Concerned about commercial property, think Global Focus

While attention is usually focused on the state of the UK housing market, concern is increasingly mounting about the health of the commercial-property sector. As the recent interest-rate rises take their toll, a number of fund companies have felt obliged to impose exit charges to stem a wave of selling by disappointed investors in their commercial-property funds. Adding to the cocktail of concerns is the spillover from problems in the US sub-prime mortgage lending market. As the US housing market has deteriorated, sub-prime loan delinquencies have risen. Historically, this would have been a problem just for lenders but more recently such debt has been packaged and sold on to other investors in the form of collateralised debt obligations or CDOs. The losses are most acute for those holding the riskier tranches.

Against such a backdrop, an unconstrained ‘best ideas’ fund that is designed to avoid economic black spots can become more appealing. The Gartmore Global Focus Fund, run by Neil Rogan, contains the manager’s 30-40 best ideas from all over the world. Current holdings for both the OEIC and SICAV versions include Apple (iPhone expectations), Nintendo (the Wii factor), China Construction Bank (strong loan growth), BHP Billiton (commodities boom) and MAN (Eastern European demand for trucks). The Global Focus Fund is rated AAA by Standard & Poor’s and has been top quartile over one, two, three, four, five and six years. Neil Rogan is AAA rated by Citywire.