It is often said that markets climb a wall of worry, but there are times when investors panic and run for the exits. In such an environment, the attractions of funds which are defensively positioned and managed by an experienced team, with an investment ethos based on an assessment of long-term fundamental value, come to the fore… Read more
CG Asset Management (CGAM)’s defensive stance is based on its belief that almost all asset classes offer the prospect of low or negative returns at current valuations. The two funds that we cover in more detail in this report, Capital Gearing Trust and CG Absolute Return Fund, have relatively low exposure to equities and have high levels of cash and other assets that are easy to turn into cash. These funds are not just hiding places in times of market turmoil, however. The managers stand ready to increase the weighting to riskier assets such as equities when they feel that valuations have reached attractive levels.
Impressive long-term track record
Peter Spiller, CGAM’s chief investment officer, assumed responsibility for Capital Gearing Trust in 1982 and since then it has been the best-performing of all conventional investment companies. An investment of £100 in April 1982 would have been worth £22,969 by the end of February 2020. That is more than 6x the return from the UK stock market (as measured by the MSCI UK Index) and is equivalent to £6,279 after adjusting for inflation.
CGAM has launched a number of open-ended, UCITS funds over the years. One of these, CG Absolute Return Fund, has many of the same characteristics as Capital Gearing Trust and offers a liquid way of accessing CGAM’s absolute return strategy.
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