Buy Capital Gearing Trust?

aroominyork

I have been a bit ‘sniffy’ about wealth preservation funds in the past, thinking investors could just pick a multi-asset fund to do a similar job. But I am now rethinking and would like to run my reasoning past the forum. I have Capital Gearing Trust in mind.

Situation: early 60s, not planning to retire soon (please don’t tell OH!), and have about 70% of the amount we would like to retire with, so will have to reduce our spending plans. Currently invested  70% equities / 30% bonds (exc. cash), and have moved to less aggressive equities over the last year or two. My equities are slightly/moderately skewed to growth, though a few months ago I bought Fidelity Global Dividend to have a more blended portfolio.

Plan would be to sell the Fidelity fund and my smallish holdings in UK All Share and Japan index funds, maybe reduce my UK and Europe smaller company funds a little, and reduce my global index bond fund. I may not put it all in CGT – maybe a little into my global (developed world) index fund.

Reasons are:

-          The coming years look unpredictable for most asset classes; I would like a professional to navigate the bumps

-          It adds a little diversification (property, gold etc.)

-          Inflation could be longer-term than recent moves in index-linked funds predict; CGT would give me some exposure to linkers

-          As we get closer to retirement it de-risks

-          CGT’s equities are skewed to value so they easily replace the Fidelity fund.

Any thoughts/challenges would be welcome.

Albermarle

I am already invested in CGT and good to see that the value has been stable in recent months , so doing their job very well .
They are UK orientated so I also have holdings in Personal Assets trust as they are more US orientated.

masonic

Like Albermarle, I hold both CGT and PNL, having switched from HSBC GS Cautious after the Covid crash recovery. Only about 15% of my portfolio between them.

I also hold a index linked Gilt ETF, and a 5% gold allocation (which is most unlike me, but alternatives seemed worse!).

All have served me well. With continued inflation, interest rate rises, geopolitical risks potentially spreading to China etc, an active manager at least has the potential to earn his/her keep.

Audaxer

I am retired and have a small percentage of my portfolio in Capital Gearing Trust, and it is good defensively, but I wouldn't put everything in to it. It had held up well recently, but I'm hoping my other funds and ITs that are down in value this year, will bounce back eventually.

If you only have 70% of the amount you want to retire with, it seems to me to be a bit too defensive to put everything in to it.

Alice_Holt

Albermarle said:

I am already invested in CGT and good to see that the value has been stable in recent months , so doing their job very well .
They are UK orientated so I also have holdings in Personal Assets trust as they are more US orientated.

      Another with holdings in both CGT and PAT. 
     And, I too, am happy with this defensive element of my portfolio.     

talexuser

I've had CGT in the ISA for 4 years and CGT and PNL in the unwrapped for the same time since slowly trading in UK funds after the Brexit vote and going mostly global. Last 2 years have topped them up with most of my dividends thinking other areas were far too toppy and due for a fall at some time or other. They did their job during the first wave pandemic and also now. I also have some RIT and CLDN as safer areas to the larger various global funds and area trackers.

aroominyork

Thanks all. Any challenge to my thinking would be welcome. I'm thinking of 12-15% of my portfolio in CGT. 

jamei305

Why CGT and not PNL or RICA (or their OEIC equivalents Tory Trojan and Ruffer Diversified Return).

I'd check out all three carefully and make sure you're clear which you prefer and why.

eskbanker

jamei305 said:

Why CGT and not PNL or RICA (or their OEIC equivalents Tory Trojan and Ruffer Diversified Return).

Don't know about the quality of the product but I bet the parties are good....

aroominyork

jamei305 said:

Why CGT and not PNL or RICA (or their OEIC equivalents Tory Trojan and Ruffer Diversified Return).

I'd check out all three carefully and make sure you're clear which you prefer and why.

Thanks - good question. RICA is quite volatile; although it holds more equities than the other two its FE score of 71 (compared to 44 for PNL and 37 for CGT) doesn't attract me as a wealth preservation fund. PNL is more US focused than I want. That leaves CGT, and I like its steady performance and the diversification into property.

jamei305

aroominyork said:

jamei305 said:

Why CGT and not PNL or RICA (or their OEIC equivalents Tory Trojan and Ruffer Diversified Return).

I'd check out all three carefully and make sure you're clear which you prefer and why.

Thanks - good question. RICA is quite volatile; although it holds more equities than the other two its FE score of 71 (compared to 44 for PNL and 37 for CGT) doesn't attract me as a wealth preservation fund. PNL is more US focused than I want. That leaves CGT, and I like its steady performance and the diversification into property.

Fair enough, but a significant portion of RICA's apparent volatility is due to swings in the premium/discount, as it's less tightly controlled than CGT's or PNL's. The OEIC equivalent - Ruffer Diversified Return - has an FE risk score of 37.