Market commentary or fund strategy at this time is often
out of date within a very short period of time. This update is a
brief review of performance over the month of December and an
outlook on the months ahead. However, please remember that past
performance is not a guide to future performance. We are all too
aware that accurate and timely communication is vital, so for the
most up-to-date information please contact our Investor HelpLine on
Freephone 0800 289 336.
Before you read on, please read this…
Past performance is not a guide to future performance. The value of
investments and the income from them may go down as well as up and
you may not get back your original investment. Please read the
Simplified Prospectus before investing. For more information on the
terms used in this article,
please click here to view the
glossary.
The views expressed are Gartmore's views and are subject to change
and are provided for information purposes only.
For fund specific risk profiles,
please click here and see the
factsheets available on this website.
Gartmore Cautious Managed Fund
Past performance is not a guide to future performance
Strength in UK equities in the final month of the year marked the
end of a remarkable period for investors. Although the domestic
economy remains vulnerable to shocks, equities have performed well
since March as markets have focused on the road to recovery. The
FTSE All-Share Index rose by 4.3% in December, bringing the result
for 2009 to 30.1%. During December, the Fund delivered a return of
1.3%, a result marginally below the IMA Cautious Managed Sector
Average of 1.4%, which is attributable to our still low exposure to
equities.
We believe that 2010 has the scope to be a 'make or break' year
for most asset classes. The case for a sharp move either way in
gilts is particularly significant, since volatility within bond
markets can in turn lead to volatility in other asset classes. In
this type of environment, a balanced fund which can increase or
decrease exposure to markets is well-equipped to cope with the
volatility.
Gartmore China Opportunities Fund
Past performance is not a guide to future performance
The Gartmore China Opportunities Fund rose by 4.4% in December,
while the MSCI Zhong Hua Index gained 2.6%. The Fund has risen
12.8% and ranks in the top decile of the IMA Asia Pacific
(excluding Japan) Sector Average over the three months to the end
of December 2009.
Chinese economic data have shown incremental improvements over
recent months. Purchasing managers' surveys, bank lending figures
and property sales all suggest the government stimulus is working.
Importantly, government subsidies have acted successfully as a
catalyst for consumer demand. At the same time, recovery in growth
has begun to take hold in the US and Europe and could lead to a
substantial revival in China's export markets.
Gartmore Corporate Bond Fund
Past performance is not a guide to future performance
The Gartmore Corporate Bond Fund fell by 0.9% in December
but outperformed the iBoxx Sterling Non-Gilt Index, which returned
-1.2%. Over the longer term, the Fund is first quartile in its peer
group over 2, 3, 4, 5 and 10 years and since inception*.
Going into 2010 credit markets remain underpinned by the gradual
economic recovery. However, the underlying gilt market on which
spreads are priced on remains, in our view, too expensive.
Headwinds in 2010 include exit strategies for global monetary
policy, ever mounting fiscal deficits, prospects of a double dip
recession, burden of increased regulation and sovereign risk.
Finally, the general election is likely to add an extra degree of
uncertainty into an already volatile environment.
* 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.
Gartmore Emerging Markets Opportunities Fund
Past performance is not a guide to future performance
The Gartmore Emerging Markets Opportunities Fund rose by 5.5% in
December while both the MSCI Emerging Markets Index and the IMA
Global Emerging Markets Sector Average gained 5.7%.
We estimate that corporate earnings in emerging countries may
grow by 25% this year. This growth could be stronger still if, in
the US and Europe, we start to see corporate sales growth and
genuine improvements in underlying credit conditions. Certainly, a
shallow, yet broad based recovery appears to be underway in the
nations of the G7. At the same time, the world's emerging economies
have begun to rebound.
Gartmore European Selected Opportunities Fund
Past performance is not a guide to future performance
Over the month, the Gartmore European Selected Opportunities Fund
delivered 3.2%, outperforming the IMA Europe ex UK Sector Average
(3.0%) and the FTSE World Europe ex UK Index (2.6%). Long term Fund
performance remains strong with the Fund ranking in the top
quartile of its peer group over 2, 3, 4, 5, 10 years and since
inception.
Following the worst recession in 60 years, we expect 2010 to
mark a further period of recovery in Europe, albeit a modest one.
The economic environment continues to be supportive of a positive
outlook, illustrated by a stronger than expected December US ISM
(Institute for Supply Management) Manufacturing Survey - a leading
indicator of economic turnarounds, and positive Gross Domestic
Product expectations. Although we are maintaining our positive
outlook for European equities over the next quarter, we remain
cautious.
Gartmore UK Alpha Fund*
Past performance is not a guide to future performance
Over December the Gartmore UK Alpha Fund gained 3.2%, which is
slightly below the IMA UK All Companies Sector Average return of
3.4%.
We continue to find the outlook difficult to determine, with a
significant number of potential positives for the market, balanced
by many negatives. On a global basis the outlook for economic
growth looks somewhat positive, especially for the Far East and
Australia. Nearer to home though, the outlook would appear less
rosy, with the key issues relating to the scale of UK debt and the
potentially stifling tax response of the authorities. We feel it is
difficult to see anything other than a long and difficult recovery
for the UK in 2010.
* As of 4 January 2010, the name and objective of
the Gartmore UK Alpha Fund was changed from the Gartmore UK Focus
Fund.
Gartmore UK Equity Income Fund
Past performance is not a guide to future
performance
The Gartmore UK Equity Income Fund outperformed its peers during
December, with a return of 3.7%, against 3.5% for the IMA UK Equity
Income Sector Average. The Fund benefitted from strength in
consumer defensives, utilities and pharmaceuticals - all sectors
which are well represented in the portfolio.
Market leadership has become much more mixed and transient. We
will stick to identifying value rather than themes. As much as ever
we are focusing on cashflow metrics and retain a healthy scepticism
of some asset based valuations, particularly where we lack
confidence or insight into the asset values disclosed.
We are finding many good quality stocks (companies with high,
stable returns and healthy balance sheets) on attractive valuations
and we continue to allocate assets accordingly.
Gartmore US Growth Fund
Past performance is not a guide to future performance
The Gartmore US Growth Fund rose by 3.8% in December, while the
S&P 500 Index gained 3.6% and the IMA North America Sector
Average added 5.8%. The Fund gained 6.8% over the final three
months of 2009 and was ranked in the first quartile of its peer
group.
While we do not believe the US economic recovery will be smooth,
we believe it will be sustained. We have sought to invest in those
companies most able to deliver consistent growth through the
recovery. The prospect of the Federal Reserve Bank eventually
moving away from an ultra-accommodative stance is bound to impact
the stock market from time to time. However, this has to be
balanced against the economic data which, on the whole, continues
to improve. US unemployment is showing signs of stabilisation and
house prices and existing home sales are increasing.
Gartmore US Opportunities Fund
Past performance is not a guide to future performance
The Gartmore US Opportunities Fund rose by 5.2% in December, while
the S&P 500 Index gained 3.6% and the IMA North America Sector
Average added 5.8%. Over the last six months, the Fund has gained
27.8% and was ranked in the first quartile of its peer group.
US unemployment is showing signs of stabilisation and house
prices and existing home sales are increasing. US manufacturing
expanded for a fifth consecutive month in December, while the ISM
(Institute for Supply Management) Manufacturing Purchasing
Managers' Index rose to its highest level since April 2006.
Historically, there has been a relatively high correlation between
this index and US payrolls.
For more information, please call our Investor HelpLine, on
Freephone 0800 289 336.
Important information
Source for all performance data: Lipper. Basis: Mid to mid, net
income reinvested and net of fees in UK sterling terms as at
31.12.09.
Telephone calls may be recorded for monitoring and training
purposes.
|