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Investment funds
News Release from: Gartmore | Subject: Investment funds
Edited by the Insidemoneytalk Editorial
Team on 18 February 2008
Gartmore News in Brief: South Korea
shipbuilders report growing order books
Hyundai Heavy Industries and Daewoo Shipbuilding and Marine Engineering of South Korea have won orders for doubled-hulled tankers worth $1.5bn this week.
The orders, received from state-owned Oman Shipping Company for delivery in 2012, are reported to have been agreed at prices higher than those achieved in 2007 This follows another $1.35bn order reported by Hyundai Heavy for large-sized container vessels from Europe
This article was originally published on Insidemoneytalk on 25 Oct 2007 at 8.00am (UK)
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South Korean shipyards have received over $6.5bn in new orders in 2008, more than 50% higher than last year.
The news is being taken as evidence that the effects of the US economic slowdown on the global marine transport industry may have been overstated.
"There's been speculation that the industry faces challenging times, with slower demand for new shipping capacity and a more difficult financing environment," says Chris Palmer, Head of Global Emerging Markets at Gartmore.
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"In fact, we remain positive as demand appears to be holding up, particularly for vessels used in the energy industry, for exploration and the transportation of products like liquified natural gas (LNG).
The needs of ship owners have changed.
Scale is important, so we are moving towards larger-sized container vessels, with greater focus on fuel efficiency and engine technology." Both the Gartmore Emerging Markets Opportunities Fund and the Gartmore SICAV Emerging Markets Fund have overweight positions (relative to their benchmark)[1] in Hyundai Heavy Industries and Hanjin Heavy Industries.
The Gartmore Emerging Markets Opportunities Fund ranked in the top quartile relative to peers over the last year[2].
The Quest for Alpha Continues with a Global Focus: The search for elusive alpha - the excess return of a fund over its benchmark index - is set to assume increasing importance, especially in the current turbulent market conditions.
A majority of respondents to a recent survey, by consultancy Watson Wyatt Worldwide expected 'the appetite for alpha to rise, stirred by a focus on absolute return investment'.
This was among the findings of the '2020 Vision: Research on the future pension and investment landscape' survey, which received 486 responses, predominately from experienced investors in Europe and Asia.
Commenting on the report's findings, Neil Rogan, head of global equities at Gartmore, observed that "global growth was the best sector in which to find alpha in 2007." Neil, who manages both the Gartmore Global Focus Fund and Gartmore SICAV Global Focus Fund, has similar expectations for 2008.
The unconstrained 'Best Ideas' Global Focus Funds have proved capable of delivering successive years of outperformance in rising and falling markets, as well as in growth and value ones, notes Neil.
Scouring the globe for best ideas enables the Funds to avoid economic black spots and to remain agile.
A rigorous sell discipline also underpins Neil's investment approach.
As part of this process, a stock will usually be sold if the outlook for the industry or franchise deteriorates, or if the price target is reached, with no compelling reasons to raise that target.
Neil stresses that "the story has to be still improving for us to keep the stock." This is in marked contrast to many, "who would keep a stock if the underlying story hasn't changed." The Gartmore Global Focus Fund, which recently celebrated its seventh anniversary, returned 38% since inception at the end of January 2001 to end January 2008 versus the MSCI World Index's 0.30% for the same period[3].
An Associate Member of the UK Society of Investment Professionals, Neil is rated AAA4 by Citywire (www.citywire.co.uk).
The Gartmore SICAV Global Focus Fund marked its third anniversary in October 2007.
[1] Gartmore's Global Emerging Markets Fund and Gartmore's SICAV Emerging Markets Fund Benchmark: MSCI Emerging Markets Index.
[2] As at 31/01/08.
[3] Source: Lipper: Basis mid to mid, net income reinvested and net of fees.
[4] As at 31/12/08.
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