Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Capital Gearing Trust cuts fees

Capital Gearing Trust cuts fees

The defensive Capital Gearing Trust has become the latest investment company to reduce its management charge.

From 6 April 2014 the £92 million trust will bring its fees down from 0.85% to 0.6%.

The trust, which launched in 1973 and is managed by Peter Spiller (pictured) and Alastair Laing, runs a strongly conservative portfolio, with 10% currently in cash and 30% in index-linked government bonds.

As a result it has performed well in bear markets but lagged significantly during bull phases.

For example, Capital Gearing returned 4.9% in 2006 while the FTSE All Share surged by 16.8%. But in 2008 it eked out a 4.7% return while the FTSE lost 30%.

Similarly Capital Gearing dropped 9% last year while the FTSE gained 20.8%. So far this year the fund has outperformed, though, returning 6.4% while the FTSE is down 0.1%.

Iain Scouller, an analyst at Oriel Securities, has highlighted Capital Gearing as one of his defensive picks alongside better known vehicles such as RIT Capital, Ruffer and Personal Assets.

‘Following a strong year for many global stock markets over 2013, most are struggling to make progress this year,’ he said.

‘Indeed some of the increasingly speculative activity that we have seen in some areas such as high demand for a number of equity IPOs and the increasing use of leverage to finance some stock market investment makes us feel distinctly nervous. We do think the risk of a market correction is growing.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
1 Comment Play CEO Tapes: Buxton to Gilbert - ‘my Glencore quandary’

CEO Tapes: Buxton to Gilbert - ‘my Glencore quandary’

Do not miss the first two minutes of this film as Richard Buxton shares how he has been challenged by a client for owning shares in a certain company.

Play CEO Tapes: the huge opportunities for asset managers

CEO Tapes: the huge opportunities for asset managers

From tech disruption, retirement and poaching, the CEO discuss the opportunities for their businesses in this episode.

Play CEO Tapes: 'we're just a bunch of white dudes sitting here'

CEO Tapes: 'we're just a bunch of white dudes sitting here'

In our brand new series, eight CEOs discuss how the industry could do a better job for female fund managers.

Read More
Your Business: Cover Star Club

Profile: how career burnout led to a family office launch

Profile: how career burnout led to a family office launch

I was burnt-out from a career in finance and had no desire to come back, says the founder of Blu Family Office

Wealth Manager on Twitter