Financial Advisers

Market commentary or fund strategy at this time is often out of date within a very short period of time. Therefore, this update is a brief factual overview of performance and stock contributors over the month of April. We are all too aware that accurate and timely communication is vital to both you and your clients, so for the most up-to-date information please contact your usual Gartmore representative.

To view individual fund commentaries please click on one of the below links:

Gartmore Cautious Managed Fund
Gartmore China Opportunities Fund
Gartmore Corporate Bond Fund
Gartmore Emerging Markets Opportunities Fund
Gartmore European Selected Opportunities Fund
Gartmore UK Absolute Return Fund
Gartmore UK Alpha Fund
Gartmore UK Equity Income Fund
Gartmore US Growth Fund
Gartmore US Opportunities Fund

For professional investors only. Not to be circulated to retail investors.

Gartmore Cautious Managed Fund

Review
April proved to be a busy month for markets. After a good start to the month with a strong US earnings season, enthusiasm was soon tempered by European sovereign concerns coming to the fore once again. With markets also facing the uncertainty of a general election and BP's spill in the Gulf of Mexico, volatility rose sharply towards the levels seen in January when Greek debt worries first hit the headlines.

Over the month of April, the Gartmore Cautious Managed Fund delivered 0.6%, outperforming the IMA Cautious Managed Sector Average of 0.1%. While most of this came from our bond exposures we also delivered a positive result from the equity book, which is pleasing given the weakness in the markets towards the end of the month.

Our defensive positioning benefited among our equities positions, with the greatest contributions to relative returns coming from a lack of exposure to miners including Rio Tinto, BHP Billiton and Xstrata. Miners struggled over the month on the news of the Australian tax proposal and continued tightening in China.

Activity was a little higher again over the month. Certain areas in the bond markets have performed exceptionally well, particularly in financials, and we have taken the opportunity to take profits in a number of positions either by selling out completely (Anglo Irish and Old Mutual bonds) or by switching into more highly rated paper as in the case of Royal Bank of Scotland or Royal Sun Alliance. We still think there is plenty to go for in the bond market this year, but occasionally a foot on the brake is needed. Likewise we took some profits on the equity portfolio after seeing some good performances from the likes of Smiths Group, GKN and our old favourite Lloyds, (which still remains a sizeable holding). We have started to buy back into the real estate sector after a period of weak performance. New holdings have been taken in Segro and Land Securities.

Outlook
We believe the final outcome of the general election is good news, although not as good as an outright Conservative win would have been. Investors have radically changed their minds recently - less stimulus, more retrenchment, and in our opinion this new coalition offers about the best chance of achieving that. Even so, the short term negative effects on growth cannot be ignored, while individual sectors will be caught by spending cuts. Tax rises can be expected, with a rise in VAT to 20% widely heralded. Other duties are also likely to be increased, placing extra pressure on the consumer. For the moment however, much of the expected tightening has already been factored into investors' thinking.

The bigger question is whether this will prove enough for the now highly fickle international bond markets. It is when we have to consider more substantial interest rate rises, and maybe increases in corporate taxes that we fear investors are still far too relaxed. Ultimately, our view of a difficult road ahead has not significantly changed, a combination of inflationary pressures combined with anaemic growth is not conducive to great equity returns. As such there is little change to the portfolio, and we remain defensively positioned with a preference for corporate debt over equities and sovereign exposures.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. When a fund holds high yielding bonds there is an increased risk of capital erosion through default or if the underlying yield is below the distribution yield. You should also be aware that economic conditions and changes to interest rate levels may significantly impact the values of high yield bonds. The annual management fee is currently charged to the capital of the Fund. Whilst this increases the yield, it will restrict the potential for capital growth. The level of yield may be subject to fluctuation and is not guaranteed. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore China Opportunities Fund

Review
Over the month of April the Gartmore China Opportunities Fund returned -0.8%, outperforming the MSCI Zhong Hua Index (-1.8%), while the IMA Asia Pacific ex Japan Sector Average delivered 0.1%. Over the year, the Fund has risen 41.4%, outperforming the MSCI Zhong Hua Index return of 35.9%. Over the same period, the IMA Asia Pacific ex Japan Sector Average returned 45.5%.

Overweight holdings in Ruinian, Baidu, Bosideng and WuXi PharmaTech all delivered the month's strongest returns. Ruinian, who produce nutritional supplements, moved higher following a successful IPO. Internet search company, Baidu, benefited from very strong Q1 numbers. The company has also upgraded their systems to improve their revenue per advertiser. Mens fashion retailer Bosideng has benefited as a result of strong sales. The US pharmaceutical company, Charles River Laboratories recently announced the acquisition of the Chinese R&D company, Wuxi PharmaTech. Wuxi represents a valuable franchise and is a good example of a company at the cutting edge of its industry.

The Fund's overweight positions in Agile Property, China Vanke and Ctrip and underweights in China Mobile and China Unicom all detracted from performance. Both Agile and China Vanke fell back due to property tightening measures. However, we retain our conviction in Agile given the company's strong year-to-date revenue and sales numbers. The company is also in the process of buying back stock. Online ticketing franchise and long term holding Ctrip appears to have taken a breather but first quarter 2010 results are likely to be strong. Our underweight in the defensive telecommunications sector, in particular with China Mobile and China Unicom, detracted from performance when the sector remained relatively flat whilst the rest of the market fell back.

There was some portfolio activity over the month. We sold out of China Eastern Airlines, China Longyuan and Shandong Weigao and invested the proceeds in Hong Kong Aircraft Engineering, Baoshan and Kweichow Moutai. Our thesis of a cyclical recovery and consolidation in the airline industry played out but China Eastern Airlines moved ahead of fundamentals as a beneficiary of Chinese yuan appreciation fervour in the market. We sold out of the stock and rotated our exposure into Hong Kong Aircraft Engineering, a business that maintains and overhauls aircraft that is yet to reflect the pick-up in airline activity. After a period of underperformance and pursuant to our sell discipline, we sold out of wind power company China Longyuan. We disposed of Shandong Weigao following disappointing numbers and an expensive valuation. The Fund has re-entered the Shanghai A-share market with purchases in leading steel company Baoshan Iron and Steel and spirit company Kweichow Moutai. Both strong companies have been sold off to attractive levels that underestimate the earnings outlook going forward.

Outlook
We remain confident of a shallow, yet broad-based recovery in the G7 nations during 2010. As the recovery takes hold, concerns over monetary tightening in China have caused investors to take a more cautious approach. Notwithstanding many global macroeconomic uncertainties, we expect any pull-back in the Chinese market to present a good opportunity to top up our most compelling positions. We expect China to continue to benefit as the recovery gathers momentum and we remain confident that Chinese equities represent good value. There are still many doubters on China which continues to offer the potential for unexpected earnings growth particularly within the consumer and technology sectors.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. The Fund can invest in smaller companies which can be more risky than investing in larger companies due to lack of liquidity and increased volatility. Emerging markets tend to be more volatile than more established stock markets and therefore your money is at greater risk. Other risk factors such as political and economic conditions should also be considered. Funds investing in overseas securities are exposed to and can hold currencies other than sterling. As a result, exchange rate movements may cause the value of investments to decrease or increase. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore Corporate Bond Fund



* Please note that the Gartmore Corporate Bond Fund was launched on 18.07.09 to receive the assets of the Rensburg Corporate Bond Trust (managed by John Anderson) on the merger of the two funds on 18.07.09. Performance figures prior to 18.07.09 reflect the performance of the Rensburg Corporate Bond Trust converted from an offer to offer basis to a mid to mid basis. The benchmark index changed to the iBoxx Sterling Non-Gilts Index on 18.07.09.

Performance
Over the month the Gartmore Corporate Bond Fund returned 0.8%, in line with the Markit iBoxx Sterling Non-Gilt Index (0.8%) and outperformed the IMA Sterling Corporate Bond Sector Average (0.6%). Long term performance remains strong with the Fund ranked in the first quartile over 2,3,4,5 and 10 years*.

Economic and Market Background
April is best described as a month of contrasts. On the corporate side, Q1 earnings were generally very strong. In the US, a slew of companies reported results ahead of expectations. The pattern was similar, though slightly less positive, in Europe. Corporate results reflected the rapidly improving global economy and management tone has become increasingly upbeat.

However, away from corporate earnings, there was plenty for investors to worry about. The sovereign situation in Greece deteriorated when S&P downgraded Greek debt to junk and the yield on 2-year Greek government bonds briefly spiked above 15%. Markets became increasingly worried about the country's sovereign solvency and the resulting contagion risk for the Euro and the rest of Europe. Delays in negotiations outlining the Greek assistance package by the EU and IMF led to increased volatility in bond markets towards the end of the month.

Investment Strategy
Our main focus over the month involved booking gains in some of the lower quality, higher yielding names which had performed well over the last few months. Spreads in broadcaster ITV, airport operator BAA, insurer Aviva and spirit group Allied Domecq have narrowed substantially since purchase. Mindful of the larger sovereign debt concerns, we rebalanced the portfolio by selling these stocks and purchasing some higher quality defensive names such as EIB and KFW.

Despite the unfolding sovereign debt crisis we selectively participated in new issues. Thomas Cook, Europe's second largest travel company, managed to raise over a $1bn through new sterling and euro bond issues. Despite adopting a slightly more cautious stance, we have yet to turn bearish and therefore will continue to actively participate in new issues we view as attractively priced.

The net result of our trades over the month has been to increase our exposure to more defensive areas of the market such as utilities and food retailers. These gains were made at the expense of financials and consumer discretionary stocks. Closer to home we continue to shun gilts. The latter asset class, still reeling from the destabilising effect of quantitative easing, has been adversely impacted from the consequences of the Greek deficit and political uncertainty. 10 year Gilts are currently yielding around 3.8% which in our view do not represent good value for money.

We would like to emphasise that we do not have any exposure to Greek debt. In the Iberian Peninsula we have stayed clear of heavily regulated sectors such as utilities, banks or telecoms.

Outlook
Markets remain muddled, exhibiting increased volatility and unpredictability. Only a few weeks ago economic data releases were pointing towards a V-shaped recovery and markets were buoyed by excellent corporate earnings. Yet the sovereign debt concerns which have destabilised bond and equity markets cannot come as a shock to investors. These issues were lurking in the background and deliberately ignored by the market. The portfolio's cautious stance going into 2010 was fuelled by the extraordinary level of debt in the US, UK and peripheral European countries.

Nevertheless, in our view, market fundamentals remain credit friendly. Corporate earnings have been strong and despite stubbornly high inflation, the new coalition government will likely focus on tightening and tax rises, dampening the need for any immediate hike in interest rates. Yet we remain vigilant as exogenous shocks, namely sovereign risks, can still adversely impact credit markets.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. This Fund invests in bonds and other fixed income securities and derivatives which collectively may be more volatile than a fund investing solely in cash or bonds. The Fund may trade instruments which are not exchange traded and therefore contain the risk a counterparty may not be able to honour its contractual obligations. Currently, the annual management charge is taken from the capital of the Fund, which will increase the income yield, but restrict the potential for capital growth. Yields may change in the opposite direction to interest rates, however, not by the same increments. The Fund invests in corporate bonds whose prices are aligned with the credit worthiness of the underlying corporate. A deterioration in a corporate credit rating may have a negative impact on the bonds price. Derivatives may be used for the purpose of efficient portfolio management. However, appropriate risk monitoring will ensure that there is no significant increase in a fund's risk profile. Derivatives will not be used for investment purposes. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore Emerging Markets Opportunities Fund

Review
The Gartmore Emerging Markets Opportunities Fund rose by 0.5% in April, outperforming the MSCI Emerging Markets Index and the IMA Global Emerging Markets Sector Average which returned 0.3% and 0.4% respectively.

A number of the Fund's overweight holdings performed well over the month, among them Kingboard, Baidu and MphasiS. Chinese electronic components manufacturer Kingboard rose over the month following positive earnings revisions at subsidiary Kingboard Laminates and better than expected performance at their High Density Interconnect (HDI) operations. Google's decision to stop censoring internet searches in China last month has proved a boost to rival Baidu. The company has reported that its net profit more than doubled in the first quarter as its revenue rose on strong gains in online marketing. The company has also gained market share in China, while Google declined. The market responded favourably to Indian IT company MphasiS' announcement that it has signed a deal to acquire privately held IT services firm Fortify Infrastructure Services.

Our overweight position in Thailand's real estate company Preuksa Real Estate was the Fund's key detractor over the month. The company's share price fell heavily over the month owing to increasing political instability in the country which has caused growing uncertainty among investors.

April saw significant activity for the portfolio. The Fund took several new positions, one of which was Woori Finance. The addition of Woori Finance now takes the Fund close to a neutral position in Korean financials. Trading close to 2010 book value, this bank has quietly improved its return profile and funding. Asian banks in general have weathered the financial crisis with most fundamentals intact and are generally believed to be well positioned to adjust to any rate rises in 2010. Significant derivative risks were removed from the system in 2009. Among our disposals was Samsung Engineering. The Fund sold the company due to strong evidence of petrochemical project cancellations in the Middle East. Projects may be cancelled due to excess capacity for refining in the USA, lack of finance, and output growth from major Chinese refineries. This view extends across the engineering industry where it is focused on large scale petro-chemical projects. Samsung Engineering has recently underperformed while valuations and weak estimates support the sale.

Outlook
We remain confident of a shallow, yet broad-based recovery in the G7 nations during 2010. As the recovery takes hold, concerns over rising interest rates have caused investors to take a more cautious approach. However, the full impact of the various government stimulus packages continues to assist the recovery. We expect any pullback in the market to present a good opportunity to top up our key positions. We expect China, Russia and Mexico to gain most from the recovery as it gathers momentum and are therefore maintaining a key overweight in these regions whilst underweighting Israel and South Korea.

As improvements in global demand continue to assist the recovery in emerging economies, we expect to see improvements across our cyclical stocks. Meanwhile, we continue to favour consumer staples firms such as Shoprite and information technology companies such as Baidu whilst remaining relatively underweight in financials.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. This Fund invests in emerging markets, which tend to be more volatile than more established stock markets and therefore your money is at greater risk. Funds investing in overseas securities are exposed to and can hold currencies other than sterling. As a result, exchange rate movements may cause the value of investments to decrease or increase. In addition, the Fund can invest in smaller companies which can be more risky than investing in larger companies due to lack of liquidity and increased volatility. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore European Selected Opportunities Fund

Review
Over the month, the Gartmore European Selected Opportunities Fund delivered -4.2%, while the IMA Europe ex UK Sector Average and the FTSE Developed Europe ex UK Index returned -3.3% and -4.0% respectively.

During April, we introduced two new holdings in the food retail sector, namely Ahold and Metro. We favour Ahold which is seeing a recovery in its domestic market via the Albert Heijn supermarket chain franchise as well as in its US operations. The stock is supported by a lowly valuation as well as a strong balance sheet. We are also attracted to Metro which is effectively a capital release story. The business has tied up too much capital at uneconomic returns and we are now seeing management address this. BMW was also added to the portfolio during April. While normally averse to car companies, we view BMW as offering best in class management and a model range benefiting from very strong Chinese demand.

We sold out of water supply pipe manufacturer Geberit, insurance provider Ageas and television broadcaster Telecinco in April reflecting our desire to reduce exposure to the mid cap segment of the market.

Atlas Copco was the top contributor to performance during the month as the stock responded well to its earnings announcements. Within the capital goods sector, MAN was a notable contributor during the month as the market responded well to the recovery in world demand for trucks. Our holding in Royal Dutch Shell also performed well against a backdrop of rising oil prices as well as an improved production profile for this former sector laggard.

The pharmaceutical sector continues to lag the broader market and this was reflected in the performance of Sanofi-Aventis and Novartis, two of our main detractors during April. While short term patience is inevitably tested it is likely that this sector requires a rollover in macro data to show outperformance. Meanwhile value exists within the industry and we will likely retain exposure. Our holding in Total also detracted as the market responded negatively to its news on production. We continue to hold the stock given its attractive valuation.

Outlook
European equities inhabit something of a parallel universe. This can be described as "excellent micro versus poor macro". This two way pull reflects the fact that indebtedness has effectively been transferred from the corporate to the state sector. Thus we have the tailwind of recovering economies, strong cashflows and low valuations against the headwind of indebtedness to the point of failing states or countries. It is anyone's guess as to how the latter plays out. Our own view remains that, barring a domino effect of defaulting sovereigns, European large cap equities are among the cheapest asset classes around. The same cannot be said of the mid cap sector whose long term outperformance may soon be drawing to a close.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment Funds investing in overseas securities are exposed to and can hold currencies other than sterling. As a result, exchange rate movements may cause the value of investments to decrease or increase. In addition, the Fund can invest in smaller companies which can be more risky than investing in larger companies due to lack of liquidity and increased volatility. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore UK Absolute Return Fund


*The Fund launched on 14 April 2009.

Review
The end of April marked the first anniversary of the Fund's launch, and the gain of 1.0% for the month bought the 12-month return to exactly 10.0%, hitting our target of a double digit return with pinpoint accuracy! The Fund's first year has marked an extraordinary period for markets, with equities rallying very strongly as the global recovery has gained traction. However this has also been accompanied by considerable volatility.

We have stated many times that our objective is to deliver double digit returns with minimum risk. The Fund's gross exposure has averaged 67% over the past year, much lower than in our history of running this strategy. Importantly, the Fund's volatility has also been significantly lower than that of the market. The return has also been achieved with a net exposure averaging just 20% and beta of 0.13.

A number of our long positions delivered very strong returns over the month, including engineering company Kentz. Kentz rose sharply during April, following a stream of positive updates on new contract wins. This added to the strong results for 2009 which were reported towards the end of March to advance the share price further. Kentz was an attractive choice for us on several levels. It brings in considerable overseas revenue, and its exposure to the mining and oil & gas industries mean it is geared into the global recovery and delivering significant top-line growth. As well as growth potential, Kentz was attractively valued and trading at a discount to its peers. Positive newsflow has drawn attention to the company and should provide the ongoing support to enable the discount to narrow further.

Outlook
As ever we remain focused on identifying prospective investment ideas from our bottom-up process rather than forming a view on market direction, and continue to find more long than short positions. Recent share price weakness has presented us with both more buying opportunities among favoured stocks and the chance to close out some successful shorts in miners and banks. Within the long book, our emphasis is generally on non-cyclical areas of the market. Among our long positions there is currently very little in the way of traditional cyclical companies.

The key thing we are looking for in the long book is the ability of a company to deliver top-line growth, something we have discussed previously. Tobacco companies were weak this month and we believe this is partly due to their inability to deliver increasing volumes. The types of companies that we are identifying for the long book are still those which have invested during the downturn and will be able to generate improving sales as the recovery gains traction. Some examples of this are Unilever, Shell, Smith & Nephew and Micro Focus.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. The Gartmore UK Absolute Return Fund invests in shares and derivative instruments, which are more volatile than other asset classes such as cash or bonds. The Fund aims to typically deliver absolute (more than zero) returns in each year, although an absolute return performance is not guaranteed. Over the short term it may experience periods of negative returns and consequently the Fund may not achieve this objective. The Fund may invest in smaller companies, which can be more risky than larger companies due to a lack of liquidity and increased volatility. The shares of smaller companies may be subject to more abrupt price movements than shares of larger companies. The investment approach for this Fund may involve a high level of investment activity and turnover of investments, which may generate substantial transaction costs which will be borne by the Fund. This Fund primarily invests in a single market which can be subject to particular political and economic risks. The manager may invest in markets other than the primary market and the Fund may therefore be exposed to risks in these markets. The Fund may take short positions via derivatives with the aim of profiting from falling prices. If the price rises this would result in a loss. The Fund may be subject to a Performance Fee which may influence the manager to change the risk profile of the Fund. Please see the "Performance Fee" section in the Prospectus for further information. The Fund may trade instruments, the performance of which depends on the continued solvency of the counterparties to the trades. The Fund may employ leverage as part of its investment strategy when using derivatives. Derivatives may contain a leverage component and consequently any adverse changes in the value or level of the underlying asset, rate or index can result in a loss greater than the amount invested in the derivative itself. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore UK Alpha Fund

Review
April was certainly an eventful month, with a strong start to the earnings season sustaining markets over the first few weeks. However, this enthusiasm was soon reined in by the volcanic eruption keeping planes out of the skies over the UK for the better part of a week and European sovereign concerns coming to the fore once again. With markets also contending with a general election and BP's spill in the Gulf of Mexico, it was not surprising to see volatility rising sharply again, towards the levels seen in January when Greek debt worries first hit the headlines.

The positive earnings season kept UK markets buoyant over much of the month, and also many US companies reporting results ahead of analyst expectations. However, the impact of wider events meant that corporate earnings weren't enough to support UK large caps, and weakness among the FTSE 100 Index ultimately drove the market down over the month. However our preferred hunting ground among the mid caps performed much better once again.

Over April the Gartmore UK Alpha Fund delivered a return of 0.4%, outperforming the FTSE All-Share Index (-1.4%) and the IMA UK All Companies Sector Average (0.1%).

The strong contributions to returns over the month came from several of our overweight positions, notably Paragon Group and N Brown.

We initiated a new position in Paragon in the second week of April, before it rallied ahead of an announcement regarding its interim results, which are due out on 18 May. The mortgage origination company reported that it expects pre-tax profit to exceed expectations, and although its underlying market is improving as arrears decline, it trades at a significant discount to its net asset value.

We added a little more to our stake in N Brown in early April, a favourite holding over the past few months. The plus-size mail order and online retailer reported strong preliminary results for its financial year, with a rise in its full-year profits which exceeded market expectations. As a result, the share price rose nearly 25% over the month. As well as being in a growing market, there is excellent growth potential from its international businesses, so although we have taken some profits since the price rise we have maintained a position in the Fund.

Outlook
The events of April were a timely reminder that our environment is still an uncertain one, and it really is far too early to tell which way the market will go next. However, we are still finding plenty of ideas for new positions in companies that look unappreciated at the moment. With markets bouncing around there have also been good opportunities to add to our favourites at low prices. As ever, we'll be keeping our eyes open to new possibilities as circumstances change and the path ahead becomes clearer.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. The Gartmore UK Alpha Fund invests in shares, which are more volatile than other asset classes such as cash or bonds. The Fund may hold concentrated positions. If one of these concentrated positions declines in value, or is otherwise adversely affected, this can have a greater effect on the Fund's value than if it held less concentrated positions. The Fund may hold a limited number of investments. If one or more of these investments declines in value, or is otherwise adversely affected, this can have a greater impact on the Fund's value than if a larger number of investments were held. The Fund can invest in smaller companies which can be more risky than investing in larger companies due to lack of liquidity and increased volatility. Funds with an emphasis on a particular sector or geographical area are exposed to a higher risk of volatility than a fund which is more broadly diversified. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change. As of 4 January 2010, the name and objective of the Gartmore UK Alpha Fund was changed from the Gartmore UK Focus Fund.

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Gartmore UK Equity Income Fund

Review
April proved to be a month of ups and downs with the FTSE 100 Index rising to 5825 over the first two weeks, before suffering a reversal of 4.7% to close lower over the period. The initial optimism was driven by some positive leading indicators and a very strong US earnings season, but this gave way to concerns over the ability of "peripheral" European countries to finance their budget deficits. Add into the mix continued Chinese tightening, the prospect of a hung parliament in the UK, a proposed Australian resource tax and BP's oil spill in the Gulf of Mexico and the market volatility is easily explained.

Sector performance was mixed with no obvious leadership from defensives or cyclicals. Winners included industrials and food & beverage stocks, but tobacco, pharmaceuticals and mining all underperformed. While industrial commodity prices continue to hover near their highs, the Australian tax proposal and developments in China served to send the mining sector 9% lower (but remember it was up 16% in March!).

Over the month of April the Gartmore UK Equity Income Fund delivered a return of 0.1%, outperforming the FTSE All-Share Index (-1.4%) and the IMA UK Equity Income Sector Average (-0.1%). We benefitted from good results among overweight positions, most notably Pearson, Bunzl and Atkins. The latter (an engineering and design consultancy) delivered a positive trading update around the middle of the month and received a series of broker upgrades. Its broad exposure to construction and public spending has left it out of favour with thematic investors, but with £300m of net cash and an operating profit of over £100m we see the current valuation of c.£650m as discounting a lot of negatives. We initially purchased a stake during November last year and were happy to top up on the back of these results.

In terms of activity it was reasonably quiet. We added to software stocks Sage and Micro Focus while disposing of some smaller holdings including British American Tobacco and Cable & Wireless. We also took advantage of some liquidity to sell out of Juridica.

Outlook
While corporate newsflow is positive, governments are struggling under the weight of debt they have accumulated over years of fiscal imprudence, culminating in the bailouts and stimuli put in place in response to the credit crunch. This contrast (healthy corporate profitability, stretched government finances) will not be lost on politicians.

Since the month end the market has responded well to Eurozone intervention intended to address fears surrounding Greece and other of the "PIIGS" (Portugal, Ireland, Italy, Greece and Spain). We wouldn't be surprised to see further initiatives (e.g. unsterilised bond purchases) but it seems inevitable that Western world deleveraging will be a painful process.

As ever, our focus remains on a company's ability to generate an attractive and sustainable level of income. At the moment this is tending to lead us towards "higher quality" companies - where returns are high and stable and balance sheets are strong.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. The Fund can invest in smaller companies which can be more risky than investing in larger companies due to lack of liquidity and increased volatility. The annual management fee is currently charged to the capital of the Fund, which may restrict the potential for capital growth. Funds with an emphasis on a particular sector or geographical area are exposed to a higher risk of volatility than a fund which is more broadly diversified. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed in reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore US Growth Fund

Performance
The Gartmore US Growth Fund rose by 2.6% in April, outperforming the S&P 500 Index (0.7%) and the IMA North America Sector Average (2.1%). The Fund has also outperformed both Index and Sector Average over the last three months.

Market Review
In April, US equities continued their upward climb buoyed by improving economic conditions, a brightening outlook for corporate profits and continued highly accommodative monetary and fiscal policies.

The US economy's trajectory remained positive during April and also began to show encouraging signs of becoming more deeply rooted. Real Gross Domestic Product (GDP) in the first quarter of 2010 rose 3.2% on an annualised basis, with corporate capital expenditures and consumer discretionary spending perking up substantially. Manufacturing activity and industrial production during April extended its "V"- shaped recovery, expanding by its fastest pace since 2004. In addition, the Commerce Department reported that personal spending rose 0.6% in March (the most in five months) which came directly on the heels of a 0.5% jump in February. Consumer incomes increased by 0.3% in March, which represented the first gain in the 2010 calendar year. The impact of these developments rippled throughout the economy, as a number of real-time indicators - including rail car volumes, trucking activity, retail sales, credit card usage, hotel occupancies, airplane yields, vehicle sales, used car prices, restaurant and shopping mall traffic, wine and spirits sales - improved markedly.

Contributors to Performance
An overweight stance in EOG Resources was the single largest positive contributor to relative performance over the month. The Houston-based oil and gas producer's output forecast for the next two years came in ahead of expectations. The company also raised its potential reserve estimate. Elsewhere exposure to Baidu also contributed to gains. The Chinese internet search engine posted consensus beating quarterly results and raised its sales growth forecast. The company has benefited from Google's decision to exit mainland China and serve its customers from Hong Kong.

Transocean was one of the key detractors to performance over the month. The Geneva-based company's Deepwater Horizon rig was rocked by an explosion and fire that killed 11 workers, sank the vessel and triggered leaks in a subsea well, spewing an estimated 5,000 barrels a day of crude into the sea off the Louisiana coast.

Fund Activity
We began selling some of our shares in Transocean earlier this year when the stock was listed on the Swiss stock exchange and as a result approached our price target. We accelerated the process following the fatal rig blast that triggered the Gulf of Mexico spill. Due to the lengthy process required to determine the various incidents that led to the spill, we decided to liquidate our entire holding.

Currently the Fund is most overweight information technology, materials and consumer discretionary companies. The Fund is slightly overweight financials. These positions are held principally at the expense of sectors with more defensive characteristics, notably consumer staples and utilities.

Outlook
Recent data has in the main, pointed to incremental improvements in the US economy. Many US businesses are rebuilding their inventories and a rebound in railroad traffic would suggest that imports are growing in order to meet stronger final demand. These factors support our view that the US economy will continue to recover this year. Against this backdrop, we continue to identify and invest in a range of attractive opportunities in the equity market.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. Funds investing in overseas securities are exposed to and can hold currencies other than sterling. As a result, exchange rate movements may cause the value of investments to decrease or increase. The Fund is permitted to, and may hold, a limited number of investments from time to time. Should one or more of these investments decline or be otherwise adversely affected, it may have a more pronounced effect on the Fund's value than if a larger number of investments were held. In addition, the Fund can invest in smaller companies which can be more risky than investing in larger companies due to lack of liquidity and increased volatility. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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Gartmore US Opportunities Fund

Performance
The Gartmore US Opportunities Fund rose by 4.0% in April, outperforming the S&P 500 Index (0.7%) and the IMA North America Sector Average (2.1%). The Fund has also outperformed the Index and Sector Average over 3, 6 and 12 months.

Market Review
In April US equities continued their upward climb buoyed by improving economic conditions, a brightening outlook for corporate profits and continued highly accommodative monetary and fiscal policies.

The US economy's trajectory remained positive during April and also began to show encouraging signs of becoming more deeply rooted. Real Gross Domestic Product (GDP) in the first quarter of 2010 rose 3.2% on an annualised basis, with corporate capital expenditures and consumer discretionary spending perking up substantially. Manufacturing activity and industrial production during April extended its "V"- shaped recovery, expanding by its fastest pace since 2004. In addition, the Commerce Department reported that personal spending rose 0.6% in March (the most in five months) which came directly on the heels of a 0.5% jump in February. Consumer incomes increased by 0.3% in March, which represented the first gain in the 2010 calendar year. The impact of these developments rippled throughout the economy, as a number of real-time indicators - including rail car volumes, trucking activity, retail sales, credit card usage, hotel occupancies, airplane yields, vehicle sales, used car prices, restaurant and shopping mall traffic, wine and spirits sales - improved markedly.

Contributors to Performance
The most significant positive contribution to relative performance came from CBS. The media group is one of the big four US TV networks and has interests in a variety of areas, including radio and digital publishing. During the month shares in the group benefited from various analyst upgrades. We continue to hold the stock based on the company's ability to leverage the recovery. Exposure to PNC Financial Services also contributed to performance. The fifth largest US bank by deposits posted better than expected results on higher net interest income. It also made smaller provisions for bad loans.

Elsewhere exposure to Google, the internet search engine, detracted from performance.

Markets were underwhelmed by Google's 37% rise in quarterly profit, preferring to focus on the rising costs the group incurred pursuing growth in new markets. Conviction in JPMorgan Chase also weighed on performance. Despite posting consensus beating results, shares in the investment bank came under pressure after the SEC charged Goldman Sachs with fraud.

Fund Activity
Currently, the Fund is most overweight financials and consumer discretionary companies. Another favoured area is telecom services. However, the Fund continues to hold underweight positions in sectors with more defensive qualities, notably utilities and consumer staples.

Outlook
Recent data has, in the main, pointed to incremental improvements in the US economy. Many US businesses are rebuilding their inventories and a rebound in railroad traffic would suggest that imports are growing in order to meet stronger final demand. These factors support our view that the US economy will continue to recover this year. Against this backdrop, we continue to identify and invest in a range of attractive opportunities in the equity market.

Important Information
Source for all fund performance data: Lipper. Basis: Mid to mid, net income reinvested and net of fees in UK sterling terms as at 30.04.10, unless otherwise stated. Past performance is not a guide to future performance. The value of investments can go down as well as up and you may not get back your original investment. Funds investing in overseas securities are exposed to and can hold currencies other than sterling. As a result, exchange rate movements may cause the value of investments to decrease or increase. The Fund may, from time to time, be significantly invested in smaller companies which may be more risky than investing in larger companies due to lack of liquidity and increased volatility. The Fund is permitted to, and may hold, a limited number of investments from time to time. Should one or more of these investments decline or be otherwise adversely affected, it may have a more pronounced effect on the Fund's value than if a larger number of investments were held. Please ensure your clients read the Simplified Prospectus before investing. The opinions expressed reflect Gartmore's views as at 21.05.10 and are subject to change.

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