Safe Port in a Sub-Prime Storm Gartmore’s Cautious Managed fund in today’s market Chris Burvill September 2007 For business and professional investors only. Please do not circulate to private investors.

2 Gartmore Cautious Managed Fund – G5434 Agenda >Why this sector is so important >Why the traditional approach works >Why it’s important now >How the Gartmore Cautious Managed Fund can weather the storm

3 Gartmore Cautious Managed Fund – G5434 What do Cautious Managed Funds do? >Hold no more than 60% in equities (often no less than 40%) >Genuinely “balanced” portfolios – as opposed to: –Balanced Managed (Max equities 85%) –UK Equity and Bond Income (Max equities 80%) –Active Managed (Max equities 100%) >… with different risk profiles: >Which appeal to cautious investors….

4 Gartmore Cautious Managed Fund – G5434 What is their attitude to risk? For illustrative purposes only Market Level 200 Return Our objective Won’t accept

5 Gartmore Cautious Managed Fund – G5434 Some evidence that it’s happening Source: Gartmore, as at 31 st July Gartmore Cautious Managed Acc IMA Active Managed IMA Balanced Managed IMA Cautious Managed IMA UK Equity & Bond Income Maximum Monthly Gain Maximum Monthly Loss %

6 Gartmore Cautious Managed Fund – G5434 Performance: % Source: Lipper/ Thomson Datastream, as at 31 st July 2007 Basis: Mid to mid, net income reinvested and net of fees in sterling

7 Gartmore Cautious Managed Fund – G5434 Protecting & adding value in asset allocation 40% Bonds60% Equities OptimisticCautious 60% Bonds40% Equities Structure of portfolio is key

8 Gartmore Cautious Managed Fund – G5434 How about more diversification? >Overseas equities? –Large UK companies provide international exposure –Does the cautious investor appreciate the risk –Does he need the risk? >Property? –Equities provide property exposure –Bonds track property yields –Diversify into property…or away from it? >Commodities? –Art –Stamps –Tea cosies

The Investment Background or “What’s all the fuss about?”

10 Gartmore Cautious Managed Fund – G5434 We all know the market is cheap…..isn’t it? >Traditional valuations look fine >Company balance sheets strong >World economy appears healthy >Interest rates set to fall

11 Gartmore Cautious Managed Fund – G5434 If only it were that easy >Earnings are cyclically high >Rates falling for governments – rising for everyone else? >Hard to divorce Financial Sector from everything else

12 Gartmore Cautious Managed Fund – G5434 Just in case we forgot… …There’s a few financial problems out there The indices are published by Markit, based on credit default swaps on MBS backed by sub-prime home equity loans. Each series contains five-sub indices, based on credit rating. The ratings range from AAA to BBB-. The indices roll every six months; This chart is based on the 07-1 index AAAAAABBBBBB Prices of US Sub-Prime Mortgages (ABX.HE Indices)

13 Gartmore Cautious Managed Fund – G5434 Gartmore Cautious Managed Fund Current Asset Allocation Top Ten Equity Holdings Current Asset Allocation Bonds 42.6% Equities 46.9% Cash 10.6% Source: Gartmore/Factset, as at 31 st August 2007 Fund size: £573m Asset Name% of Equities BP7.88 GlaxoSmithKline6.36 Vodafone6.35 Royal Dutch Shell5.86 HSBC5.62 Aviva3.91 AstraZeneca3.24 Unilever2.88 Royal Bank of Scotland 2.80 HBOS2.74

14 Gartmore Cautious Managed Fund – G5434 Conclusion >Cautious Managed Funds have a crucial role >Traditional cautious managed funds – more than capable of fulfilling that role –Investment parameters –Diversification >Rarely have those virtues been more relevant >Still plenty of potential for absolute returns

15 Gartmore Cautious Managed Fund – G5434 Important Information >For business and professional investors only. This document should not be circulated to private investors. >Past performance is not a guide to future performance. >The value of investments and the income from them may go down as well as up and you may not get back your original investment. >When a Fund holds high yielding bonds there is an increased risk of capital erosion through default or if the redemption yield is below the income yield. You should also be aware that economic conditions and changes to interest rate levels may significantly impact the values of high yield bonds. >The annual management fee is currently charged to the capital of the Fund. Whilst this increases the yield, it will restrict the potential for capital growth. >The level of yield is subject to fluctuation and is not guaranteed. >More than 35% of the Fund is likely to consist of Government and other Public Securities issued by one issuer. >Please ensure clients read the Simplified Prospectus/Key Features Document before investing. >All opinions and estimates constitute our judgment as of the date of this presentation and are subject to change without notice. Clients of Gartmore Group or any individual involved in the preparation of this material may at any time have a position in securities or options of the issuers named within this material. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. >Gartmore Group consists of the following affiliates of Gartmore Investment Management Ltd: Gartmore Fund Managers Ltd, Gartmore Investment Ltd, Gartmore Investment Japan Ltd, Gartmore Global Partners*. *SEC Registered. >These asset management affiliates of Gartmore Investment Management Ltd do business under the trade name of 'Gartmore Group'. >All data as at 31 st August 2007, unless otherwise stated. >Issued by Gartmore Investment Limited (GIL). Gartmore’s authorised unit trusts and OEICs are managed by Gartmore Fund Managers Limited (GFM). Both GIL and GFM are authorised and regulated by the Financial Services Authority. Gartmore House, 8 Fenchurch Place, London EC3M 4PB.