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Data as at: 18/04/2024

Gearing

Gearing (%)
0
Net cash (%)
13
Historic gearing 3yr low/high (%)
0 / 5
Gearing range (%)
N/A
Gearing policy

The Board is responsible for determining the gearing strategy for the Company, with day-today gearing decisions being made by the Manager within the remit set by the Board.

Borrowing limits

The Company’s articles of association contain a borrowing limit equal to the value of its adjusted total of capital and reserves. However, borrowings would not normally be expected to exceed 20% of shareholders’ funds. Total gearing, including net derivative exposure, would not normally be expected to result in a net economic equity exposure in excess of 120%. The Board and the Manager will continue to keep the overall level of gearing under review. However, in the prevailing economic environment, there is no current intention to introduce further fixed rate gearing.

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.

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