Gartmore's Global Balanced fund will continue to be overweight in US equities, particularly growth a...
Gartmore's Global Balanced fund will continue to be overweight in US equities, particularly growth areas likely to benefit from technology and telecoms activity.
Simon Melluish, manager of the pension portfolio, is particularly optimistic on the prospects of emerging markets, Pacific (ex Japan) and Continental Europe and is overweight in all three.
The balanced nature of the fund limits it from straying too far from benchmark weightings. Despite being bullish on emerging markets, the fund's holding in emerging equities still only totals 1.3%, while Pacific exposure accounts for 1.9%. North America remains the fund's largest constituent with a 40% weighting while Europe accounts for 20.4%.
The fund has invested in similar sectors around the world, especially telecoms and technology stocks, which Melluish considers favourable for growth. In the US, he is positive on providers of wireless technology.
He said: "The fundamentals are still way behind Europe and there is still a lot of market penetration to come."
One stock featuring in the portfolio is Nextel Communications, which added a record 540,300 domestic digital subscribers in the first quarter of the year. Nextel now has a worldwide subscriber base of approximately 5.6 million but Melluish is more interested in the firm's wireless potential.
Other weightings in the wireless market include Sprint PTS and VoiceStream Wireless Corp, a leading provider of digital wireless communications in the western United States. After its planned merger with Omnipoint and Aerial Communications, VoiceStream will be the fourth largest provider of wireless communications in the US.
Because of the fund's large US weighting, most of its top 10 holdings are in companies such as Cisco Systems, Microsoft and Sun Microsystems.
Melluish said that US holdings have historically achieved strong figures but the recovery seen in Asia has also contributed to the fund's performance over the year.
The fund, listed in the Global equity and bond sector, is ranked second in its sector in the year to 1 April 2000, posting returns of 15.4%. Over one month to 1 April the fund returned 7.5% compared to the sector average return of 3.2%.
The Standard & Poor's five star fund has an aggregate five year return of 13.2% compared to the sector average of 10.3%.
However, the fund posts higher than average volatility rating at 4.4, compared to the average 3.7.
As well as being overweight in emerging regions, the fund has strayed from its benchmark balance of equities and bonds. Normally to be listed in its sector it must not have more than 80% in either equities or bonds. The fund presently has a weighting of 84% equities versus 16% bonds, which Melluish said has strengthened the fund's recent performance. He said: "We have been underweight in bonds and overweight in equities over the last six months because we felt there was a strong chance of interest rates going up and putting pressure on the market."
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