Gartmore welcomes increase in equity ISA investment limits

Paul Feeney, Head of Distribution at Gartmore, has welcomed the Government’s announcement that the annual investment limit for equity Individual Savings Accounts (ISAs) is to be increased from £7,000 to £7,200 from April 2008.

Paul comments, “Although the increase is smaller than the industry had hoped, and is still a year away, the rise in the investment limit for ISAs is great news for investors as it increases the tax-free investment opportunity.

“Since their launch in 1999, ISAs have proved incredibly successful, attracting 17 million people and investment of around £220 billion into cash and equities. Equity ISAs have enjoyed a fresh surge in popularity with £8.4bn invested into funds in 2006, the highest level in five years.

“In addition the announcement in December’s Pre-Budget Report that the government won’t be scrapping ISAs in 2010, as some had feared, means we can continue to build on the rising demand from consumers. The Government is also planning a package of reforms which include removing the mini/maxi distinction, bringing PEPs into the ISA wrapper and allowing mature child trust funds to rollover into ISAs. These changes would be a great step towards simplifying the savings industry and making it more flexible.” China steps into large aircraft market

Charlie Awdry, Manager of the Gartmore China Opportunities Fund, is anticipating spin-off benefits for the Chinese manufacturing sector if the government pushes ahead with its plan to inject funds into research and development for the jet airplane market. According to a statement issued by the government, Chinese Premier Wen Jiabao recently made “an important strategic decision” to move into the market, following China’s wish to become a major force in aviation and aerospace expressed in a science and technology paper last year. The Chinese financial magazine Caijing reports that seed funding of Rmb 50-60bn (£3-4bn) is planned for two main centres – Shanghai for commercial aircraft and Xian for military.

“China is due to begin deliveries of a mid-size, China-made aircraft, the ARJ21 model, in 2009. However this is the first time that it has indicated a wider commitment to R&D for the large airplane market. Europe’s Airbus has recently identified China as the second largest potential marketplace behind the US, forecasting demand for over 2,900 large jets valued at $349bn by 2025.

“In strategic terms, the move to develop proprietary technology in the aircraft market is an important change. It symbolises the start of a phase of industrial upgrading, where Chinese industry moves from assembly-type roles to the development of higher value-added activities, developing and incorporating its own techniques”.