Interim Management Statement

CAPITAL GEARING TRUST p.l.c Interim Management Statement for the period 6 April 2009 to 3 July 2009 In accordance with the UK Listing Authority's Disclosure and Transparency Rule 4.3, Capital Gearing Trust p.l.c (the 'Company') announces its interim management statement which relates to the period from 6 April 2009 to 3 July 2009 and contains information that covers this period, and up to the date of publication of this interim management statement, unless otherwise specified. Investment Objective The Company aims to achieve capital growth in absolute terms principally through investment in quoted closed ended and other collective investment vehicles, invested in equities or property, with a willingness to hold cash, bonds, index linked securities and commodities when appropriate. Review of the period > Over the period from 6 April 2009 to 3 July 2009, the Company's Net Asset Value ('NAV') increased by 0.4% to 2,133.5p. As a comparator, the FTSE Equity Investment Instruments Index increased by 10.8%, although as an absolute return fund, the actual performance benchmark is cash. > The share price has fallen to 2,310.0p per Ordinary Share, a decrease of 2.5% from 5 April 2009. > On 20 April 2009, in accordance with the UKLA's Disclosure & Transparency Rule 5.1.2, the Company announced that Rensburg Sheppards Investment Management Limited ('Rensburg') had made a disposal of shares on 16 April, resulting in the percentage of voting rights held being reduced to 2.99% of the issued Ordinary share capital. Following a subsequent acquisition of shares on 19 June, the percentage of voting rights held by Rensburg increased to 3.42%. > On 8 June 2009, in accordance with the UKLA's Disclosure & Transparency Rule 5.1.2, the Company announced that Mrs Maunder-Taylor had made a disposal of shares on 5 June, resulting in the percentage of voting rights held being reduced to 3.32% of the issued Ordinary share capital. > The Company released the Preliminary Announcement of its full year results on 27 May 2009 and published its Annual Report for the twelve months ended 5 April 2009 on 12 June 2009. > On 8 July 2009, the Company held its 46th Annual General Meeting. Twelve resolutions were proposed and all were passed on a show of hands. > A dividend of 22.0p per Ordinary share was paid to shareholders on 13 July 2009. Material events and transactions As was true over the last year, the overall volatility of the NAV was very low, with the capital value up about 1.4% in the quarter, based on the ex-dividend NAV. That was against an improvement of 5.5% in the FTSE All-Share Index, and large falls in the US dollar (-10.1%) and the euro (-6.1%) against Sterling. Although currency movements were adverse, bond markets were reasonably stable overall, though that also marked a sell off followed by a recovery. The bonds; both conventional and index-linked, were as hoped negatively correlated with equity markets. The property trusts all showed good gains, with Henderson Global, Japan Residential, Alpha Tiger, Terra Catalyst and Eredene all up by at least 30%. The zero dividend preference shares were satisfactory, with the 'equity-type' zeros outperforming the equity market. Within the equities, most of the holdings and especially the larger holdings did well, notably North Atlantic Smaller Companies (+57%), Oryx (+53%) and Prospect Japan (+35%). Invesco Perpetual European Absolute Return just announced that it will wind up and partly for that reason rose 44%. The hedge funds were less volatile, but still did better than equity markets. Ten Largest Investments Name % of Portfolio % of portfolio at 3 July at 5 April 2009 2009 Treasury 2.5% Index-Linked 2013 6.98 6.98 Switzerland (Govt of) 2% Index-Linked 6.30 6.83 Bonds 2014 Switzerland (Govt of) 3% Bonds 2018 5.04 5.50 France (Govt of) 5.5% OAT 2029 4.99 5.36 Germany (Fed Rep) 4.75% Bonds 2028 4.63 5.00 USA Treasury 2.0% Index-Linked 2016 4.31 4.95 USA Treasury 1.375% Index-Linked 2018 4.25 4.92 USA Treasury 2.0% Index-Linked 2026 3.17 3.57 Allianz Dresdner 2nd Endowment Policy 2.85 2.82 Trust 2009 Utilico Finance Limited Zero Div Pref 2.71 - 2012 The ten largest investments at 3 July 2009 represent 45.23% of the portfolio compared to 48.85% at 5 April 2009. Distribution of Investment Funds of £59,628,278 at 3 July 2009. Name UK North Europe Elsewhere 3 July 5 April America 2009 2009 Total Total % % % % % % Investment Trust Assets: Ordinary Shares 10.2 2.0 2.5 4.7 19.4 16.0 Endowment Funds 3.6 3.6 3.6 Zero Dividend Preference Shares 10.7 10.7 10.7 Other Assets: Fixed Interest 5.8 24.6 30.4 32.3 Index Linked 12.3 18.3 1.0 31.6 33.8 Floating Interest 1.7 1.7 1.8 Cash 2.6 2.6 1.8 Performance At 3 At 5 At 5 At 5 July April October April 2009 2009 2008 2008 NAV per Ordinary Share 2,133.5p 2,125.4p 2,040.7p 2,126.4p Share Price per 2,310.0p 2,370.0p 2,098.0p 2,135.0p Ordinary Share FTSE Equity Investment 4,237.3 3,824.2 4,849.8 5,765.2 Instruments Index Past performance is not a guide to future performance. The Board is not aware of any significant events or transactions which have occurred between the 'as at' date of the financial information and the date of publication of the IMS which would have a material impact on the financial position of the company. Further information is available on the Company's website, Please contact or, CG Asset Management Limited at 25 Moorgate, London, EC2R 6AY. ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.