Capital Gearing Trust

aroominyork

Linton said:

The 2 main Wealth Preservation trusts are CGT and Personal Assets Trusts (PNL). 

It's maybe worth adding that both these managers offer open-ended. PNL's is Troy Trojan which performs almost identically. CGT's in CG Absolute Return which historically underperforms CGT by (very roughly) 0.5% pa. With the open-ended funds you save the stamp duty, have a slightly higher management fee, and potentially have a different platform fee depending on the account (ISA, SIPP, Trading) and amount.

quirkydeptless

eskbanker said:

MarcoM said:

aroominyork said:

MarcoM said:

wmb194 said:

MarcoM said:

Hi,

I like the look of this trust however its costs are quite considerable when held via HL.

I was wondering if there are other trusts maybe less known that have similar characteristics but with a smaller cost to hold.

Thanks

Why not use another, cheaper, broker?

The trust charges 1.4% per year, this is where I was looking for savings if anything similar exists.

Where did you get this from? HL says it is 0.84%, Interactive Investor says 0.73%, CGT's factsheet says "60bps on net assets <£120m, 45bps on net assets >£120m, 30bps on net assets >£500m" which, since it has about 1.275bn assets under management, computes to 0.4755%.

Investment

£5,000.00

HL charges

£146.44

Investment charges		£239.55
Net initial charge	0%	£0.00
Net ongoing charge	0.84%	£228.24
Incidental charges		£0.00
Transaction costs		£-13.63
Stamp duty	0.5%	£24.94

Total charges over 5 years		£385.99
Average annual charge		1.42%
Illustrative 5 year value		£5,942.70
Illustrative 5 year value with no charges applied		£6,381.41

So the trust charges 0.84% then.

The fact that an annualised cost of buying it and holding it at HL for five years is 1.4% is answering a different question.

That 1.4% example is for holding £5000 for 5 years and doesn't take the cost caps mentioned by ColdIron above for holding ITs into consideration so it's not a good example, even though I know you took it from HLs own site. Once you are into the freebie holdinging values, e.g. above £0 in a GIA, or £10000 in an ISA, the % cost comes down.

Albermarle

RCP  was set by the Rothschilds to look after their finances, and the family still have very large holdings.  It is rather higher equity and thus more volatile than one might expect in a wealth preservation fund.  I dont believe the costs will be significantly cheaper.

Their factsheet states an OCF of 0.72%, as does the info from Fidelity.

However HL quotes an OCF of 2.15% and an annual management charge of 1 % ( unclear whether this is included in the OCF) I guess is that the HL OCF includes the charges of the funds that RCP invest in? This disparity in charge % between different sources is confusing !

OP - You can ignore this as it is not directly related to your question.

MarcoM

Linton said:

The 2 main Wealth Preservation trusts are CGT and Personal Assets Trusts (PNL).  

Then not quitie he same but sometimes placed in the same category are Ruffer Investment TRUST (RIT) and RIT Capital Partners (RCP).  RIT is a little eccentric eg going into Bitcoin in a small way.   RCP  was set by the Rothschilds to look after their finances, and the family still have very large holdings.  It is rather higher equity and thus more volatile than one might expect in a wealth preservation fund.  I dont believe the costs will be significantly cheaper.

I dont believe the costs make any signifgicant difference to the behaviour of the funds.  If you are after a high long term return and low costs use a 100 % equity tracker and accept the high volatility.  If you want steady growth with minimal excitement in a wide range of economic conditions I think CGT and PNL are worth hiolding.  The graphs shows the last 5 years which provides a good example.  Note that such graphs are after fund manager costs though obviously cannot include platform costs.

Thanks Linton,

of the two which has lesser exposure to the UK? Am I right in saying it is PNL?

Linton

MarcoM said:

Linton said:

The 2 main Wealth Preservation trusts are CGT and Personal Assets Trusts (PNL).  

Then not quitie he same but sometimes placed in the same category are Ruffer Investment TRUST (RIT) and RIT Capital Partners (RCP).  RIT is a little eccentric eg going into Bitcoin in a small way.   RCP  was set by the Rothschilds to look after their finances, and the family still have very large holdings.  It is rather higher equity and thus more volatile than one might expect in a wealth preservation fund.  I dont believe the costs will be significantly cheaper.

I dont believe the costs make any signifgicant difference to the behaviour of the funds.  If you are after a high long term return and low costs use a 100 % equity tracker and accept the high volatility.  If you want steady growth with minimal excitement in a wide range of economic conditions I think CGT and PNL are worth hiolding.  The graphs shows the last 5 years which provides a good example.  Note that such graphs are after fund manager costs though obviously cannot include platform costs.

Thanks Linton,

of the two which has lesser exposure to the UK? Am I right in saying it is PNL?

From Morningstar:

Personal assets trust - 29.5% equity of which 22% is UK
CGT - 21.8% equity of which 29% is UK

So as a % of the fund as a whole they both have about the same % UK equity.

I dont see equity being a major factor in the operation of WP funds and guess that just provides long term growth. Where they have excelled is in the active management  of non-equity.  For example CGT was highly invested in short dated US inflation linked bonds well before recent events.

aroominyork

Also worth pointing out a very different approach to equities. CGT focuses on value; PNL focuses on quality growth.

MarcoM

Linton said:

MarcoM said:

Linton said:

The 2 main Wealth Preservation trusts are CGT and Personal Assets Trusts (PNL).  

Then not quitie he same but sometimes placed in the same category are Ruffer Investment TRUST (RIT) and RIT Capital Partners (RCP).  RIT is a little eccentric eg going into Bitcoin in a small way.   RCP  was set by the Rothschilds to look after their finances, and the family still have very large holdings.  It is rather higher equity and thus more volatile than one might expect in a wealth preservation fund.  I dont believe the costs will be significantly cheaper.

I dont believe the costs make any signifgicant difference to the behaviour of the funds.  If you are after a high long term return and low costs use a 100 % equity tracker and accept the high volatility.  If you want steady growth with minimal excitement in a wide range of economic conditions I think CGT and PNL are worth hiolding.  The graphs shows the last 5 years which provides a good example.  Note that such graphs are after fund manager costs though obviously cannot include platform costs.

Thanks Linton,

of the two which has lesser exposure to the UK? Am I right in saying it is PNL?

From Morningstar:

Personal assets trust - 29.5% equity of which 22% is UK
CGT - 21.8% equity of which 29% is UK

So as a % of the fund as a whole they both have about the same % UK equity.

I dont see equity being a major factor in the operation of WP funds and guess that just provides long term growth. Where they have excelled is in the active management  of non-equity.  For example CGT was highly invested in short dated US inflation linked bonds well before recent events.

I guess this is kind of the old debate of passive vs active investing. these funds we are discussing make a good case for active management.
dumping the HSBC FTSE all World index on the fund chart you posted makes it quite interesting, dividends aside of course

MarcoM

aroominyork said:

Also worth pointing out a very different approach to equities. CGT focuses on value; PNL focuses on quality growth.

would buying both make sense or would it just be pointless duplication?

aroominyork

MarcoM said:

Linton said:

MarcoM said:

Linton said:

The 2 main Wealth Preservation trusts are CGT and Personal Assets Trusts (PNL).  

Then not quitie he same but sometimes placed in the same category are Ruffer Investment TRUST (RIT) and RIT Capital Partners (RCP).  RIT is a little eccentric eg going into Bitcoin in a small way.   RCP  was set by the Rothschilds to look after their finances, and the family still have very large holdings.  It is rather higher equity and thus more volatile than one might expect in a wealth preservation fund.  I dont believe the costs will be significantly cheaper.

I dont believe the costs make any signifgicant difference to the behaviour of the funds.  If you are after a high long term return and low costs use a 100 % equity tracker and accept the high volatility.  If you want steady growth with minimal excitement in a wide range of economic conditions I think CGT and PNL are worth hiolding.  The graphs shows the last 5 years which provides a good example.  Note that such graphs are after fund manager costs though obviously cannot include platform costs.

Thanks Linton,

of the two which has lesser exposure to the UK? Am I right in saying it is PNL?

From Morningstar:

Personal assets trust - 29.5% equity of which 22% is UK
CGT - 21.8% equity of which 29% is UK

So as a % of the fund as a whole they both have about the same % UK equity.

I dont see equity being a major factor in the operation of WP funds and guess that just provides long term growth. Where they have excelled is in the active management  of non-equity.  For example CGT was highly invested in short dated US inflation linked bonds well before recent events.

I guess this is kind of the old debate of passive vs active investing. these funds we are discussing make a good case for active management.
dumping the HSBC FTSE all World index on the fund chart you posted makes it quite interesting, dividens aside of course

You cannot compare a WP fund to a 100% equity index fund. A reasonable comparator is VLS40, which Linton's graph shows.

Linton

MarcoM said:

aroominyork said:

Also worth pointing out a very different approach to equities. CGT focuses on value; PNL focuses on quality growth.

would buying both make sense or would it just be pointless duplication?

My relatively large holding in WP is split fairly evenly between Troy Trojan and CGT.  I done expect there will be much difference overall but it helps one sleep at night.   If your holding is a relatively small part of your total investments I see no point in having both but then there is no real downside either.