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Class conscious

Gartmore is making its cautious managed fund the focal point of this year&#39s

Isa campaign. This fund is an Oeic that invests a maximum of 60% in UK

equities, with the remainder going into investment-grade corporate bonds.

It will initially have 60 equity and 25 bond holdings and aims to provide

income of between 4.5 and 5%, with the prospect of capital growth.

Chris Burvill will manage the fund. He joined Gartmore last month after 10

years at Investec, where he managed the cautious managed and UK value

funds. He has also managed the Temple Bar and City of London investment

trusts.

On the equity side, the fund will adopt a barbell approach. This means

Burvill will hold stocks at the highand low-yield extremes rather than

making the dividend yield on every stock count. He says that when a company

is trading badly, some fund managers will ignore the brand name and

positive aspects such as sales ratio and market position but he will try to

focus on these.

For the bond element, Burvill favours telecoms because consolidation has

meant the remaining companies are better capitalised, with strong balance

sheets. Exposure to sectors such as financials is likely to come through

the equity element because of the risks of high gearing within a corporate

bond context.

The fund could suit investors who need income but want a combination of

equities and less volatile investment-grade corporate bonds. As the fund

has the flexibility to move across asset classes up to the specified

limits, Burvill must ensure he has the right mix to suit changing

conditions.

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