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

2. … Now this is “Cautious”
That’s not “Cautious”

3. 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

4. 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….

5. A typical “cautious” investor

6. A “truthful” typical cautious investor

7. What is their attitude to risk?
Return
200
Our objective
180
160
140
120
100 80 60 40
Won’t accept 20 20 40 60 80
100
120
140
160
180
200
Market Level
For illustrative purposes only.

8. Some evidence that it’s happening% 8
Maximum Gain
Maximum Loss 6 4 2 -2 -4 -6 -8
Gartmore Cautious
IMA Active
IMA Balanced
IMA Cautious
IMA UK Equity &
Managed Acc
Managed
Managed
Managed
Bond Income
Source: Gartmore, as at 31st August 2007
Basis: Measured between 28/02/03 to 31/08/07

9. Performance: 1m 3m 6m 1yr 2yr 3yr Since Inception Percentile Ranking% 1m 3m 6m
1yr
2yr
3yr
Since Inception
Percentile Ranking
5th
22nd
24th
27th
28th
19th
35th
Relative to Sector Average
0.88
1.24
1.50
1.17
2.07
5.14
8.48
Source: Lipper/ Thomson Datastream, as at 31st August 2007 Basis: Mid to mid, net income reinvested and net of fees in Sterling

10. Protecting & adding value in asset allocation
Cautious
Optimistic
60% Bonds
40% Equities
40% Bonds
60% Equities
Structure of portfolio is key

11. 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

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

13. 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

14. 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

15. Just in case we forgot… …There’s a few financial problems out there
Prices of US Sub-Prime Mortgages (ABX.HE Indices)
110
100 90 80 70 60 50 40 30
AAA AA A
BBB
BBB-
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

16. Gartmore Cautious Managed Fund Current Asset Allocation
Top Ten Equity Holdings
Asset Name
% of Equities BP
7.91
GlaxoSmithKline
6.28
Royal Dutch Shell
6.01
HSBC
5.59
Vodafone
5.03
Aviva
4.00
AstraZeneca
3.20
HBOS
2.81
Unilever
2.80
Tesco
2.76
Cash 11.6%
Equities 46.1%
Bonds
42.3%
Fund size: £592m
Source: Gartmore/FactSet as at 30th September 2007

17. 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

18. 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 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 31st 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. 18