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Head of Gartmore MultiManager Tony Lanning
looks at events over the last month.

May saw global markets rocked by massive investor uncertainty regarding the global economic outlook, exacerbated by a variety of macro level developments. During the month, factors ranging from the eurozone budget crises (most notably Greece), to the major oil spill in the Gulf of Mexico, to rapidly-mounting tension between North and South Korea all added to volatility in the markets.

Global stock markets tumbled and high yield bonds were routed. Government bonds, on the short end, rallied sharply in the latest reincarnation of a flight to safety. Central banks were back in action with the European Central Bank (ECB) announcing a €750 billion financial rescue package geared towards combating rising financial market tension, triggered by a worldwide fear of government finances. Initially the ECB’s initiative was met with market euphoria, but quickly came under substantial scrutiny and questioning as to its effectiveness and scope. Elsewhere, bank counterparty concerns were reignited, evidenced by LIBOR rising sharply. Commodity prices dipped substantially as the global growth outlook seemed to darken.

However, it is worth noting that for much of the world, there was data which gave more cause for optimism during May. In fact, much of this data pointed to increased strength and a broadening economic recovery. In addition, corporate earnings have generally remained strong since the start of this year. In the US, a slew of companies reported first quarter results ahead of expectations. The pattern was similar, though slightly less positive, in Europe. Despite a series of developments and concerns which drown these positive points during May, the global economy’s trajectory continues to be positive on balance.

We are yet to see if there will be any eurozone sovereign debt contagion. It is also likely that many of the short term shocks felt by the global markets in May will subside in the coming months. Despite inflationary pressures being priced in for the long run by bond markets, this is likely to be only a concern once economic growth picks up. By then, monetary authorities would be in a position to raise rates from their current low levels.

Although the outlook may appear muddied by recent events, overall we hold a positive medium term outlook for equities. Monetary policy in the western world remains accommodative, economic data releases are positive and equity valuations remain attractive.

Tony Lanning, Head of Gartmore MultiManager, as at 31 May 2010

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These views represent the opinion of the Gartmore MultiManager Team and therefore may differ from those expressed by individual investment desks at Gartmore.

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. Past performance is not a guide to future performance. Please ensure investors read the Simplified Prospectus before investing. The views expressed are Gartmore's views and must not be taken as an offer to buy or sell units or shares in the markets mentioned. These views are provided for information purposes only. The views expressed are as at 30 June 2010 and are subject to change.

• This entry was posted on: Wednesday, 30 June 2010 11:57 BST
• Filed under: MultiManager
• Tags: Gartmore MultiManager Range, Tony Lanning
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