Buy Capital Gearing Trust?

masonic

aroominyork said:

I don't think CGT uses leveraging. It would be a curious thing for a wealth preservation fund to do since it adds risk.

It doesn't use leveraging (at least not when I checked), but it does trade other investment trusts to benefit from movements in premium/discount. An open ended fund may well have the ability to do that too. However, there are benefits on hidden costs to having a fixed capital pool.

Shocking_Blue

Sorry if I'm being naïve about this, but as PNL has a pretty significant holding in gold, which has risen in value since Covid, and now the Ukraine situation, wouldn't the value be expected to fall once investors decided that they wanted to move back into equities, which they presumably will at some stage.

Thanks.

ColdIron

And it has more equities than gold so ...

The idea with PNL is that it has several asset classes which work in a complimentary way with each other

Albermarle

Shocking_Blue said:

Sorry if I'm being naïve about this, but as PNL has a pretty significant holding in gold, which has risen in value since Covid, and now the Ukraine situation, wouldn't the value be expected to fall once investors decided that they wanted to move back into equities, which they presumably will at some stage.

Thanks.

That is what you pay PNL for , to manage changing scenarios to preserve your wealth.

masonic

Shocking_Blue said:

Sorry if I'm being naïve about this, but as PNL has a pretty significant holding in gold, which has risen in value since Covid, and now the Ukraine situation, wouldn't the value be expected to fall once investors decided that they wanted to move back into equities, which they presumably will at some stage.

The gold allocation is not very significant (a little under 10%, compared to 45% in equities). The correlation between equities and gold is not -1, there are periods when both equities and gold rise or fall together, and there are many gold investors who do not intend to move into equities when things settle down, but in the scenario where equities are rising and gold is falling, the trust may still achieve positive performance.

Shocking_Blue

ColdIron said:

And it has more equities than gold so ...

The idea with PNL is that it has several asset classes which work in a complimentary way with each other

Albermarle said:

Shocking_Blue said:

Sorry if I'm being naïve about this, but as PNL has a pretty significant holding in gold, which has risen in value since Covid, and now the Ukraine situation, wouldn't the value be expected to fall once investors decided that they wanted to move back into equities, which they presumably will at some stage.

Thanks.

That is what you pay PNL for , to manage changing scenarios to preserve your wealth.

Thanks,

Saw the other stuff but just thought the gold % was quite high. Didn't, though, realise it would be actively managed.

Thanks.

ColdIron

Wealth preservation funds pretty much have to be actively managed. Partly because there are no trackers with the required asset allocation but also as they need the flexibility to be able to change their holdings to suit the prevailing or future economic landscape

Shocking_Blue

ColdIron said:

Wealth preservation funds pretty much have to be actively managed. Partly because there are no trackers with the required asset allocation but also as they need the flexibility to be able to change their holdings to suit the prevailing or future economic landscape

Thanks, yep, that makes sense.

aroominyork

Bobziz said:

aroominyork said:

Shame there's no open ended version of CGT. After all, 0.5% is 0.5%.

CG absolute return fund ?

That's great to know - thank you. Comparing performance CGT opened a gap from late 2020 until mid/late 2021. Looking at the two factsheets asset allocation looks very similar both now and over recent years - can anyone explain the divergence in performance?

masonic

It's probably down to a combination of small differences to holdings, constraints placed on the fund manager by the UCITS vs investment trust structure, the fund having to buy and sell holdings for net inflows/outflows, and differences in timing of transactions. You can see a similar divergence, this time in the favour of the fund, from inception to 2018.

Movements in discount/premium for the trust would also be relevant, but this has been remarkably stable.