount as its NAV returns lagged surging inflation.

The company's share price has been trading at a discount, with a premium/discount of -2.07% as of the latest actual NAV date of 8 October 2025.

This is a significant change from the company's previous premium status, and it's likely due to the company's NAV returns not keeping pace with inflation.

The company has been working to manage the discount by buying back shares, but these buybacks must be financed from distributable reserves.

Here's a breakdown of CGT's premium/discount over the past five years:

Note that the premium/discount figures for 2023 and earlier are not specified in the article.

As of the latest actual NAV date, the company's premium/discount has been around the 2% level, but it's worth noting that this is not a consistent trend.

The company has been working to manage the discount and has secured permission to buy back up to 14.99% of its share capital at a general meeting held on 26 March 2025.

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Capital Gearing Trust p.l.c has a market capitalization of up to 169 billion pounds. The company's P/E ratio has fluctuated over the years, reaching as high as 83.1x in 2024 and dropping to 26.6x in 2025.

The enterprise value of the company has also seen significant changes, ranging from 793 million to 161 billion pounds. This is a stark contrast to the company's free-float, which has remained relatively stable at around 72.51%.

A closer look at the company's valuation metrics reveals some interesting trends. In 2024, the company's EV/Sales ratio was 45.6x, while in 2025 it dropped to 20.4x. This suggests that the company's valuation has become more reasonable in recent years.

Here's a summary of the company's valuation metrics:

The company's yield has also increased in recent years, reaching 2.13% in 2025 compared to 1.66% in 2024. This could be an attractive feature for income-seeking investors.

Capital Gearing Trust has been making some significant moves lately.

Their Q3 2025 Earnings Call is scheduled for October 07, 2025.

The company has been actively engaging with shareholders and analysts, with a Shareholder/Analyst Call held on July 09, 2025.

They've also had their fair share of leadership changes, with Miss Jean Grace Kemmis-Matterson's termination as Director effective July 03, 2025.

Capital Gearing Trust has been buying back its own shares, with an Equity Buyback Plan commencing on July 03, 2025, for 2,595,398 shares representing 14.99% of its issued share capital.

Here's a list of some of the key events related to their Equity Buyback Plan:

Capital Gearing Trust has been announcing dividends and earnings results, including a 30% raise in their annual payout on May 29, 2025.

They've also posted higher FY25 net return and investment income, according to their May 29, 2025 earnings report.

The company has been keeping their shareholders informed with regular updates, including a Tranche Update on their Equity Buyback Plan on May 29, 2025.

Their Annual dividend is payable on July 08, 2025, as announced on May 28, 2025.

Capital Gearing Trust's statistics paint a picture of a stable and established investment. The company has 16.42 million shares outstanding.

The market capitalization of Capital Gearing Trust is a significant £804.52 million. This is a substantial amount of money, and it's a good sign for the company's financial health.

The total assets of Capital Gearing Trust amount to £820.88 million, which is a testament to the company's financial stability. This is a crucial factor to consider when evaluating an investment.

The total expense ratio is a relatively low 0.56%, which is a good sign for investors. This means that the company is keeping costs under control, which can lead to higher returns.

Capital Gearing Trust's shares have traded between £4,895.00 and £4,900.00, with the previous close being £4,895.00. This gives us an idea of the company's share price volatility.

Here's a summary of Capital Gearing Trust's key statistics:

Capital Gearing Trust's diluted net asset value (NAV) is estimated to be £4,994.08, with the last published NAV being £4,994.56. This gives us an idea of the company's net asset value.

The premium/discount of Capital Gearing Trust's shares is currently -2.07%, which is a relatively low figure. This suggests that the company's shares are trading at a discount to their net asset value.

Capital Gearing Trust is a closed-ended investment trust that has been around since 1965. It was established to provide investors with a way to invest in a diversified portfolio of stocks and shares.

The trust's investment objective is to provide a relatively high level of income and some capital growth over the long term.

Wendy Colquhoun (Senior Independent Director) has over 25 years of experience in providing advice to investment trusts.

She is a senior independent director and chairman of the remuneration committee.

Wendy was a senior corporate partner at international law firm CMS Cameron McKenna Nabarro Olswang LLP until May 2020.

She qualified as a solicitor in 1987 and has held roles with Dickson Minto WS and Linklaters.

Wendy is also chairman of Henderson Opportunities Trust Plc and a non-executive director of Schroder UK Mid Cap Fund Plc and Murray International Trust Plc.

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