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Investment funds
News Release from: Gartmore | Subject: Company news
Edited by the Insidemoneytalk Editorial
Team on 14 November 2007
Proposed changes to Gartmore Fledgling
Trust plc
The Board of the £98m Gartmore Fledgling Trust plc (the "Company"), managed by Gartmore's Gervais Williams and Andrew Russell, is proposing to amend the investment policy of the Company
which invests principally in the constituents of the FTSE Fledgling Index (ex Investment Companies) The proposal is to include in its investment universe AIM traded stocks that were formerly listed on the Official List of the London Stock Exchange and which meet the Fledgling Index market capitalisation criteria
This article was originally published on Insidemoneytalk on 8 Feb 2008 at 8.00am (UK)
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Gartmore Growth Opportunities plc ("GGO" or the "Company") announces the results of the offer for subscription of conversion shares ("'C' Shares") (the "Offer").
Although the managers will be allowed to invest up to 20% of the Company's assets in such stocks, it is intended that no more than 15% will normally be invested in this way.
Under its existing investment objective and policy, the Company has delivered attractive total returns for Shareholders.
The Company's net asset value rose by 173.5% on a mid market capital basis over the five year period to 30 September 2007 compared with a rise of 84.1% in the FTSE All-Share Index over the same period.
However, the investment universe in which the Company invests is shrinking.
The number of stocks in the Fledgling Index has decreased from 495 as at 31 December 2001 to just 126 as at 30 September 2007.
Of those companies leaving the Fledgling Index, 162 have relisted on the AIM market.
The benefits of the proposal would be;a greater degree of risk diversification for shareholders having increased the potential universe of investments available to the Company; by allowing investment in AIM companies, the Company would no longer be required to dispose of investments in companies which re-list to AIM therefore avoiding the associated transaction costs; the ability to hold a larger number of investments with a smaller average investment size should reduce liquidity risk.
Currently a policy of broad indexation of the Fledgling Index is adopted but with an active overlay applied to between 10 and 15% of the portfolio.
It is proposed to increase this percentage to a maximum of 35%, although it is the Directors' intention that normally no more than 30% of the Company's assets will be allocated to the active overlay.
Shareholder approval to the amendment to the investment policy is required, for which purpose an Extraordinary General Meeting of the Company has been convened for 11.30 a.m.
on 28 November 2007.
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