Capital Gearing Trust PLC GBP · LSE:CGT
Capital Gearing Trust PLC GBP — Capital Gearing Trust — Shareholder Meeting (July 2024)
23 slides from Capital Gearing Trust PLC GBP's shareholder meeting presentation, July 2024
Slide 1: Capital Gearing Trust Annual General Meeting
Capital Gearing Trust Annual General Meeting July 2024
Slide 2: Disclaimer
Disclaimer CG Asset Management Limited (“CGAM”) is authorised and regulated by the Financial Conduct Authority to carry on regulated activities in the United Kingdom. The information contained in this Document has been prepared by and is the sole copyright of CGAM. No representation is being made th
Slide 3: Capital Gearing Trust Overview
Overview Capital Gearing Trust Overview Investment Objective • The Company’s objective is to preserve and grow shareholders’ real wealth over time • The Company seeks cost-effective, long-term absolute returns via a global portfolio of equities, bonds and commodities • It follows a simple, low-cost
Slide 4: We are joined by new colleagues this year
Overview We are joined by 3 new colleagues this year Investments & IR Operations Risk & Compliance Peter Spiller Alastair Laing Chris Clothier Chris Taylor Jason Barlow Richard Goody Co - Chief Investment CEO, Fund Manager Co - Chief Investment Chief Operations Senior Operations Senior Compliance Of
Slide 5: Taking Stock
Taking Stock Positioning and Returns
Slide 6: Since 1982 the CGT share price total return has been 262x
Taking Stock Since 1982 the CGT share price total return has been 262x1 NAV Total Return History (Rebased) Apr 1982 to Apr 2024 20,000 18,000 16,000 14,000 MSCI UK 12,000 NAV Total Return 10,000 8,000 6,000 4,000 2,000 0 1998 2013 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
Slide 7: Positioning is defensive, with a focus on inflation protection
Taking Stock Positioning is defensive, with a focus on inflation protection CGT Asset Allocation May 2024 Contribution by Asset Class LTM May 2024 100% Cash & Tbills, 12% CGT 3.7% Dry Powder, 22% Credit ,10% 80% Index Linked Bonds 0.5% UK I/L, 21% 60% Index Linked Bonds, 44% US I/L, 17% Risk Assets
Slide 8: Both equity and bond portfolios have contributed to outperformance
Taking Stock Both equity and bond portfolios have contributed to outperformance CGT Risk Assets Returns Performance to May 20241 CGT Bonds Only Returns Performance to May 20241 160 50 140 40 120 30 100 80 20 60 10 40 0 20 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 -10 2015 2016 2017 2018 20
Slide 9: Infrastructure assets have faced headwinds in the last year
Taking Stock Infrastructure assets have faced headwinds in the last year CGT Risk Assets – Geographic Exposure and Asset Exposure Contribution by Risk Assets LTM May 2024 100% CGT Risk Assets 2.4% 80% UK, 51% Conventional Equity, 56% Infrastructure -0.6% 60% Property 0.1% Japan , 14% 40% EM, 2% Infr
Slide 10: Review of the last 12 months
Taking Stock Review of the last 12 months Index Linked • Short duration in UK meant dramatic outperformance relative to gilt index Bonds • Longer duration in US TIPs and sterling strength were detractors • Spreads contracted materially, returning c.9% in investment grade and c.12% in high yield Cred
Slide 11: Asset allocation remains broadly unchanged over the last year
Taking Stock Asset allocation remains broadly unchanged over the last year, with an increase in equities and a decrease in credit and index linked around the year end CGT Asset Allocation – 2014 to 2024 100% 80% 60% 40% 20% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Cash Gold Index Li
Slide 12: After a period of disruption, the discount control was re-established in February
Taking Stock After a period of disruption, the discount control was re-established in February CGT – Share Price and NAV to March 2024 5,350 8% 5,150 6% 4,950 4% Premium / (Discount) % 4,750 2% NAV / Price 4,550 0% 4,350 -2% 4,150 -4% 3,950 -6% 3,750 -8% Apr 19 Apr 18 Apr 20 Apr 21 Apr 22 Apr 23 Apr
Slide 13: Reasons for Optimism: The investment trust market opportunity
Reasons for Optimism The investment trust market opportunity
Slide 14: The emergence of a discount is not specific to CGT
Reasons for Optimism The emergence of a discount is not specific to CGT, it reflects the entire sector Investment Companies Premium (+) / Discount (-) %1 10 5 0 -5 -10 -15 -20 -25 -30 Feb 14 Feb 15 Feb 16 Feb 17 Feb 18 Feb 19 Feb 20 Feb 21 Feb 22 Feb 23 Feb 24 Equity Funds Alt.Assets 1.Alternatives
Slide 15: Discount expansion explains most of the underperformance vs MSCI World
Reasons for Optimism Discount expansion explains most of the underperformance vs MSCI World Investment Companies Index and MSCI World Total Returns (x) 18 16 14 12 10 8 6 4 2 0 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 -2 Investment Trusts MSCI World S
Slide 16: Why we are investing in Investment Trusts
Reasons for Optimism Why we are investing in Investment Trusts Technical factors have Short-run oversupply vs. Discounts are at their Uniquely positioned with caused capital to leave long-run return of widest since GFC to engage with boards the sector capital I. Pivot to fixed income Strong issuance
Slide 17: Quality growth investment trusts are available in the bargain bin
Reasons for Optimism Quality growth investment trusts are available in the bargain bin… Smithson Investment Trust: Premium (+) / Discount (-) %1 Finsbury Growth & Income: Premium (+) / Discount (-) %1 4.0 15 2.0 10 5 0.0 Jun 14 Dec 15 Jun 17 Dec 18 Jun 20 Dec 21 Jun 23 0 -2.0 Oct 18 Jun 19 Feb 20 Oc
Slide 18: … as are diversifiers if you rummage around
Reasons for Optimism … as are diversifiers if you rummage around RIT Capital Partners: Premium (+) / Discount (-) %1 BH Macro: Premium (+) / Discount (-) %1 15 20 10 15 5 10 0 Mar 14 Sep 15 Mar 17 Sep 18 Mar 20 Sep 21 Mar 23 5 -5 -10 0 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 Dec 23 -15 -5 -20 -10 -25 -15
Slide 19: Bond proxies are also available at a knock down price
Reasons for Optimism Bond proxies are also available at a knock down price International Public Partnerships: Premium(+) / Discount (-) % HICL: Premium (+) / Discount (-) % 25 40 20 30 15 10 20 5 10 0 Feb 14 Nov 15 Aug 17 May 19 Feb 21 Nov 22 -5 0 Feb 14 Nov 15 Aug 17 May 19 Feb 21 Nov 22 -10 -15 -1
Slide 20: Index linked bond markets are offering risk free returns well ahead of inflation
Reasons for Optimism Index linked bond markets are offering risk free returns well ahead of inflation Developed Government Bond 10 Year Real Yields 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% USA Canada UK Sweden Germany France Japan Australia New Zealand 12M Range Current Source: Bloo
Slide 21: We are excited about medium term returns despite our defensive positioning
Reasons for Optimism We are excited about medium term returns despite our defensive positioning CGT Asset Allocation and Yields May 2024 34% Gold Property Alternatives Equities 17% US 27% ROW UK 22% Credit T-Bills Short Medium Long Risk Assets Nominal Bonds Index Linked Index Linked Duration1 (years
Slide 22: Questions?
Questions? cgam
Slide 23: www.cgasset.com
IR@cgasset.com +44 20 3906 1643 20 King Street, London, EC2V 8EG www.cgasset.com
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