Capital Gearing Trust PLC GBP · LSE:CGT
Capital Gearing Trust PLC GBP — Capital Gearing Trust — Q3 2023 Earnings Presentation
17 slides from Capital Gearing Trust PLC GBP's earnings presentation, October 2023
Slide 1: CG Asset Management Q3 2023 Webinar
CG Asset Management Q3 2023 Webinar October 2023
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. CGAM is the appointed investment manager of Capital Gearing Trust Plc (the “Company”). The information contained in this Document has
Slide 3: CGAM Team
Overview CGAM Team 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 Officer Officer Officer Manager Offi
Slide 4: Outlook
Outlook cgam
Slide 5: The US economy appears to be operating beyond full employment
Outlook The US economy appears to be operating beyond full employment and has been doing so for some time Actual vs. Potential Real GDP Growth 5% 4% Actual > potential 3% GDP growth implies positive 2% output gap! 1% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 6: Yields have risen considerably and financial conditions are now very tight
Outlook Yields have risen considerably and financial conditions are now very tight US 10-year real yield vs. Federal Reserve estimate of r* 5 4 3 2 1 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -1 -2 10Y rea
Slide 7: The US government debt position is becoming unsustainable
Outlook The US government debt position is becoming unsustainable US Fiscal Balance (% of GDP) Differential between real interest rate and growth rate, r - g 1.0 2020 2021 2022 2023 2024 2025 0.5 0.0 -0.5 -4.4 -5.3 -5.4 -5.7 -1.0 -1.5 -2.0 -12.4 -2.5 -3.0 -16.0 -3.5 Sources: Bloomberg Finance L.P.,
Slide 8: The funnel of outcomes is wide, but the landing likely uncomfortable
Outlook The funnel of outcomes is wide, but it is likely that the ‘landing’ will be uncomfortable Strong Growth Soft landing – recovery No landing – expansion • Inflation is transitory and falls • Labour market tightness back to target continues • Economy returns to full • Inflation continues above
Slide 9: Returns and positioning
Returns and positioning cgam
Slide 10: Positioning remains defensive, with a focus on inflation protection
Positioning and Returns Positioning remains defensive, with a focus on inflation protection CGAR Asset Allocation September 2023 Contribution by Asset Class 3Q 2023 100% Cash & Tbills CGAR 1.2% 14% Dry Powder, 26% Credit 80% 12% Risk Assets 0.5% 60% Index Linked Index Linked Bonds 0.2% Index Linked,
Slide 11: Risk asset exposure is strongly weighted to UK and Japanese equities
Positioning and Returns Risk asset exposure is strongly weighted to UK and Japanese equities CGAR Risk Assets – Geographic Exposure and Asset Exposure Contribution by Risk Assets 3Q 2023 100% CGAR Risk Assets 0.5% 80% UK Equities Conventional Equity 0.8% 60% Property 0.1% Japan 40% EM Infrastructure
Slide 12: ...which have delivered strong performance this year
Positioning and Returns …which have delivered strong performance this year MSCI Japan ESG Screened ETF Performance (USD) YTD MSCI Europe Energy ETF Performance (EUR) YTD 6.2 210 6 200 5.8 190 5.6 180 5.4 170 5.2 5 160 Dec 22 Jan 23 Feb 23 Mar 23 Apr 23 May 23 Jun 23 Jul 23 Aug 23 Dec 22 Jan 23 Feb 2
Slide 13: Both equity and bond portfolios have outperformed their benchmark
Positioning and Returns Both equity and bond portfolios have outperformed their benchmark CGAR Risk Assets Returns Performance to September 20231 CGAR Bonds Only Returns Performance to September 20231 140 45 120 35 100 25 80 15 60 5 40 2016 2017 2018 2019 2020 2021 2022 2023 -5 20 0 -15 2016 2017 20
Slide 14: CGAR has delivered good risk adjusted returns relative to its peers
Positioning and Returns CGAR has delivered good risk adjusted returns relative to its peers CGAR vs. Peers – Total Returns since Inception CGAR vs. Peers – Max Monthly Drawdown 40% 40 CG Absolute 35% Return Troy Trojan 30% 30 Ruffer 25% Absolute Total Returns Return 20 20% PIMFA Conservative 15% Pyr
Slide 15: We are cautiously optimistic about prospective returns for the portfolio
Positioning and Returns We are cautiously optimistic about perspective returns for the portfolio Duration and Yield1 Weight Duration (Yrs) Yield (%) Rating2 Cash & Tbills 14% 0.19 4.6 AA- I/L Bonds 44% 6.50 4.8 / 1.7 AA Corp. Bonds 13% 2.00 7.0 BBB+ Risk Assets (HY Bonds) 1% 1.6 9.2 B+ Risk Assets 2
Slide 16: Any questions?
Outlook Any questions? Past performance is not indicative of future results CG Asset Management Limited is authorised and regulated by the Financial Conduct Authority © 2023 16
Slide 17: IR contact details
IR@cgasset.com +44 20 3906 1637 20 King Street, London, EC2V 8EG www.cgasset.com
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