A fund that limits downside can be helpful in balanced portfolios in all market environments. Ongoing uncertainty, due to factors such as the coronavirus pandemic and the UK’s departure from the EU, means that limiting downside is more important than ever.
Capital Gearing Trust (CGT)
Capital Gearing Trust does exactly what wealth preservation funds should do, having made positive net asset value (NAV) total returns for the past 10 calendar years and positive share price total returns in all but one. The fund delivers a different pattern of returns to mainstream equity markets and can make positive returns when the latter are falling. In 2020, for example, the trust made NAV and share price total returns of 8 per cent, while the FTSE All-Share index fell nearly 10 per cent.