Reasons to be cheerful

“Amid the current investment noise, there are still reasons to be cheerful,” say Roger Guy and Guillaume Rambourg, Managers of the Gartmore European Selected Opportunities Fund and the Sicav Continental European Fund.

The eurozone's unemployment rate fell to 6.9% in July, the lowest level ever recorded since the start of the series in 1993. Eurozone GDP grew by 0.3% during the second quarter of 2007, compared with the first quarter and with the recent market turmoil, expectations of a hike in eurozone interest rates have diminished, according to Germany’s ZEW, the Centre for European Economic Research.

According to Roger and Guillaume, “the likelihood of further negative new flow affecting the markets cannot be discounted just yet, but empirical evidence suggests that advanced economies are growing healthily, particularly in Europe”. Germany's export-led recovery is now morphing into stronger domestic demand as business investment and construction spending recover. “Even with localized problems in countries like Spain and Ireland, the rest of the world should be able to absorb recent market turbulence and a more protracted US slowdown”, commented Roger and Guillaume.