Interim Management Statement

CAPITAL GEARING TRUST p.l.c

Interim Management Statement

for the period 6 October 2009 to 5 January 2010

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 2009 to 5      
January 2010 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 2009 to 5 January 2010, the Company's Net     
Asset Value ('NAV') increased by 0.7% to 2,371.5p. As a comparator, the FTSE   
Equity Investment Instruments Index increased by 7.5%, although as an absolute 
return fund, the actual performance benchmark is cash.                         
                                                                               
> The share price has risen to 2,593p per Ordinary Share, an increase of 4.8%  
from 5 October 2009.                                                           
                                                                               
> The Company published its Half-Year Financial Report for the six months ended
5 October 2009 on 17 November 2009.                                            
                                                                               
Material events and transactions                                               
                                                                               
The portfolio made modest progress in the quarter. Sterling once again         
confounded our long term expectations by rising by 2% against the Euro and the 
bond markets were weak; but the main reason for underperforming the equity     
markets was our continued low allocation to that sector, although what we did  
have outperformed. Equities still look overpriced in our view.                 
                                                                               
There were realisations in Tapestry, Active Capital, Directors' Dealing        
Investment Trust, Barclays Global Endowment Fund, Premier Energy & Water and   
Invesco Perpetual European Absolute Return; all were satisfactory. Some sales  
were made in funds where the discount had narrowed, including Cazenove Absolute
Equity, Henderson Global Property, Jupiter Primadona and Melchior Japan.       
Purchases at attractive discounts were possible in Mithras, North Atlantic     
Smaller Companies, Monks, SR European and Vision Opportunity China. This last  
is a fund that invests in unquoted Chinese companies and then achieves a quote,
usually in the US. Rather surprisingly, this policy has worked well, but some  
forced sellers had pushed the discount, to a now entirely quoted portfolio, to 
30% plus.                                                                      
                                                                               
More zeros were bought, constrained only by liquidity. Finally a further US    
TIP, the 1.75% 2028, was bought; yields are good at 2% and the outlook for the 
Dollar appears favourable.                                                     

Ten Largest Investments

Name                                             % of Portfolio  % of portfolio
                                                                               
                                                   at 5 January    at 5 October
                                                                               
                                                           2010            2009
                                                                               
Treasury 2.5% Index Linked 2013                            6.60            6.61
                                                                               
Switzerland (Govt of) 2% Bonds 2014                        6.26            6.31
                                                                               
Switzerland (Govt of) 3% Bonds 2018                        5.00            5.09
                                                                               
France (Govt of) 5.5% OAT 2029                             4.82            5.05
                                                                               
Germany (Fed Rep) 4.75% Bonds 2028                         4.46            4.70
                                                                               
USA Treasury 1.375% Index Linked Bonds 2018                4.29            4.22
                                                                               
USA Treasury 2.0% Index Linked Bonds 2016                  4.28            4.25
                                                                               
USA Treasury 2.0% Index Linked Bonds 2026                  3.14            3.17
                                                                               
USA Treasury 1.75% Index Linked Bonds 2028                 2.83               -
                                                                               
Allianz Dresdner 2nd Endowment Policy Trust                2.69            2.59
2009                                                                           

The ten largest investments at 5 January 2010 represent 44.37% of the portfolio
compared to 44.52% at 5 October 2009.     
                                     

Distribution of Investment Funds of £65,650,069 at 5 January 2010.

Name                     UK       North    Europe   Elsewhere        5        5 
                                America                        January  October 
                                                                  2010     2009
                                                                               
                                                                 Total    Total
                                                                               
                          %           %         %           %        %        %
                                                                               
Investment Trust                                                               
Assets:                                                                        
                                                                               
Ordinary Shares        10.1         2.2       2.7         4.7     19.7     21.1
                                                                               
Endowment Funds         3.0                                        3.0      3.3
                                                                               
Zero Dividend          12.1                                       12.1     12.8
Preference Shares                                                              
                                                                               
Other Assets:                                                                  
                                                                               
Fixed Interest          2.7                  24.1                 26.8     27.5
                                                                               
Index Linked           11.5        21.2       1.0                 33.7     30.6
                                                                               
Floating Interest       0.7                                        0.7      0.7
                                                                               
Cash                    4.0                                        4.0      4.0


Performance

                             At 5        At 5         At 5         At 5        
                             January     October      April        October                                            
                             2010        2009         2009         2008            
                                                                               
NAV per Ordinary Share       2,371.5     2,355.8p     2,125.4p     2,040.7p    
                                                                               
Share Price per Ordinary     2,593.0p    2,475.0p     2,370.0p     2,098.0p    
Share                                                                          
                                                                               
FTSE Equity Investment       5,295.6     4,927.3      3,824.2      4,849.8     
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.