Capital Gearing Trust (CGT)

Capital Gearing Trust (LON:CGT) is managed in an unconstrained manner with two core objectives: to preserve capital and to grow shareholders’ real wealth over the long term. The aim is to provide consistently positive, risk-adjusted, real returns across all time horizons and in essentially all economic environments.

As we discuss in the Performance section, the team has achieved their objective since Peter Spiller took over the portfolio management in 1982, with the multi-asset portfolio generating positive returns for shareholders in 39 of the 40 years. The trust has performed particularly well in times of market stress, with a maximum drawdown over the past ten years of 4.8% versus a fall of 21.4% in equities, as represented by the MSCI All Countries World Index.

Furthermore, performance has held up very well over the past 12-18 months. In part, this can be attributed to some of the portfolio changes made following the market lows of the coronavirus pandemic, and a relatively early shift into more defensive assets including European rental property and renewable infrastructure, and inflation linked bonds, as discussed in the Portfolio section.

Alastair Laing and Chris Clothier joined Peter as co-managers of the trust in 2011 and 2015 respectively. Alastair is CEO and Chris is CFO of CG Asset Management and all three of them also manage the handful of open-ended fund structures at CGAM with the capital preservation theme remaining a core objective. The board are committed to providing CGT’s shareholder’s greater stability with respect to the value of their shares, in relation to the underlying NAV, through the active management of the discount control policy. They have been able to maintain a relatively consistent premium of around 2% since 2015, as discussed in the Discount section.