Capital Gearing Trust PLC GBP · LSE:CGT

Capital Gearing Trust PLC GBP — Capital Gearing Trust — Investor Presentation (October 2022)

19 slides from Capital Gearing Trust PLC GBP's investor presentation, October 2022

1. Slide 1: Focused Wealth Preservation

   Focused Wealth Preservation CGAM Multi-asset Update October 2022

2. Slide 2: Disclaimer

   CGAM Webinar Q3 2022 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

   CGAM Webinar Q3 2022 3 CONTENTS 1. What just happened? 2. Fund reporting and recent activity 3. Q&A © Copyright CGAM 2022

4. Slide 4: What just happened?

   CGAM Webinar Q3 2022 4 What just happened? Reflections on a busy couple of weeks! © Copyright CGAM 2022

5. Slide 5: We are delighted with the three recent additions to our team

   CGAM Webinar Q3 2022 5 CGAM BACKGROUND We are delighted with the three recent additions to our team Peter Spiller Alastair Laing Chris Clothier Chris Taylor Sindy Somander Richard Goody Chief Investment Officer Co-Manager Co-Manager Chief Operations Officer Operations Manager Risk & Compliance Direc

6. Slide 6: Unfunded tax cuts in the UK led to a dramatic shift in the yield curve

   CGAM Webinar Q3 2022 6 WHAT JUST HAPPENED? Unfunded tax cuts in the UK led to a dramatic shift in the yield curve UK Nominal Yield Curve UKTI 2073 – Price (£) 4.50 450 4.00 400 3.50 350 87% Peak to trough fall! 3.00 300 2.50 Yield (%) 250 2.00 200 1.50 150 1.00 100 0.50 50 - 0 Jun 22 May 22 Sep 22 N

7. Slide 7: … which flowed through to inflation linked bond proxies

   CGAM Webinar Q3 2022 7 WHAT JUST HAPPENED? … which flowed through to inflation linked bond proxies Inflation Linked “bond proxies” – share price performance (indexed to 100) 115 110 105 100 95 90 85 80 Sep 22 Aug 22 Oct 22 Jul 22 Greencoat UK Wind LXI REIT HICL Infrastructure © Copyright CGAM 2022 S

8. Slide 8: Credit spreads have widened dramatically in the UK vs. other countries

   CGAM Webinar Q3 2022 8 WHAT JUST HAPPENED? Credit spreads have widened dramatically in the UK vs. other countries UK vs. US 5Y BBB+ spread over government bonds (%) 2.2 2.1 2 • Margin calls at LDI pension funds caused a wave of 1.9 selling of high quality assets including gilts and 1.8 sterling cred

9. Slide 9: Currencies rising with rising yields… but not when competence is questioned

   CGAM Webinar Q3 2022 9 WHAT JUST HAPPENED? The past 10 years has been characterised by currencies rising with rising yields… but not when a government’s competence is called into question GBPUSD – 1 Year GBPEUR – 1 Year 1.4 1.22 1.35 1.2 1.3 1.18 1.25 1.2 1.16 1.15 1.14 1.1 1.12 1.05 1 1.1 Jun 22 Ju

10. Slide 10: Household debt and mortgage rates last this elevated before the global financial crisis

    CGAM Webinar Q3 2022 10 WHAT JUST HAPPENED? The last time household debt and mortgage rates were this elevated was the eve of the global financial crisis UK household debt to GDP versus 2-year fixed mortgage rate 100 7 6 95 5 Mortgage rate (%) Debt to GDP (%) 90 4 3 85 2 80 1 75 0 2005 2006 2007 200

11. Slide 11: Elevated debt levels are not just a UK issue

    CGAM Webinar Q3 2022 11 WHAT JUST HAPPENED? Elevated debt levels are not just a UK issue US Non-Financial Debt to GDP Total = 281% 300 250 81% 200 Debt to GDP (%) 150 78% 100 50 122% 0 1989 1994 1947 1949 1950 1952 1953 1955 1956 1958 1959 1961 1962 1964 1965 1967 1968 1970 1971 1973 1974 1976 1977

12. Slide 12: Fund reporting

    CGAM Webinar Q3 2022 12 Fund reporting Recent developments in the portfolio © Copyright CGAM 2022

13. Slide 13: Positioning remains defensive with a focus on inflation protection

    CGAM Webinar Q3 2022 13 POSITIONING AND RETURNS Positioning remains defensive with a focus on inflation protection CGT Asset Allocation September 2022 (%) Returns by Asset Class (%) 100% Cash & Tbills -1.8 CGT Dry Powder -1.9 Credit 80% -2.9 Risk Assets -4.4 60% Index Linked Index Linked Bonds 1.0 I

14. Slide 14: Both the equity and bond portfolios outperformed their benchmark

    CGAM Webinar Q3 2022 14 POSITIONING AND RETURNS Both the equity and bond portfolios outperformed their benchmark, contributing to the stability of returns CGT Risk Assets* Performance to September 2022 (%) CGT Bonds Only* Performance to September 2022 (%) 50 150 130 40 110 30 90 70 20 50 10 30 10 0

15. Slide 15: Dramatic moves in the gilt market have made linkers investable

    CGAM Webinar Q3 2022 15 INDEX-LINKED Dramatic moves in the gilt market have made linkers “investable” for the first time in many years… but caution is advised Developed Government Bond 10 Year Real Yields 3.0% 2.0% 1.0% 0.0% USA Canada UK Sweden Germany France Japan Australia -1.0% -2.0% -3.0% -4.0%

16. Slide 16: There is no alternative but it is not what you think…

    CGAM Webinar Q3 2022 16 OUTLOOK There is no alternative but it is not what you think… © Copyright CGAM 2022

17. Slide 17: What areas are we currently focused on

    CGAM Webinar Q3 2022 17 OUTLOOK What areas are we currently focused on Real Interest Rates • Recent additions have been made to UK index linked adding to the global portfolio of inflation linked bonds Yen Assets • The Yen is offering exceptional value and Japan could come to be seen as a safe haven

18. Slide 18: Since 1982 CGT has returned 280x with only one down year

    CGAM Webinar Q3 2022 18 CGAM BACKGROUND Since 1982 CGT has returned 280x1) with only one down year NAV Total Return History (Rebased) Apr 1982 to Apr 2022 20,000 18,000 16,000 14,000 12,000 CGT 10,000 MSCI UK 8,000 6,000 4,000 2,000 0 1985 2000 2005 2020 1982 1983 1984 1986 1987 1988 1989 1990 1991

19. Slide 19: Contact us

    Contact us Lisa Bajardi +(44) 203 906 1637 Lbajardi@cgasset.com CG Asset Management 20 King Street London EC2V 8EG info@cgasset.com www.cgasset.com © Copyright CGAM 2022

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