CG ASSET MANAGEMENT - Capital Gearing Trust - Annual Report

Capital Gearing Trust plc reported annual results for the year ended 31 March 2026, delivering a NAV total return of 5.8% and a share price total return of 6.4%, outperforming inflation while maintaining its long-standing defensive investment strategy. The trust increased its dividend by 66% and proposed a 10-for-1 share split to improve accessibility for retail investors. Management highlighted strong contributions from all portfolio segments, including risk assets, inflation-linked bonds and managed liquidity reserves, while continuing to position the portfolio conservatively amid elevated geopolitical tensions, inflationary pressures and stretched global equity valuations. During the year, the trust reduced exposure to renewable infrastructure and other higher-risk assets, increasing allocations to index-linked bonds and short-duration fixed income investments to enhance resilience. Portfolio performance benefited from successful investment trust opportunities, emerging market exposure and infrastructure holdings, while maintaining a disciplined focus on capital preservation and risk-adjusted returns. Looking ahead, management remains cautious on global markets, citing concerns over persistent inflation, rising government debt, geopolitical uncertainty and historically high US equity valuations. The trust believes its diversified multi-asset approach, emphasis on inflation protection, liquidity management and selective investment opportunities positions it well to deliver stable long-term returns while protecting shareholder capital during periods of market volatility. Key themes discussed included portfolio positioning, inflation-linked bond strategy, infrastructure investments, discount opportunities in investment trusts and the outlook for global markets and interest rates.