| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1925.18 | -61 |
| Intrinsic value (DCF) | 1961.91 | -60 |
| Graham-Dodd Method | 40.78 | -99 |
| Graham Formula | 130.57 | -97 |
Capital Gearing Trust p.l.c (LSE: CGT) is a UK-based closed-ended investment trust specializing in diversified asset allocation across public equities and fixed-income securities. Managed by CG Asset Management, the trust primarily invests in UK government bonds and equities across multiple sectors, aiming to preserve capital while delivering steady returns. Its performance is benchmarked against the FTSE Equity Investment Instruments Index and the Retail Price Index (RPI), reflecting its focus on inflation-adjusted returns. Established in 1963, the trust has a long-standing reputation for conservative risk management, making it attractive to income-focused investors. With a market cap of £847 million, it offers a dividend yield supported by a well-balanced portfolio. Its strategy emphasizes low volatility (beta of 0.44) and liquidity, holding £11.6 million in cash equivalents and zero debt. Capital Gearing Trust is a key player in the UK financial services sector, catering to investors seeking stability in uncertain markets.
Capital Gearing Trust presents a low-risk investment profile, appealing to conservative investors with its focus on capital preservation and inflation-linked returns. Its 0.44 beta indicates minimal market volatility exposure, while a dividend yield of 78 GBp per share underscores income stability. However, its reliance on UK-centric assets may limit growth potential compared to globally diversified peers. The trust’s zero debt and £11.6 million cash position provide financial resilience, but net income of £13.7 million (EPS: 0.56 GBp) reflects modest profitability. Investors should weigh its defensive positioning against potential underperformance in high-growth market cycles.
Capital Gearing Trust’s competitive edge lies in its conservative, multi-asset approach, blending equities and government bonds to mitigate risk. Unlike aggressive growth funds, it prioritizes capital preservation, resonating with risk-averse investors. Its benchmark against the RPI ensures alignment with inflation, a rarity among peers. However, its UK focus may lag behind globally diversified trusts in bullish markets. The trust’s zero leverage and liquidity reserves enhance stability but could limit returns in low-yield environments. Competitors often employ more dynamic strategies (e.g., global equities or high-yield bonds), which may outperform during rallies but lack CGT’s downside protection. Its small-cap status (£847 million) also means less scalability than larger asset managers, though nimble positioning allows tactical shifts. The absence of fees (implied by zero capital expenditures) is a cost advantage, but reliance on CG Asset Management’s expertise introduces key-person risk.