In a market experiencing wild share price swings, wouldn’t it be great if there was a fund or trust in which you could put some money without fearing for the worst? Say hello to Capital Gearing Trust (CGT).

This investment trust’s stated objectives are to preserve shareholders’ real wealth (i.e. accounting for inflation) and to achieve absolute total return over the medium to longer term.

Admittedly that does mean the trust could have a few periods with little growth and where it feels like returns are going nowhere.

But it also means that when there’s a market crisis, your money could be in good hands. In the year ending April 2008 when the global financial crisis was unfolding, the trust’s share price rose 3.6% and net asset value per share rose 5%. In the following year when the crisis was causing widespread damage its share price rose 11%.

Its share price during the dot-com bubble shows it weathered that storm pretty well too.

Remarkably, the trust has only ever had one year of negative performance in NAV terms, when it lost 2.5%. In the past 37 years, the trust has delivered double-digit annual gains 22 times.

Part of the reason for its reliable performance is its mix of assets, put together by experienced investment manager Peter Spiller, who has been running the trust since 1982.

Its current underlying assets are split roughly into three main areas: equities (via other investment trusts and exchange-traded funds), index-linked government bonds, and cash and short-duration bond-like securities. The latter includes zero dividend preference shares and corporate bonds.

Capital Gearing has a 1% allocation to gold. The low size of the allocation is perhaps perplexing given gold’s safe haven qualities and its rally over the past year – its peer Ruffer Investment (RICA) has around 7.7% in gold and gold miners’ shares – but Spiller argues the commodity is ‘very difficult’ to value and doesn’t protect against inflation if you pay too much for it.

The trust has a 0.68% ongoing charge. According to the Association of Investment Companies, this is the third lowest – alongside RIT Capital Partners (RCP) – in the ‘flexible investment’ sector in which Capital Gearing resides, with only Aberdeen Diversified Income and Growth (ADIG) and Hansa Trust (HAN) coming out cheaper. These two have been more volatile than Capital Gearing and delivered a significantly lower total return over the past 20 years.

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