Interim Management Statement

CAPITAL GEARING TRUST p.l.c

Interim Management Statement
for the period 6 April 2011 to 5 July 2011

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 2011 to 5
July 2011 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 2011 to 5 July 2011, the Company's Net Asset
Value ('NAV') rose by 5.05% to 2,767.3p, after adjusting the 5 April NAV by
the amount of the dividend. As a comparator, the FTSE Equity Investment
Instruments Index increased by 1.9% and the FTSE All-Share Index increased
by 0.7%, although as an absolute return fund, the actual performance
benchmark is cash.
 
 The share price has fallen to 3,030p per ordinary share, a decrease of
2.7% from 5 April 2011.
 
 On 4 May 2011, in accordance with the UKLA's Disclosure & Transparency
Rule 5.1.2, the Company announced that Suffolk Life Annuities Limited no
longer consider that they have a notifiable interest in the Company's
shares.
 
 The Company released the Preliminary Announcement of its full year
results on 25 May 2011 and published its Annual Report for the twelve
months ended 5 April 2011 on 2 June 2011.
 
 In accordance with the Board's stated intention to operate an informal
discount/premium control mechanism to satisfy major market supply and
demand imbalances, 47,000 ordinary shares of 25p each were issued on 10
June 2011 at a price per share of £31.385 (representing a 15% premium to
the underlying net asset value) and a further 25,000 ordinary shares of 25p
each were issued on 20 June 2011 at a price per share of £31.37
(representing a 14.99% premium to the underlying net asset value).
 
 On 17 June 2011, the Company was promoted to the FTSE All-Share Index.
 
 On 5 July 2011, the Company held its 48th Annual General Meeting. Twelve
resolutions were proposed and all were passed on a show of hands.
 
 A dividend of 18.5p per ordinary share was paid to shareholders on 11
July 2011.

Material events and transactions
 
 The quarter saw lacklustre equity markets, reacting to slower economic
growth in developed economies.
 
 The pressure on the Euro increased as the relentless rise in peripheral
bond yields was met with no clear political solution.
 
 The end of the US quantitative easing programme was met, somewhat counter
intuitively, with falling bond yields.
 
 The asset allocation remained broadly unchanged in the period, although
within the equity allocation the Japanese holdings were increased.
 
Ten Largest Investments

Name                                                      % of          % of
                                                     Portfolio     portfolio
                                                     at 5 July    at 5 April
                                                          2011          2011
Treasury 1.25% Index Linked 2017                          5.82          6.03
Switzerland (Govt of) 3% Bonds 2018                       5.04          4.82
USA Treasury 1.75% Index Linked Bonds 2028                5.02          5.16
USA Treasury 2% Index Linked Bonds 2026                   4.74          2.94
Germany (Fed Rep) 4% Bonds 2037                           4.42          4.44
Sweden (Kingdom of) 3.5% Index Linked Bonds 2028          4.06          2.14
Germany (Fed Rep) 4.75% Bonds 2028                        3.85          3.88
USA Treasury 1.375% Index Linked Bonds 2018               3.84          3.96
Germany (Fed Rep) 1.75% Index Linked 2020                 3.71          2.83
Treasury 1.25% Index Linked 2027                          3.53          2.38

The ten largest investments at 5 July 2011 represented 44.03% of the
portfolio compared to 40.19% at 5 April 2011.

Distribution of Investment Funds of £80,801,180 at 5 July 2011.

Name                  UK       North Europe Elsewhere     5     5
                             America                   July April
                                                       2011  2011
                                                      Total Total
                       %           %      %         %     %     %
Investment Trust
Assets:
Ordinary Shares      9.5         3.0    5.0       7.0  24.5  26.8
Zero Dividend       12.9           -      -         -  12.9  13.3
Preference Shares
Other Assets:
Index Linked         9.3        21.6    8.8         -  39.7  33.1
Fixed Interest       2.8           -   16.0         -  18.8  23.9
Cash                 4.1           -      -         -   4.1   2.9

Performance

                                At 5     At 5     At 5     At 5
                                July    April  October    April
                                2011     2011     2010     2010
NAV per Ordinary Share      2,767.3p 2,652.8p 2,631.8p 2,467.4p
Share Price per Ordinary    3,030.0p 3,115.0p 2,802.2p 2,630.0p
Share
FTSE Equity Investment       6,351.5  6,230.4  5,765.3  5,592.2
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,
www.capitalgearingtrust.com.
Please contact [e-mail] or,
CG Asset Management Limited at 25 Moorgate, London, EC2R 6AY.
 
Date: 15 July 2011