Gartmore News in Brief:

Global Economy Plays Key Role in Maintaining Europe's Growth

"In the recent market turmoil, European bourses have arguably suffered disproportionately, especially given the region's largely strong underlying fundamentals", say Roger Guy and Guillaume Rambourg, co-managers of Gartmore's £2 billion European Selected Opportunities Fund.

The predominance of financials has weighed heavily on European stock markets.

Some 30% of the FTSEurofirst 300 comprises banks, insurers and financial-services companies.

However, providing global growth remains strong, there is every reason to remain bullish about Europe according to Guy and Rambourg.

"Growth in exports has been a key factor in the improvement of sentiment towards the region and dependence on direct exports to the US has also diminished".

"The eurozone exports more to Asia than the US and almost twice as much to Eastern Europe".

Although consumer and business confidence indicators have recently dipped in Germany, this erosion of confidence is mainly due to financial market turmoil according to Guy and Rambourg.

Thanks to falling unemployment, German consumer confidence had held up despite the increase in VAT at the start of the year.

Germany is shaking off its reputation as the 'sick man' of Europe to resume its role as the engine of Europe's economy.

The Gartmore European Selected Opportunities Fund is rated AAA by Standard and Poor's, as at 31 July 2007.

Gartmore's Cautious Managed Fund Steers a Steady Course Gartmore's Cautious Managed Fund has been positioned defensively through the recent market storm and manager Chris Burvill sees little reason to alter course now.

Burvill is concerned that some banks could announce write-offs in coming weeks as a result of losses derived from investments backed by US sub-prime mortgages.

"One of the problems is that, while most hedge funds are marked-to-market, so we know which ones have been most affected by the collapse in US sub-prime, banks have more discretion and the results we have seen lately don't tell us everything we need to know," says Burvill.

"If we get bank write-offs, the ability of banks to lend and make profits will be affected".

"There'll be less funding, fewer mortgages and less scope for consumers to borrow and that's bad news for our consumer-dependent economy".

"I don't believe it is likely that the stock market, which gets a large part of its profits from the banking sector, can be insulated from that." During the spring and summer, Chris Burvill took a number of steps to shift the Cautious Managed Fund to a more defensive position.

The Fund's equity exposure was reduced in favour of a higher weighting in gilts in June.

In another defensive step, the Fund's blue-chip exposure was increased to its highest-ever level at the expense of mid-cap stocks.

The Fund is underweight financials too".

""We've worked hard to create a strategy that has the potential to protect investors' funds on the downside".

"We've been concerned about credit, the financial system and valuations in some sections of the market".

"We've been right to be concerned." 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.

Back to top