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Gartmore mixes government bonds and corporates

Gartmore has added the Gartmore Sicav European bond fund to its offshore fund range.

The fund invests in government bonds as well as investment-grade corporate bonds. It aims for capital growth over the long-term and is expected to have around 52 holdings including Spanish, German and Swedish government bonds, plus corporate bonds from Tesco, hotel group Hilton and German chemical company Bayer.

The fund is benchmarked against the Merrill Lynch Pan Europe broad market index and is managed on a top-down and bottom-up basis by Richard Hodges. Hodges also manages the other new bond fund in the Sicav range, the Gartmore Sicav European corporate bond fund and has been managing the Gartmore capital strategy European bond fund since 1999.

Hodges will select bonds for this fund in the same way as the other bond funds he manages. He will rely on research from Gartmore’s credit analysts, but this will be complemented by data from equity analysts to give a fuller picture of the creditworthiness of the companies issuing the bonds.

This fund will provide investors with the security of lower-risk government bonds with the higher returns available on corporate bonds, without exposing investors to the riskier high-yield end of the bond market. However, the yields are unlikely to spectacular and will not suit all investors.

According to Standard & Poor’s, two of the Gartmore Sicav funds are first quartile, two are second quartile and one is fourth quartile based on £1,000 invested on a bid-to-bid basis with gross income reinvested over one year to July 8, 2002. One-year past performance for the other funds is not available because they are recent additions to the Sicav range.

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Investment risks

The value of an investment and any income from it can fall as well as rise and you may not get back the amount originally invested. Forecasts and past performance are not a guide to future performance. Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. These are Neptune’s views and as such this document is deemed to be impartial research. We do not undertake to advise you of any change to our views.

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