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News Release from: Gartmore | Subject: Investments
Edited by the Insidemoneytalk Editorial
Team on 23 July 2007
Gartmore News in Brief
In this weeks News in Brief from Gartmore:
Gartmore's Sacha Sadan Comments on Mining Stocks, Gartmore US opportunities sees more in UnitedHealth, No Initial Charge on Investment Trust Schemes Gartmore US opportunities sees more in UnitedHealth: The question of US healthcare reform has gained renewed prominence thanks, in large part, to Democratic presidential hopefuls and the controversial film SiCKO by documentary maker Michael Moore
This article was originally published on Insidemoneytalk on 19 Apr 2007 at 8.00am (UK)
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Among major industrial nations, the US lacks universal healthcare coverage, a goal variously pursued by the likes of Theodore Roosevelt and Harry Truman.
While the question of healthcare reform will remain challenging, Marsico Capital Management, subadviser to the Gartmore US Opportunities Fund, has demonstrated a different approach to healthcare stocks.
For instance, the Fund holds UnitedHealth Group, the Minnesota-based diversified health and well-being company.
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According to Cory Gilchrist, the Fund's manager, "UnitedHealth has a technology platform that allows the company to mine data better than its peers, giving it a lower cost structure and making it more like a Chicago Mercantile Exchange." In his view, both companies offer a low-cost solution using technologies that they are then able to license to competitors.
Thus, the business models of the managed care company and the exchange come to resemble each other.
"Being global generalists we're looking across many industries, and what we often find is that a company with a significant competitive advantage in one industry actually looks more like a company in a different industry," according to Cory.
The management of Gartmore US Opportunities Fund transitioned to Marsico on the 29th June 2007.
Marsico, which is based in Denver, Colorado, specialises primarily in US large- and multi-cap equity mandates.
Gartmore's Sacha Sadan Comments on Mining Stocks: Mining stocks have soared since Rio Tinto launched its bid to acquire Alcan of Canada for US$101 per share last week.
The all-cash bid is the largest ever made in the mining industry.
According to Sacha Sadan, manager of Gartmore's UK Growth Fund, mining stocks have further to travel.
"Rio Tinto's bid came in at a substantial premium to the all-time-high closing price of Alcan before Alcoa's earlier bid".
"This demonstrates that the industry values mining assets considerably more highly than the stock market has done in the past." Gartmore has held a significantly overweight exposure to diversified miners in its UK growth funds over the past year and believes that outlook remains good due to demand growth in the global economy and scope for an upward re-rating of the entire sector.
Earlier this year, mining stocks soared on rumours that BHP Billiton might be planning a bid for Rio Tinto.
The recent upturn in corporate activity comes as demand from the world's emerging industrial economies continues to gather pace.
Sacha welcomes the proposed acquisition, believing that it would be earnings enhancing for the UK mining giant.
"The deal validates the view that there is long-term value in the sector and that the cycle for commodities is longer than the stock market thinks".
Gartmore's UK Growth Fund holds an overweight exposure to diversified mining companies, including Xstrata, Kazakhmys and Vedanta Resources.
Special Offers: For the Gartmore Cautious Managed Fund, the Gartmore Global Focus Fund and the Gartmore MultiManager range of Funds, for all lump sum investments until 30th September 2007.
1% discount on the initial charge, 4% initial commission.
No Initial Charge on Investment Trust Schemes: New investments into the company's investment trust ISAit, PEPit and SAVEit schemes; No initial charge for new investments, £1,000 lump sum and minimum transfer, value £50 minimum amount for monthly savings.
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