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Gartmore US Equities Excellence in Asset Management Simon Melluish – Head of US Equities Expectmore Getmore 29th January 2002 Agenda  People

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									Gartmore US Equities
Excellence in Asset Management




Simon Melluish – Head of US Equities


                                       Expectmore, Getmore,
29th January 2002
Agenda
 People

 Investment process

 Funds
    Gartmore American Growth Fund
        sector stances
        top 10 holdings

 New role for small caps

 Appendix
                                     Expectmore, Getmore,
Organisation Chart
                         Peter Chambers                                                Gartmore has access to
                           Global CIO                                                   dedicated portfolio constructors
                                                                                        and research analysts through its
    Neil Rogan                                          Young Chin                      sister company, Villanova Capital
Head of Int’l Equities                                   US CIO



     Gartmore              Gartmore         Villanova                 Villanova
     Portfolio             Research         Research                  Portfolio
    Constructors                                                     Constructors
                          Liam Pagliaro     Jason Kotik
  Simon Melluish          Richard Urwin    Kent Madden           William Miller
     Nick Ford             Jamie Lewin     Fran Radano           Chris Baggini
   Simon Moss            Katie Flanagan    Chris Welch            Chuck Bath
    Ben Walker           Gavin Cartledge     Chip Zhu            Paul Cluskey
                          Robert Murphy                           Aaron Harris
                              Asim                                Ann Rafferty
                           Nurmohamed                              Jean Rhee
                                                                Kwang Chin Kim


                                                                                                 Expectmore, Getmore,
Investment Process
    Ideas Generation                Research                     Robust and disciplined
                                                                  investment process

                                                                 Separate research and
Sell Disciplines
                                                                  portfolio construction
                                                                  functions
                                               Portfolio
                                               Construction      Sell discipline as
                                                                  important as buying

                       Portfolio                                 An evolving process
                       Monitoring




                                                                        Expectmore, Getmore,
Gartmore American Growth Fund
Relative to S&P 500 Composite Index
            Underweight %                                          Overweight %

                                    Industrials                                       4.3
                                   Healthcare                          2.1
                                     Materials              0.8
                                   Unassigned         0.3
                                           -0.1       Consumer Staples
                                          -0.3        Energy
                                          -0.3        Financials
                             -1.4                     Telecommunications
                            -1.7                      Information Technology
                     -2.3                             Utilities
         -3.6                                         Consumer Discretionary

 -5       -4       -3        -2       -1          0         1      2         3    4         5


                                                                                                Expectmore, Getmore,

Source: FactSet as at 24th January 2001
Gartmore American Growth Fund
Top Ten Holdings
                                          Microsoft Corp 5.0%
                                          Exxon Mobile Corp 2.9%
                                          Fannie 2.6%
                                          Pfizer 2.5%
               Top ten holdings =         Wal-Mart Store 2.5%
                     26.4%                Citigroup 2.4%
                  of the portfolio        Procter & Gamble 2.3%
                                          General Electric 2.2%
                                          Intel Corp 2.0%
                                          American International Group 2.0 %




                                                                               Expectmore, Getmore,

Source: FactSet as at 24th January 2002
“Maximum Bullish” Outlook for Small Caps
 Average Price Performance Before and After Last Four Recessions                                      We believe…
 Time Period (mos)                    Historical                            Current
 (benchmarked to                Large Cap Small Cap                  Large Cap Small Cap                 Small caps should be owned in
 R=100)                                                                                                   periods of economic recession
           R-24                        110.4             108.8               92.4             113.3
           R-21                        108.3             109.9               86.3              98.4
           R-18                        101.8             106.3               92.0             105.4      Buy when macroeconomic
  Before
           R-15                         99.4              99.4               80.1              89.3       Newsflow is bleak
           R-12                         98.1              96.7               78.3              83.6
           R-9                          95.8              89.0               80.5              87.1      Out-performance is strong coming
           R-6                          95.9              92.0               81.2              86.4
           R-3                          99.3              97.0               88.1              93.2       out of recessions
           R                           100.0             100.0              100.0             100.0
           R+3                         104.7             110.6              105.9             113.8      This time will not be different
           R+6                         107.3             117.8
           R+9                         118.5             132.0
           R+12                        124.8             152.0
   After   R+15                        130.4             156.6
           R+18                        133.8             166.5
           R+21                        134.8             167.5
           R+24                        137.4             176.7



                                                                                                                 Expectmore, Getmore,
R-3 = Three months prior to the first day of the first quarter that registered negative GDP growth
R+3 = Three months after the first day of the first quarter that registered negative GDP growth
Source: Ibbotson Associates, Frank Russell Company and Salomon Smith Barney
Appendix
Biography
Simon Melluish - Head of US Equities

Simon joined Gartmore as an Investment Manager on the Global
Portfolio Team in 1995 with specific responsibility for the US market.
In July 2000 he was promoted to Head of US Equities.
He began his career at Henderson Administration plc where he was
responsible for US equity investment for UK segregated pension funds.
Prior to joining Gartmore he worked at Singer & Friedlander
Investment Management as an Assistant Director in the Private Client
division with joint responsibility for a number of discretionary global
portfolios for private individuals.
Simon graduated from Durham University in 1986 with an
Honours degree in Economics.

                                                         Expectmore, Getmore,
A Cautionary Note
    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.
    Past performance is not necessarily a guide to future performance.
    Changes in rates of exchange between currencies may cause the
     value of investments to decrease or increase.
    For the attention of business and professional investors only. This
     document should not be circulated to private investors.
    Investment may be made in securities which are free of withholding
     taxes in respect of interest/dividend payments to the Fund. Such tax
     relief may be subject to change in the future and does not imply that
     such relief is applicable to the beneficial owner of the assets.
    All data as at 17th January 2001 unless stated otherwise.


                                                                                             Expectmore, Getmore,
Issued and approved by Gartmore Fund Managers Limited (GFM) which is regulated by the FSA.
GFM is a member of the NatWest and Gartmore Marketing Group and of AUTIF
Heading (OdenseXBold size 34)
Sub Heading (Odense Xbold size 28)
 Text (Odense size 26)
    sub text (Odense size 26)
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                                        Expectmore, Getmore,
Page with Table and Bullet Points
Table Title-Odense Demi    Size 18                             Text (Odense size 20)
Table text                 Odense                                 sub text same
Table text                 18
Table Lines                2pt outer, 1.5pt inner borders
Table Paragraph on title   6 cm before and after




                                                                     Expectmore, Getmore,
Chart and Bullets Points
Odense size                                   Odense size 16      Text (Odense size 20)
16        Odense size 16                                             sub text same
180       Odense size 16                                80
          Odense size 16
170                                                     70
          Odense size 16
160                                                     60

150                                                     50

140                                                     40

130                                                     30

120                                                     20

110                                                     10

100                                                     0
                    98              99   00   01

                                                                        Expectmore, Getmore,

Source and Date: (Odense Cond size 12)
Chart with Chart Title and Bullets with Titles
Chart Title (Odense Demi size 20)                           Titles (Odense Demi size20)
Pence                                                        Bullet Odense size 20
500                       Sold
                                                            Titles (Odense Demi size20)
450
                                                             Bullet Odense size 20
400                                                          Bullet Odense size 20
350                                                         Titles (Odense Demi size20)
                    Buy
300                                                          Bullet Odense size 20
                                                             Bullet Odense size 20
250

200

150

100
            May               Jun         Jul   Aug   Sep
                                         2001
                                                                     Expectmore, Getmore,

Source and Date: (Odense Cond size 12)
Bar Chart Example
Chart Title (FrnkGothITC Hv BT - 24pt)
30    BBB                                                  30.030.0
                                                   28.0
      GARTMORE
                                              25.0       25.0
25    Other                           23.0           25.0
      Other                                 20.0
                                 20.0
20                       18.0            20.0
                     15.0      15.0
15            14.0          15.0
                 10.0
         10.0 10.0
10
     5.05.0
5

0
         A           B           C            D            E

                                                                      Expectmore, Getmore,
Organisational Charts
                                              Name and Title
                                            Odense Cond size 12



                                              Andrew Fleming                           Roger Bartley
        Nick Henderson
                                               Deputy CIO,                              Gartmore
             Global
                                              Head of Equity                            Quantitative
         Fixed income
                                                Investments                              Strategies




                                Stephen Watson                 Philip Ehrmann                   Neil Rogan
 Robert Siddles
                                Global Portfolio                 Emerging                       Pacific Rim
  US Equities
                                     Team                           Markets                      Equities




                  Mark Crutchley
                                               Peter Whelpton                   Stephen Jones
                    Neil Mears
                                                 Japanese                         European
                  Gervais Williams
                                                   Equities                        Equities
                    UK Equities


                                                                                                              Expectmore, Getmore,
528c – 173/120/216


2727c – 70/104/228


326c – 0/187/181


389c – 204/241/0


123c – 255/205/0




                     Expectmore, Getmore,
Other Page Examples




                      Expectmore, Getmore,
Global Sector Trends
(Local Currency)
%
                                                                           Defensive sectors had
130
                                                                            outperformed cyclical
120
                                                                            sectors prior to
110
                                                                            September 11th
100
 90                                                                        As markets have rallied
 80                                                                         after the terrorist
 70                                                                         attacks, that pattern of
 60          Energy                                                         relative returns has
 50          Financials
                                                                            reversed
 40          Information Technology
 30          Telecoms
 20          Non-Cyclical Consumer Goods
      Dec          Feb           Apr            Jun   Aug   Oct   Dec



                                                                                  Expectmore, Getmore,
Source: Thomson Financial Datastream/Gartmore
As at 17th December 2001
Rebased to 100
Equity Market Trends
(Local Currency)
%                                                                                 All markets fell sharply
               US                                     UK                           in the immediate
120            Europe ex UK                           Japan                        aftermath of the
               Pacific Rim                            Emerging Markets             attacks on the US
110
                                                                                  Recent rally has seen
100                                                                                all markets return to
90                                                                                 their pre-attack levels
                                                                                  Rally seen as
80
                                                                                   evidence that markets
70                                                                                 had become oversold

60
      Dec          Feb          Apr             Jun      Aug     Oct     Dec



                                                                                         Expectmore, Getmore,
Source: Thomson Financial Datastream/Gartmore
As at 17th December 2001
Rebased to 100
The US Market 2001
A Volatile Time for Equities
Price Indexed                                                         Investors astoundingly
130                                                                    optimistic given bear
                         S&P 500 Composite Sector Average
                                                                       market and war
                         Nasdaq Composite Price Index
120
                         Dow Jones Industrials Price Index
110

100

 90

 80

 70

 60
      Dec         Feb         Apr         Jun    Aug   Oct   Dec
                                          2001
                                                                             Expectmore, Getmore,
Source: Thomson Financial Datastream
From 20th December 2000 to 20th December 2001
Rebased to 100
How Are Gartmore Focus Funds Different?

Focus Fund                          Typical Unit Trusts
25-30 stocks                        70-100 stocks
- easier to monitor
Index coverage secondary            Significant index coverage
 - only real conviction ideas
No padding                          Padding to reduce risk
- maximise your positive views
Size counts                         Small individual stock bets
- average individual stock bet 3%
Small moves can give big returns    Returns around the index




                                                                  Expectmore, Getmore,
Investment Themes
For The Year Ahead
Will economic activity recover in 2002?                                            Yes...
 Near term news flow will be mostly negative, but...
 Expect news to turn more positive as we go through the year
 Very easy monetary conditions and falling energy prices are the main drivers

Will the policy stance remain stimulative?                                         Yes…
 Little upward pressure on interest rates as inflation outlook remains benign
 Large fiscal stimulus expected, especially in the US
 Scope for major policy changes in Japan remain limited

Will equity markets rally in this environment?                                     Yes…
 Outlook for corporate profits improving, not yet fully priced in to markets
 Falling levels of risk aversion will also provide a boost to markets
 However, sector level valuation measures would suggest that limited
  upside exists in Technology given recent strong rally



                                                                            Expectmore, Getmore,
The Gartmore Stable Growth Fund
Top Ten Holdings
                                            Gartmore Absolute Growth            Fund size: £18.8 m
                                            6.2% London UK Equity 5.5%
                                            Royal
                                                                                No of holdings: 23
                                            Merrill Lynch Def Ret II 5.5%
                                                                                Estimated Gross
            Top ten holdings =
                                            Investors Capital 5.3%               Redemption Yield after
                   48.6%                    Jupiter Enhanced 5.0%                charges: 7.3%¹
              of the portfolio
                                                                                Weighted Hurdle Rate:
                                            City of Oxford 4.5%
                                                                                 -4.7%¹
                                            Exeter Financials 4.4%
                                            Murray Global Return 4.1%
                                                                                Weighted life of
                                            Jupiter Dividend & Growth 4.1%       investments: 4.5 years¹
                                            Jupiter Split 4.0%




                                                                                   Expectmore, Getmore,
Source: Gartmore as at 31st December 2001
¹ Source: DB (Fundamental Data)/ABN Amro
Biography
Ashley Willing - Senior Investment Manager
Ashley joined Gartmore in 1994 as an investment
analyst. He assumed responsibility in 1997 for
managing a number of UK Institutional pension
funds. From 1999 he was responsible for running
the Gartmore Pooled funds and the NatWest Life
funds, as well as being a member of the UK Retail
team. From the start of 2001 he relinquished his
Institutional responsibilities to concentrate fully on
Retail funds.
Ashley graduated from Loughborough University in
1994 with an Honours degree in Economics with
Politics. Prior to University, Ashley worked in
accounting for four years where he was involved in
the auditing of a number of UK Companies.

                                                         Expectmore, Getmore,

								
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