Capital Gearing Trust PLC is launching a new fund called the CG Portfolio - UK Index Linked Bond Fund. This is the company's first new launch in seven years and reflects their belief that index-linked bonds are attractively priced assets globally. The decision to launch the fund now is based on several factors, including the substantial increase in yields on index-linked gilts over the past 18 months, the expectation of higher and more volatile inflation, and the historical outperformance of index-linked bonds compared to nominal bonds. The company also believes that index-linked bonds will act as a good hedge to a portfolio of risk assets.
Capital Gearing Trust PLC has been investing in index-linked bonds for over 30 years and currently manages approximately £2.4 billion in index-linked bonds, including £500 million in UK index-linked bonds. Their UK index-linked holdings in their multi-asset funds have significantly outperformed the index in recent years. The new fund will be a daily dealing Irish UCITS and is expected to have a total expense ratio (TER) of 0.25% per annum. It is also expected to have a yield of over 2%.
Overall, the launch of the CG Portfolio - UK Index Linked Bond Fund reflects Capital Gearing Trust PLC's confidence in the attractiveness of index-linked bonds and their ability to provide inflation protection and positive returns for UK investors.