The firm feels the fund will struggle to maintain its track record, citing the likelihood that protecting its floor price in current market conditions will adversely affect its target of capital growth.
The safeguard fund launched in May 1996 and is in the IMA guaranteed/protected sector. It has been run by State Street’s Christopher Flood since June 2007. In the past 12 months, it has returned 1.7 per cent compared with an average of 3.4 per cent for the sector.
Gartmore favours a merger into the multi-manager absolute return fund, which is managed by Tony Lanning, as it aims to offer absolute returns over the long term but does not offer a guaranteed option.