Capital Gearing Trust PLC GBP · LSE:CGT
Capital Gearing Trust PLC GBP — CG Asset Management — Q3 2024 Earnings Presentation
23 slides from Capital Gearing Trust PLC GBP's earnings presentation, October 2024
Slide 1: CG Asset Management Q3 2024 Webinar
CG Asset Management Q3 2024 Webinar October 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: Funds Summary
Overview Funds Summary Dealing Strategy Fund Launched AUM6 AMC Fee TER Frequency Capital Gearing Trust 19821 £957m Listed 0.39%3 0.47% Absolute Return CG Absolute Return Long only investments in a 2016 £893m Daily 0.35% 0.45% portfolio of bonds, equities (EUR Hedged, USD Hedged available) and commod
Slide 4: Positioning and Returns
Positioning and Returns CGAM Q3 2024 Webinar
Slide 5: The portfolio performed defensively through a volatile period
Positioning and Returns The portfolio performed defensively through a volatile period Contribution by Asset Class LTM September 20241 CGT Asset Allocation September 2024 100% CGT 5.6% Cash & Tbills, Dry 22% Powder, 80% 30% Risk Assets 3.2% Credit, 9% UK I/L, 12% Index Linked Bonds 1.3% 60% Index Lin
Slide 6: Both equity and bond portfolios have contributed to performance
Positioning and Returns Both equity and bond portfolios have contributed to performance CGT Risk Assets Returns Performance to September 20241 CGT Bonds Only Returns Performance to September 20241 50 150 130 40 110 30 90 20 70 50 10 30 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 2015 2016
Slide 7: The long term returns of the IT Index have been similar to the MSCI World
Investment Trusts The long term returns of the IT Index have been similar to the MSCI World Investment Trust Index and MSCI World Total Returns (x) Investment Trust Index and MSCI World TR (Log x) 20 10 15 10 1 5 0 0.1 2008 1992 1994 1996 1998 2000 2002 2004 2006 2010 2012 2014 2016 2018 2020 2022 2
Slide 8: Discounts are still attractive…
Investment Trusts Discount are still attractive… Investment Companies Premium (+) / Discount (-) % 10 5 0 -5 -10 -15 -20 -25 -30 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Equity Funds Alternative Assets Alternative assets exclude 3i Past performance is not indicative of future results.
Slide 9: …with catalysts at multiple levels to narrow them
Investment Trusts …with catalysts at multiple levels to narrow them Reversal of macro factors • Fixed income allocations are better balanced • Multi-asset outflows have largely slowed • Cost disclosure changes will help at the margin Past performance is not indicative of future results. CG Asset Man
Slide 10: …with catalysts at multiple levels to narrow them
Investment Trusts …with catalysts at multiple levels to narrow them Reversal of macro Record return factors of capital • Fixed income allocations are • C.£15bn returned through better balanced buybacks, wind downs and M&A in the last 18m • Multi-asset outflows have • 45 corporate actions, and largel
Slide 11: …with catalysts at multiple levels to narrow them
Investment Trusts …with catalysts at multiple levels to narrow them Reversal of macro Record return Engagement leading to factors of capital constructive outcomes • Fixed income allocations are • C.£15bn returned through • Governance has improved better balanced buybacks, wind downs over the years a
Slide 12: We have increased our special situations and activist positions
Investment Trusts We have increased our special situations and activist positions PRS REIT: Share Price (GBp) 120 110 PRSR 100 90 80 70 60 50 2019 2020 2021 2022 2023 2024 1. Net asset values are reported on a weekly basis for BHMG Source: Bloomberg Finance L.P. Past performance is not indicative of
Slide 13: Outlook
Outlook CGAM Q3 2024 Webinar cgam
Slide 14: Paul the Psychic Octopus was one of the breakout stars of the 2010 world cup
MACRO OUTLOOK Paul the Psychic Octopus was one of the breakout stars of the 2010 world cup Past performance is not indicative of future results CG Asset Management Limited is authorised and regulated by the Financial Conduct Authority © 2024 14
Slide 15: Is the yield curve the psychic octopus of the financial world?
MACRO OUTLOOK Is the yield curve the psychic octopus of the financial world? US 2Y/10Y Spread (shaded areas denote recessions) 350 300 250 200 150 100 50 0 1987 2015 1980 1981 1982 1983 1984 1985 1986 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Slide 16: The curve is dis-inverting, with just the tip of the tentacle left to uncurl
MACRO OUTLOOK The curve is dis-inverting, with just the tip of the tentacle left to uncurl US Nominal Curve Development 6.0 5.0 4.0 3.0 2.0 1.0 0.0 0 5 10 15 20 25 30 Maturity (Years) Source: Bloomberg Oct-24 Oct-23 Past performance is not indicative of future results CG Asset Management Limited is
Slide 17: The dis-inversion and the Sahm Rule are moving with spooky synchronicity
MACRO OUTLOOK The dis-inversion and the Sahm Rule are moving with spooky synchronicity Sahm Rule1) 4 3.5 3 2.5 2 1.5 1 0.5 0 1969 1995 2017 1959 1961 1963 1965 1967 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2019 2021 2023 -0.5 -1 1)
Slide 18: The Sahm Rule is a heuristic and not a fundamental law!
MACRO OUTLOOK The Sahm Rule is a heuristic and not a fundamental law! “The Sahm rule is an empirical regularity. It’s not a proposition; it’s not a law of nature.” Claudia Sahm Past performance is not indicative of future results CG Asset Management Limited is authorised and regulated by the Financi
Slide 19: US consumer is struggling and US corporates are showing caution
MACRO BACKDROP US consumer is struggling and US corporates are showing caution US Credit Card Debt - % of Balance 90+ days delinquent US Non-defense New Orders Capital Goods - % chg yoy (3m avg) 25% 16 14 15% 12 5% 10 8 -5% 6 -15% 4 -25% 2 0 -35% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201
Slide 20: Today CAPE sits at its 97 percentile against a backdrop of tech mania
MACRO BACKDROP Today CAPE sits at its 97 percentile against a backdrop of tech mania – sound familiar? US Stock Market - CAPE Ratio 50 45 40 36 35 30 25 20 15 10 5 0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 Source: Princeton University Press, Robert J. Shiller Past performanc
Slide 21: Index-linked bond markets are offering risk-free returns well ahead of inflation
MACRO BACKDROP 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% USA Canada UK Sweden Denmark Germany Japan Australia New Zealand -0.5% -1.0% -1.5% 12M Range Current Source: Bloomberg
Slide 22: We are excited about medium term returns despite our defensive positioning
Outlook We are excited about medium term returns despite our defensive positioning CGT Asset Allocation and Yields September 2024 36% Gold Property Alternatives 20% Equities 14% US 30% ROW UK Credit Cash Short Medium Long Risk Assets Nominal Bonds Index Linked Index Linked Duration1 (years) 1.0 5.2
Slide 23: www.cgasset.com
IR@cgasset.com +44 (0)203 906 1649 20 King Street, London, EC2V 8EG www.cgasset.com