Interim Management Statement

CAPITAL GEARING TRUST p.l.c

Interim Management Statement

for the period 6 October 2010 to 5 January 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 October 2010 to 5      
January 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 October 2010 to 5 January 2011, the Company's Net Asset 
Value ('NAV') increased by 0.08% to 2,633.9p. As a comparator, the FTSE Equity 
Investment Instruments Index increased by 8.87%, although as an absolute return
fund, the actual performance benchmark is cash.                                
                                                                               
The share price has risen to 3,040.0p per Ordinary Share, an increase of 7.8%  
from 5 October 2010.                                                           

The Company published its Half-Year Financial Report for the six months ended 5
October 2010 on 11 November 2010.                                               
                                                                             
A block listing application was made to the UK Listing Authority for 40,000    
Ordinary Shares of 25p each, ranking pari passu with the existing issued       
shares. The admission of these shares to the Official List became effective on 
22 November 2010.                                                                  
                                                                               
On 10 September 2010, in accordance with the UKLA's Disclosure & Transparency  
Rule 5.1.2, the Company announced that Smith & Williamson Holdings Limited had 
made an acquisition of shares on 8 September, resulting in the percentage of   
voting rights held increasing to above 10% of the issued Ordinary share        
capital. On 22 December 2010, the Company further announced that Smith &       
Williamson Holdings Limited had made a disposal of shares on 21 December,      
resulting in the percentage of voting rights held reducing to below the 10%    
threshold.                                                                     
 
                                                                                     
Material events and transactions                                               
                                                                               
The quarter saw equity markets strengthen and bond markets weaken as confidence
in world economic growth increased and fears of inflation grew.                
                                                                               
The euro was under pressure from concerns over sovereign default and           
uncertainty over the commitment of the strong countries to eventual fiscal     
union.                                                                         
                                                                               
Corporate profits were good and investors were willing to ignore the wholly    
uncorrected structural imbalances that weigh on the world economy.             
                                                                               
Asset allocation was broadly unchanged, though there was a marginal shift from 
US TIPS into UK convertibles and zero dividend preference shares.              
                                                                               
Liquidation proceeds were received from Invesco English and International,     
Melchior Japan and Tapestry.  Henderson Global Property announced that it would
wind up.                                                                       
                                                                               

Ten Largest Investments

Name                                        % of Portfolio % of portfolio
                                              at 5 January   at 5 October
                                                      2011           2010
                                                                           
Treasury 1.25% Index Linked 2017                      5.92           5.96
                                                                           
USA Treasury 1.75% Index Linked Bonds 2028            5.25           5.43
                                                                           
Switzerland (Govt of) 3% Bonds 2018                   4.97           4.94
                                                                           
Germany (Fed Rep) 4% Bonds 2037                       4.61           5.26
                                                                           
France (Govt of) 5.5% OAT 2029                        4.14           4.62
                                                                           
USA Treasury 1.375% Index Linked Bonds 2018           4.06           4.04
                                                                           
USA Treasury 2% Index Linked Bonds 2016               4.06           4.00
                                                                           
Germany (Fed Rep) 4.75% Bonds 2028                    3.96           4.45
                                                                           
Switzerland (Govt of) 2% Bonds 2014                   3.31           3.24
                                                                           
USA Treasury 2% Index Linked Bonds 2026               3.01           3.08
                                                                           

The ten largest investments at 5 January 2011 represented 43.29% of the        
portfolio compared to 45.02% at 5 October 2010.                                
                                                                               

Distribution of Investment Funds of £74,667,480 at 5 January 2011

                                                                 
                                                         5 January 5 October
Name                               North                      2011      2010
                             UK  America Europe Elsewhere    Total     Total
                              %        %      %         %        %         %
                                                                           
Investment Trust Assets:                                                   
                                                                           
Ordinary shares            12.7      3.0    4.4       6.9     27.0      25.6
                                                                           
Endowment funds            0.3         -      -         -      0.3       0.3
                                                                           
Zero dividend preference                                                   
shares                     13.4        -      -         -     13.4      12.3
                                                               
Other Assets:                                                              
                                                                           
Index linked                9.5     19.7    3.1         -     32.3      33.0
                                                                           
Fixed interest              2.7        -   23.5         -     26.2      27.5
                                                                           
Floating interest             -        -      -         -        -       0.6
                                                                           
Cash held by custodian                                                     
awaiting investment         0.8        -      -         -      0.8       0.7
 
                                                                 
Performance

                                       At 5      At 5      At 5      At 5    
                                       January   October   April     October 
                                       2011      2010      2010      2009    
                                                                          
NAV per Ordinary Share                 2,633.9p  2,631.8p  2,467.4p  2,355.8p
                                                                          
Share Price per Ordinary Share         3,040.0p  2,820.0p  2,630.0p  2,475.0p
                                                                          
FTSE Equity Investment Instruments     6,276.6   5,765.3   5,592.2   4,927.3 
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.   
                                                                               
For enquiries, please contact [e-mail] or,              
CG Asset Management Limited at 25 Moorgate, London, EC2R 6AY.                       
                                                                               
Further information is available on the Company's website,                     
                                                                               
www.capitalgearingtrust.com.                                                   
                                                                                    
                                                                               
Disclaimer: Neither the contents of the Company's website nor the contents of  
any website accessible from hyperlinks on the Company's website (or any other  
website) is incorporated into, or forms part of, this announcement.            
                                                                                   
                                                                               
Date: 28 January 2011