Outlook for “The Year of the Pig”

In the run up to the Chinese New Year, which starts on Sunday 18 February, Gartmore’s Charlie Awdry, Manager of the £350.6m Gartmore China Opportunities Fund, comments on his very recent trip to China and states why he remains upbeat about the outlook and prospects for investing in China in 2007, “The Year of the Pig”.

Charlie comments, “Chinese companies have enjoyed a strong run of profit growth and continue to invest for the future. The overall economy should benefit as companies put accumulated retained earnings to work which will support investment levels going forward. The authorities remain vigilant on increases in liquidity and food prices so we can expect more policy measures however they are still pro-growth.

Manufacturing capacity is rapidly being upgraded. Both private and state controlled enterprises are aggressively moving up manufacturing value chains driven by the prospects of higher margins, improving technical expertise and by the need to offset the margin pressures caused by an appreciating currency.

Demographic trends, urbanisation, and rising incomes continue to fuel robust consumer spending. Consumer demand and confidence is strong and department stores are a hive of activity. Our long held high conviction overweight in the consumer space continues as we expect companies to report very strong profit growth. We continue to examine and discover opportunities in the rapidly developing and under researched service sector of the economy, whilst in addition, continue to see upward revisions for economic growth expectations in 2007.”

The Gartmore China Opportunities Fund, which was established in 1983, also a Year of the Pig, has an impressive short-term and long-term performance record. The Fund is placed top decile over 1, 2, 4, 5, 6, 8, 9 and 10 years. Charlie Awdry took over management of the Fund on the 12th June 2006 and has delivered first decile performance since this date.