Gartmore US Equities

1
Gartmore US Equities
Excellence in Asset Management

• Simon Melluish Head of US Equities

Expectmore, Getmore,
29th January 2002
2
Agenda

• People
• Investment process
• Funds
• Gartmore American Growth Fund
• sector stances
• top 10 holdings
• New role for small caps
• Appendix

3
Organisation Chart

• Gartmore has access to dedicated portfolio
  constructors and research analysts through its
  sister company, Villanova Capital

Peter Chambers Global CIO
Neil Rogan Head of Intl Equities
Young Chin US CIO
Villanova Research Jason Kotik Kent Madden Fran
Radano Chris Welch Chip Zhu
Villanova Portfolio Constructors William
Miller Chris Baggini Chuck Bath Paul
Cluskey Aaron Harris Ann RaffertyJean Rhee Kwang
Chin Kim
Gartmore Research Liam Pagliaro Richard
Urwin Jamie Lewin Katie Flanagan Gavin
Cartledge Robert MurphyAsim Nurmohamed
Gartmore Portfolio Constructors Simon
Melluish Nick Ford Simon Moss Ben Walker
4
Investment Process

• Robust and disciplined investment process
• Separate research and portfolio construction
  functions
• Sell discipline as important as buying
• An evolving process

Ideas Generation
Research
Sell Disciplines
PortfolioConstruction
PortfolioMonitoring
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Gartmore American Growth FundRelative to SP 500
Composite Index
Underweight
Overweight
Industrials
Healthcare
Materials
Unassigned
Consumer Staples
Energy
Financials
Telecommunications
Information Technology
Utilities
Consumer Discretionary
Source FactSet as at 24th January 2001
6
Gartmore American Growth FundTop Ten Holdings
Microsoft Corp 5.0
Exxon Mobile Corp 2.9
Fannie 2.6
Pfizer 2.5
Top ten holdings 26.4 of the portfolio
Wal-Mart Store 2.5
Citigroup 2.4
Procter Gamble 2.3
General Electric 2.2
Intel Corp 2.0
American International Group 2.0
Source FactSet as at 24th January 2002
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Maximum Bullish Outlook for Small Caps
Average Price Performance Before and After Last
Four Recessions

• We believe
• Small caps should be owned in periods of economic
  recession
• Buy when macroeconomic Newsflow is bleak
• Out-performance is strong coming out of
  recessions
• This time will not be different

R-3 Three months prior to the first day of the
first quarter that registered negative GDP
growthR3 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
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Appendix
9
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.

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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.

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
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Organisational Charts
Name and TitleOdense Cond size 12
Nick Henderson GlobalFixed income
Andrew Fleming Deputy CIO, Head of
Equity Investments
Roger Bartley Gartmore Quantitative Strategies
Stephen Watson Global Portfolio Team
Philip Ehrmann Emerging Markets
Neil Rogan Pacific RimEquities
Robert Siddles US Equities
Peter Whelpton Japanese Equities
Stephen Jones European Equities
Mark Crutchley Neil Mears Gervais Williams UK
Equities
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528c 173/120/216
2727c 70/104/228
326c 0/187/181
389c 204/241/0
123c 255/205/0
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Expectmore, Getmore,
19
Global Sector Trends (Local Currency)

• Defensive sectors had outperformed cyclical
  sectors prior to September 11th
• As markets have rallied after the terrorist
  attacks, that pattern of relative returns has
  reversed

Source Thomson Financial Datastream/GartmoreAs
at 17th December 2001Rebased to 100
20
Equity Market Trends (Local Currency)

• All markets fell sharply in the immediate
  aftermath of the attacks on the US
• Recent rally has seen all markets return to their
  pre-attack levels
• Rally seen as evidence that markets had become
  oversold

Source Thomson Financial Datastream/GartmoreAs
at 17th December 2001Rebased to 100
21
The US Market 2001A Volatile Time for Equities

• Investors astoundingly optimistic given bear
  market and war

Price Indexed
130
SP 500 Composite Sector Average
Nasdaq Composite Price Index
120
Dow Jones Industrials Price Index
110
100
90
80
70
60
Dec
Feb
Apr
Jun
Aug
Oct
Dec
2001
Source Thomson Financial DatastreamFrom 20th
December 2000 to 20th December 2001Rebased to 100
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How Are Gartmore Focus Funds Different?
 
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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

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The Gartmore Stable Growth FundTop Ten Holdings

• Fund size 18.8 m
• No of holdings 23
• Estimated Gross Redemption Yield after charges
  7.3¹
• Weighted Hurdle Rate -4.7¹
• Weighted life of investments 4.5 years¹

Gartmore Absolute Growth 6.2
Royal London UK Equity 5.5
Merrill Lynch Def Ret II 5.5
Investors Capital 5.3
Top ten holdings 48.6 of the portfolio
Jupiter Enhanced 5.0
City of Oxford 4.5
Exeter Financials 4.4
Murray Global Return 4.1
Jupiter Dividend Growth 4.1
Jupiter Split 4.0
Source Gartmore as at 31st December 2001¹
Source DB (Fundamental Data)/ABN Amro
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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.