Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and 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
Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Play Dangerous daisy chains, Black Friday blues and Uber valuations

Dangerous daisy chains, Black Friday blues and Uber valuations

This week’s Investment Pulse looks at the domino effect in European banks, America’s disappointing Black Friday and how much Uber is really worth.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter