Gartmore News In Brief

Economic reform a top priority for China

As Asia's fastest growing economy, China continues to outperform other emerging markets, expanding 11.9% in the last quarter from a year earlier.

"Economic reform remains a top priority for the Chinese government, a trend we expect to continue", comments Charlie Awdry, manager of the Gartmore China Opportunities Fund.

Since 2003 the Communist party in China has shown an ongoing commitment to economic reform.

The latest development allows individual investors access to the Hong Kong stock market through broadening the Qualified Domestic Institutional Investor (QDII) scheme.

Charlie highlights, "this is not only good news for the Hong Kong market but especially good news for the Hong Kong exchanges and clearing, both of which the China Opportunities Fund has significant exposure to".

In addition, this month the first Chinese fund manager will begin investing in 10 overseas equity markets, including India, Japan and Hong Kong and US.

Both examples can be seen as attempts by the Chinese government to tackle the issue of high domestic liquidity, by encouraging greater outflows from the financial system through investment abroad.

The move also highlights how strong economic growth in China is having a positive impact on Hong Kong, enabling it to flourish as China continues to rapidly expand.

The majority of the Gartmore China Opportunities Fund's exposure is via the Hong Kong stock market.

The Gartmore China Opportunities Fund has returned 45.9% year to date and is the top performing Fund in the Lipper IMA Asia Pacific ex Japan sector over six and twelve month timeframes.

Source: Lipper mid to mid net income reinvested and net of fees as at 31.08.07 Share Buybacks and Director Purchases Help to Underpin UK Equities Gartmore's UK equities team believes that recent market falls have left some stocks significantly undervalued.

Sacha Sadan, manager of Gartmore's ?348 million UK Growth Fund, draws encouragement from the recent spate of share buybacks.

"Legal and General, Bradford and Bingley, Taylor Wimpey and GlaxoSmithKline have all launched or extended share-buyback programmes in the past few weeks," notes Sacha.

This is important because companies, with their unique understanding of their own operations and the markets in which they operate, are in the best position to ascertain the real value of their assets.

In late July, GlaxoSmithKline more than doubled its share buyback programme to ?12 billion.

Simon King, manager of the £217 million UK Focus Fund comments that, "a sharp rise in the number of directors investing in their own shares is further evidence that the stock market is undervaluing corporate assets".

In the near term, both managers are prepared for a further period of unsettling news, as banks and other financial institutions reveal the extent of their exposure to structured products based on US sub-prime mortgages.

However, their funds are positioned to benefit from a rebound in investor confidence.

"The recent indiscriminate sell-off means that it is possible to invest in excellent UK companies with a virtually or entirely undisturbed trading outlook, some with prices between 10 per cent and 20 per cent lower than they were just two months ago", said Sacha.

Special Offer Extended For the Gartmore Cautious Managed Fund, the Gartmore Global Focus Fund and the Gartmore MultiManager range of Funds, for all lump sum investments now extended until 31st December 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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