Overview Performance Portfolio ESG Dividends Charges Gearing Research Announcements Management Documents Invest

Data as at: 18/04/2024

Gearing

Gearing (%)
1
Net cash (%)
0
Historic gearing 3yr low/high (%)
1 / 9
Gearing range (%)
0 / 20
Gearing policy

The Board believes that sensible use of gearing should enhance returns to our shareholders over the longer term and that the normal position for NAIT is to be geared. Gearing is one of the principal advantages of the Company's investment trust structure and that the ability to gear for the long term should help enhance long-term total returns for shareholders. Given the Company’s relatively low level of gearing, the Company has the ability to raise sufficient funds so as to remain within its debt covenants and pay expenses.

Borrowing limits

The Board has set gearing limits and regularly reviews actual exposures, cash flow projections and compliance with banking covenants. In order to manage the level of gearing, the Board has set a maximum gearing ratio of 20% of net assets. The Board receives regular updates from the Manager on the Company’s net gearing levels and its compliance with loan covenants.

Ways in which investment companies can magnify income and capital returns, but which can also magnify losses.

At its simplest, gearing means borrowing money to buy more assets in the hope the company makes enough profit to pay back the debt and interest and leave something extra for shareholders.

how gearing works table

However, if the investment portfolio doesn’t perform well, gearing can increase losses. The more an investment company gears, the higher the risk.

Investment companies can usually borrow at lower rates of interest than you’d get as an individual. They also have flexible ways to borrow – for example they might get an ordinary bank loan or, for split capital investment companies, issue different classes of share.

Not all investment companies use gearing, and most use relatively low levels of gearing.

An indication of the maximum and minimum levels that the company would expect to be geared in normal market conditions.

Morningstar logo Data provided by Morningstar.

FE fundinfo logo Company documents provided by FE fundinfo.