Capital Gearing Trust (CGT) Q2 2026 Portfolio Update Highlights Inflation-Linked Bonds and Listed Fund Holdings

Regulatory Background: Disclosure Requirements for Capital Gearing Trust

In line with UK Listing Rule 11.7.8, Capital Gearing Trust has disclosed its holdings in other listed closed-ended investment funds that do not limit their investments in similar funds to 15% or less of total assets. This rule ensures transparency around "fund-of-fund" structures, helping investors and regulators understand potential indirect capital concentration across multiple investment vehicles that may not be evident from headline portfolio summaries.

The trust’s disclosure confirms three such holdings as of 30 June 2026. This regulatory obligation aligns with UK efforts to provide shareholders with clear insights into capital deployment, especially when underlying assets may have liquidity constraints or valuations depend on other funds’ net asset values. The full investment list as at 30 June 2026 is available on the company’s website, offering detailed portfolio information beyond the regulatory summary.

Details of Listed Closed-Ended Fund Holdings as of 30 June 2026

Capital Gearing Trust’s portfolio included three listed closed-ended investment funds requiring disclosure under UK Listing Rule 11.7.8 at 30 June 2026. Residential Secure Income was the largest, representing 0.62% of net assets, followed by GCP Infrastructure Investments at 0.53%, and Achilles Investment Company at 0.17%. Combined, these holdings comprised 1.32% of net assets.

Individually modest, these positions reflect the trust’s conservative approach, emphasizing government bonds, index-linked securities, and capital preservation instruments over reliance on other closed-ended funds. Residential Secure Income and GCP Infrastructure Investments are established players in UK infrastructure and specialist income sectors, while Achilles Investment Company is a smaller holding. No specific investment rationale for these holdings was provided in the announcement.

UK Inflation-Linked Gilts Dominate Top Ten Holdings

The top ten investments as at 31 March 2026 show a strong focus on inflation-linked government bonds. Four UK Treasury inflation-linked gilts feature prominently: the UK Treasury 0.125% Inflation-Linked bond maturing 10 August 2031 (7.58% of net assets), the 0.75% Inflation-Linked bond due 22 November 2033 (3.99%), the 0.125% Inflation-Linked bond maturing 22 March 2029 (3.04%), and the 0.125% Inflation-Linked bond due 22 November 2032 (2.76%). Together, these represent approximately 17.37% of net assets.

This allocation underscores the trust’s mandate to safeguard and grow real shareholder wealth, leveraging inflation-linked bonds tied to the UK Retail Prices Index (RPI) or Consumer Prices Index (CPI). The focus on maturities between 2029 and 2033 indicates active duration risk management at quarter-end.

Significant US Treasury Inflation-Protected Securities (TIPS) Exposure

Capital Gearing Trust also held a notable allocation to US Treasury Inflation-Protected Securities (TIPS), with four TIPS positions among the top ten holdings as at 31 March 2026. The largest US holding was the US Treasury 0.125% Inflation-Linked bond maturing 15 January 2031 (5.43% of net assets), followed by bonds maturing 15 July 2031 (3.81%), 15 January 2032 (3.43%), and 15 January 2034 (1.75%), totaling approximately 15.74% of net assets.

This US inflation-linked bond exposure provides geographic diversification alongside UK gilts and introduces US dollar currency risk. The announcement does not specify if currency hedging is applied; investors should consult the trust’s latest annual report or factsheet for details on currency management.

Japanese Government Bond Among Top Holdings

The Japan Treasury 0.6% bond maturing 1 January 2027 was the third largest individual holding at 5.10% of net assets as at 31 March 2026. This conventional, non-inflation-linked bond with a short maturity likely serves as a near-cash or capital preservation asset rather than for inflation protection.

Its presence highlights the trust’s selective allocation to non-UK sovereign debt markets when value or capital preservation attributes are identified. Japanese government bonds traditionally offer low nominal yields, but currency and valuation factors may enhance their appeal within the portfolio. Currency hedging status for this position is not disclosed.

Vanguard FTSE 100 UCITS ETF Provides Equity Exposure

Among the top ten holdings, the Vanguard FTSE 100 UCITS ETF was the sole non-government bond and non-infrastructure asset, representing 2.81% of net assets as at 31 March 2026. This ETF offers broad, low-cost exposure to the largest London Stock Exchange companies by tracking the FTSE 100 Index.

The modest weighting aligns with the trust’s strategy of maintaining limited equity exposure while prioritizing capital preservation. Utilizing a passive UCITS ETF rather than individual equities or active funds reflects a cost-efficient and transparent method for equity market participation. The cautious equity stance is evident in the relatively low allocation compared to the dominant fixed income and inflation-linked bond holdings.

Portfolio Concentration: Top Ten Holdings Constitute 41.02% of Net Assets

The trust’s ten largest investments as at 31 March 2026 accounted for 41.02% of net assets, indicating a balanced diversification with the remaining 58.98% spread across other investments. These additional holdings are detailed on the company’s website but not included in this announcement.

The concentration in sovereign inflation-linked bonds from the UK, US, and Japan, alongside a Japanese conventional government bond and a UK equity ETF, reflects Capital Gearing Trust’s enduring capital preservation focus. All percentage figures are based on bid prices, providing a conservative valuation by reflecting the lower end of the bid-offer spread.

Valuation Methodology: Importance of Bid Price Basis

The announcement emphasizes that all disclosed percentages use bid prices, representing the price at which market makers buy securities from the trust. This approach yields a conservative portfolio valuation compared to mid-price calculations commonly used in net asset value reporting.

Investors should be aware of this when comparing these figures with other sources like monthly factsheets or annual reports, which may use mid prices. The bid-mid price difference is more pronounced for less liquid instruments but typically narrow for major government bonds such as UK gilts and US Treasuries. This consideration is especially relevant for interpreting smaller portfolio positions.

Contact Information and Access to Full Portfolio Details

The update was issued by Capital Gearing Trust P.L.C., with company secretarial services provided by Frostrow Capital LLP. Inquiries can be directed to Frostrow Capital LLP at [email protected]. The announcement contains no management commentary or forward-looking statements beyond the regulatory portfolio disclosure.

The full list of investments as at 30 June 2026 is available on the Capital Gearing Trust website, offering investors comprehensive portfolio transparency beyond the summary top-ten and listed fund disclosures. As this is a routine regulatory filing, no immediate share price impact was evident. Future quarterly updates may reveal changes in the trust’s inflation-linked bond allocations or its exposure to listed closed-ended investment funds.