Capital Gearing Trust PLC GBP · LSE:CGT

Capital Gearing Trust PLC GBP — Capital Gearing Trust — Q1 2022 Earnings Presentation

18 slides from Capital Gearing Trust PLC GBP's earnings presentation, April 2022

  1. Slide 1: CG Asset Management First Quarter Review April 2022

    CG Asset Management First Quarter Review April 2022

  2. Slide 2: Disclaimer

    First Quarter Review 2 Disclaimer This presentation is issued and intended for professional investors and eligible market counterparties only. Performance figures have been calculated by CG Asset Management Ltd based on information provided by Bloomberg, Morningstar and Northern Trust International

  3. Slide 3: Contents

    First Quarter Review 3 CONTENTS 1. Peter turns 40 again (!) 2. Positioning & Returns 3. Asset prices and inflation © Copyright CGAM 2022

  4. Slide 4: Peter turns 40 again (!)

    First Quarter Review 4 Peter turns 40 again (!) © Copyright CGAM 2022

  5. Slide 5: Since 1982 CGT has returned 280x with only one down year

    First Quarter Review 5 CGT TRACK RECORD Since 1982 CGT has returned 280x1) with only one down year NAV Total Return History (Rebased) Apr 1982 to Mar 2022 YTD CGT TR 45% 49% 29% 35% 47% 3% 30% 2% 19% 18% 30% 18% 5% 20% 13% 17% 4% 10% 11% 10% 3% 22% 15% 15% 5% 7% 0% 18% 8% 10% 11% (2)% 5% 3% 13% 0% 8

  6. Slide 6: Positioning and Returns

    First Quarter Review 6 Positioning and Returns © Copyright CGAM 2022

  7. Slide 7: Positioning remains defensive with a focus on inflation protection

    First Quarter Review 7 POSITIONING AND RETURNS Positioning remains defensive with a focus on inflation protection CGT Asset Allocation Mar 2022 (%) Returns by Asset Class over last twelve months (%) 100% Cash & Tbills Dry Powder CGT 10.7 Credit 80% Index Linked Gold 18.6 Index Linked 60% Bonds Risk

  8. Slide 8: Both the equity and bond portfolios have contributed to the outperformance and stability

    First Quarter Review 8 POSITIONING AND RETURNS Both the equity and bond portfolios have contributed to the outperformance and the stability of returns CGT Risk Assets* Returns Recent Performance To Mar 2022 (%) CGT Bonds Only* Returns Recent Performance To Mar 2022 (%) 160 45 140 35 120 100 25 80 60

  9. Slide 9: The first quarter proved a good test of the portfolio's defensive characteristics

    First Quarter Review 9 POSITIONING AND RETURNS The first quarter proved to be a good test to demonstrate the defensive characteristics of the portfolio CGT YTD Mar 2022 Performance vs. Benchmarks Risk Assets Bonds 0.1 -0.7 -7.3 -8.4 Benchmark CGT Note: Bonds benchmark = GBP Aggregate, Risk Assets Be

  10. Slide 10: A substantial allocation to Power & Energy delivered equity outperformance

    First Quarter Review 10 FUND RETURNS & POSITIONING A substantial allocation to Power & Energy delivered equity outperformance in the period Risk Assets – Geographic Exposure and Asset Exposure First Quarter Performance (%) 100% Conventional CGT 0.0 80% Equity UK Power & Energy 11.7 60% Power & Energ

  11. Slide 11: Asset prices and inflation

    First Quarter Review 11 Asset prices and inflation Some reflections on what the future may hold © Copyright CGAM 2022

  12. Slide 12: The money illusion: thinking in nominal rather than real terms

    First Quarter Review 12 ASSET PRICES AND INFLATION The money illusion: the psychological predisposition to think in nominal rather than real terms • Equities are not an inflation hedge … they actually love disinflation • Be very sceptical of real assets claims • Valuation really matters © Copyright

  13. Slide 13: Equities actually love disinflation

    First Quarter Review 13 ASSET PRICES AND INFLATION Equities actually love disinflation Real equity returns vs. inflation rate percentiles, 1900 - 2021 13 18 12 10 11 8 7 7.4 2.7 4.1 1 0.5 1.6 Bottom 5% 5-20 -3.5 20-35 35-50 50-65 65-80 80-95 Top 5% -10 -30 Real Equity Returns Inflation rate of at le

  14. Slide 14: Equities are at best a partial hedge against inflation

    First Quarter Review 14 “Equities are at best a partial hedge against inflation; their nominal returns tend to be higher during inflation, but not by a large enough margin to ensure that real returns completely resist inflation.” DIMSON AND MARSH CREDIT SUISSE YEAR BOOK “For a variety of reasons rev

  15. Slide 15: Inflation may be one factor influencing the gold price but others matter more

    First Quarter Review 15 ASSET PRICES AND INFLATION Inflation may be one factor influencing the gold price but other factors are overwhelmingly more important Real gold price – 1950 to 2022 900 $820 800 $680 700 600 500 400 300 200 $150 $100 100 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 200

  16. Slide 16: What areas are we currently focused on?

    First Quarter Review 16 ASSET PRICES AND INFLATION What areas are we currently focused on? Real Interest Rates • Real rates are already negative but expect them to become more negative Rented Accommodation • Underpinned both by strong house price growth and wage inflation Renewable Infrastructure •

  17. Slide 17: Contact us

    Contact us Alastair Laing +(44) 203 906 1631 alaing@cgasset.com CG Asset Management 20 King Street EC2V 8EG info@cgasset.com www.cgasset.com © Copyright CGAM 2022

  18. Slide 18: First Quarter Review

    First Quarter Review 18 © Copyright CGAM 2022

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