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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
811-08495
(Investment Company Act file number)
GARTMORE MUTUAL FUNDS
(Exact name of registrant as specified in charter)
1200 RIVER ROAD, CONSHOHOCKEN, PENNSYLVANIA 19428
(Address of principal executive offices) (Zip code)
ELIZABETH A. DAVIN, ESQ.
NATIONWIDE PLAZA
COLUMBUS, OHIO 43215
(Name and address of agent for service)
Registrant's telephone number, including area code: (484) 530-1300
Date of fiscal year end: OCTOBER 31, 2003
Date of reporting period: APRIL 30, 2003
Form N-CSR is to be used by management investment companies to file reports
with the Securities and Exchange Commission (the "Commission") not later than
ten (10) days after the transmission to stockholders of any report that is
required to be transmitted to stockholders under Rule 30e-1 under the Investment
Company Act of 1940, as amended (17 CFR 270.30e-1) (the "1940 Act"). The
Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is
not required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, D.C. 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. 3507.
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ITEM 1. REPORTS TO STOCKHOLDERS.
Include a copy of the report transmitted to stockholders pursuant to Rule
30e-1 under the 1940 Act (17 CFR 270.30e-1).
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SEMIANNUAL REPORT
April 30, 2003
SECTOR SERIES
Gartmore Global Financial Services Fund
Gartmore Global Health Sciences Fund
Gartmore Global Technology and Communications Fund
Gartmore Global Utilities Fund
LEADERSHIP SERIES
Gartmore Nationwide Leaders Fund
Gartmore U.S. Growth Leaders Fund
Gartmore Worldwide Leaders Fund
INTERNATIONAL SERIES
Gartmore Emerging Markets Fund
Gartmore International Growth Fund
Gartmore International Small Cap Growth Fund
CONCEPT SERIES
Gartmore High Yield Bond Fund
Gartmore Millennium Growth Fund
Gartmore Value Opportunities Fund
Gartmore Micro Cap Equity Fund
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GARTMORE GLOBAL INVESTMENTS
THE NEXT GENERATION OF ASSET MANAGEMENT
At Gartmore Global Investments, we look beyond traditional approaches, offering
sophisticated solutions designed not only to manage the heightened risks of
today's markets but also to capitalize on them, delivering new sources of
growth.
LEADING-EDGE SKILLS AND RESOURCES
We are a global asset manager with nearly $70 billion1 under management and a
professional staff on three continents. With our worldwide reach and deep
experience in both alternative and traditional investments, we are uniquely
positioned to pursue opportunities wherever they arise, in all market climates.
- - Alternative investment strategies:
Solutions for every need and market
We offer a broadly diversified range of mutual funds, separate accounts and
alternative investments, designed to help clients manage risk and make
money, no matter which way markets move.
- - Time-tested management disciplines:
Helping to ensure that the best ideas rise to the top
Our disciplined investment process ensures that our clients benefit from
our best thinking-by putting ideas and people into creative conflict
through systematic checks and balances.
- - Progressive approaches:
Building portfolios for markets that don't stand still Our investment
offerings are engineered to serve as building blocks within new asset
allocation strategies adapted to today's market realities. We're committed
to providing guidance and tools to help our clients incorporate these new
approaches into their own investment strategies.
Gartmore Global investments is a member of Gartmore Group.
The following asset management affiliates of Nationwide do business under the
trade name "Gartmore Group":
Gartmore Capital Management Ltd3
Gartmore Fund Managers Ltd3
Gartmore Global Partners2,3
Gartmore Investment Ltd3
Gartmore Japan Ltd3
Gartmore Morley Capital Management, Inc.2
Gartmore Mutual Fund Capital Trust2,4
NorthPointe Capital LLC2
Gartmore SA Capital Trust2,4
Additional information can be found online:
WWW.GARTMOREFUNDS.COM
1. As of April 30, 2003.
2. These are SEC-registered investment advisers based in the United States.
3. These advisers are subsidiaries of Gartmore Investment Management plc,
which ultimately reports to Nationwide.
4. Together, these advisers do business as Gartmore Global Investments.
Gartmore Global Investments is the investment adviser to Gartmore Funds. "Look
Beyond." and the Family of Funds Diagram are service marks of Gartmore Global
Investments, Inc. Nationwide is a registered service mark of Nationwide Mutual
Insurance Company.
Securities offered through Gartmore Distribution Services,Inc., Member NASD.
This report is for the information of shareholders of Gartmore Funds. For more
complete information, including all sales charges and expenses, please ask your
representative for a prospectus. Please read it carefully before you invest or
send money.
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Look BEYOND with Gartmore Funds.
TAKING DIVERSIFICATION TO THE NEXT LEVEL
CORE Series
Broad market portfolios featuring growth, value and blend styles as well as
balanced and fixed income funds designed to form the foundation of an asset
allocation program.
INTERNATIONAL Series
International growth and emerging markets portfolios designed to capture
overseas investment opportunities.
SECTOR Series
Global sector portfolios focused on specific industries, including financial
services, health sciences, technology and utilities.
LEADERSHIP Series
Concentrated stock portfolios specializing in major world markets that feature
the best ideas of our global investment team.
CONCEPT Series
Opportunistic portfolios that can vary significantly in style, market cap, risk
and asset class.
CONTENTS
2 MESSAGE TO SHAREHOLDERS
4 MARKET PERSPECTIVES
SECTOR SERIES
6 Gartmore Global Financial Services Fund
8 Gartmore Global Health Sciences Fund
10 Gartmore Global Technology and
Communications Fund
12 Gartmore Global Utilities Fund
LEADERSHIP SERIES
23 Gartmore Nationwide Leaders Fund
25 Gartmore U.S. Growth Leaders Fund
27 Gartmore Worldwide Leaders Fund
INTERNATIONAL SERIES
36 Gartmore Emerging Markets Fund
41 Gartmore International Growth Fund
46 Gartmore International Small Cap Growth Fund
CONCEPT SERIES
58 Gartmore High Yield Bond Fund
62 Gartmore Millennium Growth Fund
66 Gartmore Value Opportunities Fund
71 Gartmore Micro Cap Equity Fund
86 NOTES TO FINANCIAL STATEMENTS
+ ABOUT PERFORMANCE
The performance of the fund, as reflected on page 62, includes performance
of its respective predecessor funds prior to reorganization. In addition,
the performance of the Class A, Class B and Class C shares prior to such
date has been restated for sales charges but not for fees applicable to
such classes. The reorganization of the fund took place May 11, 1998. The
predecessor to the Gartmore Millennium Growth Fund was the Financial
Horizons Investment Trust Growth Fund. The Gartmore Mutual Funds were
preceded by funds of the Nationwide Mutual Funds, and the Nationwide
Investing Foundation or Nationwide Investing Foundation II.
Inception-to-date class-specific total returns can be found in the
Financial Highlights, which begin on page 79.
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MESSAGE TO SHAREHOLDERS
April 30, 2003
DEAR FELLOW SHAREHOLDERS,
The stock market's recent positive turn has provided some bright news in what
has been a painful three-year cycle of negative returns and searing market
volatility. We don't know when we'll see calmer days, but we're positioning
ourselves to thrive amid any future market conditions.
Given the recent turbulent investment environment, a number of our competitors
have been forced to significantly cut costs and valuable resources. While we've
had to make challenging resource allocation decisions, we've avoided major cuts.
Gartmore Global Investments has prospered during the lengthy bear market with
what we believe is a winning formula:
- - A strong investment management team and well-managed processes
- - A focus on delivering enhanced risk-adjusted performance
- - A diverse product line designed to help meet our clients' varying needs
- - A burgeoning distribution network geared to ensure that our asset-gathering
initiatives succeed
This letter is dedicated to sharing with you Gartmore Global Investments'
successes and ongoing strategies. Our success as a firm directly affects our
ability to deliver quality products and services to you, the shareholders of the
Gartmore Funds. The primary driver of our success is our employees, the firm's
greatest single resource. By maintaining financial stability and continuing to
grow our asset base and revenues, we can retain the best employees. Our people
help to ensure that we continue to bring you quality mutual fund products and
services.
RECENT SUCCESSES
ATTRACTIVE STABLE-VALUE AND ASSET ALLOCATION FUNDS One product that has garnered
a great deal of interest from investors, advisors and the press is our
stable-value product, the Gartmore Morley Capital Accumulation Fund. This Fund's
assets (all share classes) have grown from $142 million as of Oct. 31, 2002, to
$411 million as of April 30, 2003, nearly a threefold increase. In view of the
volatile equity markets and low bond yields, this product can offer lower
volatility than that offered by many equity and fixed-income products.
In the immediate future, the Fed may cut interest rates to ensure that the
economic recovery takes hold and to ward off deflation. However, in the long
run, we believe interest rates will rise. In this environment, bond funds will
likely face a loss in principal value. However, stable-value funds are designed
to help preserve principal during periods of rising interest rates.
[PHOTO]
D. BRUCE JOHNSTON
President and CEO
Gartmore Global Investments
The past six months also have seen renewed investor interest in asset
allocation, which has driven a surge in assets into the Gartmore Investor
Destinations Funds, our series of five asset allocation funds. These Funds offer
risk levels ranging from conservative to aggressive, and give investors a choice
of well-diversified portfolios designed to provide the desired balance of risk
and return.1
Upon achieving their three-year histories on March 31, 2003, the Gartmore
Investor Destinations Funds were eligible for rating by Morningstar. The Funds
received the following ratings:2
GARTMORE MORNINGSTAR NUMBER OF
INVESTOR RATING AS OF MORNINGSTAR FUNDS
DESTINATIONS APRIL 30, CATEGORY IN EACH
FUND 2003 NAME CATEGORY
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Aggressive ***** U.S. Large-Cap Growth 481
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Moderately Aggressive ***** U.S. Large-Cap Growth 481
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Conservative **** Domestic Hybrid 396
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Moderately Conservative *** Domestic Hybrid 396
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Moderate ** Domestic Hybrid 396
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NOTE: Morningstar ratings are for the three-year period ended April 30, 2003
We continue to believe that asset allocation is one of the most important
concepts for investors to consider as they pursue their investment objectives.
Well-developed asset allocation plans can help match investors' goals and return
expectations with their risk levels and financial objectives.
INVESTMENT PERFORMANCE
Young Chin, Gartmore Global Investments' Global Chief Investment
Officer-Equities, discusses investment highlights in his letter in the next
section.
ONGOING STRATEGIES FOR FUTURE SUCCESSES
In addition to our relentless focus on performance, at Gartmore Global
Investments we also are concentrating on introducing new products and
distributing them to a wider audience.
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2 SEMIANNUAL REPORT 2003
PRODUCT DIVERSITY
We create and maintain a lineup of high-quality products that help meet
investors' needs as market conditions change. This means developing both core
(traditional) products and specialty, or more innovative, products.
CORE PRODUCTS such as the Gartmore Nationwide Fund and the Gartmore Growth Fund
are managed to adhere closely to their style mandates. The intended result is
performance in line with or slightly above that of their benchmarks and peers.
SPECIALTY PRODUCTS such as the Gartmore Global Health Sciences Fund (sector
fund) and the Gartmore U.S. Growth Leaders Fund (focus fund) offer clients
innovative ways to meet their investment objectives. Sector funds constrain
their investment universe to one particular sector of the economy, while focus
funds limit the number of stocks in a portfolio. We believe that sector funds
can provide shareholders with greater diversification and the opportunity for
potential outperformance. Focus funds add extra return potential to a portfolio,
but they also come with greater risk.
In addition, Gartmore Global Investments recently has developed a number of
innovative investment vehicles that are meant to appeal to both risk-averse and
risk-tolerant investors. First, the Gartmore Nationwide Principal Protected Fund
offers investors the ability to protect their principal while still
participating in the equity market.3 The Fund seeks to provide investors with
some of the upside earnings potential available in rising equity markets, but
endeavors to provide a hedge against a falling equity marketplace.
Another specialty product is the Gartmore Long-Short Equity Plus Fund, designed
to outperform the S&P 500 Index through hedging strategies.4 This fund employs a
combination of long and short positions to obtain a market-neutral exposure. It
attempts to deliver above-market returns by buying stocks that are likely to
outperform their peers and shorting stocks that may underperform their peers.
DISTRIBUTION
Another key strength has been our expanded distribution capabilities. Broadening
our channels has helped us offer our products to you in many ways through your
trusted financial advisor. In addition, greater distribution can help grow
assets and permit us greater leverage in negotiating with our service providers,
which could result in lower fund family expenses.
To further enhance our distribution efforts, Wilson (Bill) Santos joined
Gartmore Global Investments in January 2003 as Executive Vice President of
Distribution reporting to me. Bill manages our retail distribution efforts,
including sales, marketing and product development. He is well known in the
asset management industry and brings with him a wealth of experience.
OUTLOOK
As investors ourselves, we know how disconcerting the market's poor performance
and wild volatility can be. We thank you for placing your confidence in us and
for allowing us to help you achieve your financial goals.
We remain focused on our three key themes-investment performance, product
diversity and distribution. We will keep you updated on our progress in upcoming
shareholder reports.
[SIGNATURE]
D. BRUCE JOHNSTON
President and CEO, Gartmore Global Investments
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1. By investing in the Gartmore Investor Destinations Funds, you receive asset
allocation services that you would not receive if you invested in the
underlying funds directly. However, because you are investing indirectly in
other funds through a Gartmore Investor Destinations Fund, you are paying a
proportionate share of the applicable expenses of the underlying funds
(including management fees, as well as the expenses of the Gartmore
Investor Destinations Fund).
2. For each fund with at least a three-year history, Morningstar calculates a
Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure
that accounts for variation in a fund's monthly performance (including the
effects of sales charges, loads and redemption fees), placing more emphasis
on downward variations and rewarding consistent performance. The top 10% of
funds in each category receive 5 stars, the next 22.5% receive 4 stars, the
next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10%
receive 1 star. (Each share class is counted as a fraction of one fund
within this scale and rated separately, which may cause slight variations
in the distribution percentages.) The Overall Morningstar Rating for a fund
is derived from a weighted average of the performance figures associated
with its three-, five- and 10-year (if applicable) Morningstar Rating
metrics.
Morningstar Rating is for the A share class only; other classes may have
different performance characteristics. Fund ratings are subject to change
monthly. Despite high ratings, the funds may have experienced periods of
negative performance.
3. Purchases can only be made during the offering period. When the investment
is held for the entire seven-year period, provided no shares are redeemed
and all dividends and distributions are automatically reinvested, the fund
will be worth at least the initial investment at the end of the offering
period less any sales charges or redemptions and extraordinary expenses.
Unless held in a tax-deferred account, U.S. income taxes are due yearly on
the interest and dividends earned by the Fund's investments, even if you
reinvest your dividends. If the investment is made through a retirement
account, taxes on dividends will generally not be due until they are
distributed from the account.
4. The Gartmore Long-Short Equity Plus Fund invests at least 80% of its net
assets in long and short positions. The Fund's investment process offers
the potential for consistent excess returns over those of the S&P 500
Index, the Fund's benchmark. The Fund's investment process combines
positions in S&P 500 Index instruments such as index futures and index
swaps with a primarily market-neutral exposure in individual long and short
positions in equity securities. The Fund is speculative and involves a high
degree of risk. The Fund may be leveraged, and performance can be volatile.
An investor could lose all or a substantial amount of his or her
investment. The Fund's high fees and expenses may offset the Fund's trading
profit.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Investors cannot invest
directly in market indexes.
Performance returns assume reinvestment of all distributions. The investment
return and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Investing in mutual funds involves market risk, including possible loss of
principal. There is no assurance that the investment objective of any fund will
be achieved.
Funds that concentrate on specific sectors or a relatively small number of
securities may be subject to greater volatility than a more diversified
investment.
A plan of regular investing does not assure a profit or protect against a loss
in declining markets. You should consider your financial ability to continue
your purchase through periods of fluctuating price levels.
Securities offered through GARTMORE DISTRIBUTION SERVICES, INC., Member NASD.
For more information about Gartmore Funds, including all charges and expenses,
please call 800-848-0920 or download a prospectus at www.gartmorefunds.com.
Please read it carefully before investing any money.
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2003 SEMIANNUAL REPORT 3
INVESTMENT HIGHLIGHTS
APRIL 30, 2003
Taking a look back at the past six months, we find that the markets were again
volatile. As an example, in November 2002 and April 2003, the S&P 500 Index rose
5.88% and 8.23%, respectively, but it fell during the middle months and posted
only a slight gain in March.
During the second half of the period, in particular, the market experienced
extreme daily swings, reacting to each bit of news about the war in Iraq.
Amid such volatility, you may be considering taking steps to reduce the amount
of risk in your investment portfolio. We also are focused on risk.
MISSION: TO PROVIDE SUPERIOR RISK-ADJUSTED RETURNS Our main goal during the
lengthy bear market has been to provide our investors with funds that have the
potential to deliver consistent and superior risk-adjusted performance as
compared to their appropriate benchmarks and stated peer groups.
PROCESS: EMPLOY A COMBINATION OF FUNDAMENTAL AND QUANTITATIVE TECHNIQUES
During the past several years, we have made many enhancements to our flagship
fund, the Gartmore Nationwide Fund (formerly the Gartmore Total Return Fund),
with good results. Now we are in the process of implementing those changes to
more of our funds, as described below.
In September 2000, we added a new manager to the Gartmore Nationwide Fund and
also added the research services of Gartmore's analyst team. It is our
philosophy, where it is appropriate, to EMPLOY A TEAM-ORIENTED INVESTMENT
MANAGEMENT APPROACH to ensure that adequate personnel resources are devoted to
our funds.
We also supplemented the Fund's fundamental research efforts with quantitative
processes. Today, we balance taking advantage of good investment opportunities
that can contribute to solid investment results with our additional goal of
delivering positive investment results consistently. The addition of
quantitative processes has helped us accomplish both of these objectives. Our
goal is to enhance all of our proprietary funds to TAKE ADVANTAGE OF BOTH
FUNDAMENTAL RESEARCH AND QUANTITATIVE PROCESSES.
[PHOTO]
YOUNG CHIN, Global Chief Investment Officer-Equities Gartmore Global Investments
We continue to focus on each fund's overall construction to ensure that we are
comfortable with the degree to which each portfolio deviates from its benchmark.
We strive to add value largely through superior stock selection. Our goal is to
maintain well-diversified portfolios that can outperform their benchmarks
through many individual stock ideas.
Our quantitative research efforts also CONCENTRATE ON OBTAINING HIGHER-QUALITY
DATA AND INTERPRETING THIS DATA BETTER THAN OUR COMPETITORS. For instance,
instead of using standard earnings estimate numbers, we focus on those estimates
of only the best Wall Street analysts. We also employ techniques that help us
avoid investing in companies that could be on the verge of bankruptcies (such as
Enron Corp. and WorldCom Group).
The Gartmore Nationwide Fund continues to employ fundamental research, but our
research team for the Fund is now global, with analysts located around the
world. Our analysts perform in-depth global industry and company analysis. We
constantly search for short-term stock catalysts such as better-than-expected
earnings, anticipated mergers and management changes.
Good stock picking alone is not enough to beat an index or outperform a fund's
peer group. To accomplish these goals, we are bringing together a variety of
resources that involve rigorous, bottom-up fundamental research on companies,
industries and countries as well as sophisticated portfolio analysis and
risk-control techniques.
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4 SEMIANNUAL REPORT 2003
PERFORMANCE: SUCCESS STORIES
GARTMORE NATIONWIDE FUND: As of April 30, 2003, the Fund's three-year annualized
performance (Class A) outstripped its benchmark on a relative basis by 3.27%
(-9.70% versus -12.97%, respectively). This Fund also outperformed the vast
majority of its peers (87%) with a 13th percentile Lipper ranking (93 out of 755
funds) in the large-cap core fund universe.1
GARTMORE GLOBAL HEALTH SCIENCES FUND: The Fund (Class A) was ranked ahead of 94%
of its peers (6th percentile, or eight out of 145 funds) in the
Health/Biotechnology category of Lipper Funds for the two-year period ended
April 30, 2003 (Fund inception date: Dec. 18, 2000).
GARTMORE U.S. GROWTH LEADERS FUND: This focus or concentrated Fund (Class A)
outperformed 97% of its peers, (10 out of 354 funds) according to Lipper, for
multi-cap managers for the two-year period ended April 30, 2003. The Fund
invests in a limited number of stocks, all with the ability to drive returns. It
is diversified by stock capitalization (size) and invests in only the managers'
best ideas.
GARTMORE MICRO CAP EQUITY FUND and GARTMORE MID CAP GROWTH FUND: We introduced
these two funds in 2002. For the six months ended April 30, 2003, the Gartmore
Micro Cap Equity Fund (Class A) outperformed 98% of its peers (ranked in the 2nd
percentile, or six out of 480 small-cap core funds), and it returned 18.98%
versus 19.89% for its benchmark, the Wilshire Micro Cap Index.
For the same period, the Gartmore Mid Cap Growth Fund (Class A) returned 10.14%,
outperforming the 8.20% return of its benchmark, the Russell Midcap Growth
Index. This Fund ranked in the 6th percentile, or 28 out of 521 mid-cap growth
core funds.
GARTMORE GOVERNMENT BOND FUND: For the three-year period ended April 30, 2003,
this Fund produced a 10.00% annualized total return. In its category, as defined
by Lipper (intermediate U.S. government bond funds), the Fund outperformed 89%
of its peers, ranking in the 11th percentile, or nine out of 85 funds.
RECOGNITION: BARRON'S
Our efforts were validated by Barron's seventh annual firm survey, reported on
Feb. 3, 2003, which evaluated
and ranked firms based on the performance of an organization's entire product
line. We came in at 11th on the list of 81 firms. Barron's recognized us along
with a small number of other firms that share "a belief in diversification and
thus boast a stable of equity, international, balanced and bond-investment
products."2
OUTLOOK: IMPROVING CONDITIONS
To help investors achieve their goals, we continually strive to provide products
that conform to various risk levels. We are proud of the results we have been
able to achieve within such a difficult market environment. We look forward to
improved economic and market conditions as well as consistent fund performance
and the continued introduction of innovative products to the marketplace.
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1. Ranked by Lipper, Inc., based on annualized total returns. This Fund was
ranked in the top 32% of 996 funds, 6% of 883 funds and 13% of 755 funds
for the one- two- and three-year periods, respectively.
2. The Barron's/Lipper fund-family survey uses a weighted-average ranking
system to assess firm-wide performance. Each firm's family of funds is
weighted by asset size, while the overall ranking weights the five fund
categories in proportion to their overall importance within Lipper's
universe.
There are more than 81 fund families vying for your dollars, but only that
number met our criteria for inclusion in the Barron's/Lipper Survey. To
make the cut, a fund complex must include one or more money market funds,
at least three U.S. stock funds, at least one foreign stock portfolio and
one balanced or asset allocation fund that invests in both bonds and
stocks. Families also must offer at least two taxable bond funds and at
least one municipal bond fund. The performance of money market, sector and
single-state muni-bond funds don't figure in our rankings.
[In 2002] U.S. stock funds accounted for 54.34% of a family's ranking.
International equity funds accounted for 9.95%; balanced funds about 9.24%;
taxable bond funds, 21.1%; and muni funds, 5.33%. As a result, expertise in
managing a stock portfolio weighs most heavily in the overall ranking.
However, expertise in bonds helped out more this year. The weightings
reflect the distribution of assets across all mutual funds that are at
least one year old. To calculate the results, Lipper ranks each fund's
return versus those of others in the same category, placing the best
performers in the 1st percentile. Next, all the funds in a given family
that fit a particular broad asset-class category (say, tax-exempt funds)
are averaged together on an asset-weighted basis. The bigger the fund, the
greater its impact on a family's ranking in that category. Then, each
family's percentile rankings in the broad categories are combined in the
weightings listed above. The lower the figure, the higher the family ranks
on our final list.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
Investing involves market risk, including the possible loss of principal. There
is no guarantee that the objective of any fund will be achieved.
For more information about these mutual funds, including all charges and
expenses, please download a prospectus at www.gartmorefunds.com or call
800-848-0920. Please read it carefully before investing any money.
Gartmore Global Investments is the investment adviser to Gartmore Funds.
Securities offered through GARTMORE DISTRIBUTION SERVICES, INC.,
Member NASD.
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2003 SEMIANNUAL REPORT 5
GARTMORE GLOBAL FINANCIAL SERVICES FUND
Class A Shares symbol: GLFAX
Class B Shares symbol: GLFBX
Class C Shares symbol: GLFCX
Institutional Service Class symbol: GFISX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund outperformed, returning
6.64%* versus 4.40% for its benchmark, the Morgan Stanley Capital International
(MSCI) World Financials Index.
For broader comparison, the average return for this Fund's peer category
(Financial Services) was 4.95%, according to Lipper, an independent company that
provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
The markets were volatile during the period. For instance, in November 2002 and
April 2003, the MSCI World Financials Index ("Index") rose 4.88% and 13.54%,
respectively, but it fell during the other months.
The Fund outperformed the Index (and the S&P 500 Index) by its positioning to be
more aggressive during market rallies and more defensive during market
downturns.
Good stock selection as well as allocation decisions drove returns. The Fund's
overweight position in diversified financials and banking sectors added to
performance, because the Fund's returns in this category were up 20% and 24%,
respectively. Insurance stocks such as Everest Re Group Ltd. and MetLife, Inc.,
as well as capital market stocks such as Bank of New York Co., Inc. and J.P.
Morgan Chase & Co., significantly outperformed the Index due to the Fund's
ability to avoid the downturns and capture market advances.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
Several Fund positions were up strongly such as Citigroup, Inc., which gained 7%
based on better-than-expected first-quarter earnings that reflected an increase
in most of its business lines; Fannie Mae, which gained 10% on the continuing
strong demand for housing and mortgages; and the State Bank of India, which
advanced 40% due to the Indian government's efforts to make it easier for
financial institutions to collect bad loans as well as the Bank's consistent
ability to beat earnings.
New purchases included U.S. property and casualty insurer RenaissanceRe Holdings
Ltd., which is experiencing improving pricing trends and Korean consumer finance
company Kookmin Bank, whose stock price became attractive due to concern about
the SARS illness.
Sales included Dutch financial life insurers ING Groep N.V., AEGON N.V. and
Fortis Group, all of which were hurt by weak equity and economic conditions as
well as the accounting troubles of Ahold N.V.
HOW IS THE FUND POSITIONED?
We are positioning the Fund for those stocks that will perform well in an
economic recovery rather than a market rebound. Based on our stronger conviction
that an economic recovery will take place in the United States and that economic
conditions in Europe will continue to be weak, we have been shifting out of
European insurance providers and into U.S. bank stocks. We also are adding to
our positions in Asia due to our expectations for stronger growth in that
region.
We are searching for companies with strong balance sheets, high returns on
equities and those that can generate better cash flows.
PORTFOLIO MANAGER: Robert Murphy
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $2,751,769
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 Yr. Inception1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -8.01% -3.58%
w/SC3 -13.29% -7.68%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -8.61% -4.27%
w/SC4 -13.18% -7.09%
- ------------------------------------------------------------
Class C. . . . . . . . . . . w/o SC2 -8.61% -4.27%
w/SC5 -10.39% -4.96%
- ------------------------------------------------------------
Institutional Service Class6 -7.74% -3.30%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on December 18, 2001.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted because it is charged when you sell Class C shares within the
first year after purchase.
6 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS MSCI WORLD
DATE . . . A FINANCIALS CPI
- -----------------------------------------------------
12/18/2001 9,425 10,000 10,000
10/31/2002 8,409 8,501 10,260
4/30/2003. 8,967 8,875 10,496
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Global Financial Services Fund, Morgan Stanley Capital International World
Financials Index (MSCI World Financials)(a), and the Consumer Price Index
(CPI)(b) since inception. Unlike the Fund, the returns for these indices do not
reflect any fees, expenses, or sales charges.
(a) The MSCI World Financials Index is an unmanaged index representative of the
stocks in the global financial services sector and is based on 23 developed
market country indices.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
6 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE GLOBAL FINANCIAL SERVICES FUND
COMMON STOCKS (95.9%)
SHARES VALUE
- -----------------------------------------------------------
FRANCE (2.5%)
BANKING (1.0%)
BNP Paribas SA. . . . . . . . . . . . . 600 $ 28,163
----------
FINANCIAL SERVICES (1.5%)
Euronext NV . . . . . . . . . . . . . . 2,000 44,194
----------
72,357
----------
- -----------------------------------------------------------
GERMANY (3.7%)
BANKING (3.7%)
Aareal Bank AG (b). . . . . . . . . . . 1,200 18,749
Depfa Bank PLC. . . . . . . . . . . . . 1,600 86,601
----------
105,350
----------
- -----------------------------------------------------------
INDIA (3.5%)
BANKING (3.5%)
State Bank of India GDR . . . . . . . . 6,800 101,524
----------
- -----------------------------------------------------------
IRELAND (1.1%)
BANKING (1.1%)
Bank of Ireland . . . . . . . . . . . . 2,500 30,830
----------
- -----------------------------------------------------------
ITALY (1.5%)
BANKING (1.5%)
UniCredito Italiano SPA . . . . . . . . 9,800 42,872
----------
- -----------------------------------------------------------
JAPAN (3.4%)
FINANCIAL SERVICES (3.4%)
ACOM Co. Ltd. . . . . . . . . . . . . . 3,520 98,876
----------
- -----------------------------------------------------------
KOREA (3.0%)
BANKING (3.0%)
Kookmin Bank ADR. . . . . . . . . . . . 3,100 85,405
----------
- -----------------------------------------------------------
SINGAPORE (1.9%)
BANKING (1.9%)
Development Bank of Singapore Ltd.. . . 11,000 53,897
----------
- -----------------------------------------------------------
UNITED KINGDOM (6.3%)
BANKING (6.3%)
HSBC Holdings PLC . . . . . . . . . . . 11,550 126,542
Royal Bank of Scotland Group PLC. . . . 2,100 55,077
----------
181,619
----------
- -----------------------------------------------------------
UNITED STATES (69.0%)
BANKING (28.5%)
Bank Of America Corp. . . . . . . . . . 1,300 96,265
Charter One Financial, Inc. . . . . . . 2,500 72,625
City National Corp. . . . . . . . . . . 900 37,053
Comerica, Inc.. . . . . . . . . . . . . 1,040 45,250
Commerce Bancorp, Inc.. . . . . . . . . 1,000 40,670
Commerce Bancshares, Inc. . . . . . . . 700 26,495
FleetBoston Financial Corp. . . . . . . 1,500 39,780
KeyCorp . . . . . . . . . . . . . . . . 1,800 43,398
North Fork Bancorp, Inc.. . . . . . . . 3,200 103,552
PNC Financial Services Group. . . . . . 1,100 48,290
U.S. Bancorp. . . . . . . . . . . . . . 4,000 88,600
UnionBanCal Corp. . . . . . . . . . . . 1,360 54,944
Wachovia Corp.. . . . . . . . . . . . . 1,100 42,031
Wells Fargo & Co. . . . . . . . . . . . 1,600 77,216
----------
816,169
----------
FINANCIAL SERVICES (25.9%)
American Express Co.. . . . . . . . . . 1,500 56,790
Capital One Financial Corp. . . . . . . 2,200 92,114
Citigroup, Inc. . . . . . . . . . . . . 3,500 137,375
Fannie Mae. . . . . . . . . . . . . . . 1,900 137,542
Freddie Mac . . . . . . . . . . . . . . 1,000 57,900
Lehman Brothers Holding, Inc. . . . . . 900 56,673
Morgan Stanley Dean Witter & Co.. . . . 1,920 85,920
The Bank Of New York Co., Inc.. . . . . 1,700 44,965
Washington Mutual, Inc. . . . . . . . . 1,900 75,050
----------
744,329
----------
INSURANCE (14.6%)
American International Group, Inc.. . . 1,266 73,365
Everest Re Group Ltd. . . . . . . . . . 1,200 83,580
Prudential Financial, Inc.. . . . . . . 1,286 41,113
Radian Group, Inc.. . . . . . . . . . . 1,600 63,520
RenaissanceRE Holdings Ltd. . . . . . . 2,100 93,009
Travelers Property Casualty Corp. . . . 3,577 58,055
Class A
Travelers Property Casualty Corp. . . . 363 5,899
Class B
----------
418,541
----------
1,979,039
----------
TOTAL COMMON STOCKS 2,751,769
----------
TOTAL INVESTMENTS (COST $2,624,321) (A)
- 95.9% 2,751,769
OTHER ASSETS IN EXCESS OF LIABILITIES
- 4.1% 116,598
----------
NET ASSETS - 100.0% $2,868,367
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt
GDR Global Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 7
GARTMORE GLOBAL HEALTH SCIENCES FUND
Class A Shares symbol: GLSAX
Class B Shares symbol: GLSBX
Class C Shares symbol: GMSCX
Institutional Service Class symbol: GLSIX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund outperformed, returning
5.30%* versus 5.18% for its benchmark, the Goldman Sachs Healthcare Index.
For broader comparison, the average return for this Fund's peer category
(Health/Biotechnology) was 4.99%, according to Lipper, an independent company
that provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Health-care stocks finished the period with respectable gains after having
experienced, as did the broader markets, a volatile six months. Stocks overall
were extraordinarily tied to geopolitical events. The health-care sector (as
represented by the Index), for example, rose more than 4.6% in April as it
became apparent that the war in Iraq was progressing relatively smoothly.
Thanks to superb stock selection, the Fund outperformed the returns of its
benchmark in each of the sector's four industries and outpaced many of its
Lipper peers. The largest portion of the Fund's outperformance came from the
health-care equipment and supplies industry, whose performance beat the same
industry in the Index. Biotechnology also added significantly to the Fund's
performance because of its outstanding total return. At period end, it
represented approximately 20% of the portfolio. Specifically in this area, Amgen
Inc., one of the Fund's top holdings, contributed more than 1.5% to Fund
results. Investors are upbeat on Amgen because the company has a strong balance
sheet and is expected to launch a new psoriasis drug in early 2004.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
Top Fund holdings include pharmaceutical bellwethers such as Pfizer, Inc. and
Merck & Co., Inc. For the long-term, these companies are expected to benefit
from an aging U.S. population. Pfizer also is an attractive holding because it
has a solid drug pipeline thanks to one of the largest research and development
budgets in the industry. Merck has a respectable long-term earnings growth rate
while boasting a reasonable valuation.
The Fund bought shares of biopharmaceutical company Gilead Sciences, Inc. Gilead
has solid management and a strong revenue stream, primarily because of strong
sales of its HIV/AIDS drug, Viread.
HOW IS THE FUND POSITIONED?
We expect conditions within the sector to remain similar to those experienced in
2002. On the whole, we are limiting the Fund's exposure to large-cap
pharmaceutical stocks because these companies have been most affected by the
industry's negative fundamental issues (including competition from generic
drugmakers and limited product pipelines). We increased the Fund's biotechnology
holdings during the period. We have found attractive investment opportunities
within several large-cap companies in this area, such as Amgen and Gilead
Sciences, which have strong drug pipelines and/or revenue streams. Overall, we
plan to profit from individual stock selection based on company fundamentals.
PORTFOLIO MANAGER: Paul Cluskey
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $4,590,543
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -9.99% -5.56%
w/SC3 -15.15% -7.92%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -10.68% -6.20%
w/SC4 -15.15% -7.42%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -10.58% -6.16%
w/SC6 -12.38% -6.56%
- ------------------------------------------------------------
Institutional Service Class7 -9.74% -5.26%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on December 29, 2000.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (9/20/02). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS GS
DATE . . . A HEALTHCARE CPI
- ----------------------------------------
12/28/2000 9,425 10,000 10,000
10/31/2001 8,802 8,445 10,213
10/31/2002 7,830 6,945 10,428
4/30/2003. 8,246 7,305 10,659
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Global Health Sciences Fund, the Goldman Sachs Healthcare Index (GS
Healthcare)(a), and the Consumer Price Index (CPI)(b) since inception. Unlike
the Fund, the returns for these indices do not reflect any fees, expenses, or
sales charges.
(a) The GS Healthcare is a modified capitalization-weighted index designed as a
benchmark for U.S. traded securities in the economic sector of healthcare.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
8 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE GLOBAL HEALTH SCIENCES FUND*
COMMON STOCKS (76.7%)
SHARES VALUE
- -------------------------------------------------------------
BATTERIES/ BATTERY SYSTEMS (0.8%)
Wilson Greatbatch Technologies, Inc
(b).. . . . . . . . . . . . . . . . . . 1,280 $ 41,971
----------
- -------------------------------------------------------------
DRUGS (36.1%)
Allergan, Inc.. . . . . . . . . . . . . . 1,310 92,028
Amgen, Inc. (b) . . . . . . . . . . . . . 4,060 248,919
AstraZeneca PLC, ADR. . . . . . . . . . . 800 31,896
Eli Lilly & Co. . . . . . . . . . . . . . 1,550 98,921
GlaxoSmithKline PLC, ADR. . . . . . . . . 1,170 47,408
King Pharmaceuticals, Inc. (b). . . . . . 2,450 30,895
Medicis Pharmaceutical Corp. Class A
(b). . . . . . . . . . . . . . . . . .. 2,930 168,885
Merck & Co., Inc. . . . . . . . . . . . . 5,370 312,426
Penwest Pharmaceuticals Co. (b) . . . . . 4,430 80,759
Pfizer, Inc.. . . . . . . . . . . . . . . 15,054 462,910
Sepracor, Inc. (b). . . . . . . . . . . . 4,330 82,920
Wyeth . . . . . . . . . . . . . . . . . . 4,455 193,926
----------
1,851,893
----------
- -------------------------------------------------------------
MEDICAL - BIOMEDICAL/GENETIC (5.0%)
Genzyme Corp. (b) . . . . . . . . . . . . 4,760 191,733
Millenium Pharmaceuticals, Inc. (b) . . . 5,920 65,120
----------
256,853
----------
- -------------------------------------------------------------
MEDICAL - HMO (7.5%)
Anthem, Inc. (b). . . . . . . . . . . . . 1,500 102,960
UnitedHealth Group, Inc.. . . . . . . . . 1,830 168,598
WellPoint Health Networks, Inc. (b) . . . 1,510 114,669
----------
386,227
----------
- -------------------------------------------------------------
MEDICAL INSTRUMENTS (5.0%)
Advanced Medical Optics, Inc. (b) . . . . 164 2,301
Conceptus, Inc. (b) . . . . . . . . . . . 5,870 61,224
Medtronic, Inc. . . . . . . . . . . . . . 4,100 195,734
----------
259,259
----------
- -------------------------------------------------------------
MEDICAL PRODUCTS (6.9%)
Henry Schein, Inc. (b). . . . . . . . . . 2,200 94,930
Johnson & Johnson . . . . . . . . . . . . 4,170 235,021
Luminex Corp. (b) . . . . . . . . . . . . 4,000 24,400
----------
354,351
----------
- -------------------------------------------------------------
PHARMACEUTICAL PRODUCTS (1.5%)
PerkinElmer, Inc. . . . . . . . . . . . . 7,530 74,698
----------
- -------------------------------------------------------------
THERAPEUTICS (12.5%)
Abgenix, Inc. (b) . . . . . . . . . . . . 11,300 107,350
Cell Therapeutics, Inc. (b) . . . . . . . 3,930 35,370
Gilead Sciences, Inc. (b) . . . . . . . . 3,130 144,418
Medimmune, Inc. (b) . . . . . . . . . . . 2,570 90,644
OSI Pharmaceuticals, Inc. (b) . . . . . . 2,570 53,970
The Medicines Co. (b) . . . . . . . . . . 5,020 103,161
United Therapeutics Corp. (b) . . . . . . 5,950 106,797
----------
641,710
----------
- -------------------------------------------------------------
VETERINARY DIAGNOSTICS (1.4%)
VCA Antech, Inc. (b). . . . . . . . . . . 4,410 74,039
----------
TOTAL COMMON STOCKS 3,941,001
----------
MUTUAL FUNDS (12.6%)
Biotech HOLDRs Trust Index Fund . . . . . 1,800 183,060
iShares Dow Jones U.S. Healthcare Sector
Index Fund. . . . . . . . . . . . . . . 5,200 263,640
NASDAQ Biotech Index Fund (b) . . . . . . 3,540 202,842
----------
TOTAL MUTUAL FUNDS 649,542
----------
TOTAL INVESTMENTS (COST $4,316,620) (A)
- 89.3% 4,590,543
OTHER ASSETS IN EXCESS OF LIABILITIES -
10.7% 552,144
----------
NET ASSETS - 100.0% $5,142,687
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt
* As of April 30, 2003, the Fund was invested solely in United States
securities.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 9
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
Class A Shares symbol: GAGTX
Class B Shares symbol: GBGTX
Class C Shares symbol: GCGTX
Institutional Service Class symbol: GIGTX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned 3.80%* versus
9.05% for its benchmark, the Morgan Stanley High-Tech 35 Index.
For broader comparison, the average return for this Fund's peer category
(Science & Technology Funds) was 10.45%, according to Lipper, an independent
company that provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO FACTORS INFLUENCED PERFORMANCE?
Geopolitical uncertainty continued to be the major driver of broad-market
returns during the period. At the beginning of the year, markets experienced
sharp sell-offs as the United States campaigned for global support of a war with
Iraq.
With the start of the war, markets soared and many investors anticipated a quick
end to the conflict. However, toward the end of the first quarter, they saw
extreme levels of volatility as market rallies and declines generally tracked
the latest news from Iraq. Economic indicators were mixed and corporate profits
remained lacklus-ter, but on the bright side, the steady flow of corporate
scandals that had plagued the market had finally abated.
Consumer confidence, which had suffered a steady decline for four months,
greatly improved in April. This surge was due primarily to a swift resolution
in the U.S.-led war in Iraq.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
As the Middle-East conflict grew, the Fund became more defensive, seeing that
both corporate and consumer confidence were declining. Throughout the period, we
held a defensive position in the sector. In addition, we remained cautious about
the anticipated technology recovery.
Strong stock selection, such as a modest position in the software company Amdocs
Ltd. helped the Fund beat its benchmark within the information technology
sector.
Throughout the period, the Fund added Internet stocks because these companies'
business models began to mature and gain profitability. To take advantage of
this, we purchased Internet auction company Ebay, Inc. and on-line retailer
Amazon.com, Inc. We later sold Ebay, Inc. because its valuation became too high.
We continue to like the fundamentals of the company, and will monitor its price
levels in the future.
HOW IS THE FUND POSITIONED?
Looking ahead, we remain cautiously optimistic about the recovery for
technology-related stocks. We believe that the industry still needs
consolidation. So far, we have not seen signs of increased capital spending, due
to the conflict with Iraq and other global socioeconomic concerns. However, we
are positioning the Fund to take advantage of better economic conditions,
because we believe capital spending eventually will improve in 2003.
We remain positioned with a focus on high-quality defensive names that can
deliver on earnings expectations within the present volatile market environment.
PORTFOLIO MANAGER: Aaron Harris
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $3,448,194
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -24.59% -35.03%
w/SC3 -28.91% -36.37%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -25.00% -35.53%
w/SC4 -28.75% -36.17%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -25.07% -35.36%
w/SC6 -26.64% -35.59%
- ------------------------------------------------------------
Institutional Service Class7 -24.32% -34.70%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on June 30, 2000.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS MORGAN STANLEY
DATE . . . A HIGH TECH CPI
- --------------------------------------------------
6/30/2000. 9,425 10,000 10,000
10/31/2000 10,471 9,136 10,099
10/31/2001 4,091 4,346 10,313
10/31/2002 2,676 2,864 10,531
4/30/2003. 2,778 3,124 10,764
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Global Technology and Communications Fund, Morgan Stanley High-Tech 35 Index
(Morgan Stanley High-Tech)(a), and the Consumer Price Index (CPI)(b) since
inception. Unlike the Fund, the returns for these indices do not reflect any
fees, expenses, or sales charges.
(a) The Morgan Stanley High-Tech is an equal dollar-weighted index of 35 stocks
in nine different technology subsectors.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
10 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
COMMON STOCKS (91.0%)
SHARES VALUE
- ---------------------------------------------------------------
CANADA (4.8%)
COMPUTER SOFTWARE (1.9%)
Cognos, Inc. (b). . . . . . . . . . . . . . 2,660 $ 72,192
----------
TELECOM EQUIPMENT (2.9%)
Nortel Networks Corp. (b) . . . . . . . . . 42,500 109,650
----------
181,842
----------
- ---------------------------------------------------------------
FINLAND (2.1%)
TELECOM EQUIPMENT (2.1%)
Nokia Corp. ADR . . . . . . . . . . . . . . 4,700 77,879
----------
- ---------------------------------------------------------------
TAIWAN (2.3%)
SEMICONDUCTORS (2.3%)
Taiwan Semiconductor Manufacturing Co.
Ltd. ADR (b). . . . . . . . . . . . . . 10,400 87,048
----------
- ---------------------------------------------------------------
UNITED STATES (81.8%)
COMMERCIAL SERVICES (1.7%)
Iron Mountain, Inc. (b) . . . . . . . . . . 1,600 63,760
----------
COMPUTER HARDWARE (9.9%)
Dell Computer Corp. (b) . . . . . . . . . . 2,390 69,095
EMC Corp. (b) . . . . . . . . . . . . . . . 20,800 189,072
International Business Machines Corp. . . . 1,400 118,860
----------
377,027
----------
COMPUTER SERVICES (1.6%)
Exult, Inc. (b) . . . . . . . . . . . . . . 4,300 30,917
----------
59,537
----------
COMPUTER SOFTWARE (12.9%)
CheckFree Corp. (b) . . . . . . . . . . . . 2,400 66,168
Electronic Arts, Inc. (b) . . . . . . . . . 1,360 80,607
Microsoft Corp. . . . . . . . . . . . . . . 4,060 103,815
Oracle Corp. (b). . . . . . . . . . . . . . 6,600 78,408
Packeteer, Inc. (b) . . . . . . . . . . . . 6,200 81,096
VERITAS Software Corp. (b). . . . . . . . . 3,700 81,437
----------
491,531
----------
COMPUTERS - INTEGRATED SYSTEMS (4.4%)
3Com Corp. (b). . . . . . . . . . . . . . . 6,600 34,320
Cisco Systems, Inc. (b) . . . . . . . . . . 8,870 133,405
----------
167,725
----------
COMPUTERS - MEMORY DEVICES (4.3%)
Activcard Corp. (b) . . . . . . . . . . . . 6,600 62,370
Seagate Technology (b). . . . . . . . . . . 5,500 66,495
StorageNetworks, Inc. (b) . . . . . . . . . 30,200 33,824
----------
162,689
----------
DATA PROCESSING & REPRODUCTION (4.2%)
First Data Corp.. . . . . . . . . . . . . . 4,040 158,489
----------
E - COMMERCE (3.8%)
Amazon.com, Inc. (b). . . . . . . . . . . . 5,000 143,350
----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS (7.9%)
Agere Systems, Inc. Class A (b) . . . . . . 35,500 63,545
Intel Corp. . . . . . . . . . . . . . . . . 5,290 97,336
Micron Technology, Inc. (b) . . . . . . . . 7,600 64,600
NVIDIA Corp. (b). . . . . . . . . . . . . . 5,300 75,631
----------
301,112
----------
INSTRUMENTS - SCIENTIFIC (3.0%)
PerkinElmer, Inc. . . . . . . . . . . . . . 11,300 112,096
----------
MISCELLANEOUS MANUFACTURING (1.5%)
Applied Films Corp. (b) . . . . . . . . . . 2,600 56,550
----------
MULTI-MEDIA (1.9%)
AOL Time Warner (b) . . . . . . . . . . . . 5,200 71,136
----------
NETWORKING (2.2%)
Enterasys Networks, Inc. (b). . . . . . . . 25,600 61,440
Juniper Networks, Inc. (b). . . . . . . . . 2,100 21,462
----------
82,902
----------
SEMICONDUCTORS (4.6%)
Cypress Semiconductor Corp. (b) . . . . . . 2,000 17,440
Sigma Designs, Inc. (b) . . . . . . . . . . 12,640 83,424
Texas Instruments, Inc. . . . . . . . . . . 4,000 73,960
----------
174,824
----------
TELECOM EQUIPMENT (6.8%)
Comverse Technology, Inc. (b) . . . . . . . 7,000 91,490
Corvis Corp. (b). . . . . . . . . . . . . . 70,100 49,701
UTStarcom, Inc. (b) . . . . . . . . . . . . 5,400 117,563
----------
258,754
----------
TELECOM SERVICES (2.5%)
Amdocs Ltd. (b) . . . . . . . . . . . . . . 5,420 95,717
----------
TELECOMMUNICATIONS (5.2%)
BellSouth Corp. . . . . . . . . . . . . . . 4,500 114,705
Verizon Communications, Inc.. . . . . . . . 2,200 82,236
----------
196,941
----------
WIRELESS EQUIPMENT (3.4%)
Motorola, Inc.. . . . . . . . . . . . . . . 4,400 34,804
QUALCOMM, Inc.. . . . . . . . . . . . . . . 2,900 92,481
----------
127,285
----------
3,101,425
----------
TOTAL COMMON STOCKS 3,448,194
----------
TOTAL INVESTMENTS (COST $3,243,036) (A)
- 91.0% 3,448,194
OTHER ASSETS IN EXCESS OF LIABILITIES -
9.0% 341,114
----------
NET ASSETS - 100.0% $3,789,308
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 11
GARTMORE GLOBAL UTILITIES FUND
Class A Shares symbol: GGUAX
Class B Shares symbol: GGUBX
Class C Shares symbol: GGUCX
Institutional Service Class symbol: GUISX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned 7.16%* versus
8.68% for its benchmark, the 60% Morgan Stanley Capital International (MSCI)
Telecommunications/40% Utilities Index.
For broader comparison, the average return for this Fund's peer category
(Utilities Funds) was 6.96%, according to Lipper, an independent company that
provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Utilities were the best-performing sector in U.S. and global indexes during the
period. Given the low yield of global bonds, the relatively high dividend yield
of utility stocks has made them very attractive. Higher energy prices as well as
strong cash flows and more visible earnings helped the Fund's utility stocks
advance.
Performance was hurt by an underweight position in utility stocks relative to
the benchmark. However, stock selection within the sector was strong with stocks
such as Endesa SA, Dominion Resources, Inc. and Calpine Corp. up 37%, 24% and
163%, respectively, during the six-month period.
The Fund's focus on European rather than U.S. telecommunications stocks toward
the end of 2002 hurt performance due to the U.S. rally in that sector. The Fund
was underweight in U.S. fixed-line communications companies because they have
been forced to grant access to those lines at below cost. Unfortunately, those
companies' stocks rallied based on investors' anticipation of favorable reforms.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
The Fund's largest holdings include Vodafone Group PLC, Verizon Communications,
Inc. and SBC Communications, Inc. These stocks are also heavily weighted in the
Index.
New purchases during the six months include Centrica PLC, the U.K. gas utility,
which we bought because of its attractive valuation, solid dividend yield (3%)
and stable cash flow. ALLTEL Corp. was another purchase. This stock is a local
phone company similar to SBC Communications, but it serves a rural (rather than
metropolitan) market and is subject to fewer regulatory constraints.
Stocks that were sold included Telecom Italia SpA because of the company's
merger with its parent company; we believe the new corporate structure lacks
clarity for its minority shareholders. Cinergy Corp. was sold because it hit its
price target, and Vodafone Group was reduced to fund some purchases of stocks
with greater upside potential.
HOW IS THE FUND POSITIONED?
Given the current degree of volatility in the market, we are minimizing
portfolio risk (as compared to that of the benchmark) by taking a neutral
position in regard to sectors (approximately 60% in telecommunications stocks
and 40% in utility stocks) and some of the Index's largest holdings.
The Fund is overweight in European telecommunications stocks, because we believe
that they will benefit from their restructuring activities. Stocks such as
France Telecom and Deutsche Telekom should be rewarded, because they have been
reducing their debt loads and cutting costs.
PORTFOLIO MANAGER: Julian Sinclair
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $2,304,723
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -9.62% -16.86%
w/SC3 -14.77% -20.39%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -10.28% -17.45%
w/SC4 -14.73% -19.86%
- ------------------------------------------------------------
Class C. . . . . . . . . . . w/o SC2 -10.28% -17.45%
w/SC5 -12.09% -18.05%
- ------------------------------------------------------------
Institutional Service Class6 -9.42% -16.66%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on December 18, 2001.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted because it is charged when you sell Class C shares within the
first year after purchase.
6 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS COMPOSITE MSCI WORLD MSCI WORLD
DATE . . . A (60%, 40%) CPI TELECOM UTILITIES
- --------------------------------------------------------------------
12/18/2001 9,425 10,000 10,000 10,000 10,000
10/31/2002 6,837 7,418 10,260 6,862 8,099
4/30/2003. 7,326 8,062 10,496 7,346 8,944
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Global Utilities Fund, Morgan Stanley Capital International World
Telecommunications Services Index (MSCI World Telecom)(a), Morgan Stanley
Capital International World Utilities Index (MSCI World Utilities)(b), Composite
Index (Composite)(c) and the Consumer Price Index (CPI)(d) since inception.
Unlike the Fund, the returns for these indices do not reflect any fees,
expenses, or sales charges.
(a) The MSCI World Telecom Index is an unmanaged index representative of the
stocks in the global utillities sector and is based on 23 developed market
country indices.
(b) The MSCI World Utilities Index is an unmanaged index representative of the
stocks in the global utilities sector and is based on 23 developed market
country indices.
(c) The Composite is a combination of 60% MSCI World Telecom and 40% MSCI World
Utilities.
(d) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
12 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE GLOBAL UTILITIES FUND
COMMON STOCKS (98.8%)
SHARES VALUE
- ------------------------------------------------------
FINLAND (2.1%)
OIL & GAS UTILITY (2.1%)
Fortum Oyj. . . . . . . . . . . . . 6,807 $ 48,846
--------
- ------------------------------------------------------
FRANCE (3.3%)
TELECOMMUNICATIONS (2.0%)
France Telecom SA . . . . . . . . . 1,948 45,001
--------
WATER UTILITY (1.3%)
Suez SA . . . . . . . . . . . . . . 1,919 31,246
--------
76,247
--------
- ------------------------------------------------------
GERMANY (9.7%)
GAS & ELECTRIC UTILITY (5.3%)
E. ON AG. . . . . . . . . . . . . . 2,139 101,453
Rwe AG. . . . . . . . . . . . . . . 881 23,793
--------
125,246
--------
TELECOMMUNICATIONS (4.4%)
Deutsche Telekom AG . . . . . . . . 7,636 102,091
--------
227,337
--------
- ------------------------------------------------------
ITALY (1.0%)
ELECTRIC UTILITY (1.0%)
Enel SpA. . . . . . . . . . . . . . 4,026 24,083
--------
- ------------------------------------------------------
JAPAN (11.6%)
ELECTRIC UTILITY (6.0%)
Chubu Electric Power Co., Inc.. . . 2,100 42,261
Kansai Electric Power Co., Inc. . . 2,600 43,493
Tokyo Electric Power Co., Inc.. . . 2,700 54,788
--------
140,542
--------
TELECOMMUNICATIONS (5.6%)
Nippon Telegraph & Telephone Corp.. 18 63,089
NTT DoCoMo, Inc.. . . . . . . . . . 32 66,007
--------
129,096
--------
269,638
--------
- ------------------------------------------------------
MEXICO (1.2%)
TELECOMMUNICATIONS (1.2%)
America Movil SA de CV ADR. . . . . 1,629 27,318
--------
- ------------------------------------------------------
NETHERLANDS (0.9%)
TELECOMMUNICATIONS (0.9%)
Koninklijke KPN NV (b). . . . . . . 3,276 21,790
--------
- ------------------------------------------------------
PORTUGAL (1.0%)
TELECOMMUNICATIONS (1.0%)
Portugal Telecom SA . . . . . . . . 3,105 22,212
--------
- ------------------------------------------------------
RUSSIA (0.5%)
ELECTRIC UTILITY (0.5%)
RAO Unified Energy Systems GDR. . . 786 11,869
--------
SPAIN (7.3%)
ELECTRIC UTILITY (2.3%)
Endesa SA . . . . . . . . . . . . . 2,180 30,922
Iberdrola SA. . . . . . . . . . . . 1,361 21,917
--------
52,839
--------
TELECOMMUNICATIONS (5.0%)
Telefonica SA (b) . . . . . . . . . 10,596 117,187
--------
170,026
--------
- ------------------------------------------------------
UNITED KINGDOM (18.6%)
ELECTRIC UTILITY (1.5%)
National Grid Group PLC . . . . . . 5,295 34,782
--------
GAS UTILITY (1.3%)
Centrica PLC. . . . . . . . . . . . 11,451 30,426
--------
TELECOMMUNICATIONS (14.8%)
BT Group PLC. . . . . . . . . . . . 18,652 53,435
Vodafone Group PLC. . . . . . . . . 147,871 291,874
--------
345,309
--------
WATER UTILITY (1.0%)
Awg PLC (b) . . . . . . . . . . . . 2,604 22,287
--------
432,804
--------
- ------------------------------------------------------
UNITED STATES (41.6%)
COMMUNICATIONS (3.0%)
Comcast Corp. (b) . . . . . . . . . 2,157 68,830
--------
ELECTRIC UTILITY (10.6%)
American Electric Power Co., Inc. . 1,232 32,500
Calpine Corp. (b) . . . . . . . . . 6,895 37,026
Dominion Resources, Inc.. . . . . . 989 58,529
Duke Energy Corp. . . . . . . . . . 2,290 40,281
FPL Group, Inc. . . . . . . . . . . 840 51,131
Southern Co. (The). . . . . . . . . 985 28,654
--------
248,121
--------
GAS & ELECTRIC UTILITY (1.9%)
Exelon Corp.. . . . . . . . . . . . 449 23,815
NiSource, Inc.. . . . . . . . . . . 1,133 21,414
--------
45,229
--------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 13
STATEMENT OF INVESTMENTS(Continued)
April 30, 2003 (Unaudited)
GARTMORE GLOBAL UTILITIES FUND (Continued)
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ---------------------------------------------------------------
UNITED STATES (continued)
TELECOMMUNICATIONS (24.7%)
ALLTEL Corp. . . . . . . . . . . 857 $ 40,159
AT&T Corp. . . . . . . . . . . . 1,607 27,399
AT&T Wireless Services, Inc. (b) 11,781 76,105
Nextel Communications, Inc.
Class A (B). . . . . . . . . . 2,333 34,505
SBC Communications, Inc. . . . . 8,173 190,921
Verizon Communications, Inc. . . 5,546 207,309
----------
576,398
----------
WATER UTILITY (1.4%)
Philadelphia Suburban Corp.. . . 1,500 33,975
----------
972,553
----------
TOTAL COMMON STOCKS 2,304,723
----------
TOTAL INVESTMENTS (COST $2,148,506) (A)
- 98.8% 2,304,723
OTHER ASSETS IN EXCESS OF LIABILITIES -
1.2% 27,681
----------
NET ASSETS - 100.0% $2,332,404
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt
GDR Global Depositary Receipt
At April 30,2003, the Fund's open forward foreign currency contacts were as
follows:
SEE NOTES TO FINANCIAL STATEMENTS.
UNREALIZED
DELIVERY CONTRACT APPRECIATION
CURRENCY DATE VALUE MARKET VALUE (DEPRECIATION)
- ---------------------------------------------------------
LONG CONTRACTS:
Euro 5/02/03. . $ 5,330 $ 5,425 $ 95
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
14 SEMIANNUAL REPORT 2003
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 2003 (Unaudited)
GARTMORE GARTMORE GARTMORE GARTMORE
GLOBAL GLOBAL GLOBAL GLOBAL
FINANCIAL HEALTH TECHNOLOGY UTILITIES
SERVICES SCIENCES AND FUND
FUND FUND COMMUNICATIONS
FUND
- --------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value
(cost $2,624,321; $4,316,620;
$3,243,036 and
2,148,506; respectively) . . . . . . . . . . . . . $2,751,769 $4,590,543 $3,448,194 $2,304,723
Cash. . . . . . . . . . . . . . . . . . . . . . . . 119,747 500,918 560,310 9,353
Foreign currency, at value
(cost $2,271; $0; $25,458
and $0; respectively). . . . . . . . . . . . . . 2,282 - 25,342 -
Interest and dividends receivable . . . . . . . . . 15,045 789 1,260 7,737
Receivable for capital shares issued. . . . . . . . 2,006 55,006 - -
Receivable for investments sold . . . . . . . . . . 56,375 212,058 582,771 40,868
Unrealized appreciation on forward
foreign currency contracts. . . . . . . . . . . . - - - 95
Receivable from adviser . . . . . . . . . . . . . . 4,769 4,325 5,309 4,831
Reclaims receivable . . . . . . . . . . . . . . . . 369 - - 1,400
Prepaid expenses and other assets . . . . . . . . . 13,475 14,190 13,916 13,341
- --------------------------------------------------------------------------------------------------------------
Total Assets. . . . . . . . . . . . . . . . . . . . 2,965,837 5,377,829 4,637,102 2,382,348
- --------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable to custodian. . . . . . . . . . . . . . . . - - 949 -
Payable for investments purchased
Accrued expenses and other payables . . . . . . . . 93,388 229,005 841,215 46,853
Investment advisory fees. . . . . . . . . . . . . . 2,245 3,755 2,816 1,464
Fund administration and transfer agent fees . . . . 427 828 1,241 476
Distribution fees . . . . . . . . . . . . . . . . . 1,257 1,103 982 1,024
Administrative servicing fees . . . . . . . . . . . - 287 171 -
Other . . . . . . . . . . . . . . . . . . . . . . . 153 164 420 127
- --------------------------------------------------------------------------------------------------------------
Total Liabilities . . . . . . . . . . . . . . . . . 97,470 235,142 847,794 49,944
- --------------------------------------------------------------------------------------------------------------
NET ASSETS. . . . . . . . . . . . . . . . . . . . . $2,868,367 $5,142,687 $ 3,789,308 $2,332,404
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
REPRESENTED BY:
Capital . . . . . . . . . . . . . . . . . . . . . . $3,020,131 $5,443,477 $11,218,986 $3,026,488
Accumulated net investment income
(loss) . . . . . . . . . . . . . . . . . . . . . 8,547 (15,147) (22,375) 5,789
Accumulated net realized gains
(losses) from investment
and foreign currency transactions . . . . . . . . (287,868) (559,566) (7,612,349) (856,383)
Net unrealized appreciation (depreciation)
on investments and translation of assets
and liabilitiesdenominated in foreign
currencies . . . . . . . . . . . . . . . . . . . 127,557 273,923 205,046 156,510
- --------------------------------------------------------------------------------------------------------------
NET ASSETS. . . . . . . . . . . . . . . . . . . . . $2,868,367 $5,142,687 $ 3,789,308 $ 2,332,404
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
NET ASSETS:
Class A Shares. . . . . . . . . . . . . . . . . . . $ 726,505 $2,410,011 $ 1,728,020 $ 589,455
Class B Shares. . . . . . . . . . . . . . . . . . . 717,256 765,514 808,216 580,458
Class C Shares. . . . . . . . . . . . . . . . . . . 708,524 97,945 14,674 577,330
Institutional Service Class Shares. . . . . . . . . 716,082 1,869,217 1,238,398 585,161
- --------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . $2,868,367 $5,142,687 $ 3,789,308 $ 2,332,404
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of shares authorized):
Class A Shares. . . . . . . . . . . . . . . . . . . 76,556 275,827 633,068 76,830
Class B Shares. . . . . . . . . . . . . . . . . . . 76,161 88,861 302,753 75,986
Class C Shares. . . . . . . . . . . . . . . . . . . 75,235 11,366 5,461 75,572
Institutional Service Class Shares. . . . . . . . . 75,251 212,427 447,369 76,158
- --------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . 303,203 588,481 1,388,651 304,546
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
NET ASSET VALUE:
Class A Shares. . . . . . . . . . . . . . . . . . . $ 9.49 $ 8.74 $ 2.73 $ 7.67
Class B Shares (a). . . . . . . . . . . . . . . . . $ 9.42 $ 8.61 $ 2.67 $ 7.64
Class C Shares (b). . . . . . . . . . . . . . . . . $ 9.42 $ 8.62 $ 2.69 $ 7.64
Institutional Service Class Shares. . . . . . . . . $ 9.52 $ 8.80 $ 2.77 $ 7.68
MAXIMUM OFFERING PRICE PER SHARE
(100%/(100%-maximum sales charge)
of net asset value adjusted to the nearest cent):
Class A Shares. . . . . . . . . . . . . . . . . . . $ 10.07 $ 9.27 $ 2.90 $ 8.14
Class C Shares. . . . . . . . . . . . . . . . . . . $ 9.52 $ 8.71 $ 2.72 $ 7.72
- --------------------------------------------------------------------------------------------------------------
Maximum Sales Charge - Class A Shares . . . . . . . $ 5.75% $ 5.75% $ 5.75% $ 5.75%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Maximum Sales Charge - Class C Shares . . . . . . . $ 1.00% $ 1.00% $ 1.00% $ 1.00%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
(a) For Class B shares, the redemption price per share varies by length of time
shares are held.
(b) For Class C shares, the redemption price per share is reduced by 1.00% for
shares held less than one year.
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 15
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 2003 (Unaudited)
GARTMORE GARTMORE GARTMORE GARTMORE
GLOBAL GLOBAL GLOBAL GLOBAL
FINANCIAL HEALTH TECHNOLOGY UTILITIES
SERVICES SCIENCES AND FUND
FUND FUND COMMUNICATIONS
FUND
- -----------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income. . . . . . . . . . . . . . . . $ 375 $ 2,773 $ 1,134 $ 104
Dividend income
(net of foreign withholding tax
of $2,045; $0; $127 and $1,759;
respectively). . . . . . . . . . . . . . . . 34,604 14,527 7,744 27,132
- -----------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . . . . . . . 34,979 17,300 8,878 27,236
- -----------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees . . . . . . . . . . . 13,484 19,835 16,869 8,835
Fund administration and transfer agent fees. . 6,680 7,350 3,537 6,548
Distribution fees Class A. . . . . . . . . . . 854 2,131 1,987 696
Distribution fees Class B. . . . . . . . . . . 3,368 3,616 3,854 2,753
Distribution fees Class C. . . . . . . . . . . 3,332 309 75 2,738
Administrative servicing fees Class A. . . . . - 540 275 -
Administrative servicing fees. . . . . . . . . - 1,058 773 -
Institutional Service Class Shares
Registration and filing fees . . . . . . . . . 23,927 19,820 18,356 23,918
Printing fees. . . . . . . . . . . . . . . . . 32 229 14,877 21
Other. . . . . . . . . . . . . . . . . . . . . 435 588 2,071 362
- -----------------------------------------------------------------------------------------------------
Total expenses before reimbursed expenses. . . 52,112 55,476 62,674 45,871
Expenses reimbursed. . . . . . . . . . . . . . (25,679) (23,029) (31,421) (26,431)
- -----------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . . . . . . 26,433 32,447 31,253 19,440
- -----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) . . . . . . . . . 8,546 (15,147) (22,375) 7,796
- -----------------------------------------------------------------------------------------------------
REALIZED/UNREALIZED GAINS
(LOSSES) FROM INVESTMENTS:
Net realized gains (losses) on
investment transactions . . . . . . . . . . (223,207) 82,747 (40,379) (110,550)
Net realized gains (losses) on
foreign currency transactions . . . . . . . (28,558) (2,224) (2,574) (12,312)
- -----------------------------------------------------------------------------------------------------
Net realized gains (losses) on
investment and foreign currency
transactions . . . . . . . . . . . . . . . (251,765) 80,523 (42,953) (122,862)
Net change in unrealized
appreciation/depreciation on
investments and translation
of assets and liabilities
denominated in foreign currencies. . . . . . 416,888 163,651 161,952 267,173
- -----------------------------------------------------------------------------------------------------
Net realized/unrealized gains (losses)
on investments and foreign currencies . . . 165,123 244,174 118,999 144,311
- -----------------------------------------------------------------------------------------------------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS . . . . . . . . . . . . . . $173,669 $229,027 $ 96,624 $152,107
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
16 SEMIANNUAL REPORT 2003
STATEMENTS OF CHANGES IN NET ASSETS
GARTMORE GLOBAL GARTMORE GLOBAL
FINANCIAL SERVICES GLOBAL HEALTH SCIENCES
FUND FUND
- ---------------------------------------------------------------------------------------------------------------
SIX SIX YEAR ENDED
MONTHS PERIOD MONTHS OCTOBER
ENDED ENDED ENDED 31,
APRIL OCTOBER APRIL 2002
30, 31, 30,
2003 2002 2003
(A)
- ---------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss). . . . . . . . . . . $ 8,546 $ 4,363 $ (15,147) $ (30,921)
Net realized gains (losses) on investment
and foreign currency transactions. . . . . . . (251,765) (46,672) 80,523 (416,407)
Net change in unrealized appreciation/
Depreciation on investments and translation
of assets and liabilities denominated in
foreign currencies . . . . . . . . . . . . . . 416,888 (289,331) 163,651 41,363
- ---------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations. . 173,669 (331,640) 229,027 (405,965)
- ---------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income . . . . . . . . . . . . . . (1,596) (183) - -
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income . . . . . . . . . . . . . . (179) - - -
DISTRIBUTIONS TO CLASS C SHAREHOLDERS FROM:
Net investment income . . . . . . . . . . . . . . (177) - - -
DISTRIBUTIONS TO INSTITUTIONAL SERVICE CLASS
SHAREHOLDERS FROM:
Net investment income . . . . . . . . . . . . . . (2,031) (255) - -
- ---------------------------------------------------------------------------------------------------------------
Change in net assets from shareholder . . . . . . (3,983) (438) - -
distributions
- ---------------------------------------------------------------------------------------------------------------
Change in net assets from capital transactions. . 15,314 3,015,445 1,183,867 1,801,772
- ---------------------------------------------------------------------------------------------------------------
Change in net assets. . . . . . . . . . . . . . . 185,000 2,683,367 1,412,894 1,395,807
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . 2,683,367 - 3,729,793 2,333,986
- ---------------------------------------------------------------------------------------------------------------
End of period . . . . . . . . . . . . . . . . . . $2,868,367 $2,683,367 $5,142,687 $3,729,793
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
(a) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002.
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 17
STATEMENTS OF CHANGES IN NET ASSETS
GARTMORE GLOBAL TECHNOLOGY GARTMORE GLOBAL
AND COMMUNICATIONS FUND UTILITIES FUND
- -------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31
2003 2002 2003 2002 (A)
- -------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss) . . . . . . . . . . . . $ (22,375) $ (57,380) $ 7,796 $ 25,423
Net realized gains (losses) on investment
and foreign currency transactions. . . . . . . . . (42,953) (1,284,638) (122,862) (744,672)
Net change in unrealized appreciation/
depreciation on investments and translation
of assets and liabilities denominated in
foreign currencies . . . . . . . . . . . . . . . . . 161,952 (191,807) 267,173 (110,663)
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations . . . 96,624 (1,533,825) 152,107 (829,912)
- -------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS FROM:
Net investment income. . . . . . . . . . . . . . . . - - (3,287) (4,321)
DISTRIBUTIONS TO CLASS B SHAREHOLDERS FROM:
Net investment income. . . . . . . . . . . . . . . . - - (2,128) (2,276)
DISTRIBUTIONS TO CLASS C SHAREHOLDERS FROM:
Net investment income. . . . . . . . . . . . . . . . - - (2,116) (2,258)
DISTRIBUTIONS TO INSTITUTIONAL SERVICE CLASS
SHAREHOLDERS FROM:
Net investment income. . . . . . . . . . . . . . . . - - (3,654) (5,057)
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets from shareholder distributions. - - (11,185) (13,912)
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets from capital transactions . . . 538,834 754,205 14,004 3,021,302
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets . . . . . . . . . . . . . . . . 635,458 (779,620) 154,926 2,177,478
NET ASSETS:
Beginning of period. . . . . . . . . . . . . . . . . 3,153,850 3,933,470 2,177,478 -
- -------------------------------------------------------------------------------------------------------------------------
End of period. . . . . . . . . . . . . . . . . . . . $ 3,789,308 $ 3,153,850 $ 2,332,404 $ 2,177,478
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
(a) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002.
See notes to financial statements.
- --------------------------------------------------------------------------------
18 SEMIANNUAL REPORT 2003
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE GLOBAL FINANCIAL SERVICES FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES INCOME DISTRIBUTIONS PERIOD
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 0.04 (1.12) (1.08) - - $ 8.92
October 31, 2002 (d)
Six Months Ended . . . $ 8.92 0.04 0.55 0.59 (0.02) (0.02) $ 9.49
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 10.00 (0.02) (1.11) (1.13) - - $ 8.87
October 31, 2002 (d)
Six Months Ended . . . $ 8.87 0.01 0.54 0.55 - - $ 9.42
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 10.00 (0.02) (1.11) (1.13) - - $ 8.87
October 31, 2002 (d)
Six Months Ended . . . $ 8.87 0.01 0.54 0.55 - - $ 9.42
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 0.06) (1.12) (1.06) - - $ 8.94
October 31, 2002 (d)
Six Months Ended . . . $ 8.94 0.06 0.55 0.61 (0.03) (0.03) $ 9.52
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
NET ASSETS EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
AT END OF TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . (10.78%) (e) $ 675 1.66% (f) 0.47% (f) 3.76% (f) (1.63%) (f) 102.39%
October 31, 2002 (d)
Six Months Ended . . . 6.64% (e) $ 727 1.65% (f) 0.95% (f) 3.55% (f) (0.96%) (f) 93.54%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . (11.30%) (e) $ 672 2.38% (f) (0.25%) (f) 4.51% (f) (2.38%) (f) 102.39%
October 31, 2002 (d)
Six Months Ended . . . 6.23% (e) $ 717 2.40% (f) 0.19% (f) 4.30% (f) (1.71%) (f) 93.54%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . (11.30%) (e) $ 665 2.38% (f) (0.25%) (f) 4.51% (f) (2.38%) (f) 102.39%
October 31, 2002 (d)
Six Months Ended . . . 6.23% (e) $ 709 2.40% (f) 0.19% (f) 4.30% (f) (1.71%) (f) 93.54%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . (10.57%) (e) $ 671 1.40% (f) 0.73% (f) 3.51% (f) (1.38%) (f) 102.39%
October 31, 2002 (d)
Six Months Ended . . . 6.81% (e) $ 716 1.40% (f) 1.19% (f) 3.30% (f) (0.71%) (f) 93.54%
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratio would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002.
(e) Not annualized.
(f) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 19
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE GLOBAL HEALTH SCIENCES FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM RETURN ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT OF TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES CAPITAL DISTRIBUTIONS PERIOD
- -------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 (0.03) (0.63) (0.66) (0.01) (0.01) $ 9.33
October 31, 2001 (d)
Year Ended . . . . . . $ 9.33 (0.06) (0.97) (1.03) - - $ 8.30
October 31, 2002
Six Months Ended . . . $ 8.30 (0.02) 0.46 0.44 - - $ 8.74
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 10.00 (0.09) (0.62) (0.71) - - $ 9.29
October 31, 2001 (d)
Year Ended . . . . . . $ 9.29 (0.15) (0.93) (1.08) - - $ 8.21
October 31, 2002
Six Months Ended . . . $ 8.21 (0.05) 0.45 0.40 - - $ 8.61
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 7.92 (0.01) 0.30 0.29 - - $ 8.21
October 31, 2002 (e)
Six Months Ended . . . $ 8.21 (0.04) 0.45 0.41 - - $ 8.62
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 (0.01) (0.62) (0.63) (0.01) (0.01) $ 9.36
October 31, 2001 (d)
Year Ended . . . . . . $ 9.36 (0.04) (0.97) (1.01) - - $ 8.35
October 31, 2002
Six Months Ended . . . $ 8.35 (0.02) 0.47 0.45 - - $ 8.80
April 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
NET ASSETS EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
AT END OF TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- -------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . (6.61%) (f) $ 779 1.53% (g) (0.55%) (g) 6.84% (g) (5.86%) (g) 754.05%
October 31, 2001 (d)
Year Ended . . . . . . (11.04%) $ 1,538 1.60% (0.99%) 3.10% (2.49%) 893.80%
October 31, 2002
Six Months Ended . . . 5.30%(f) $ 2,410 1.56% (g) (0.70%) (g) 2.73% (g) (1.87%) (g) 302.81%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . (7.10%) (f) $ 774 2.13% (g) (1.15%) (g) 7.61% (g) (6.63%) (g) 754.05%
October 31, 2001 (d)
Year Ended . . . . . . (11.63%) $ 730 2.28% (1.71%) 4.00% (3.43%) 893.80%
October 31, 2002
Six Months Ended . . . 4.87% (f) $ 766 2.25% (g) (1.35%) (g) 3.40% (g) (2.51%) (g) 302.81%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . 3.66% (f) $ 58 2.25% (g) (1.69%) (g) 2.80% (g) (2.24%) (g) 893.80%
October 31, 2002 (e)
Six Months Ended . . . 4.99% (f) $ 98 2.25% (g) (1.38%) (g) 3.41% (g) (2.54%) (g) 302.81%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . (6.25%) (f) $ 781 1.10% (g) (0.13%) (g) 6.59% (g) (5.62%) (g) 754.05%
October 31, 2001 (d)
Year Ended . . . . . . (10.79%) $ 1,403 1.27% (0.66%) 2.85% (2.24%) 893.80%
October 31, 2002
Six Months Ended . . . 5.39% (f) $ 1,869 1.39% (g) (0.52%) (g) 2.55% (g) (1.68%) (g) 302.81%
April 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratio would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from December 29, 2000 (commencement of operations) through
October 31, 2001.
(e) For the period from September 23, 2002 (commencement of operations) through
October 31, 2002.
(f) Not annualized.
(g) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
20 SEMIANNUAL REPORT 2003
GARTMORE GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT REALIZED TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES GAINS DISTRIBUTIONS PERIOD
- --------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 (0.02) 1.14 1.12 - - $ 11.12
October 31, 2000 (d)
Year Ended . . . . . . $ 11.12 (0.06) (6.41) (6.47) (0.63) (0.63) $ 4.02
October 31, 2001
Year Ended . . . . . . $ 4.02 (0.04) (1.35) (1.39) - - $ 2.63
October 31, 2002
Six Months Ended . . . $ 2.63 (0.01) 0.11 0.10 - - $ 2.73
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . 10.00 (0.06) 1.15 1.09 - - $ 11.09
October 31, 2000 (d)
Year Ended . . . . . . $ 11.09 (0.09) (6.40) (6.49) (0.63) (0.63) $ 3.97
October 31, 2001
Year Ended . . . . . . $ 3.97 (0.07) (1.32) (1.39) - - $ 2.58
October 31, 2002
Six Months Ended . . . $ 2.58 (0.02) 0.11 0.09 - - $ 2.67
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 5.37 (0.02) (1.36) (1.38) - - $ 3.99
October 31, 2001 (e)
Year Ended . . . . . . $ 3.99 (0.08) (1.31) (1.39) - - $ 2.60
October 31, 2002
Six Months Ended . . . $ 2.60 (0.03) 0.12 0.09 - - $ 2.69
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 (0.03) 1.15 1.12 - - $ 11.12
October 31, 2000 (d)
Year Ended . . . . . . $ 11.12 (0.04) (6.39) (6.43) (0.63) (0.63) $ 4.06
October 31, 2001
Year Ended . . . . . . $ 4.06 (0.03) (1.37) (1.40) - - $ 2.66
October 31, 2002
Six Months Ended . . . $ 2.66 (0.01) 0.12 0.11 - - $ 2.77
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
NET ASSETS EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
AT END OF TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . 11.20% (f) $ 4,602 1.73% (g) (1.07%) (g) 4.43% (g) (3.77%) (g) 149.08%
October 31, 2000 (d)
Year Ended . . . . . . (60.93%) $ 2,038 1.73% (1.05%) 6.38% (5.70%) 922.33%
October 31, 2001
Year Ended . . . . . . (34.58%) (h) $ 1,514 1.69% (1.37%) 2.56% (2.24%) 944.01%
October 31, 2002
Six Months Ended . . . 3.80% (f) $ 1,728 1.69% (g) (1.18%) (g) 3.52% (g) (3.01%) (g) 491.30%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . 10.90% (f) S 2,275 2.33% (g) (1.69%) (g) 5.18% (g) (4.54%) (g) 149.08%
October 31, 2000 (d)
Year Ended . . . . . . (61.30%) $ 1,137 2.33% (1.66%) 7.21% (6.54%) 922.33%
October 31, 2001
Year Ended . . . . . . (35.01%) (h) $ 780 2.38% (2.02%) 3.32% (2.96%) 944.01%
October 31, 2002
Six Months Ended . . . 3.49% (f) $ 808 2.40% (g) (1.90%) (g) 4.24% (g) (3.72%) (g) 491.30%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . (25.70%) (f) $ 29 2.33% (g) (1.79%) (g) 9.94% (g) (9.40%) (g) 922.33%
October 31, 2001 (e)
Year Ended . . . . . . (34.84%) (h) $ 17 2.38% (1.83%) 3.40% (2.85%) 944.01%
October 31, 2002
Six Months Ended . . . 3.46% (f) $ 15 2.40% (g) (1.90%) (g) 4.24% (g) (3.74%) (g) 491.30%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . 11.20% (f) $ 1,854 1.40% (g) (0.76%) (g) 4.17% (g) (3.53%) (g) 149.08%
October 31, 2000 (d)
Year Ended . . . . . . (60.58%) $ 730 1.40% (0.70%) 5.70% (5.00%) 922.33%
October 31, 2001
Year Ended . . . . . . (34.48%) (h) $ 843 1.41% (1.37%) 2.08% (2.04%) 944.01%
October 31, 2002
Six Months Ended . . . 4.14% (f) $ 1,238 1.55% (g) (1.04%) (g) 3.38% (g) (2.86%) (g) 491.30%
April 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratio would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from June 30, 2000 (commencement of operations) through
October 31, 2000.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Not annualized.
(g) Annualized.
(h) The total returns shown include losses realized on the disposal of
investments that were reimbursed by the adviser, which otherwise would have
reduced total returns by 0.54%, 0.60%, 0.89%, and 0.38% for Class A, Class
B, Class C and Institutional Service Class shares, respectively. See notes
to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 21
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE GLOBAL UTILITIES FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES INCOME DISTRIBUTIONS PERIOD
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 0.11 (2.85) (2.74) (0.06) (0.06) $ 7.20
October 31, 2002 (d)
Six Months Ended . . . $ 7.20 0.03 0.48 0.51 (0.04) (0.04) $ 7.67
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 10.00 0.05 (2.84) (2.79) (0.03) (0.03) $ 7.18
October 31, 2002 (d)
Six Months Ended . . . $ 7.18 0.01 0.48 0.49 (0.03) (0.03) $ 7.64
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 10.00 0.05 (2.84) (2.79) (0.03) (0.03) $ 7.18
October 31, 2002 (d)
Six Months Ended . . . $ 7.18 0.01 0.48 0.49 (0.03) (0.03) $ 7.64
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 0.13 (2.85) (2.72) (0.07) (0.07) $ 7.21
October 31, 2002 (d)
Six Months Ended . . . $ 7.21 0.05 0.47 0.52 (0.05) (0.05) $ 7.68
April 30, 2003
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
NET ASSETS RATIO OF INVESTMENT EXPENSES INCOME
AT END OF EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
PERIOD TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL (000S) NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . (27.46%) (e) $ 547 1.46% (f) 1.46% (f) 3.96% (f) (1.04%) (f) 146.88%
October 31, 2002 (d)
Six Months Ended . . . 7.16% (e) $ 589 1.45% (f) 1.02% (f) 3.84% (f) (1.38%) (f) 48.38%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . (27.93%) (e) $ 544 2.18% (f) 0.75% (f) 4.71% (f) (1.78%) (f) 146.88%
October 31, 2002 (d)
Six Months Ended . . . 6.81% (e) $ 580 2.20% (f) 0.27% (f) 4.59% (f) (2.13%) (f) 48.38%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . (27.93%) (e) $ 541 2.18% (f) 0.75% (f) 4.71% (f) (1.78%) (f) 146.88%
October 31, 2002 (d)
Six Months Ended . . . 6.81% (e) $ 577 2.20% (f) 0.27% (f) 4.59% (f) (2.13%) (f) 48.38%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . (27.27%) (e) $ 545 1.20% (f) 1.72% (f) 3.71% (f) (0.79%) (f) 146.88%
October 31, 2002 (d)
Six Months Ended . . . 7.22% (e) $ 585 1.20% (f) 1.27% (f) 3.59% (f) (1.13%) (f) 48.38%
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratio would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002.
(e) Not annualized.
(f) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
22 SEMIANNUAL REPORT 2003
GARTMORE NATIONWIDE LEADERS FUND
Class A Shares symbol: GULAX
Class B Shares symbol: GULBX
Class C Shares symbol: GULCX
Institutional Service Class symbol: GULIX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned 0.17%* versus
4.47% for its benchmark, the S&P 500 Index.
For broader comparison, the average return for this Fund's peer category
(Multi-Cap Core Funds) was 3.89%, according to Lipper, an independent company
that provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Despite weak economic growth and a jobless recovery, markets rebounded in April
because of better-than-expected first-quarter profits and the successful
resolution of the conflict in Iraq. Improved capital spending numbers during the
first quarter of 2003 (for information processing equipment and software) also
boosted investor sentiment.
Fund performance was hurt by an underweight position in technology stocks.
Internet and communication equipment stocks rallied during the period, which
caused some investors to speculate that these stocks were reaching "bubble"
levels again. Fears about the possibility of reduced consumer spending hurt Fund
holdings such as MBNA Corp., the consumer credit company; Maytag Corp., the
appliance maker; and The Black & Decker Corp., the home tool and accessory
maker.
Strong returns and sizable allocations (about 5%) to stocks such as St. Jude
Medical, Inc., Eaton Corp., Dominion Resources, Inc., Fannie Mae and
UnitedHealth Group, Inc. helped returns.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
Top holdings included St. Jude Medical, Inc., the cardiac device manufacturer;
Anheuser-Busch Cos., Inc., the domestic beer producer; Eaton Corp., the
industrial manufacturer; Ecolab, Inc., the chemical cleaning products
manufacturer; and The Goldman Sachs Group, Inc., the investment management firm.
We purchased UnitedHealth Group, Inc., The Goldman Sachs Group, Inc. and
EchoStar Communications Corp. during the period. UnitedHealth Group, a
health-care benefits administrator, was purchased due to its ability to help
companies control their medical costs, which have been on the rise. Goldman
Sachs was purchased to take advantage of the market recovery, while EchoStar
Communications should gain from growing demand for direct-to-satellite TV
products and services.
We reduced the Fund's consumer discretionary weighting and sold our positions in
Brunswick Corp. and Maytag Corp. We also sold Novellus Systems, Inc. due to
concerns about higher inventories within the technology sector.
HOW IS THE FUND POSITIONED?
Now that the conflict in Iraq has ended, investors are once again focusing on
long-term economic fundamentals and corporate profits, which we believe will
show improvement during the year.
The Fund is positioned for an economic recovery, with an overweighting in the
industrials and material sectors. The Fund's global industrial holdings also
should gain from the weaker dollar, which makes U.S. exports more attractive. We
reduced our overweight in the consumer discretionary sector, based on concerns
about consumer spending in light of the present higher unemployment rate and
smaller wage gains. We continue to search for stocks that can deliver earnings
growth during uncertain and volatile market conditions.
PORTFOLIO MANAGER: Simon Melluish
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $2,365,154
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -14.72% -4.68%
w/SC3 -19.64% -8.83%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -15.46% -5.42%
w/SC4 -19.68% -8.26%
- ------------------------------------------------------------
Class C. . . . . . . . . . . w/o SC2 -15.53% -5.42%
w/SC5 -17.20% -6.11%
- ------------------------------------------------------------
Institutional Service Class6 -14.74% -4.57%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on December 28, 2001.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted because it is charged when you sell Class C shares within the
first year after purchase.
6 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS
DATE A S&P 500 CPI
- --------------------------------------------------
12/28/2001 9,425 10,000 10,000
10/31/2002 8,822 7,816 10,260
4/30/2003 8,838 8,166 10,496
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Nationwide Leaders Fund, S&P 500 Index (S&P 500)(a) and the Consumer Price Index
(CPI)(b) since inception. Unlike the Fund, the returns for these indices do not
reflect any fees, expenses, or sales charges.
(a) The S&P 500 is a capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy through changes in the
aggregate market value of these 500 stocks which represent all major
industries.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 23
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE NATIONWIDE LEADERS FUND
COMMON STOCKS (98.0%)
SHARES VALUE
- ------------------------------------------------------------
CABLE TV (4.2%)
EchoStar Communications Corp. (b). . . . 3,400 $ 101,864
----------
- ------------------------------------------------------------
CAPITAL GOODS (12.4%)
Eaton Corp.. . . . . . . . . . . . . . . 1,600 131,312
Corp.. . . . . . . . . . . . . . . . . . 2,600 54,912
Parker Hannifin Corp.. . . . . . . . . . 2,800 113,904
----------
300,128
----------
- ------------------------------------------------------------
CHEMICALS (5.1%)
Ecolab, Inc. . . . . . . . . . . . . . . 2,400 122,616
----------
- ------------------------------------------------------------
CONSUMER PRODUCTS (9.1%)
Black & Decker Corp. . . . . . . . . . . 2,500 103,125
Newell Rubbermaid, Inc.. . . . . . . . . 3,800 115,824
----------
218,949
----------
- ------------------------------------------------------------
FINANCIAL SERVICES (5.0%)
Goldman Sachs Group, Inc.. . . . . . . . 1,600 121,440
----------
- ------------------------------------------------------------
FOOD & BEVERAGE (6.0%)
Anheuser-Busch Cos., Inc.. . . . . . . . 2,900 144,652
----------
- ------------------------------------------------------------
HEALTHCARE (13.2%)
HCA, Inc.. . . . . . . . . . . . . . . . 1,300 41,730
St. Jude Medical, Inc. (b) . . . . . . . 3,000 157,380
UnitedHealth Group, Inc. . . . . . . . . 1,300 119,769
----------
318,879
----------
- ------------------------------------------------------------
INSURANCE (4.4%)
Allstate Corp. (The) . . . . . . . . . . 2,800 105,812
----------
- ------------------------------------------------------------
MANUFACTURING (12.3%)
3M Co. . . . . . . . . . . . . . . . . . 600 75,624
Illinois Tool Works, Inc.. . . . . . . . 1,800 115,164
Nucor Corp.. . . . . . . . . . . . . . . 2,600 106,210
----------
296,998
----------
- ------------------------------------------------------------
MEDICAL INSTRUMENTS (4.5%)
Boston Scientific Corp. (b). . . . . . . 2,500 107,625
----------
- ------------------------------------------------------------
MORTGAGE / ASSET BACKED OBLIGATIONS (4.8%)
Fannie Mae . . . . . . . . . . . . . . . 1,600 115,824
----------
- ------------------------------------------------------------
PAPER & FOREST PRODUCTS (4.5%)
Weyerhaeuser Co. . . . . . . . . . . . . 2,200 109,098
----------
- ------------------------------------------------------------
RAILROADS (5.0%)
Norfolk Southern Corp. . . . . . . . . . 5,700 120,897
----------
- ------------------------------------------------------------
UTILITIES (4.4%)
Dominion Resources, Inc. . . . . . . . . 1,800 106,524
----------
- ------------------------------------------------------------
WASTE MANAGEMENT (3.1%)
Waste Management, Inc. . . . . . . . . . 3,400 73,848
----------
TOTAL COMMON STOCKS 2,365,154
----------
TOTAL INVESTMENTS (COST $2,310,745) (A)
- 98.0% 2,365,154
OTHER ASSETS IN EXCESS OF LIABILITIES -
2.0% 47,389
----------
NET ASSETS - 100.0% $2,412,543
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
24 SEMIANNUAL REPORT 2003
GARTMORE U.S. GROWTH LEADERS FUND
Class A Shares symbol: GXXAX
Class B Shares symbol: GXXBX
Class C Shares symbol: GXXCX
Institutional Service Class symbol: GXXIX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund outperformed, returning
14.21%* versus 11.77% and 4.47% for its benchmarks, respectively, the Nasdaq 100
Index and the S&P 500 Index.
For broader comparison, the average return for this Fund's peer category
(Multi-Cap Growth) was 4.44%, according to Lipper, an independent company that
provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Stock market and economic performance were dictated to an unusual extent by
geopolitical events. For example, the equity markets fell amid the uncertainties
in the run-up to war and rose after it became apparent that the war would end
relatively quickly. As the Fund's stellar performance indicates, however,
individual opportunities that offered stronger-than-average growth were still
available.
The Fund significantly outperformed both of its benchmarks because of quality
stock selection and strong sector allocation decisions. The stocks that
represented the top five contributors to return, for example, made up 13.69% of
the portfolio and added a full 7.5% to performance. On a sector allocation
level, the Fund had 15.10% less technology holdings than the Nasdaq 100 Index.
Yet these holdings performed better than those of this Index and contributed
almost as much to the Fund's return as the Index's much higher technology
allocation did to it.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
Among the Fund's largest positions were The Gap, Inc. and Target Corp.
(representing 4.15% and 3.79%, respectively). The Gap was a major contributor to
Fund performance, adding 1.71% to return as it continued to experience strong
same store sales growth. Target, an upscale discount retail chain, is expected
to perform well in the future because it offers higher-end discretionary items
whose sales should benefit as the economic picture improves.
The Fund recently bought shares of Genzyme Corp., a firm that won FDA approval
to market a new drug for Fabry disease, a rare genetic disorder, just before the
end of the period; it is expecting approval of another drug soon. The Fund sold
shares of Applebee's International, Inc. The restaurant firm performed well, yet
the managers sold this stock because, with its lofty valuation, it was no longer
one of their best picks.
HOW IS THE FUND POSITIONED?
We believe that the impetus for growth will come slightly more from capital
spending and less from consumer spending than in the past (although we don't
believe consumer spending will dry up). The Fund maintains a sizable exposure to
the information technology sector, particularly semiconductor equipment and
products.
We have raised the Fund's exposure to economically sensitive financials stocks.
We believe that they will perform well as the economy improves. It is a stock
picker's market, and we plan to profit from individual stock selection based on
company fundamentals of industry leaders.
PORTFOLIO MANAGER: Christopher Baggini, CFA and Aaron Harris
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $4,514,921
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -4.13% -13.78%
w/SC3 -9.65% -15.57%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -4.95% -14.41%
w/SC4 -9.71% -15.29%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -5.07% -14.22%
w/SC6 -7.02% -14.52%
- ------------------------------------------------------------
Institutional Service Class7 -3.95% -13.50%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on June 30, 2000.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
S&P
DATE CLASS A 500 CPI
- ----------------------------------------------
6/30/2000. 9,425 10,000 10,000
10/31/2000 10,971 9,861 10,099
10/31/2001 5,945 7,405 10,313
10/31/2002 5,422 6,287 10,522
4/30/2003. 6,192 6,568 10,764
Comparative performance of $10,000 invested in Class A shares of the Gartmore
U.S. Growth Leaders Fund, S&P 500 Index (S&P 500)(a), and the Consumer Price
Index (CPI)(b) since inception. Unlike the Fund, the returns for these indices
do not reflect any fees, expenses, or sales charges.
(a) The S&P 500 is a capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy through changes in the
aggregate market value of these 500 stocks which represent all major
industries.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 25
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE U.S. GROWTH LEADERS FUND
COMMON STOCKS (93.1%)
SHARES VALUE
- ------------------------------------------------------------
AEROSPACE/DEFENSE (3.0%)
Lockheed Martin Corp.. . . . . . . . . . 2,900 $ 145,145
----------
- ------------------------------------------------------------
AUTOMOTIVE (3.4%)
Advance Auto Parts, Inc. (b) . . . . . . 3,300 164,142
----------
- ------------------------------------------------------------
BANKS (3.0%)
Wells Fargo & Co.. . . . . . . . . . . . 3,000 144,780
----------
- ------------------------------------------------------------
BROADCAST MEDIA/CABLE TELEVISION (7.4%)
AOL Time Warner, Inc. (b). . . . . . . . 12,700 173,736
Clear Channel Communications, Inc. (b) . 4,700 183,817
----------
357,553
----------
- ------------------------------------------------------------
COMPUTER EQUIPMENT (6.7%)
Dell Computer Corp. (b). . . . . . . . . 5,000 144,550
EMC Corp. (b). . . . . . . . . . . . . . 19,600 178,164
----------
322,714
----------
- ------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (14.4%)
Affiliated Computer Services, Inc.
Class A (b) . . . . . . . . . . . . . 3,000 143,100
Cognos, Inc. (b) . . . . . . . . . . . . 6,550 177,767
Mercury Interactive Corp. (b). . . . . . 4,200 142,548
Symantec Corp. (b) . . . . . . . . . . . 5,450 239,527
----------
702,942
----------
- ------------------------------------------------------------
FINANCIAL SERVICES (6.2%)
Capital One Financial Corp.. . . . . . . 3,000 125,610
Citigroup, Inc.. . . . . . . . . . . . . 4,500 176,625
----------
302,235
----------
- ------------------------------------------------------------
FOOD & BEVERAGE (3.0%)
PepsiCo, Inc.. . . . . . . . . . . . . . 3,400 147,152
----------
- ------------------------------------------------------------
INSURANCE (3.2%)
American International Group, Inc. . . . 2,700 156,465
----------
- ------------------------------------------------------------
MEDICAL PRODUCTS (10.3%)
Amgen, Inc. (b). . . . . . . . . . . . . 2,700 165,537
Genzyme Corp. (b). . . . . . . . . . . . 4,100 165,148
Merck & Co., Inc.. . . . . . . . . . . . 2,900 168,722
----------
499,407
----------
- ------------------------------------------------------------
RETAIL (12.5%)
Lowe's Companies, Inc. . . . . . . . . . 5,000 219,450
Target Corp. . . . . . . . . . . . . . . 5,500 183,920
The Gap, Inc.. . . . . . . . . . . . . . 12,100 201,223
----------
604,593
----------
- ------------------------------------------------------------
SEMICONDUCTORS (12.9%)
Agere Systems, Inc. Class A (b). . . . . 80,000 143,200
Emulex Corp. (b) . . . . . . . . . . . . 8,000 163,920
Intel Corp.. . . . . . . . . . . . . . . 8,450 155,480
Novellus Systems, Inc. (b) . . . . . . . 5,800 162,632
----------
625,232
----------
- ------------------------------------------------------------
TELECOMMUNICATIONS (7.1%)
Nokia Corp.. . . . . . . . . . . . . . . 11,650 193,041
Verizon Communications, Inc. . . . . . . 4,000 149,520
----------
342,561
----------
TOTAL COMMON STOCKS 4,514,921
----------
TOTAL INVESTMENTS (COST $4,156,941) (A)
- 93.1% 4,514,921
OTHER ASSETS IN EXCESS OF LIABILITIES -
6.9% 336,855
----------
NET ASSETS - 100.0% $4,851,776
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
26 SEMIANNUAL REPORT 2003
GARTMORE WORLDWIDE LEADERS FUND
Class A Shares symbol: GLLAX
Class B Shares symbol: GLLBX
Class C Shares symbol: GLLCX
Institutional Service Class symbol: GLLSX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned -4.00%* versus
3.88% for its benchmark, the Morgan Stanley Capital International (MSCI) World
Index.
For broader comparison, the average return for this Fund's peer category (Global
Funds) was 1.81%, according to Lipper, an independent company that provides
mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Volatility dominated global equity markets during the past six months,
reflecting rising geopolitical turmoil ahead of the conflict in Iraq, and the
resultant fall in consumer confidence. However, equities rebounded in April
after the successful resolution of the war in Iraq, which boosted investor
confidence.
Stock selection within the information technology and consumer discretionary
sectors hurt portfolio returns. Within the Index, communications equipment and
Internet stocks rallied, based on low valuations and increasing Internet usage,
respectively. The Fund was underweight in communication equipment stocks, which
hurt returns. The Fund's Internet stock-Korean software firm NCSoft Corp.-fell
along with the Korean market because of the government's crackdown on financial
reporting and fears about the spread of the SARS illness.
The Fund's consumer discretionary stocks such as Bayerische Motoren Werke AG
(BMW) and Newell Rubbermaid, Inc. detracted from returns. BMW declined on fears
about reductions in consumer spending, while investor rotation out of consumer
staples names into more high-growth stocks hurt Newell Rubbermaid.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
Among the Fund's top holdings were Microsoft Corp., which fell 4% during the
period, based on concerns about future computer sales; St. Jude Medical, Inc., a
cardiac rhythm device manufacturer, which gained 47% on strong demand from an
aging population for its cardiac-related products; and JetBlue Airways Corp.,
which was up 17% due to improved traffic flow and market share gains.
Fund purchases included Man Group PLC, the U.K. hedge fund manager, which has
gained from volatile markets, and Vodafone Group PLC, which was purchased
because of its successful new product introductions and better-than-expected
demand.
Sales included Dixons Group PLC, the U.K. electronics retailer, based on
concerns about the strength of consumer spending. We also sold J.P. Morgan Chase
& Co. because of its higher expenses, which we expect will erode profits.
HOW IS THE FUND POSITIONED?
Given the present uncertain market conditions, we are increasing high-beta names
(those that move more than the market) during rallies and selling these
positions when we see a chance to realize profits.
Regarding the Fund's country weightings, we are overweight in the United Kingdom
and the United States, because we have the greatest conviction that the recovery
is under way in those markets. We also have an overweight position in Emerging
Markets, because we believe we will find the strongest economic and profit
growth in that region. We are underweight in Europe and Japan due to weak
economic conditions in those regions.
PORTFOLIO MANAGER: Gartmore Global Partners - Subadviser
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $3,430,713
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -19.88% -21.30%
w/SC3 -24.46% -23.03%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -20.43% -21.87%
w/SC4 -24.41% -22.75%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -20.34% -21.70%
w/SC6 -21.97% -21.99%
- ------------------------------------------------------------
Institutional Service Class7 -19.61% -21.03%
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on August 30, 2000.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS MSCI
DATE A WORLD CPI
- ------------------------------------------------
8/30/2000. 9,425 10,000 10,000
10/31/2000 8,596 9,312 10,069
10/31/2001 5,900 6,962 10,284
10/31/2002 5,184 5,952 10,492
4/30/2003. 4,976 6,183 10,733
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Worldwide Leaders Fund, the Morgan Stanley Capital International World Index
(MSCI World)(a), and the Consumer Price Index (CPI)(b) since inception. Unlike
the Fund, the returns for these indices do not reflect any fees, expenses, or
sales charges.
(a) The MSCI World is an index that has developing countries' securities and
represents the local market of that security.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 27
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE WORLDWIDE LEADERS FUND
COMMON STOCKS (79.3%)
SHARES VALUE
- --------------------------------------------------------
AUSTRALIA (1.7%)
MULTI-MEDIA (1.7%)
The News Corp. Ltd. 10,400 $74,035
--------
- --------------------------------------------------------
FINLAND (2.4%)
OIL & GAS (2.4%)
Fortum Oyj 14,200 101,898
--------
- --------------------------------------------------------
FRANCE (1.4%)
BANKING (1.4%)
Societe Generale 1,000 61,157
--------
- --------------------------------------------------------
GERMANY (4.4%)
BANKING (1.4%)
Deutsche Bank AG 1,200 61,871
--------
TELECOMMUNICATIONS (3.0%)
Deutsche Telekom AG 9,500 127,012
--------
188,883
--------
- --------------------------------------------------------
ISRAEL (1.9%)
PHARMACEUTICALS (1.9%)
Teva Pharmaceutical Industries Ltd.
ADR 1,750 81,725
--------
- --------------------------------------------------------
ITALY (2.3%)
BANKING (2.3%)
Banca Nazionale del Lavoro SpA (b) 60,900 98,684
--------
- --------------------------------------------------------
JAPAN (6.0%)
BUILDING & CONSTRUCTION (2.9%)
Asahi Glass Co. Ltd. 23,000 122,464
--------
RETAIL (1.3%)
Marui Co., Ltd. 6,800 56,619
--------
TELECOMMUNICATIONS (1.8%)
NTT DoCoMo, Inc. 38 78,383
--------
257,466
--------
- --------------------------------------------------------
NETHERLANDS (1.2%)
INSURANCE (1.2%)
ING Groep NV 3,100 50,337
--------
- --------------------------------------------------------
NORWAY (1.7%)
OIL & GAS (1.7%)
Statoil ASA 8,900 70,586
--------
- --------------------------------------------------------
TAIWAN (4.4%)
ELECTRONICS (1.6%)
Optronics Corp. ADR (b) 13,000 67,600
--------
SEMICONDUCTORS (2.8%)
Taiwan Semiconductor Manufacturing Co.
Ltd. ADR (b) 14,600 122,202
--------
189,802
--------
- --------------------------------------------------------
UNITED KINGDOM (11.4%)
BANKING (3.1%)
HSBC Holdings PLC 5,900 64,640
Lloyds TSB Group PLC 10,600 69,714
--------
134,354
--------
BUILDING & CONSTRUCTION (3.3%)
George Wimpey PLC 34,400 137,450
--------
INSURANCE (0.9%)
Wellington Underwriting PLC (b) 26,221 36,478
--------
TELECOMMUNICATIONS (3.0%)
Vodafone Group PLC 65,900 130,076
--------
TRANSPORTATION (1.1%)
National Express Group PLC 6,200 47,861
--------
486,219
--------
- --------------------------------------------------------
UNITED STATES (40.5%)
AIRLINES (2.8%)
JetBlue Airways Corp. (b) 3,750 117,863
--------
COMPUTER SOFTWARE (6.7%)
Dell Computer Corp. (b) 4,300 124,313
Microsoft Corp. 6,500 166,205
--------
290,518
--------
COSMETICS/PERSONAL CARE (2.3%)
Colgate-Palmolive Co 1,700 97,189
--------
DIVERSIFIED MANUFACTURING OPERATIONS (1.4%)
Tyco International Ltd. 3,900 60,840
--------
FINANCIAL SERVICES (3.0%)
Federated Investors, Inc. 2,300 62,767
Merrill Lynch & Co., Inc. 1,600 65,680
--------
128,447
--------
HOME FURNISHING (2.5%)
Newell Rubbermaid, Inc. 3,500 106,680
--------
INSURANCE (6.1%)
Allstate Corp. (The) 3,200 120,928
Platinum Underwriters Holdings, Inc. 2,900 76,705
RenaissanceRe Holdings 1,500 66,435
--------
264,068
--------
- --------------------------------------------------------------------------------
28 SEMIANNUAL REPORT 2003
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ------------------------------------------------------------
UNITED STATES (continued)
INTERNET SERVICES (3.7%)
Amazon.com, Inc. (b) . . . . . . . . . . 3,700 $ 106,079
USA Interactive (b). . . . . . . . . . . 1,700 50,915
----------
156,994
----------
MEDICAL INSTRUMENTS (3.2%)
St. Jude Medical, Inc. (b) . . . . . . . 2,600 136,396
----------
MEDICAL PRODUCTS (2.2%)
Johnson & Johnson. . . . . . . . . . . . 1,700 95,812
----------
PHARMACEUTICALS (3.2%)
Pfizer, Inc. . . . . . . . . . . . . . . 4,400 135,300
----------
RETAIL (1.6%)
Home Depot, Inc. (The) . . . . . . . . . 2,400 67,512
----------
SEMICONDUCTORS (1.8%)
Applied Materials, Inc. (b). . . . . . . 5,200 75,920
----------
1,733,539
----------
TOTAL COMMON STOCKS 3,394,331
----------
PREFERRED STOCKS (0.9%)
- ------------------------------------------------------------
GERMANY (0.9%)
AUTOMOTIVE (0.9%)
Porsche AG . . . . . . . . . . . . . . . 100 $ 36,382
----------
TOTAL PREFERRED STOCKS 36,382
----------
TOTAL INVESTMENTS (COST $3,254,623) (A) 3,430,713
- 80.2%
OTHER ASSETS IN EXCESS OF LIABILITIES -
19.8% 847,352
----------
NET ASSETS - 100.0% $4,278,065
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt
At April 30, 2003, the Fund's open forward foreign currency contracts were as
follows:
UNREALIZED
DELIVERY CONTRACT APPRECIATION
CURRENCY DATE VALUE MARKET VALUE (DEPRECIATION)
- --------------------------------------------------------------------
LONG
CONTRACTS:
Euro. . . . . . 5/06/03 $ 60,972 $ 61,128 $ 156
SHORT
CONTRACTS:
Japanese Yen. . 5/01/03 $ 50,477 $ 50,942 $ (465)
- --------------------------------------------------------------------
TOTAL CONTRACTS $ (309)
---------------
---------------
At April 30, 2003, the Fund's open long futures contracts were as follows:
MARKET VALUE UNREALIZED
NUMBER OF LONG COVERED BY APPRECIATION
CONTRACTS CONTRACTS* EXPIRATION CONTRACTS (DEPRECIATION)
- -----------------------------------------------------------------
3 S & P 500. 6/21/03 $ 687,075 $ 11,730
* Cash pledged as collateral.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 29
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 2003 (Unaudited)
GARTMORE GARTMORE GARTMORE
NATIONWIDE LEADERS U.S. GROWTH LEADERS WORLDWIDE LEADERS
FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value
(cost $2,310,745; $4,156,941
and $3,254,623; respectively) . . . . . . . . $ 2,365,154 $ 4,514,921 $ 3,430,713
Cash. . . . . . . . . . . . . . . . . . . . . . - 328,268 829,707
Foreign currency, at value
(cost $0; $0 and $3,095;
respectively). . . . . . . . . . . . . . . . - - 3,095
Interest and dividends receivable . . . . . . . 3,793 199 10,301
Receivable for capital shares issued. . . . . . - 4,278 -
Receivable for investments sold . . . . . . . . 51,064 475,559 202,341
Unrealized appreciation on forward
foreign currency contracts. . . . . . . . . . - - 156
Receivable from adviser . . . . . . . . . . . . 5,462 3,838 3,504
Reclaims receivable . . . . . . . . . . . . . . - - 4,877
Prepaid expenses and
other assets. . . . . . . . . . . . . . . . . 12,234 17,790 21,233
- -----------------------------------------------------------------------------------------------------------------
Total Assets. . . . . . . . . . . . . . . . . . 2,437,707 5,344,853 4,505,927
- -----------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable to custodian. . . . . . . . . . . . . . 21,895 - -
Payable for investments purchased . . . . . . . - 484,771 221,482
Unrealized depreciation on forward
foreign currency contracts. . . . . . . . . . - - 465
Accrued expenses and other payables
Investment advisory fees. . . . . . . . . . . . 1,720 3,135 2,796
Fund administration and transfer
agent fees. . . . . . . . . . . . . . . . . . 597 886 671
Distribution fees . . . . . . . . . . . . . . . 648 1,179 1,050
Administrative servicing fees . . . . . . . . . 113 206 38
Other . . . . . . . . . . . . . . . . . . . . . 191 2,900 1,360
- -----------------------------------------------------------------------------------------------------------------
Total Liabilities . . . . . . . . . . . . . . . 25,164 493,077 227,862
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS. . . . . . . . . . . . . . . . . . . $ 2,412,543 $ 4,851,776 $ 4,278,065
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
REPRESENTED BY:
Capital . . . . . . . . . . . . . . . . . . . . $ 2,694,679 $ 6,551,635 $ 6,603,948
Accumulated net investment
income (loss). . . . . . . . . . . . . . . . 122 (19,174) 7,119
Accumulated net realized gains
(losses) from investment,
futures and foreign currency
transactions. . . . . . . . . . . . . . . . . (336,667) (2,038,665) (2,521,574)
Net unrealized appreciation
(depreciation) on investments,
futures and translation of assets
and liabilities denominated in
foreign currencies. . . . . . . . . . . . . . 54,409 357,980 188,572
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS. . . . . . . . . . . . . . . . . . . $ 2,412,543 $ 4,851,776 $ 4,278,065
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS:
Class A Shares. . . . . . . . . . . . . . . . . $ 900,960 $ 2,038,593 $ 2,229,500
Class B Shares. . . . . . . . . . . . . . . . . 334,678 957,922 933,134
Class C Shares. . . . . . . . . . . . . . . . . 244,807 94,570 15,819
Institutional Service Class Shares. . . . . . . 932,098 1,760,691 1,099,612
Total . . . . . . . . . . . . . . . . . . . . . $ 2,412,543 $ 4,851,776 $ 4,278,065
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of shares authorized):
Class A Shares. . . . . . . . . . . . . . . . . 95,488 325,295 422,265
Class B Shares. . . . . . . . . . . . . . . . . 35,730 155,900 180,041
Class C Shares. . . . . . . . . . . . . . . . . 26,133 15,296 3,038
Institutional Service Class Shares. . . . . . . 98,645 278,015 206,373
Total . . . . . . . . . . . . . . . . . . . . . 255,996 774,506 811,717
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE:
Class A Shares. . . . . . . . . . . . . . . . . $ 9.44 $ 6.27 $ 5.28
Class B Shares (a). . . . . . . . . . . . . . . $ 9.37 $ 6.14 $ 5.18
Class C Shares (b). . . . . . . . . . . . . . . $ 9.37 $ 6.18 $ 5.21
Institutional Service Class Shares. . . . . . . $ 9.45 $ 6.33 $ 5.33
MAXIMUM OFFERING PRICE PER SHARE
(100%/(100% - maxiumum sales charge) of net
asset value adjusted to the nearest cent):
Class A Shares. . . . . . . . . . . . . . . . . $ 10.02 $ 6.65 $ 5.60
Class C Shares. . . . . . . . . . . . . . . . . $ 9.46 $ 6.24 $ 5.26
- -----------------------------------------------------------------------------------------------------------------
Maximum Sales Charge -
Class A Shares. . . . . . . . . . . . . . . . 5.75% 5.75% 5.75%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Maximum Sales Charge -
Class C Shares. . . . . . . . . . . . . . . . 1.00% 1.00% 1.00%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
(a) For Class B shares, the redemption price per share varies by length of time
shares are held.
(b) For Class C shares, the redemption price per share is reduced by 1.00% for
shares held less than one year. See notes to financial statements.
- --------------------------------------------------------------------------------
30 SEMIANNUAL REPORT 2003
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 2003 (Unaudited)
GARTMORE GARTMORE GARTMORE
NATIONWIDE U.S. GROWTH WORLDWIDE
LEADERS LEADERS LEADERS
FUND FUND FUND
- ---------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income . . . . . . . . . . . . $ 843 $ 1,196 $ 314
Dividend income
(net of foreign withholding tax
of $0; $0 and $2,671; respectively) . 21,888 9,899 30,312
- ---------------------------------------------------------------------------------
Total Income. . . . . . . . . . . . . . 22,731 11,095 30,626
- ---------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees. . . . . . . . 10,229 16,908 15,328
Fund administration and
transfer agent fees . . . . . . . . 6,255 6,241 7,126
Distribution fees Class A . . . . . . . 1,108 2,005 1,340
Distribution fees Class B . . . . . . . 1,579 3,920 4,481
Distribution fees Class C . . . . . . . 1,182 159 87
Administrative servicing fees Class A . - 114 18
Administrative servicing fees
Institutional Service Class . . . . . 768 939 276
Registration and filing fees. . . . . . 26,002 17,429 15,171
Printing fees . . . . . . . . . . . . . 644 5,187 1,625
Other . . . . . . . . . . . . . . . . . 421 450 491
- ---------------------------------------------------------------------------------
Total expenses before reimbursed
expenses. . . . . . . . . . . . . . . 48,188 53,352 45,943
Expenses reimbursed . . . . . . . . . . (29,911) (23,083) (18,282)
- ---------------------------------------------------------------------------------
Total Expenses. . . . . . . . . . . . . 18,277 30,269 27,661
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS). . . . . . 4,454 (19,174) 2,965
- ---------------------------------------------------------------------------------
REALIZED/UNREALIZED GAINS (LOSSES)
FROM INVESTMENTS:
Net realized gains (losses)
on investment transactions . . . . . (272,031) 323,404 (150,276)
Net realized gains (losses)
on futures transactions . . . . . . - - 5,608
Net realized gains (losses)
on foreign currency transactions . . - - (88,048)
- ---------------------------------------------------------------------------------
Net realized gains (losses)
on investment, futures,
and foreign currency transactions . . (272,031) 323,404 (232,716)
Net change in unrealized appreciation/
depreciation on investments,
futures and translation of assets
and liabilities denominated in
foreign currencies. . . . . . . . . . 264,752 166,204 133,052
- ---------------------------------------------------------------------------------
Net realized/unrealized gains (losses)
on investments, futures and
foreign currencies. . . . . . . . . . (7,279) 489,608 (99,664)
- ---------------------------------------------------------------------------------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS. . . . . . . . . . . $ (2,825) $ 470,434 $ (96,699)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 31
STATEMENTS OF CHANGES IN NET ASSETS
GARTMORE GARTMORE GARTMORE
NATIONWIDE LEADERS FUND U.S. GROWTH LEADERS FUND WORLDWIDE LEADERS FUND
- ----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS YEAR SIX MONTHS ENDED YEAR
ENDED ENDED ENDED ENDED APRIL 30, ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2003 OCTOBER 31,
2003 2002 (A) 2003 2002 2002
- ----------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss). . $ 4,454 $ 1,052 $ (19,174) $ (39,899) $ 2,965 $ (5,315)
Net realized gains (losses)
on investment, futures
and foreign currency
transactions . . . . . . . . (272,031) (64,636) 323,404 (574,350) (232,716) (1,470,076)
Net change in unrealized
appreciation/depreciation
on investments, futures and
translation of assets and
liabilities denominated in
foreign currencies. . . . . . 264,752 (210,343) 166,204 215,122 133,052 1,029,657
- ----------------------------------------------------------------------------------------------------------------------------
Change in net assets
resulting from operations. . (2,825) (273,927) 470,434 (399,127) (96,699) (445,734)
- ----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS FROM:
Net investment income . . . . . (3,467) (580) - - - -
DISTRIBUTIONS TO CLASS B
SHAREHOLDERS FROM:
Net investment income . . . . . (477) - - - - -
DISTRIBUTIONS TO CLASS C
SHAREHOLDERS FROM:
Net investment income . . . . . (368) - - - - -
DISTRIBUTIONS TO INSTITUTIONAL
SERVICE CLASS SHAREHOLDERS FROM:
Net investment income . . . . . (3,661) (660) - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Change in net assets
from shareholder
distributions . . . . . . . . (7,973) (1,240) - - - -
- ----------------------------------------------------------------------------------------------------------------------------
Change in net assets. . . . . . 192,834 2,505,674 1,437,718 917,301 1,240,785 364,889
from capital transactions
- ----------------------------------------------------------------------------------------------------------------------------
Change in net assets. . . . . . 182,036 2,230,507 1,908,152 518,174 1,144,086 (80,845)
NET ASSETS:
Beginning of period . . . . . . 2,230,507 - 2,943,624 2,425,450 3,133,979 3,214,824
- ----------------------------------------------------------------------------------------------------------------------------
End of period . . . . . . . . . $ 2,412,543 $ 2,230,507 $ 4,851,776 $ 2,943,624 $ 4,278,065 $ 3,133,979
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
(a) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002. See notes to financial statements.
- --------------------------------------------------------------------------------
32 SEMIANNUAL REPORT 2003
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE NATIONWIDE LEADERS FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES INCOME DISTRIBUTIONS PERIOD
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 0.02 (0.55) (0.53) (0.01) (0.01) $ 9.46
October 31, 2002 (d)
Six Months Ended . . $ 9.46 0.02 - 0.02 (0.04) (0.04) $ 9.44
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 10.00 (0.05) (0.55) (0.60) - - $ 9.40
October 31, 2002 (d)
Six Months Ended . . . $ 9.40 (0.02) - (0.02) (0.01) (0.01) $ 9.37
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 10.00 (0.05) (0.55) (0.60) - - $ 9.40
October 31, 2002 (d)
Six Months Ended . . . $ 9.40 (0.02) - (0.02) (0.01) (0.01) $ 9.37
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 0.03 (0.55) (0.52) (0.01) (0.01) $ 9.47
October 31, 2002 (d)
Six Months Ended . . . $ 9.47 0.02 - 0.02 (0.04) (0.04) $ 9.45
April 30, 2003
(Unaudited)
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
NET ASSETS RATIO OF INVESTMENT EXPENSES INCOME
AT END OF EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
PERIOD TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL (000S) NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . (5.34%) (e) $ 891 1.45% (f) 0.23% (f) 4.93% (f) (3.25%) (f) 60.54%
October 31, 2002 (d)
Six Months Ended . . 0.17% (e) $ 901 1.45% (f) 0.54% (f) 4.08% (f) (2.09%) (f) 46.70%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . (6.00%) (e) $ 317 2.20% (f) (0.58%) (f) 5.78% (f) (4.16%) (f) 60.54%
October 31, 2002 (d)
Six Months Ended . . . (0.17%) (e) $ 335 2.20% (f) (0.20%) (f) 4.83% (f) (2.84%) (f) 46.70%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . (6.00%) (e) $ 243 2.21% (f) (0.60%) (f) 5.80% (f) (4.19%) (f) 60.54%
October 31, 2002 (d)
Six Months Ended . . . (0.17%) (e) $ 245 2.20% (f) (0.20%) (f) 4.83% (f) (2.83%) (f) 46.70%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . (5.23%) (e) $ 778 1.32% (f) 0.39% (f) 4.74% (f) (3.03%) (f) 60.54%
October 31, 2002 (d)
Six Months Ended . . . 0.21% (e) $ 932 1.38% (f) 0.62% (f) 4.02% (f) (2.01%) (f) 46.70%
April 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002. Registration of shares effective with the Securities and
Exchange Commission on December 28, 2001. On the effective date the net
asset value was $10.11 per share for all classes which resulted in returns
of (6.37%), (7.02%), (7.02%) and (6.26%) for Class A shares, Class B
shares, Class C shares and Institutional Service Class shares,
respectively.
(e) Not annualized.
(f) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 33
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE U.S. GROWTH LEADERS FUND
INVESTMENT
ACTIVITIES DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT REALIZED TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES GAINS DISTRIBUTIONS PERIOD
- --------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 (0.01) 1.65 1.64 - - $ 11.64
October 31, 2000 (d)
Year Ended . . . . . . $ 11.64 (0.08) (5.13) (5.21) (0.41) (0.41) $ 6.02
October 31, 2001
Year Ended . . . . . . $ 6.02 (0.07) (0.46) (0.53) - - $ 5.49
October 31, 2002
Six Months Ended
April 30, 2003
(Unaudited) (f). . . $ 5.49 (0.03) 0.81 0.78 - - $ 6.27
CLASS B SHARES
Period Ended . . . . . $ 10.00 (0.03) 1.65 1.62 - - $ 11.62
October 31, 2000 (d)
Year Ended . . . . . . $ 11.62 (0.11) (5.14) (5.25) (0.41) (0.41) $ 5.96
October 31, 2001
Year Ended . . . . . . $ 5.96 (0.12) (0.44) (0.56) - - $ 5.40
October 31, 2002
Six Months Ended
April 30, 2003
(Unaudited) (f). . . $ 5.40 (0.05) 0.79 0.74 - - $ 6.14
CLASS C SHARES
Period Ended . . . . . $ 6.45 (0.04) (0.41) (0.45) - - $ 6.00
October 31, 2001 (e)
Year Ended . . . . . . $ 6.00 (0.12) (0.44) (0.56) - - $ 5.44
October 31, 2002 (f)
Six Months Ended
April 30, 2003
(Unaudited) (f). . . $ 5.44 (0.05) 0.79 0.74 - - $ 6.18
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 - 1.66 1.66 - - $ 11.66
October 31, 2000 (d)
Year Ended . . . . . . $ 11.66 (0.06) (5.13) (5.19) (0.41) (0.41) $ 6.06
October 31, 2001
Year Ended . . . . . . $ 6.06 (0.06) (0.46) (0.52) - - $ 5.54
October 31, 2002 (f)
Six Months Ended . . . $ 5.54 (0.02) 0.81 0.79 - - $ 6.33
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
NET ASSETS EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
AT END OF TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- -------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . 16.40% (g) $ 1,411 1.20% (h) (0.30%) (h) 8.29% (h) (7.39%) (h) 124.62%
October 31, 2000 (d)
Year Ended . . . . . . (45.81%) $ 1,195 1.60% (1.04%) 7.91% (7.35%) 944.67%
October 31, 2001
Year Ended . . . . . . (8.80%) $ 1,356 1.57% (1.20%) 3.04% (2.67%) 773.95%
October 31, 2002
Six Months Ended
April 30, 2003
(Unaudited) (f). . . 14.21% (g) $ 2,039 1.56% (h) (0.94%) (h) 2.87% (h) (2.24%) (h) 402.75%
CLASS B SHARES
Period Ended . . . . . 16.20% (g) $ 804 1.70% (h) (0.83%) (h) 9.20% (h) (8.33%) (h) 124.62%
October 31, 2000 (d)
Year Ended . . . . . . (46.25%) $ 772 2.20% (1.66%) 8.84% (8.30%) 944.67%
October 31, 2001
Year Ended . . . . . . (9.40%) $ 719 2.26% (1.89%) 3.88% (3.51%) 773.95%
October 31, 2002
Six Months Ended
April 30, 2003
(Unaudited) (f). . . 13.70% (g) $ 958 2.30% (h) (1.68%) (h) 3.60% (h) (2.98%) (h) 402.75%
CLASS C SHARES
Period Ended . . . . . (6.98%) (g) $ 9 2.20% (h) (1.77%) (h) 9.87% (h) (9.44%) (h) 944.67%
October 31, 2001 (e)
Year Ended . . . . . . (9.33%) $ 16 2.27% (1.89%) 3.69% (3.31%) 773.95%
October 31, 2002 (f)
Six Months Ended
April 30, 2003
(Unaudited) (f). . . 13.60% (g) $ 95 2.30% (h) (1.67%) (h) 3.52% (h) (2.89%) (h) 402.75%
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . 16.60% (g) $ 777 0.75% (h) 0.12% (h) 8.14% (h) (7.27%) (h) 124.62%
October 31, 2000 (d)
Year Ended . . . . . . (45.55%) $ 449 1.30% (0.75%) 7.39% (6.84%) 944.67%
October 31, 2001
Year Ended . . . . . . (8.58%) $ 853 1.32% (0.95%) 2.52% (2.15%) 773.95%
October 31, 2002 (f)
Six Months Ended . . . 14.26% (g) $ 1,761 1.46% (h) (0.84%) (h) 2.75% (h) (2.13%) (h) 402.75%
April 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from June 30, 2000 (commencement of operations) through
October 31, 2000.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Net investment income (loss) is based on average shares outstanding during
the period.
(g) Not annualized.
(h) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
34 SEMIANNUAL REPORT 2003
GARTMORE WORLDWIDE LEADERS FUND
INVESTMENT ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET ASSET NET ASSETS
ASSET VALUE, NET GAINS FROM VALUE, AT END OF
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT END OF TOTAL PERIOD
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES PERIOD RETURN (A) (000S)
- ------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 - (0.88) (0.88) $ 9.12 (8.80%) (f) $ 1,542
October 31, 2000 (d)
Year Ended . . . . . . $ 9.12 (0.01) (2.85) (2.86) $ 6.26 (31.36%) $ 1,096
October 31, 2001
Year Ended . . . . . . $ 6.26 - (0.76) (0.76) $ 5.50 (12.14%) $ 1,046
October 31, 2002
Six Months Ended . . . $ 5.50 - (0.22) (0.22) $ 5.28 (4.00%) (f) $ 2,230
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 10.00 - (0.89) (0.89) $ 9.11 (8.90%) (f) $ 1,519
October 31, 2000 (d)
Year Ended . . . . . . $ 9.11 (0.06) (2.85) (2.91) $ 6.20 (31.94%) $ 1,051
October 31, 2001
Year Ended . . . . . . $ 6.20 (0.04) (0.75) (0.79) $ 5.41 (12.74%) $ 936
October 31, 2002
Six Months Ended . . . $ 5.41 (0.01) (0.22) (0.23) $ 5.18 (4.25%) (f) $ 933
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 7.77 (0.02) (1.52) (1.54) $ 6.23 (19.82%) (f) $ 20
October 31, 2001 (e)
Year Ended . . . . . . $ 6.23 (0.04) (0.75) (0.79) $ 5.44 (12.68%) $ 19
October 31, 2002
Six Months Ended . . . $ 5.44 (0.01) (0.22) (0.23) $ 5.21 (4.23%) (f) $ 16
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 0.01 (0.89) (0.88) $ 9.12 (8.80%) (f) $ 1,521
October 31, 2000 (d)
Year Ended . . . . . . $ 9.12 0.01 (2.84) (2.83) $ 6.29 (31.03%) $ 1,048
October 31, 2001
Year Ended . . . . . . $ 6.29 0.01 (0.76) (0.75) $ 5.54 (11.92%) $ 1,133
October 31, 2002
Six Months Ended . . . $ 5.54 0.01 (0.22) (0.21) $ 5.33 (3.79%) (f) $ 1,100
April 30, 2003
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
NET NET TO AVERAGE TO AVERAGE PORTFOLIO
ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- ----------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . 1.68% (g) 0.05% (g) 6.74% (g) (5.01%) (g) 21.59%
October 31, 2000 (d)
Year Ended . . . . . . 1.75% (0.19%) 5.71% (4.15%) 34.57%
October 31, 2001
Year Ended . . . . . . 1.69% (0.03%) 2.60% (0.94%) 467.35%
October 31, 2002
Six Months Ended . . . 1.65% (g) 0.41% (g) 2.84% (g) (0.78%) (g) 225.66%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . 2.26% (g) (0.53%) (g) 7.47% (g) (5.74%) (g) 21.59%
October 31, 2000 (d)
Year Ended . . . . . . 2.35% (0.78%) 6.47% (4.90%) 34.57%
October 31, 2001
Year Ended . . . . . . 2.39% (0.72%) 3.36% (1.69%) 467.35%
October 31, 2002
Six Months Ended . . . 2.40% (g) (0.41%) (g) 3.60% (g) (1.61%) (g) 225.66%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . 2.35% (g) (1.04%) (g) 7.40% (g) (6.09%) (g) 34.57%
October 31, 2001 (e)
Year Ended . . . . . . 2.39% (0.71%) 3.41% (1.73%) 467.35%
October 31, 2002
Six Months Ended . . . 2.40% (g) (0.44%) (g) 3.61% (g) (1.65%) (g) 225.66%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . 1.36% (g) 0.37% (g) 6.45% (g) (4.72%) (g) 21.59%
October 31, 2000 (d)
Year Ended . . . . . . 1.42% 0.13% 5.44% (3.89%) 34.57%
October 31, 2001
Year Ended . . . . . . 1.42% 0.25% 2.34% (0.67%) 467.35%
October 31, 2002
Six Months Ended . . . 1.45% (g) 0.49% (g) 2.65% (g) (0.71%) (g) 225.66%
April 30, 2003
(Unaudited)
- ----------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from August 30, 2000 (commencement of operations) through
October 31, 2000.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Not annualized.
(g) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 35
GARTMORE EMERGING MARKETS FUND
Class A Shares symbol: GEGAX
Class B Shares symbol: GEGBX
Class C Shares symbol: GEGCX
Institutional Service Class symbol: GEGSX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30 2003, the Fund returned 5.74%* versus
6.10% for its benchmark, the S&P/IFCI Emerging Markets Composite Index.
For broader comparison, the average return for this Fund's peer category
(Emerging Markets Funds) was 6.26%, according to Lipper, an independent company
that provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Emerging Markets equities outperformed those of developed markets, driven
primarily by strong performance from the Latin American region. Brazil, Peru and
Argentina were up 40%, 43% and 89%, respectively, due to improving political
conditions.
The economies of countries such as Russia and Turkey also gained, with Russia's
economy benefiting from the higher price of oil and Turkey's advance on
expectations of increased tourism due to the fall of Baghdad. Asian markets fell
as a result of tensions in North Korea, the outbreak and spread of SARS, and the
crackdown on financial reporting in South Korea.
Fund performance was helped by an overweight position and good stock selection
in Brazil (up 40%) and Mexico (up 8%). An underweight allocation to South Korea,
which fell 7%, also helped returns. Stock selection as well as an underweight
position in South African equities detracted from performance, because that
market was up 14% due to rising commodity prices. The Fund's overweight position
in Impala Platinum Holdings Ltd., a mining stock, hurt returns because of the
unexpected 20% rise in South Africa's currency (the rand), which hurt profits.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
The Fund's top holdings included Samsung Electronics Co. Ltd. (6% weighting),
the world's largest electronics manufacturer, which fell 9% due to technology
company inventory concerns that could signal slowing demand. Siam Commercial
Bank, a 3% position, was up 30% on Thailand's strong consumer spending and loan
growth. Unibanco de Bancos Brasileiros, the Brazilian bank, soared 105% due to
the region's better economic prospects.
The Fund increased its exposure to issues in Brazil and Mexico, and sold some
South Africa positions, including AngloGold Ltd. and Anglo American PLC.
HOW IS THE FUND POSITIONED?
The geopolitical climate has eased somewhat with the conflict resolution in
Iraq, and marketplace uncertainty has dropped significantly. However, in Asia,
the SARS virus has become a major economic concern. The spread of the virus
appears to have slowed, and we believe that many buying opportunities were
created in Asia as a result of recent share price declines. We are increasing
our mid-cap weightings in Asian industrial companies because these companies are
generating high earnings growth. However, the Fund remains underweight in South
Korean equities because of North Korean tensions.
We are overweight in Brazil, because we expect it to implement widespread
economic reforms, which we believe will generate many attractive long-term
opportunities. The Fund also is overweight in Mexico, which has been benefiting
from the weaker U.S. dollar.
PORTFOLIO MANAGER: Gartmore Global Partners - Subadviser
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $5,259,118
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -17.17% -11.59%
w/SC3 -21.93% -13.54%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -17.67% -12.13%
w/SC4 -21.79% -13.13%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -17.68% -11.71%
w/SC6 -19.34% -12.04%
- ------------------------------------------------------------
Institutional Service Class7 -16.93% -11.24%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on August 30, 2000.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS S&P/IFCI EMERGING
DATE A MARKETS COMPOSITE CPI
- -----------------------------------------------------------
8/30/2000. 9,425 10,000 10,000
10/31/2000 7,652 8,368 10,069
10/31/2001 5,644 6,602 10,284
10/31/2002 6,418 7,458 10,492
4/30/2003. 6,786 7,913 10,733
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Emerging Markets Fund, S&P/IFCI Emerging Markets Composite Index(a), and the
Consumer Price Index (CPI)(b) since inception. Unlike the Fund, the returns for
these indices do not reflect any fees, expenses, or sales charges.
(a) The S&P/IFCI Emerging Markets Composite is an index that aims to represent
the performance of the stocks in emerging stock markets that are available
to foreign institutional investors.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
36 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE EMERGING MARKETS FUND
COMMON STOCKS (93.3%)
SHARES VALUE
- ----------------------------------------------------------
ARGENTINA (0.1%)
FINANCIAL SERVICES (0.1%)
Grupo Financiero Galicia SA ADR (b) . . 1,100 $ 3,267
--------
- ----------------------------------------------------------
BRAZIL (10.9%)
BANKING (2.6%)
Banco Bradesco SA ADR . . . . . . . . . 1,700 35,020
Unibanco de Bancos Brasileiros SA
GDR . . . . . . . . . . . . . . . . . 5,902 107,122
--------
142,142
--------
BEVERAGES (0.8%)
Companhia de Bebidas das Americas
ADR . . . . . . . . . . . . . . . . . 2,200 43,758
--------
MINING (0.8%)
Cia Vale Do Rio Doce ADR. . . . . . . . 1,800 47,520
--------
OIL & GAS (1.5%)
Petroleo Brasileiro SA ADR. . . . . . . 1,600 29,680
Petroleo Brasileiro SA ADR. . . . . . . 3,200 54,752
--------
84,432
--------
PAPER PRODUCTS (1.1%)
Votorantim Celulose ADR . . . . . . . . 3,300 62,700
--------
STEEL (0.9%)
Gerdau SA ADR . . . . . . . . . . . . . 4,300 52,288
--------
TELECOMMUNICATIONS (2.1%)
Tele Norte Leste Participacoes SA ADR . 5,300 57,505
Telesp Celular Participacoes SA ADR . . 15,972 61,492
--------
118,997
--------
TRANSPORTATION (1.1%)
Empresa Brasileira de Aeronautica SA
ADR. . . . . . . . . . . . . . . . . 4,300 59,641
--------
611,478
--------
- ----------------------------------------------------------
CHINA (4.9%)
BEVERAGES (0.4%)
Harbin Brewery Group Ltd. (b) . . . . . 80,000 24,106
--------
ELECTRIC UTILITY (0.9%)
Huaneng Power International, Inc. . . . 56,000 53,135
--------
METALS (0.4%)
Aluminum Corporation of China . . . . . 137,000 23,890
--------
OIL & GAS (1.9%)
CNOOC Ltd.. . . . . . . . . . . . . . . 71,500 93,969
--------
Sinopec Shanghai Petrochemical Co
Ltd. (b).. . . . . . . . . . . . . . 80,000 12,412
106,381
--------
STEEL (0.6%)
Angang New Steel Co. Ltd. . . . . . . . 206,000 32,224
--------
TRANSPORTATION (0.7%)
China Merchants Holdings International
Co. Ltd.. . . . . . . . . . . . . . . 12,000 9,463
--------
China Shipping Development Co. Ltd. . . 112,000 28,721
--------
38,184
--------
277,920
--------
- ----------------------------------------------------------
HONG KONG (1.9%)
AUTOMOBILE (0.8%)
Denway Motors Ltd.. . . . . . . . . . . 142,000 46,884
--------
OIL & GAS (1.1%)
China Petroleum & Chemical Corp.. . . . 292,000 57,658
--------
104,542
--------
- ----------------------------------------------------------
HUNGARY (2.0%)
BANKING (0.7%)
OTP Bank Rt.. . . . . . . . . . . . . . 3,800 40,797
--------
PHARMACEUTICALS (1.3%)
Gedeon Richter Rt. GDR. . . . . . . . . 1,000 71,700
--------
112,497
--------
- ----------------------------------------------------------
INDIA (3.0%)
BANKING (0.8%)
ICICI Bank Ltd. ADR (b) . . . . . . . . 8,843 46,603
--------
DIVERSIFIED (0.8%)
Reliance Industries Ltd. GDR. . . . . . 4,000 45,560
--------
PHARMACEUTICALS (1.1%)
Dr. Reddy's Laboratories Ltd. ADR . . . 1,200 22,680
--------
Ranbaxy Laboratories Ltd. GDR . . . . . 2,480 38,762
--------
61,442
--------
SOFTWARE & COMPUTER SERVICES (0.3%)
Infosys Technologies Ltd. ADR . . . . . 400 16,440
--------
170,045
--------
- ----------------------------------------------------------
INDONESIA (2.7%)
AUTOMOBILE (1.8%)
PT Astra International, Inc. (b). . . . 294,730 102,791
--------
TELECOMMUNICATIONS (0.9%)
PT Telekomunikasi Indonesia . . . . . . 108,000 51,052
--------
153,843
--------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 37
STATEMENT OF INVESTMENTS (Continued)
April 30, 2003 (Unaudited)
GARTMORE EMERGING MARKETS FUND (Continued)
COMMON STOCKS (CONTINUED)
SHARES VALUE
- -------------------------------------------------------------
ISRAEL (2.2%)
BANKING (0.4%)
Bank Hapoalim Ltd. (b). . . . . . . . . . 11,600 $ 20,069
----------
COMPUTER HARDWARE (1.8%)
M-Systems Flash Disk Pioneer Ltd. (b) . . 12,304 102,123
----------
122,192
----------
- -------------------------------------------------------------
KOREA (20.5%)
AUTOMOBILE (2.0%)
Hyundai Motor Co. Ltd.. . . . . . . . . . 3,000 70,865
Ssangyong Motor Co. (b) . . . . . . . . . 9,900 42,533
----------
113,398
----------
BANKING (1.5%)
Shinhan Bank GDR. . . . . . . . . . . . . 4,300 83,420
----------
CHEMICALS (1.5%)
Honam Petrochemical Corp. . . . . . . . . 1,100 27,658
LG Petrochemical Co. Ltd. . . . . . . . . 3,900 55,531
----------
83,189
----------
CONSTRUCTION (0.5%)
Daelim Industrial Co. Ltd.. . . . . . . . 1,800 29,333
----------
CONSUMER GOODS (1.5%)
LG Electronics, Inc. GDR (b) (c). . . . . 8,160 86,904
----------
ELECTRONICS (5.8%)
Samsung Electronics GDR (c) . . . . . . . 5,303 325,603
----------
FINANCIAL SERVICES (0.2%)
LG Investment & Securities Co.. . . . . . 1,320 12,385
----------
MACHINERY & EQUIPMENT (0.3%)
Samsung Heavy Industries. . . . . . . . . 4,100 18,155
----------
SHIPBUILDING (1.0%)
Daewoo Shipbuilding & Marine Engineering
Co. Ltd. (b). . . . . . . . . . . . . . 6,800 57,366
----------
STEEL (1.7%)
POSCO ADR . . . . . . . . . . . . . . . . 4,750 97,613
----------
TELECOMMUNICATIONS (2.7%)
KT Corp.. . . . . . . . . . . . . . . . . 1,080 44,356
KT Freetel (b). . . . . . . . . . . . . . 2,100 46,580
SK Telecom Co. Ltd. . . . . . . . . . . . 460 63,983
----------
154,919
TRANSPORTATION (1.8%)
Hanjin Shipping Co. Ltd.. . . . . . . . . 8,900 61,531
Korean Air Co. Ltd. . . . . . . . . . . . 4,000 38,025
99,556
----------
1,161,841
----------
- -------------------------------------------------------------
MALAYSIA (2.5%)
BANKING (0.9%)
Malayan Banking Berhad. . . . . . . . . . 25,000 51,974
----------
FINANCIAL SERVICES (0.4%)
Sime Darby Berhad . . . . . . . . . . . . 17,400 22,895
----------
OIL & GAS (1.2%)
Petronas Dagangan Berhad. . . . . . . . . 40,200 65,060
----------
139,929
----------
- -------------------------------------------------------------
MEXICO (11.0%)
BUILDING PRODUCTS (0.7%)
Cemex SA de CV ADR. . . . . . . . . . . . 1,800 41,130
----------
CABLE TV/PROGRAMMING (1.4%)
Azteca SA de CV ADR . . . . . . . . . . . 13,800 80,040
----------
CONSTRUCTION (1.0%)
Consorcio ARA SA de CV (b). . . . . . . . 29,400 54,247
----------
DIVERSIFIED (1.8%)
SA Class A. . . . . . . . . . . . . . . . 28,400 48,428
Grupo IMSA SA de CV ADR . . . . . . . . . 4,100 53,382
----------
101,810
----------
FINANCIAL SERVICES (1.9%)
Grupo Financiero Banorte SA . . . . . . . 38,300 106,542
----------
MINING (0.8%)
Grupo Mexico SA Class B (b) . . . . . . . 35,300 44,245
----------
RETAIL (2.4%)
Grupo Elektra SA de CV ADR. . . . . . . . 5,200 56,107
Organizacion Soriana SA de CV (b) . . . . 25,000 45,302
Wal-Mart de Mexico SA de CV ADR . . . . . 1,500 42,075
----------
143,484
----------
TELECOMMUNICATIONS (1.0%)
America Movil SA de CV ADR. . . . . . . . 3,197 53,614
----------
625,112
----------
- -------------------------------------------------------------
POLAND (0.5%)
PETROLEUM (0.5%)
Polski Koncern Naftowy Orlen SA GDR . . . 2,700 25,380
----------
- --------------------------------------------------------------------------------
38 SEMIANNUAL REPORT 2003
SHARES VALUE
- ----------------------------------------------------------------
RUSSIA (6.2%)
ELECTRIC UTILITY (1.2%)
RAO Unified Energy Systems GDR . . . . . 4,565 $ 68,932
----------
MINING (0.3%)
Norilsk Nickel ADR . . . . . . . . . . . 800 18,464
----------
OIL & GAS (4.7%)
OAO Gazprom ADR. . . . . . . . . . . . . 6,000 94,080
Surgutneftegaz ADR . . . . . . . . . . . 3,900 76,752
YUKOS ADR. . . . . . . . . . . . . . . . 510 89,505
----------
260,337
----------
347,733
----------
- ----------------------------------------------------------------
SOUTH AFRICA (8.2%)
BANKING (1.5%)
ABSA Group Ltd.. . . . . . . . . . . . . 10,769 47,213
Nedcor Ltd.. . . . . . . . . . . . . . . 2,900 39,058
----------
86,271
----------
DIVERSIFIED (0.6%)
Nampak Ltd.. . . . . . . . . . . . . . . 20,100 31,298
----------
FINANCIAL SERVICES (0.8%)
Sanlam Ltd.. . . . . . . . . . . . . . . 57,228 47,426
----------
MINING (4.1%)
Anglo American PLC . . . . . . . . . . . 6,368 92,242
AngloGold Ltd. . . . . . . . . . . . . . 1,664 47,453
Impala Platinum Holdings Ltd.. . . . . . 1,806 89,353
----------
229,048
----------
OIL & GAS (1.2%)
Sasol Ltd. . . . . . . . . . . . . . . . 6,396 69,346
----------
463,389
----------
- ----------------------------------------------------------------
TAIWAN (10.6%)
BANKING (0.6%)
Mega Financial Holding Co. Ltd. (b). . . 80,000 35,571
----------
CHEMICALS (1.1%)
Formosa Plastic Corp.. . . . . . . . . . 44,000 54,275
Nan Ya Plastic Corp. . . . . . . . . . . 9,910 8,585
----------
62,860
----------
COMPUTER HARDWARE (2.8%)
Asustek Computer, Inc. . . . . . . . . . 20,000 39,013
Compal Electronics, Inc. GDR . . . . . . 20,820 113,053
----------
152,066
----------
ELECTRONICS (0.9%)
AU Optronics Corp. (b) . . . . . . . . . 52,000 26,403
AU Optronics Corp. ADR (b) . . . . . . . 4,800 24,960
----------
51,363
----------
PAPER PRODUCTS (0.5%)
Far Eastern Textile Ltd. . . . . . . . . 104,000 30,430
----------
SEMICONDUCTORS (3.5%)
Pro Mos Technologies, Inc. GDR (b) . . . 10,700 17,976
Taiwan Semiconductor Manufacturing Co
Ltd. (b). . . . . . . . . . . . . . . 66,000 90,498
Taiwan Semiconductor Manufacturing Co.
Ltd. ADR (b) . . . . . . . . . . . . 10,000 83,700
----------
192,174
----------
TELECOMMUNICATIONS (0.4%)
Chunghwa Telecom Co. Ltd.. . . . . . . . 16,000 23,637
----------
TRANSPORTATION (0.8%)
Yang Ming Marine Transport (b) . . . . . 113,000 47,489
----------
595,590
----------
- ----------------------------------------------------------------
THAILAND (3.7%)
BUILDING PRODUCTS (0.4%)
The Siam Cement Public Co. Ltd.. . . . . 7,000 20,737
----------
ELECTRIC UTILITY (0.3%)
Electricity Generating Public Co. Ltd. . 19,000 18,504
----------
FINANCIAL SERVICES (3.0%)
Siam Commercial Bank Public Co. Ltd. (b) 215,200 171,929
----------
211,170
----------
- ----------------------------------------------------------------
TURKEY (2.4%)
BANKING (1.2%)
Turkiye Garanti Bankasi AS (b) . . . . . 52,907,316 63,854
----------
DIVERSIFIED (0.3%)
Enka Insaat ve Sanayi AS (b) . . . . . . 479,600 16,691
----------
FINANCIAL SERVICES (0.9%)
Haci Omer Sabanci Holding AS . . . . . . 23,387,750 52,645
----------
133,190
----------
TOTAL COMMON STOCKS 5,259,118
----------
TOTAL INVESTMENTS (COST $5,013,622) (A)
- 93.3% 5,259,118
OTHER ASSETS IN EXCESS OF LIABILITIES -
6.7% 374,808
----------
NET ASSETS - 100.0% $5,633,926
----------
----------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 39
STATEMENT OF INVESTMENTS (Continued)
April 30, 2003 (Unaudited)
GARTMORE EMERGING MARKETS FUND (Continued)
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
(c) Represents a restricted security acquired and eligible for resale under
rule 144A, which limits the resale to certain qualified buyers.
ADR American Depositary Receipt GDR Global Depositary Receipt
At April 30, 2003, the Fund's open forward foreign currency contracts were as
follows:
UNREALIZED
DELIVERY CONTRACT APPRECIATION
CURRENCY DATE VALUE MARKET VALUE (DEPRECIATION)
- -------------------------------------------------------------------------
LONG CONTRACTS:
Hong Kong Dollar . 5/02/03 $ 77,005 $ 77,007 $ 2
South African Rand 5/07/03 24,229 23,861 (368)
------------------------------------------
TOTAL LONG . . . . $ 101,234 $ 100,868 $ (366)
CONTRACTS ------------------------------------------
------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
40 SEMIANNUAL REPORT 2003
GARTMORE INTERNATIONAL GROWTH FUND
Class A Shares symbol: GIGAX
Class B Shares symbol: GIGBX
Class C Shares symbol: GIGCX
Institutional Service Class symbol: GIGSX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned -1.86%* versus
3.08% for its benchmark, the Morgan Stanley Capital International (MSCI) AC
World Free Ex-U.S. Index.
For broader comparison, the average return for this Fund's peer category
(International) was 0.93%, according to Lipper, an independent company that
provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Uncertainty and volatility dominated global equity markets during the period.
This reflected the increasing geopolitical turmoil caused by the expectation of
and subsequent war with Iraq. The economy stalled as consumers and companies
both curtailed spending, which hurt economic growth and profits. However,
markets rallied in April, based on the successful resolution of the war in Iraq,
which improved investor confidence.
Despite turbulent economic and market conditions, high-beta (stocks that move
more then the market) growth stocks drove market performance. The Fund trailed
the Index's returns due to its more defensive posture and its emphasis on
companies with strong balance sheets and consistent earnings. Strong stock
selection within the financial, telecommunications services and consumer staples
sectors was not enough to offset the decline in stocks within the industrials,
materials and energy sectors.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
The Fund's top holdings included Vodafone Group PLC, the United Kingdom's
largest telecommunications company, which was up 24%; BP PLC, the diversified
energy company, which gained only 0.70%; and Novartis AG, the sixth-largest
pharmaceutical company, which was up 6%, based on its strong generic and branded
drug sales.
Fund purchases included Man Group, a large UK hedge fund manager, which gained
from volatile markets; Tesco PLC, the United Kingdom's largest food retailer,
which we expect to continue to gain market share; and Siam Cement Public Co.
Ltd., Thailand's diversified conglomerate, which we expect to gain from China's
robust economic growth.
Sony Corp., the Japanese consumer electronics company, was sold on concerns that
consumer spending might fall. BT Group PLC was sold and Total Fina Elf SA was
reduced due to the decline in the price of oil later in the period. In addition,
Taiwan Semiconductor Manufacturing Co.Ltd., the Taiwanese chipmaker, was sold,
based on concerns about political tensions in North Korea as well as the level
of technology spending.
HOW IS THE FUND POSITIONED?
Given the projected environment of uncertainty and volatility, we are keeping
our sector weightings in line with those of the benchmark. Regarding our country
weightings, we are overweight in U.K. equities and have just increased our
allocation to European financial equities. As to our stock selection, we are
behaving tactically by increasing high-beta names (those that move more than the
market) during rallies and selling those positions when we see a chance to
realize profits.
PORTFOLIO MANAGER: Gartmore Global Partners - Subadviser
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $5,241,365
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -20.48% -21.30%
w/SC3 -25.11% -23.03%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -21.04% -21.87%
w/SC4 -24.98% -22.75%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -21.06% -21.70%
w/SC6 -22.67% -21.99%
- ------------------------------------------------------------
Institutional Service Class7 -20.36% -21.08%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on August 30, 2000.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS MSCI AC
DATE A WORLD FREE EX U.S. CPI
- ---------------------------------------------------------------
8/30/2000. 9,425 10,000 10,000
10/31/2000 8,351 9,145 10,069
10/31/2001 5,834 6,866 10,284
10/31/2002 5,071 6,118 10,492
4/30/2003. 4,976 6,307 10,733
Comparative performance of $10,000 invested in Class A shares of the Gartmore
International Growth Fund, Morgan Stanley Capital International All Country
World Free ex U.S. Index (MSCI AC World ex U.S.)(a), and the Consumer Price
Index (CPI)(b) since inception. Unlike the Fund, the returns for these indices
do not reflect any fees, expenses, or sales charges.
(a) The MSCI AC World Free ex U.S. is an index that contains companies that are
replicas of their local markets not including any securities in the United
States.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 41
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE INTERNATIONAL GROWTH FUND
COMMON STOCKS (90.0%)
SHARES VALUE
- ---------------------------------------------------------
AUSTRALIA (4.4%)
BANKING (2.0%)
National Australia Bank Ltd.. . . . . . 2,900 $ 58,958
Westpac Banking Corp. . . . . . . . . . 5,900 58,720
--------
117,678
--------
MULTI-MEDIA (1.4%)
The News Corp. Ltd. . . . . . . . . . . 11,100 79,018
--------
TELECOMMUNICATIONS (1.0%)
Telstra Corporation Ltd.. . . . . . . . 21,200 55,832
--------
252,528
--------
- ---------------------------------------------------------
BRAZIL (1.5%)
BANKING (0.4%)
Unibanco - Uniao de Bancos Brasileiros
SA GDR. . . . . . . . . . . . . . . . 1,400 25,410
--------
BREWERY (0.6%)
Companhia de Bebidas das Americas
ADR . . . . . . . . . . . . . . . . . 1,700 33,813
--------
MINING (0.5%)
Companhia Vale de Rio Doce ADR. . . . . 1,150 30,360
--------
89,583
--------
- ---------------------------------------------------------
CANADA (4.3%)
BANKING (1.3%)
Royal Bank of Canada. . . . . . . . . . 1,800 75,031
--------
MULTI-MEDIA (1.0%)
Technologies, Inc. (b). . . . . . . . . 9,600 60,480
--------
OIL & GAS (2.0%)
Petro-Canada. . . . . . . . . . . . . . 1,900 62,605
Suncor Energy, Inc. . . . . . . . . . . 3,100 50,975
--------
113,580
--------
249,091
--------
- ---------------------------------------------------------
FINLAND (3.4%)
OIL & GAS (1.3%)
Fortum Oyj. . . . . . . . . . . . . . . 10,200 73,194
--------
TELECOMMUNICATIONS (2.1%)
Nokia Oyj . . . . . . . . . . . . . . . 7,248 122,626
--------
195,820
--------
- ---------------------------------------------------------
FRANCE (4.9%)
BANKING (2.4%)
BNP Paribas SA. . . . . . . . . . . . . 1,700 79,796
Societe Generale. . . . . . . . . . . . 950 58,099
--------
137,895
--------
HEALTH & PERSONAL CARE (1.2%)
L'Oreal SA. . . . . . . . . . . . . . . 1,000 71,480
--------
OIL & GAS (0.8%)
Total Fina Elf SA . . . . . . . . . . . 358 46,945
--------
TELECOMMUNICATIONS (0.5%)
Alcatel SA. . . . . . . . . . . . . . . 3,500 28,670
--------
284,990
--------
- ---------------------------------------------------------
GERMANY (9.3%)
AUTOMOTIVE (1.6%)
Bayerische Motoren Werke AG . . . . . . 2,698 90,028
--------
BANKING (1.5%)
Deutsche Bank AG. . . . . . . . . . . . 1,700 87,651
--------
COMPUTER SOFTWARE & SERVICES (0.5%)
SAP AG. . . . . . . . . . . . . . . . . 300 30,500
--------
FINANCIAL SERVICES (0.5%)
Deutsche Boerse AG. . . . . . . . . . . 600 27,855
--------
MANUFACTURING (1.7%)
Henkel KGaA . . . . . . . . . . . . . . 500 28,296
Siemens AG. . . . . . . . . . . . . . . 1,400 69,214
--------
97,510
--------
RETAIL (1.0%)
Metro AG. . . . . . . . . . . . . . . . 2,100 57,653
--------
TELECOMMUNICATIONS (2.0%)
Deutsche Telekom AG . . . . . . . . . . 8,624 115,300
--------
UTILITIES (0.5%)
E. ON AG. . . . . . . . . . . . . . . . 600 28,458
--------
534,955
--------
- ---------------------------------------------------------
HONG KONG (2.1%)
DIVERSIFIED (0.6%)
Hutchison Whampoa Ltd.. . . . . . . . . 6,000 33,389
--------
FINANCIAL SERVICES (0.5%)
Hong Kong Exchanges & Clearing Ltd. . . 26,000 30,337
--------
OIL & GAS (1.0%)
CNOOC Ltd.. . . . . . . . . . . . . . . 44,000 57,827
--------
121,553
--------
- ---------------------------------------------------------
IRELAND (1.0%)
BUILDING & CONSTRUCTION (1.0%)
CRH PLC . . . . . . . . . . . . . . . . 3,600 55,242
--------
- ---------------------------------------------------------
ISRAEL (0.6%)
PHARMACEUTICALS (0.6%)
Teva Pharmaceutical Industries Ltd.
ADR . . . . . . . . . . . . . . . . . 700 32,690
--------
- --------------------------------------------------------------------------------
42 SEMIANNUAL REPORT 2003
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ----------------------------------------------------------
ITALY (3.2%)
BANKING (1.3%)
Banca Nazionale del Lavoro SpA (b) . . . 45,100 $ 73,081
--------
TELECOMMUNICATIONS (1.0%)
Telecom Italia SpA . . . . . . . . . . . 7,200 58,818
--------
UTILITIES (0.9%)
Enel SpA . . . . . . . . . . . . . . . . 9,000 53,836
--------
185,735
--------
- ----------------------------------------------------------
JAPAN (8.3%)
AUTOMOTIVE (0.4%)
Honda Motor Co. Ltd. . . . . . . . . . . 700 23,185
--------
BUILDING & CONSTRUCTION (1.1%)
Asahi Glass Co. Ltd. . . . . . . . . . . 12,000 63,894
--------
CHEMICALS (1.3%)
Mitsubishi Chemical Corp.. . . . . . . . 30,000 49,807
Shin-Etsu Chemical Co. Ltd.. . . . . . . 900 26,941
76,748
--------
ELECTRONICS (1.9%)
Canon, Inc.. . . . . . . . . . . . . . . 1,000 40,416
Matsushita Electric Industrial Co. Ltd.. 5,000 39,829
Sanyo Electric Co. Ltd.. . . . . . . . . 9,000 28,149
--------
108,394
--------
HEALTH & PERSONAL CARE (0.9%)
Kao Corp.. . . . . . . . . . . . . . . . 3,000 54,712
--------
RETAIL (0.7%)
Marui Co., Ltd.. . . . . . . . . . . . . 4,900 40,799
--------
TELECOMMUNICATIONS (2.0%)
Nippon Telegraph & Telephone Corp. . . . 8 28,040
NTT DoCoMo, Inc. . . . . . . . . . . . . 41 84,571
--------
112,611
--------
480,343
--------
- ----------------------------------------------------------
KOREA (1.1%)
CHEMICALS (0.5%)
Honam Petrochemical Corp.. . . . . . . . 1,100 27,658
--------
ELECTRONICS (0.6%)
Samsung Electronics Co. Ltd. . . . . . . 290 36,250
--------
63,908
--------
- ----------------------------------------------------------
MALAYSIA (0.4%)
BANKING (0.4%)
Commerce Asset-Holding Berhad. . . . . . 32,000 24,758
--------
- ----------------------------------------------------------
NETHERLANDS (3.2%)
ELECTRONICS (0.4%)
Koninklijke (Royal) Philips Electronics
NV. . . . . . . . . . . . . . . . . . 1,200 22,324
--------
INSURANCE (0.9%)
ING Groep NV . . . . . . . . . . . . . . 3,200 51,961
--------
OIL & GAS (1.3%)
Royal Dutch Petroleum Co.. . . . . . . . 1,798 73,541
--------
TRANSPORTATION (0.6%)
TNT Post Group NV. . . . . . . . . . . . 2,265 35,338
--------
183,164
--------
- ----------------------------------------------------------
NORWAY (0.7%)
OIL & GAS (0.7%)
Statoil ASA. . . . . . . . . . . . . . . 4,800 38,069
--------
- ----------------------------------------------------------
PORTUGAL (0.9%)
TELECOMMUNICATIONS (0.9%)
Portugal Telecom, SGPS, SA . . . . . . . 7,400 52,936
--------
- ----------------------------------------------------------
SOUTH AFRICA (0.9%)
MINING (0.9%)
AngloGold Ltd. ADR . . . . . . . . . . . 1,800 50,796
--------
- ----------------------------------------------------------
SPAIN (3.3%)
BANKING (1.6%)
Banco Santander Central Hispano SA . . . 12,500 98,208
--------
TELECOMMUNICATIONS (0.8%)
Telefonica SA (b). . . . . . . . . . . . 3,993 44,161
--------
UTILITIES (0.9%)
Endesa SA. . . . . . . . . . . . . . . . 3,600 51,064
--------
193,433
--------
- ----------------------------------------------------------
SWITZERLAND (7.5%)
BANKING (1.0%)
UBS AG . . . . . . . . . . . . . . . . . 1,200 56,934
--------
CHEMICALS (0.9%)
Givaudan SA. . . . . . . . . . . . . . . 130 50,321
--------
FOOD & BEVERAGE (0.7%)
Nestle SA. . . . . . . . . . . . . . . . 200 40,773
--------
HEALTH & PERSONAL CARE (1.5%)
Roche Holding AG . . . . . . . . . . . . 1,400 89,081
--------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 43
STATEMENT OF INVESTMENTS (Continued)
April 30, 2003 (Unaudited)
GARTMORE INTERNATIONAL GROWTH FUND (Continued)
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ------------------------------------------------------------
SWITZERLAND (continued)
PHARMACEUTICALS (3.4%)
Alcon, Inc. (b) . . . . . . . . . . . . 1,300 $ 57,265
Novartis AG . . . . . . . . . . . . . . 3,500 138,059
----------
195,324
----------
432,433
----------
- ------------------------------------------------------------
TAIWAN (3.1%)
ELECTRONICS (0.8%)
AU Optronics Corp. (b). . . . . . . . . 50,000 25,387
AU Optronics Corp. ADR (b). . . . . . . 3,900 20,280
----------
45,667
----------
FINANCIAL SERVICES (0.4%)
Fubon Financial Holding Co. Ltd.. . . . 33,829 23,096
----------
SEMICONDUCTORS (1.9%)
Taiwan Semiconductor Manufacturing Co.
Ltd. ADR (b). . . . . . . . . . . . . 13,400 112,158
----------
180,921
----------
- ------------------------------------------------------------
UNITED KINGDOM (25.9%)
BANKING (6.5%)
Abbey National PLC. . . . . . . . . . . 4,000 28,417
Barclays PLC. . . . . . . . . . . . . . 8,700 60,103
HSBC Holdings PLC . . . . . . . . . . . 14,900 163,244
Lloyds TSB Group PLC. . . . . . . . . . 9,400 61,822
Royal Bank of Scotland Group PLC. . . . 2,400 62,945
----------
376,531
----------
BUILDING & CONSTRUCTION (1.9%)
George Wimpey PLC . . . . . . . . . . . 6,600 26,371
Persimmon PLC . . . . . . . . . . . . . 12,900 86,026
----------
112,397
----------
DIVERSIFIED (1.1%)
Unilever PLC. . . . . . . . . . . . . . 6,517 64,057
----------
FINANCIAL SERVICES (0.5%)
Man Group PLC . . . . . . . . . . . . . 1,700 28,665
----------
FOOD & BEVERAGE (1.0%)
Diageo PLC. . . . . . . . . . . . . . . 5,400 59,896
----------
INSURANCE (1.0%)
Aviva PLC . . . . . . . . . . . . . . . 4,000 28,129
Wellington Underwriting PLC (b) . . . . 20,311 28,256
----------
56,385
----------
MINING (0.5%)
Anglo American PLC. . . . . . . . . . . 2,000 28,641
----------
OIL & GAS (3.1%)
BG Group PLC. . . . . . . . . . . . . . 8,100 32,397
BP PLC. . . . . . . . . . . . . . . . . 23,029 145,936
----------
178,333
----------
PHARMACEUTICALS (3.1%)
AstraZeneca PLC . . . . . . . . . . . . 751 29,467
GlaxoSmithKline PLC . . . . . . . . . . 7,550 151,318
----------
180,785
----------
RETAIL (2.6%)
Marks & Spencer Group PLC . . . . . . . 12,652 58,944
Safeway PLC . . . . . . . . . . . . . . 7,000 30,431
Tesco PLC . . . . . . . . . . . . . . . 10,200 32,278
Whitbread PLC . . . . . . . . . . . . . 3,100 30,694
----------
152,347
----------
TELECOMMUNICATIONS (3.7%)
Vodafone Group PLC. . . . . . . . . . . 108,451 214,065
----------
TOBACCO (0.5%)
Imperial Tobacco Group PLC. . . . . . . 1,600 26,774
----------
TRANSPORTATION (0.4%)
National Express Group PLC. . . . . . . 3,000 23,159
----------
1,502,035
----------
TOTAL COMMON STOCKS 5,204,983
----------
- --------------------------------------------------------------------------------
44 SEMIANNUAL REPORT 2003
COMMON STOCKS PREFERRED STOCK (0.6%) (99.5%)
SHARES VALUE
- -------------------------------------------------------------------
GERMANY (0.6%)
AUTOMOTIVE (0.6%)
Porsche AG. . . . . . . . . . . . . . . . . . . 100 $ 36,382
----------
TOTAL PREFERRED STOCK 36,382
----------
TOTAL INVESTMENTS (COST $5,106,554) (A) - 90.6% 5,241,365
OTHER ASSETS IN EXCESS OF LIABILITIES - 9.4% 541,520
----------
NET ASSETS - 100.0% $5,782,885
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt GDR Global Depositary Receipt
At April 30, 2003, the Fund's open forward foreign currency contracts were as
follows:
UNREALIZED
DELIVERY CONTRACT APPRECIATION
CURRENCY DATE VALUE MARKET VALUE (DEPRECIATION)
- ----------------------------------------------------------------------
SHORT
CONTRACTS:
Japanese Yen. . 5/01/03 $ 52,671 $ 53,157 $ (486)
Japanese Yen. . 5/02/03 24,647 24,816 (169)
- ----------------------------------------------------------------------
TOTAL SHORT . . $ 77,318 $ 77,973 $ (655)
CONTRACTS
- ----------------------------------------------------------------------
LONG
CONTRACTS:
Euro. . . . . . 5/06/03 $ 54,560 $ 54,700 $ (140
- ----------------------------------------------------------------------
TOTAL CONTRACTS $ (515)
---------------
---------------
At April 30, 2003, the Fund's open long futures contracts were as follows:
MARKET
NUMBER VALUE UNREALIZED
OF LONG COVERED BY APPRECIATION
CONTRACTS CONTRACTS* EXPIRATION CONTRACT (DEPRECIATION)
- --------------------------------------------------------------------------------
FUTURES:
Europe. . . . 6 MSCI Pan Euro 6/20/03 $ 82,440 $ (1,225)
United States 11 NIKKEI 225 6/12/03 429,000 (550)
----------------------------
$ 511,440 $ (1,775)
----------------------------
----------------------------
* Cash pledged as collateral.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 45
GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND
Class A Shares symbol: GAIGX
Class B Shares symbol: GBIGX
Class C Shares symbol: GCIGX
Institutional Service Class symbol: GSIGX
Institutional Class symbol: GIIGX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund's return was flat at
0.00%* versus 7.58% for its benchmark, the Morgan Stanley Capital International
Developed Countries Europe, Australasia Far East Small Cap Index (MSCI EAFE).
For broader comparison, the average return for this Fund's peer category
(International Small Cap Funds) was 6.05%, according to Lipper, an independent
company that provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Global small-cap stocks outperformed their large-cap counterparts due to more
visible earnings and a seasonal bounce that favored smaller stocks over large
stocks during the first few months of 2003. The latter factor was particularly
relevant in the Asian-Pacific markets.
The Fund underperformed due to its bias toward small, less-liquid stocks, which
were punished amid rising volatility. Information technology and industrial
holdings also accounted for a large portion of the Fund's overall negative
returns. These cyclical stocks fell on news of weaker economic growth. Finally,
Japanese holdings detracted from returns because that market's typical seasonal
bounce did not occur. Japan's economy continues to battle deflation, and its
government has been unable to stimulate growth.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
The Fund's top holdings included HIT Entertainment PLC, Eiffage SA and Interpump
Group SpA HIT Entertainment is a U.K. children's cable network that has
delivered strong growth based on its innovative products (Bob the Builder,
Thomas and Barney) and strong brand name. Eiffage SA is a French construction
company whose business has been expanding into new geographic areas. Interpump
Group SpA, an Italian manufacturer of hydraulic equipment, has a highly
profitable professional cleaning equipment (power hoses) business.
Major transactions during the period included Chubb PLC as well as Cox Insurance
Holdings PLC, which were purchased to take advantage of the high demand for auto
insurance as well as Cox's attractive stock price. BHP Steel Ltd. was purchased
due to rising steel prices and demand from Asian economies, particularly China.
Sales included U.K. retailer The Peacock Group PLC was sold and U.K. wine
retailer Majestic Wines PLC holdings were reduced to capture profits. We also
sold Club M diterran e SA, based on concerns about slowing travel activity.
HOW IS THE FUND POSITIONED?
We expect global small-cap stocks to continue to outperform their large-cap
counterparts due to attractive prices and more visible earnings. Although global
economic growth may be below trend in 2003, we expect the highest growth from
the Emerging Markets regions and the United Kingdom. We project that continental
Europe and Japan will generate only weak growth in 2003, but we are finding
particular opportunities in those markets. We plan to focus on individual stock
selection in all markets as our primary source of returns.
PORTFOLIO MANAGER: Gartmore Global Partners - Subadviser
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $3,535,260
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -24.42% -22.35%
w/SC3 -28.72% -24.28%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -24.93% -22.89%
w/SC4 -28.68% -23.88%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -24.83% -22.89%
w/SC6 -26.29% -23.22%
- ------------------------------------------------------------
Institutional Service Class7 -24.18% -22.11%
- ------------------------------------------------------------
Institutional Class7 . . . . -24.11% -21.99%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on December 21, 2000.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS MSCI EAFE
DATE A SMALL CAP INDEX CPI
- ------------------------------------------------------
12/21/2000 9,425 10,000 10,000
10/31/2001 6,202 8,480 10,213
10/31/2002 5,194 7,690 10,428
4/30/2003. 5,193 8,140 10,659
Comparative performance of $10,000 invested in Class A shares of the Gartmore
International Small Cap Growth Fund, Morgan Stanley Capital International
Developed Countries Europe Australasia Far East Small Cap Index (MSCI EAFE Small
Cap Index)(a), and the Consumer Price Index (CPI)(b) since inception. Unlike the
Fund, the returns for these indices do not reflect any fees, expenses, or sales
charges.
(a) The MSCI EAFE Small Cap Index is an unmanaged index that is generally
representative of the small capitalization securities of international
stock markets.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
46 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND
COMMON STOCKS (86.7%)
SHARES VALUE
- -------------------------------------------------------
AUSTRALIA (5.7%)
BEVERAGES (0.6%)
Coca-Cola Amatil Ltd. . . . . . . . . 6,808 $ 24,232
--------
BUILDING PRODUCTS - CEMENT/AGGREGATE (1.0%)
James Hardie Industries NV. . . . . . 10,165 41,713
--------
CLOTHING (0.5%)
Billabong International Ltd.. . . . . 6,165 21,944
--------
COMMERCIAL SERVICES (1.1%)
Mayne Group Ltd.. . . . . . . . . . . 24,352 45,091
--------
MULTI-MEDIA (1.1%)
Publishing & Broadcasting Ltd.. . . . 7,839 43,300
--------
STEEL - PRODUCERS (1.4%)
BHP Steel Ltd.. . . . . . . . . . . . 27,299 57,890
--------
234,170
--------
- -------------------------------------------------------
BELGIUM (2.1%)
PHARMACEUTICALS (1.4%)
Omega Pharma SA . . . . . . . . . . . 2,311 59,964
--------
WIRE & CABLE PRODUCTS (0.7%)
Bekaert SA. . . . . . . . . . . . . . 577 26,504
--------
86,468
--------
- -------------------------------------------------------
BRAZIL (0.9%)
AEROSPACE / DEFENSE (0.9%)
Empresa Brasiliera De Aeronautica SA
ADR. . . . . . . . . . . . . . . . 2,684 37,227
--------
- -------------------------------------------------------
FINLAND (1.1%)
BUILDING & CONSTRUCTION (0.7%)
Uponor Oyj. . . . . . . . . . . . . . 1,419 28,505
--------
TELECOMMUNICATIONS (0.4%)
Elisa Oyj (b) . . . . . . . . . . . . 1,877 14,454
--------
42,959
--------
- -------------------------------------------------------
FRANCE (8.3%)
ADVERTISING / MARKETING (1.7%)
Trader.com NV (b) . . . . . . . . . . 8,011 70,181
--------
BUILDING & CONSTRUCTION (2.4%)
Eiffage SA. . . . . . . . . . . . . . 1,113 96,388
--------
DIVERSIFIED OPERATIONS (0.9%)
Fimalac SA. . . . . . . . . . . . . . 1,459 34,844
--------
ELECTRONICS (0.0%)
Cofidur (b) . . . . . . . . . . . . . 2,300 642
--------
HOSPITALS (1.5%)
Generale de Sante (b) . . . . . . . . 5,451 62,050
--------
MANUFACTURING (0.8%)
Bacou-Dalloz (b). . . . . . . . . . . 420 34,545
--------
RETAIL - MAJOR DEPARTMENT STORES (0.6%)
Galeries Lafayette SA . . . . . . . . 221 26,242
--------
TRANSPORT - TRUCK (0.4%)
Norbert Dentressangle . . . . . . . . 574 15,239
--------
340,131
--------
- -------------------------------------------------------
GERMANY (1.9%)
BROADCASTING & TELEVISION (0.1%)
PrimaCom AG (b) . . . . . . . . . . . 9,328 3,435
--------
ELECTRONIC COMPONENTS (1.0%)
Epcos AG (b). . . . . . . . . . . . . 2,860 43,727
--------
RETAIL (0.8%)
Takkt AG. . . . . . . . . . . . . . . 6,565 32,237
--------
79,399
--------
- -------------------------------------------------------
GREECE (1.4%)
BUILDING & CONSTRUCTION (0.8%)
Aktor SA Technical Co.. . . . . . . . 4,659 31,093
--------
CELLULAR TELECOMMUNICATIONS (0.6%)
Vodafone-Panafon SA . . . . . . . . . 4,076 25,837
--------
56,930
--------
- -------------------------------------------------------
HONG KONG (0.3%)
APPLIANCES (0.3%)
VTech Holdings Ltd. . . . . . . . . . 19,000 10,963
--------
- -------------------------------------------------------
HUNGARY (1.1%)
PHARMACEUTICALS (1.1%)
Gedeon Richter Rt. GDR. . . . . . . . 600 43,020
--------
- -------------------------------------------------------
IRELAND (2.1%)
BANKING (1.1%)
DePfa Bank PLC. . . . . . . . . . . . 824 44,600
--------
FOOD & BEVERAGE (1.0%)
Greencore Group . . . . . . . . . . . 13,633 41,840
--------
86,440
--------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 47
STATEMENT OF INVESTMENTS (Continued)
April 30, 2003 (Unaudited)
GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND (Continued)
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ----------------------------------------------------------
ISRAEL (1.2%)
COMPUTER EQUIPMENT (1.2%)
M-SYSTEMS Flash Disk Pioneer Ltd. (b). . 5,853 $ 48,580
--------
- ----------------------------------------------------------
ITALY (5.9%)
BUILDING & CONSTRUCTION (0.8%)
Astaldi SpA (b). . . . . . . . . . . . . 14,301 32,239
--------
BUILDING PRODUCTS - CEMENT / AGGREGATE (1.7%)
Buzzi Unicem SpA . . . . . . . . . . . . 9,642 68,114
--------
CERAMIC PRODUCTS (0.4%)
Granitifiandre SpA . . . . . . . . . . . 2,108 17,032
--------
MANUFACTURING (2.3%)
Interpump Group SpA. . . . . . . . . . . 21,962 92,402
--------
PUBLISHING (0.7%)
Mondadori (Arnoldo) Editore SpA. . . . . 4,300 30,472
--------
240,259
--------
- ----------------------------------------------------------
JAPAN (26.3%)
AUDIO/VIDEO PRODUCTS (0.4%)
D&M Holdings, Inc. (b) . . . . . . . . . 7,000 17,022
--------
BROKERAGE SERVICES (1.2%)
Matsui Securities Co. Ltd. . . . . . . . 8,000 49,976
--------
BUILDING & CONSTRUCTION (0.1%)
Nishimatsu Construction Co. Ltd. . . . . 2,000 5,635
--------
CHEMICALS - DIVERSIFIED (1.7%)
Dainippon Ink & Chemicals, Inc.. . . . . 27,000 41,883
Kaneka Corp. . . . . . . . . . . . . . . 6,000 27,218
--------
69,101
--------
COMMERCIAL SERVICES (0.8%)
Nichii Gakkan Co.. . . . . . . . . . . . 600 30,589
--------
COMPUTER SOFTWARE/SERVICES (1.7%)
Agrex, Inc.. . . . . . . . . . . . . . . 1,000 11,571
Capcom Co. Ltd.. . . . . . . . . . . . . 3,300 26,342
Nomura Research Institute Ltd. . . . . . 500 29,893
--------
67,806
--------
COMPUTER SYSTEMS (0.9%)
Net One Systems Co. Ltd. . . . . . . . . 9 36,601
--------
COMPUTERS-INTEGRATED SYSTEMS (1.6%)
Meitec Corp. . . . . . . . . . . . . . . 1,500 38,110
NEC Soft Ltd.. . . . . . . . . . . . . . 1,700 25,416
--------
63,526
--------
ELECTRONIC COMPONENTS (4.5%)
Citizen Watch Co. Ltd. . . . . . . . . . 3,000 15,823
Dainippon Screen Mfg. Co. Ltd. (b) . . . 5,000 17,357
Hosiden Corp.. . . . . . . . . . . . . . 6,500 43,820
Kinseki Ltd. . . . . . . . . . . . . . . 8,000 39,577
MegaChips Corp.. . . . . . . . . . . . . 1,300 9,276
Shinko Electric Industries Co. Ltd.. . . 1,800 31,695
UMC Japan (b). . . . . . . . . . . . . . 38 29,951
--------
187,499
--------
ELECTRONICS (1.2%)
Anritsu Corp.. . . . . . . . . . . . . . 7,000 22,774
Yamaichi Electronics Co. Ltd.. . . . . . 2,000 26,413
--------
49,187
--------
ENERGY EQUIPMENT & SERVICES (0.4%)
Shizuokagas Co. Ltd. . . . . . . . . . . 5,000 14,548
--------
FINANCIAL SERVICES (0.3%)
JACCS Co. Ltd. . . . . . . . . . . . . . 3,000 11,521
--------
INSTRUMENTS - SCIENTIFIC (0.5%)
Jeol Ltd.. . . . . . . . . . . . . . . . 8,000 19,453
--------
INTERNET CONTENT (0.2%)
Cybird Co. Ltd. (b). . . . . . . . . . . 4 9,022
--------
LEASING (0.8%)
Diamond Lease Co. Ltd. . . . . . . . . . 2,500 31,234
--------
MACHINERY (1.8%)
Hitachi Construction Machinery Co. Ltd.. 4,000 20,460
Mori Seiki Co. Ltd.. . . . . . . . . . . 6,000 25,155
Tsubaki Nakashima Co. Ltd. . . . . . . . 4,500 30,148
--------
75,763
--------
MANUFACTURING (1.7%)
Amano Corp.. . . . . . . . . . . . . . . 6,000 29,381
Kawasaki Heavy Industries Ltd. . . . . . 52,000 42,730
--------
72,111
--------
REAL ESTATE OPERATORS/DEVELOPERS (1.2%)
Heiwa Real Estate Co. Ltd. . . . . . . . 15,500 30,672
Urban Corp.. . . . . . . . . . . . . . . 6,100 20,050
50,722
RETAIL - MAJOR DEPARTMENT STORES (1.3%)
Daimura, Inc.. . . . . . . . . . . . . . 5,000 17,986
Parco Co. Ltd. . . . . . . . . . . . . . 11,000 33,850
--------
51,836
--------
RETAIL - TOY STORES (1.0%)
Toys R Us - Japan Ltd. . . . . . . . . . 3,400 41,338
--------
- --------------------------------------------------------------------------------
48 SEMIANNUAL REPORT 2003
COMMON STOCKS (CONTINUED)
SHARES VALUE
- -------------------------------------------------------------
JAPAN (continued)
SHIPBUILDING (1.0%)
Mitsui Engineering & Shipbuilding Co.
Ltd.. . . . . . . . . . . . . . . . . 39,000 $ 40,550
----------
STEEL (1.2%)
Tokyo Steel Manufacturing Co. Ltd. . . . 13,800 47,212
----------
TOYS (0.8%)
Takara Co. Ltd.. . . . . . . . . . . . . 5,000 31,737
----------
1,073,989
----------
- -------------------------------------------------------------
KOREA (2.9%)
ELECTRONIC COMPONENTS (0.9%)
KH Vatec Co. Ltd.. . . . . . . . . . . . 689 35,839
----------
FINANCE (1.2%)
Daishin Securities Co. Ltd. (b). . . . . 3,780 50,711
----------
RETAIL (0.8%)
LG Home Shopping, Inc. . . . . . . . . . 580 32,986
----------
119,536
----------
- -------------------------------------------------------------
MEXICO (3.0%)
BROADCASTING & TELEVISION (0.8%)
TV Azteca SA . . . . . . . . . . . . . . 5,500 31,900
----------
FINANCIAL SERVICES (0.9%)
Grupo Financiero Banorte SA de CV. . . . 13,809 38,413
----------
RETAIL (1.3%)
Grupo Elektra SA de CV ADR . . . . . . . 4,671 50,401
----------
120,714
----------
- -------------------------------------------------------------
NETHERLANDS (1.9%)
BROADCASTING & TELEVISION (0.7%)
Fox Kids Europe NV (b) . . . . . . . . . 5,878 29,519
----------
SATELLITE TELECOMMUNICATIONS (1.2%)
New Skies Satellites NV (b). . . . . . . 10,110 46,824
----------
76,343
----------
- -------------------------------------------------------------
SOUTH AFRICA (1.5%)
METALS & MINING (1.5%)
Northam Platinum Ltd.. . . . . . . . . . 43,970 59,220
----------
- -------------------------------------------------------------
SPAIN (1.0%)
MULTI-MEDIA (0.2%)
Recoletos Grupo de Comunicacion SA . . . 1,241 7,202
----------
SECURITY SERVICES (0.8%)
Prosegur, Compania de Seguridad SA . . . 2,466 31,924
----------
39,126
----------
- -------------------------------------------------------------
SWITZERLAND (0.6%)
BROKERAGE SERVICES (0.5%)
Compagnie Financiere Tradition . . . . . 400 21,382
----------
MEDICAL PRODUCTS (0.1%)
Centerpulse AG (b) . . . . . . . . . . . 18 3,935
----------
25,317
----------
- -------------------------------------------------------------
UNITED KINGDOM (17.5%)
AUTO/RELATED PRODUCTS (1.5%)
Reg Vardy PLC. . . . . . . . . . . . . . 10,717 61,662
----------
BREWERY (1.4%)
Majestic Wine PLC. . . . . . . . . . . . 6,779 58,398
----------
BROADCASTING & TELEVISION (2.3%)
HIT Entertainment PLC. . . . . . . . . . 27,652 97,229
----------
BUILDING & CONSTRUCTION (1.9%)
Westbury PLC . . . . . . . . . . . . . . 15,628 76,431
----------
COMPUTER SOFTWARE (1.0%)
Eidos PLC (b). . . . . . . . . . . . . . 17,853 38,877
----------
DATA/INTERNET (1.3%)
NDS Group PLC ADR (b). . . . . . . . . . 4,100 52,685
----------
INSURANCE (1.9%)
Cox Insurance Holdings PLC (b) . . . . . 60,941 77,919
----------
RETAIL - SPECIALTY (2.0%)
HMV Group PLC. . . . . . . . . . . . . . 43,091 80,578
----------
SECURITY SERVICES (1.7%)
Chubb PLC. . . . . . . . . . . . . . . . 66,801 71,265
----------
TELECOMMUNICATIONS (1.0%)
Spirent PLC. . . . . . . . . . . . . . . 117,926 39,580
----------
TELEVISION (1.5%)
Chrysalis Group PLC. . . . . . . . . . . 18,400 59,845
----------
714,469
----------
TOTAL COMMON STOCKS 3,535,260
----------
TOTAL INVESTMENTS (COST $3,678,547) (A)
- 86.7% 3,535,260
OTHER ASSETS IN EXCESS OF LIABILITIES -
13.3% 542,171
----------
NET ASSETS - 100.0% $4,077,431
----------
----------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 49
STATEMENT OF INVESTMENTS (Continued)
April 30, 2003 (Unaudited)
GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND (Continued)
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt GDR Global Depositary Receipt
At April 30, 2003, the Fund's open forward foreign currency contracts were as
follows:
UNREALIZED
DELIVERY CONTRACT MARKET APPRECIATION
CURRENCY DATE VALUE VALUE (DEPRECIATION)
- ----------------------------------------------------------------------
SHORT CONTRACTS:
Euro. . . . . . . . . 5/06/03 $ 36,891 $ 36,986 $ ( 95)
Hong Kong . . . . . . 5/02/03 9,061 9,061 -
Japanese Yen. . . . . 5/01/03 12,501 12,616 (115)
- ----------------------------------------------------------------------
TOTAL SHORT CONTRACTS $ 58,453 $ 58,663 $ (210)
- ----------------------------------------------------------------------
LONG CONTRACTS:
Australia Dollar. . . 5/02/03 $ 4,314 $ 4,357 $ 43
South African Rand. . 5/02/03 32,859 32,889 30
Japanese Yen. . . . . 5/06/03 95,053 95,247 194
- ----------------------------------------------------------------------
TOTAL LONG CONTRACTS. $ 132,226 $132,493 $ 267
- ----------------------------------------------------------------------
TOTAL CONTRACTS $ 57
---------------
---------------
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
50 SEMIANNUAL REPORT 2003
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 2003 (Unaudited)
GARTMORE GARTMORE GARTMORE
EMERGING MARKETS INTERNATIONAL INTERNATIONAL SMALL CAP
FUND GROWTH FUND GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $5,013,622;
$5,106,554 and $3,678,547; respectively) . . . . . $ 5,259,118 $ 5,241,365 $ 3,535,260
Cash . . . . . . . . . . . . . . . . . . . . . . . . 657,142 355,098 715,452
Foreign currency, at value (cost $106,466;
$135,111 and $14,546; respectively). . . . . . . . 106,586 135,892 14,432
Interest and dividends receivable. . . . . . . . . . 16,432 20,369 10,069
Receivable for investments sold. . . . . . . . . . . - 110,248 251,002
Unrealized appreciation on forward
foreign currency contracts . . . . . . . . . . . . 2 140 267
Receivable from adviser. . . . . . . . . . . . . . . 3,822 3,666 5,795
Receivable for variation margin on
futures contracts . . . . . . . . . . . . . . . . - 1,925 -
Reclaims receivable. . . . . . . . . . . . . . . . . - 6,886 2,176
Prepaid expenses and other assets. . . . . . . . . . 17,441 16,969 29,625
- --------------------------------------------------------------------------------------------------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . 6,060,543 5,892,558 4,564,078
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable to custodian . . . . . . . . . . . . . . . . - - 2,050
Payable for investments purchased. . . . . . . . . . 418,232 99,836 478,752
Unrealized depreciation on forward
foreign currency contracts . . . . . . . . . . . . 368 655 210
Payable for variation margin on
futures contracts. . . . . . . . . . . . . . . . . - 442 -
Accrued expenses and other payables
Investment advisory fees . . . . . . . . . . . . . . 5,048 4,443 2,901
Fund administration and transfer agent fees. . . . . 750 2,217 1,771
Distribution fees. . . . . . . . . . . . . . . . . . 1,766 1,838 798
Administrative servicing fees. . . . . . . . . . . . 211 - 7
Other. . . . . . . . . . . . . . . . . . . . . . . . 242 242 158
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities. . . . . . . . . . . . . . . . . . 426,617 109,673 486,647
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . $ 5,633,926 $ 5,782,885 $ 4,077,431
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
REPRESENTED BY:
Capital. . . . . . . . . . . . . . . . . . . . . . . $ 7,172,966 $ 10,379,486 $ 6,222,512
Accumulated net investment income (loss) . . . . . . 20,428 17,537 (1,584)
Accumulated net realized gains (losses)
from investment, futures, and foreign
currency transactions. . . . . . . . . . . . . . . (1,805,025) (4,755,582) (1,999,570)
Net unrealized appreciation (depreciation)
on investments, futures, and translation
of assets and liablities
denominated in foreign currencies. . . . . . . . . . 245,557 141,444 (143,927)
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . $ 5,633,926 $ 5,782,885 $ 4,077,431
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 51
STATEMENTS OF ASSETS AND LIABILITIES (Continued)
April 30, 2003 (Unaudited)
GARTMORE GARTMORE GARTMORE
EMERGING MARKETS INTERNATIONAL INTERNATIONAL SMALL CAP
FUND GROWTH FUND GROWTH FUND
- ---------------------------------------------------------------------------------------------------------
NET ASSETS:
Class A Shares. . . . . . . . . . . . . . $ 2,900,822 $ 2,199,810 $ 1,989,710
Class B Shares. . . . . . . . . . . . . . 1,504,035 1,796,525 694,277
Class C Shares. . . . . . . . . . . . . . 15,624 11,845 2,931
Institutional Service Class Shares. . . . 1,213,445 1,774,705 694,284
Institutional Class Shares. . . . . . . . - - 696,229
- ---------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . $ 5,633,926 $ 5,782,885 $ 4,077,431
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of shares authorized):
Class A Shares. . . . . . . . . . . . . . 403,199 416,649 361,114
Class B Shares. . . . . . . . . . . . . . 212,538 346,984 128,122
Class C Shares. . . . . . . . . . . . . . 2,179 2,276 541
Institutional Service Class Shares. . . . 167,072 333,333 125,000
Institutional Class Shares. . . . . . . . - - 125,000
- ---------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . 784,988 1,099,242 739,777
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE:
Class A Shares. . . . . . . . . . . . . . $ 7.19 $ 5.28 $ 5.51
Class B Shares (a). . . . . . . . . . . . $ 7.08 $ 5.18 $ 5.42
Class C Shares (b). . . . . . . . . . . . $ 7.17 $ 5.21 $ 5.42
Institutional Service Class Shares. . . . $ 7.26 $ 5.32 $ 5.55
Institutional Class Shares. . . . . . . . $ - $ - $ 5.57
MAXIMUM OFFERING PRICE PER SHARE
(100%/100%-maximum sales charge)
of net asset value adjusted
to the nearest cent):
Class A Shares. . . . . . . . . . . . . . $ 7.63 $ 5.60 $ 5.85
Class C Shares. . . . . . . . . . . . . . $ 7.24 $ 5.26 $ 5.47
- ---------------------------------------------------------------------------------------------------------
Maximum Sales Charge -. . . . . . . . . . 5.75% 5.75% 5.75%
Class A Shares
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Maximum Sales Charge -. . . . . . . . . . 1.00% 1.00% 1.00%
Class C Shares
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
(a) For Class B shares, the redemption price per share varies by length of time
shares are held.
(b) For Class C shares, the redemption price per share is reduced by 1.00% for
shares held less than one year. See notes to financial statements.
- --------------------------------------------------------------------------------
52 SEMIANNUAL REPORT 2003
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 2003 (Unaudited)
GARTMORE GARTMORE GARTMORE
EMERGING MARKETS INTERNATIONAL INTERNATIONAL SMALL
FUND GROWTH FUND CAP GROWTH FUND
- --------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income. . . . . . . . . . . . . . . . . . $ 2,395 $ 540 $ 1,218
Dividend income (net of foreign witholding tax of
$2,147; $8,314 and $2,391; respectively). . . . 72,046 66,028 21,130
- --------------------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . . . . . . . . . 74,441 66,568 22,348
- --------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees . . . . . . . . . . . . . 30,392 27,320 15,658
Fund administration and transfer agent fees. . . . 10,183 12,051 10,786
Distribution fees Class A. . . . . . . . . . . . . 3,302 2,405 1,017
Distribution fees Class B. . . . . . . . . . . . . 7,320 8,891 3,375
Distribution fees Class C. . . . . . . . . . . . . 75 51 24
Administrative servicing fees Class A. . . . . . . 951 13 43
Registration and filing fees . . . . . . . . . . . 17,911 17,897 15,335
Other. . . . . . . . . . . . . . . . . . . . . . . 2,396 1,960 829
- --------------------------------------------------------------------------------------------------------------
Total expenses before reimbursed expenses. . . . . 72,530 70,588 47,067
Expenses reimbursed. . . . . . . . . . . . . . . . (19,648) (20,981) (23,108)
- --------------------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . . . . . . . . 52,882 49,607 23,959
- --------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) . . . . . . . . . . . 21,559 16,961 (1,611)
- --------------------------------------------------------------------------------------------------------------
REALIZED/UNREALIZED GAINS (LOSSES)
FROM INVESTMENTS:
Net realized gains (losses)
on investment transactions. . . . . . . . . . . (264,955) (396,320) (423,175)
Net realized gains (losses)
on futures transactions. . . . . . . . . . . . . - 781 -
Net realized gains (losses)
on foreign currency transactions. . . . . . . . (32,565) (127,510) (39,452)
- --------------------------------------------------------------------------------------------------------------
Net realized gains (losses)
on investment, futures,
and foreign currency transactions
Net change in unrealized. . . . . . . . . . . . . (297,520) (523,049) (462,627)
appreciation/depreciation on
investments, futures, and
translation of assets and liabilities
denominated in foreign currencies. . . . . . . . 491,472 402,984 501,156
- --------------------------------------------------------------------------------------------------------------
Net realized/unrealized gains (losses)
on investments, futures,
and foreign currencies . . . . . . . . . . . . . 193,952 (120,065) 38,529
- --------------------------------------------------------------------------------------------------------------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS . . . . . . . . . . . . . . . . . $ 215,511 $ (103,104) $ 36,918
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 53
STATEMENTS OF CHANGES IN NET ASSETS
GARTMORE EMERGING GARTMORE INTERNATIONAL GARTMORE INTERNATIONAL
MARKETS FUND GROWTH FUND SMALL CAP GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2003 2002 2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
FROM INVESTMENT ACTIVITIES
OPERATIONS:
Net investment income (loss) . . . $ 21,559 $ (29,397) $ 16,961 $ 3,846 $ (1,611) $ (16,625)
Net realized gains (losses) on
investment, futures,
and foreign currency transactions. (297,520) (691,207) (523,049) (892,076) (462,627) (587,340)
Net change in unrealized
appreciation/depreciation
on investments, futures,
and translation of assets
and liabilities denominated
in foreign currencies . . . . . 491,472 999,702 402,984 59,121 501,156 54,641
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets resulting
from operations . . . . . . . . 215,511 279,098 (103,104) (829,109) 36,918 (549,324)
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets from
capital transactions. . . . . . 819,403 1,076,593 264,366 134,097 1,132,688 140,174
- -------------------------------------------------------------------------------------------------------------------------
Change in net assets . . . . . . . 1,034,914 1,355,691 161,262 (695,012) 1,169,606 (409,150)
NET ASSETS:
Beginning of period. . . . . . . . 4,599,012 3,243,321 5,621,623 6,316,635 2,907,825 3,316,975
- -------------------------------------------------------------------------------------------------------------------------
End of period. . . . . . . . . . . $ 5,633,926 $ 4,599,012 $ 5,782,885 $ 5,621,623 $ 4,077,431 $ 2,907,825
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
54 SEMIANNUAL REPORT 2003
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE EMERGING MARKETS FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- ---------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES INCOME DISTRIBUTIONS PERIOD
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 (0.01) (1.87) (1.88) (0.01) (0.01) $ 8.11
October 31, 2000 (d)
Year Ended . . . . . . $ 8.11 0.01 (2.14) (2.13) - - $ 5.98
October 31, 2001
Year Ended . . . . . . $ 5.98 (0.03) 0.85 0.82 - - $ 6.80
October 31, 2002
Six Months Ended . . . $ 6.80 0.03 0.36 0.39 - - $ 7.19
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 10.00 (0.01) (1.88) (1.89) (0.01) (0.01) $ 8.10
October 31, 2000 (d)
Year Ended . . . . . . $ 8.10 (0.03) (2.13) (2.16) - - $ 5.94
October 31, 2001
Year Ended . . . . . . $ 5.94 (0.08) 0.85 0.77 - - $ 6.71
October 31, 2002
Six Months Ended . . . $ 6.71 0.01 0.36 0.37 - - $ 7.08
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 7.57 (0.01) (1.54) (1.55) - - $ 6.02
October 31, 2001 (e)
Year Ended . . . . . . $ 6.02 (0.08) 0.86 0.78 - - $ 6.80
October 31, 2002
Six Months Ended . . . $ 6.80 0.01 0.36 0.37 - - $ 7.17
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 - (1.88) (1.88) (0.01) (0.01) $ 8.11
October 31, 2000 (d)
Year Ended . . . . . . $ 8.11 0.04 (2.13) (2.09) (0.01) (0.01) $ 6.01
October 31, 2001
Year Ended . . . . . . $ 6.01 (0.02) 0.87 0.85 - - $ 6.86
October 31, 2002
Six Months Ended . . . $ 6.86 0.04 0.36 0.40 - - $ 7.26
April 30, 2003
(Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
NET ASSETS EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
AT END OF TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- --------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . (18.90%) (f) $ 1,366 2.15% (g) (0.35%) (g) 7.24% (g) (5.44%) (g) 10.88%
October 31, 2000 (d)
Year Ended . . . . . . (26.24%) $ 1,066 2.15% 0.18% 5.93% (3.60%) 97.85%
October 31, 2001
Year Ended . . . . . . 13.71% $ 1,996 2.01% (0.49%) 2.41% (0.89%) 57.86%
October 31, 2002
Six Months Ended . . . 5.74% (f) $ 2,901 1.87% (g) 0.90% (g) 2.62% (g) 0.17% (g) 73.55%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . (19.00%) (f) $ 1,353 2.75% (g) (0.95%) (g) 7.96% (g) (6.16%) (g) 10.88%
October 31, 2000 (d)
Year Ended . . . . . . (26.67%) $ 1,164 2.75% (0.40%) 6.67% (4.32%) 97.85%
October 31, 2001
Year Ended . . . . . . 12.96% $ 1,443 2.71% (1.18%) 3.22% (1.69%) 57.86%
October 31, 2002
Six Months Ended . . . 5.51% (f) $ 1,504 2.55% (g) 0.28% (g) 3.31% (g) (0.47%) (g) 73.55%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . (20.48%) (f) $ 10 2.75% (g) (0.85%) (g) 8.68% (g) (6.78%) (g) 97.85%
October 31, 2001 (e)
Year Ended . . . . . . 12.96% $ 15 2.72% (1.12%) 3.28% (1.68%) 57.86%
October 31, 2002
Six Months Ended . . . 5.44% (f) $ 16 2.55% (g) 0.29% (g) 3.32% (g) (0.47%) (g) 73.55%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . (18.90%) (f) $ 1,354 1.82% (g) (0.02%) (g) 6.95% (g) (5.15%) (g) 10.88%
October 31, 2000 (d)
Year Ended . . . . . . (25.81%) $ 1,004 1.82% 0.49% 5.60% (3.29%) 97.85%
October 31, 2001
Year Ended . . . . . . 14.14% $ 1,145 1.73% (0.21%) 2.24% (0.72%) 57.86%
October 31, 2002
Six Months Ended . . . 5.83% (f) $ 1,213 1.55% (g) 1.29% (g) 2.31% (g) 0.54% (g) 73.55%
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from August 30, 2000 (commencement of operations) through
October 31, 2000.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Not annualized.
(g) Annualized.
See notes to financial statements
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 55
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE INTERNATIONAL GROWTH FUND
INVESTMENT ACTIVITIES
- ------------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET ASSET NET ASSETS
ASSET VALUE, NET GAINS FROM VALUE, AT END OF
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT END OF TOTAL PERIOD
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES PERIOD RETURN (A) (000S)
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . . . . $ 10.00 - (1.14) (1.14) $ 8.86 (11.40%) (f) $ 2,975
October 31, 2000 (d)
Year Ended . . . . . . . . . $ 8.86 (0.02) (2.65) (2.67) $ 6.19 (30.14%) $ 2,156
October 31, 2001
Year Ended . . . . . . . . . $ 6.19 0.01 (0.82) (0.81) $ 5.38 (13.09%) $ 1,965
October 31, 2002
Six Months Ended . . . . . . $ 5.38 0.02 (0.12) (0.10) $ 5.28 (1.86%) (f) $ 2,200
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . . . . $ 10.00 (0.01) (1.14) (1.15) $ 8.85 (11.50%) (f) $ 2,950
October 31, 2000 (d)
Year Ended . . . . . . . . . $ 8.85 (0.07) (2.64) (2.71) $ 6.14 (30.62%) $ 2,078
October 31, 2001
Year Ended . . . . . . . . . $ 6.14 (0.03) (0.81) (0.84) $ 5.30 (13.68%) $ 1,840
October 31, 2002
Six Months Ended . . . . . . $ 5.30 - (0.12) (0.12) $ 5.18 (2.26%) (f) $ 1,797
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . . . . $ 7.72 (0.02) (1.53) (1.55) $ 6.17 (20.08%) (f) $ 10
October 31, 2001 (e)
Year Ended . . . . . . . . . $ 6.17 (0.03) (0.81) (0.84) $ 5.33 (13.61%) $ 10
October 31, 2002
Six Months Ended . . . . . . $ 5.33 - (0.12) (0.12) $ 5.21 (2.25%) (f) $ 12
April 30, 2003 (Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . . . . $ 10.00 0.01 (1.15) (1.14) $ 8.86 (11.40%) (f) $ 2,954
October 31, 2000 (d)
Year Ended . . . . . . . . . $ 8.86 - (2.64) (2.64) $ 6.22 (29.80%) $ 2,073
October 31, 2001
Year Ended . . . . . . . . . $ 6.22 0.03 (0.83) (0.80) $ 5.42 (12.86%) $ 1,807
October 31, 2002
Six Months Ended . . . . . . $ 5.42 0.03 (0.13) (0.10) $ 5.32 (1.85%) (f) $ 1,775
April 30, 2003
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
NET NET TO AVERAGE TO AVERAGE PORTFOLIO
ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- ----------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . . . . 1.85% (g) 0.05% (g) 4.01% (g) (2.11%) (g) 46.31%
October 31, 2000 (d)
Year Ended . . . . . . . . . 1.85% (0.30%) 4.01% (2.46%) 236.28%
October 31, 2001
Year Ended . . . . . . . . . 1.76% 0.20% 2.10% (0.14%) 226.70%
October 31, 2002
Six Months Ended . . . . . . 1.65% (g) 0.79% (g) 2.42% (g) 0.03% (g) 123.44%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . . . . 2.45% (g) (0.54%) (g) 4.75% (g) (2.84%) (g) 46.31%
October 31, 2000 (d)
Year Ended . . . . . . . . . 2.45% (0.89%) 4.75% (3.19%) 236.28%
October 31, 2001
Year Ended . . . . . . . . . 2.46% (0.50%) 2.85% (0.89%) 226.70%
October 31, 2002
Six Months Ended . . . . . . 2.40% (g) 0.03% (g) 3.17% (g) (0.74%) (g) 123.44%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . . . . 2.45% (g) (1.10%) (g) 6.72% (g) (5.37%) (g) 236.28%
October 31, 2001 (e)
Year Ended . . . . . . . . . 2.46% (0.53%) 2.95% (1.02%) 226.70%
October 31, 2002
Six Months Ended . . . . . . 2.40% (g) 0.07% (g) 3.18% (g) (0.70%) (g) 123.44%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . . . . 1.52% (g) 0.39% (g) 3.75% (g) (1.84%) (g) 46.31%
October 31, 2000 (d)
Year Ended . . . . . . . . . 1.52% 0.03% 3.72% (2.17%) 236.28%
October 31, 2001
Year Ended . . . . . . . . . 1.48% 0.48% 1.85% 0.11% 226.70%
October 31, 2002
Six Months Ended . . . . . . 1.40% (g) 1.03% (g) 2.17% (g) 0.27% (g) 123.44%
April 30, 2003
(Unaudited)
- ----------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from August 30, 2000 (commencement of operations) through
October 31, 2000.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Not annualized.
(g) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
56 SEMIANNUAL REPORT 2003
GARTMORE INTERNATIONAL SMALL CAP GROWTH FUND
INVESTMENT ACTIVITIES
- -----------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET ASSET NET ASSETS
ASSET VALUE, NET GAINS FROM VALUE, AT END OF
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT END OF TOTAL PERIOD
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES PERIOD RETURN (A) (000S)
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended. . . . . . . . $ 10.00 (0.03) (3.39) (3.42) $ 6.58 (34.20%) (g) $ 834
October 31, 2001 (d)
Year Ended. . . . . . . . . $ 6.58 (0.03) (1.04) (1.07) $ 5.51 (16.26%) $ 810
October 31, 2002
Six Months Ended. . . . . . $ 5.51 - - - $ 5.51 0.00% (g) $ 1,990
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended. . . . . . . . $ 10.00 (0.07) (3.39) (3.46) $ 6.54 (34.60%) (g) $ 828
October 31, 2001 (d)
Year Ended. . . . . . . . . $ 6.54 (0.08) (1.03) (1.11) $ 5.43 (16.97%) $ 705
October 31, 2002
Six Months Ended. . . . . . $ 5.43 (0.02) 0.01 (0.01) $ 5.42 (0.18%) (g) $ 694
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended. . . . . . . . $ 9.45 (0.04) (2.86) (2.90) $ 6.55 (30.69%) (g) $ 2
October 31, 2001 (e)
Year Ended. . . . . . . . . $ 6.55 (0.05) (1.07) (1.12) $ 5.43 (17.10%) $ 6
October 31, 2002
Six Months Ended. . . . . . $ 5.43 (0.03) 0.02 (0.01) $ 5.42 (0.18%) (g) $ 3
April 30, 2003
(Unaudited) (f)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended. . . . . . . . $ 10.00 - (3.39) (3.39) $ 6.61 (33.90%) (g) $ 826
October 31, 2001 (d)
Year Ended. . . . . . . . . $ 6.61 (0.02) (1.05) (1.07) $ 5.54 (16.19%) $ 693
October 31, 2002
Six Months Ended. . . . . . $ 5.54 - 0.01 0.01 $ 5.55 0.18% (g) $ 694
April 30, 2003
(Unaudited)
INSTITUTIONAL CLASS SHARES
Period Ended. . . . . . . . $ 10.00 0.01 (3.39) (3.38) $ 6.62 (33.80%) (g) $ 827
October 31, 2001 (d)
Year Ended. . . . . . . . . $ 6.62 (0.01) (1.06) (1.07) $ 5.55 (16.16%) $ 694
October 31, 2002
Six Months Ended. . . . . . $ 5.55 - 0.02 0.02 $ 5.57 0.36% (g) $ 696
April 30, 2003
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
NET NET TO AVERAGE TO AVERAGE PORTFOLIO
ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- ---------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended. . . . . . . . 1.85% (h) (0.37%) (h) 6.81% (h) (5.33%) (h) 121.33%
October 31, 2001 (d)
Year Ended. . . . . . . . . 1.70% (0.46%) 3.31% (2.07%) 140.18%
October 31, 2002
Six Months Ended. . . . . . 1.63% (h) 0.06% (h) 3.28% (h) (1.60%) (h) 65.43%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended. . . . . . . . 2.45% (h) (0.96%) (h) 7.57% (h) (6.08%) (h) 121.33%
October 31, 2001 (d)
Year Ended. . . . . . . . . 2.40% (1.16%) 4.06% (2.82%) 140.18%
October 31, 2002
Six Months Ended. . . . . . 2.37% (h) (0.85%) (h) 3.98% (h) (2.47%) (h) 65.43%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended. . . . . . . . 2.45% (h) (1.14%) (h) 15.71% (h) (14.40%) (h) 121.33%
October 31, 2001 (e)
Year Ended. . . . . . . . . 2.40% (0.88%) 4.00% (2.48%) 140.18%
October 31, 2002
Six Months Ended. . . . . . 2.37% (h) (1.14%) (h) 3.89% (h) (2.66%) (h) 65.43%
April 30, 2003
(Unaudited) (f)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended. . . . . . . . 1.52% (h) (0.04%) (h) 6.54% (h) (5.06%) (h) 121.33%
October 31, 2001 (d)
Year Ended. . . . . . . . . 1.42% (0.18%) 3.06% (1.82%) 140.18%
October 31, 2002
Six Months Ended. . . . . . 1.37% (h) 0.15% (h) 2.98% (h) (1.47%) (h) 65.43%
April 30, 2003
(Unaudited)
INSTITUTIONAL CLASS SHARES
Period Ended. . . . . . . . 1.37% (h) 0.11% (h) 6.53% (h) (5.05%) (h) 121.33%
October 31, 2001 (d)
Year Ended. . . . . . . . . 1.37% (0.13%) 3.06% (1.82%) 140.18%
October 31, 2002
Six Months Ended. . . . . . 1.37% (h) 0.17% (h) 2.98% (h) (1.44%) (h) 65.43%
April 30, 2003
(Unaudited)
- ---------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing among the classes of shares.
(d) For the period from December 21, 2000 (commencement of operations) through
October 31, 2001.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Net investment income (loss) is based on average shares outstanding during
the period.
(g) Not annualized.
(h) Annualized.
See notes to financial statements
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 57
GARTMORE HIGH YIELD BOND FUND
Class A Shares symbol: NYBAX
Class B Shares symbol: NYBBX
Class C Shares symbol: NYBCX
Institutional Service Class symbol: NHYSX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned 17.16%* versus
25.72% for its benchmark, the Salomon Smith Barney U.S. High Yield Market Index.
For broader comparison, the average return for this Fund's peer category (High
Current Yield) was 17.88%, according to Lipper, an independent company that
provides mutual fund data and analysis.
WHAT MACROECONOMIC FACTORS INFLUENCED PERFORMANCE?
Yield spreads in the high-yield market-their premium over risk-free
Treasuries-tightened during the period, an indication that investors were ready
to add higher-risk securities to their portfolios. Within this environment,
investors flocked to high yield bonds and their performance reflected the high
demand. The positive sentiment toward both stocks and high-yield bonds was
enhanced as the war in Iraq progressed and eventually ended smoothly.
The Fund performed well, yet underperformed its Index in part because it held a
bias toward higher-quality issues in a period during which lower-quality,
higher-risk securities drove much of the performance. For example, CCC-rated
securities (in which the Fund was underweight the Index by 2.43%) finished up
more than 50%. By comparison, the higher-quality B-rated bonds gained "only"
27.42% during the period.
WHAT PORTFOLIO ATTRIBUTES AFFECTED PERFORMANCE?
The consumer products sector added significantly to performance and the Fund
held its largest overweight relative to the Index in this area (more than 6%).
An emphasis on the broadcast/outdoor sector (overweight by 2.5%) also
contributed positively to the Fund's return. Nextel Communications added most to
the Fund's performance, rising more than 60% and contributing 44 basis points to
return.
The wireless communications company enjoys a growing market share and strong
revenue figures. It has reduced its debt burden over the past year, prompting
Fitch credit rating agency to revise its outlook on Nextel's debt to positive.
SBA Communications Corp. was the third-largest single contributor to the Fund's
performance (adding 30 basis points). The markets reacted positively to SBA, an
operator of wireless communications towers, as the company finalized a deal to
sell towers in the Western U.S. to help limit the company's outstanding debt.
On the downside, however, investments in HealthSouth Corp. and Fleming Cos.
detracted from performance on a relative and absolute basis. HealthSouth is a
large surgical and medical services company that operates throughout the U.S.
Fleming, which sells wholesale items to supermarkets, was negatively affected
because of its relationship with financially troubled retailer Kmart Corp.
HOW IS THE FUND POSITIONED?
Corporate balance sheets are improving, allowing us to increase risk in the
portfolio by increasing its exposure to the lower-credit-quality companies that
we believe will continue to outperform. Even with this shift, however, the
portfolio will remain broadly diversified to shield against the effects of
unstable corporate earnings. Specifically, we have slightly limited the Fund's
exposure to consumer products, yet increased holdings in the utilities and cable
TV areas.
PORTFOLIO MANAGER: Karen Bater
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $102,391,281
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- -----------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 6.84% -1.64%
w/SC3 1.81% -3.06%
- -----------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 6.09% -2.39%
w/SC4 1.22% -3.04%
- -----------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 6.08% -2.70%
w/SC6 4.04% -2.99%
- -----------------------------------------------------------
Institutional Service Class7 7.24% -1.19%
- -----------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on December 29, 1999.
2 These returns do not reflect the effects of sales charges (SC).
3 A 4.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
SALOMON
SMITH BARNEY
CLASS U.S.
DATE A HIGH YIELD CPI
- -----------------------------------------------
12/29/1999 9,525 10,000 10,000
10/31/2000 8,335 9,637 10,339
10/31/2001 8,036 9,643 10,559
10/31/2002 7,694 8,990 10,772
4/30/2003. 9,014 11,302 11,020
Comparative performance of $10,000 invested in Class A shares of the Gartmore
High Yield Bond Fund, Salomon Smith Barney U.S. High-Yield Market Index (a), and
the Consumer Price Index (CPI)(b) since inception. Unlike the Fund, the returns
for these indices do not reflect any fees, expenses, or sales charges.
(a) The Salomon Smith Barney U.S. High-Yield Market Index is an unmanaged index
of high-yield debt securities and is a broad market measure.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
58 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE HIGH YIELD BOND FUND
CORPORATE BONDS (96.6%)
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------
AEROSPACE/DEFENSE EQUIPMENT (1.3%)
BE Aerospace, Inc., 8.00%, 03/01/08. . . . $ 500,000 $ 350,000
Sequa Corp., 9.00%, 08/01/09 . . . . . . . 1,000,000 1,045,000
----------
1,395,000
----------
- ------------------------------------------------------------------
APPLIANCES (1.5%)
Salton, Inc., 12.25%, 04/15/08 . . . . . . 1,500,000 1,560,000
----------
- ------------------------------------------------------------------
AUTO PARTS & EQUIPMENT (4.0%)
Collins & Aikman Products Corp.,
10.75%, 12/31/11 . . . . . . . . . . . . 1,000,000 1,025,000
Dura Operating Corp., 9.00%, 05/01/09. . . 1,000,000 955,000
Rexnord Corp., 10.13%, 12/15/12 (c). . . . 750,000 806,250
Tenneco Automotive, Inc., 11.63%,
10/15/09. . . . . . . . . . . . . . . . 500,000 442,500
TRW Automotive, Inc., 9.38%, 02/15/13. . . 625,000 682,813
TRW Automotive, Inc., 11.00%, 02/15/13 (c) 300,000 328,500
----------
4,240,063
----------
- ------------------------------------------------------------------
BANKS (0.5%)
Ahold Finance USA, Inc., 8.25%,
07/15/10. . . . . . . . . . . . . . . . 625,000 550,781
----------
- ------------------------------------------------------------------
BUILDING & CONSTRUCTION (2.9%)
D.R. Horton, Inc., 8.50%, 04/15/12 . . . . 900,000 985,500
WCI Communities, Inc., 9.13%, 05/01/12 . . 1,000,000 1,010,000
William Lyon Homes, 10.75%, 04/01/13 . . . 1,000,000 1,025,000
3,020,500
- ------------------------------------------------------------------
CABLE & SATELLITE (8.2%)
Charter Communications Holdings, LLC,
8.63%, 04/01/09. . . . . . . . . . . . . 1,000,000 657,500
CSC Holdings, Inc., 7.63%, 04/01/11. . . . 1,000,000 1,052,500
DIRECTV Holdings Finance, 8.38%,
03/15/13 (c) . . . . . . . . . . . . . . 1,000,000 1,120,000
Echostar DBS Corp., 9.13%, 01/15/09. . . . 1,500,000 1,687,500
Mediacom, LLC, 9.50%, 01/15/13 . . . . . . 1,750,000 1,881,249
Sanmina Corp., 10.38%, 01/15/10 (c). . . . 1,000,000 1,140,000
Young Broadcasting, Inc., 10.00%,
03/01/11. . . . . . . . . . . . . . . . 1,000,000 1,080,000
----------
8,618,749
----------
- ------------------------------------------------------------------
CHEMICALS (3.2%)
Alpharma, Inc., 8.63%, 05/01/11 (c). . . . 450,000 465,750
Equistar Chemical Funding, 10.13%,
09/01/08 . . . . . . . . . . . . . . . . 625,000 656,250
Equistar Chemical Funding, 10.63%,
05/01/11 (c) . . . . . . . . . . . . . . 100,000 105,750
Lyondell Chemical Co., 9.50%, 12/15/08 . . 1,000,000 1,020,000
Noveon, Inc., 11.00%, 02/28/11 . . . . . . 1,000,000 1,130,000
----------
3,377,750
----------
- ------------------------------------------------------------------
COMMUNICATION/MOBILE (4.0%)
Alamosa Delaware, Inc., 13.63%,
08/15/11. . . . . . . . . . . . . . . . 1,000,000 680,000
American Tower Corp., 9.38%, 02/01/09. . . 500,000 495,000
SBA Communications Corp., 10.25%,
02/01/09. . . . . . . . . . . . . . . . 1,000,000 840,000
TeleCorp PCS, Inc., 10.63%, 07/15/10 . . . 1,000,000 1,190,000
Triton PCS, Inc., 9.38%, 02/01/11. . . . . 1,000,000 952,500
----------
4,157,500
----------
- ------------------------------------------------------------------
CONSUMER PRODUCTS/SERVICES (4.5%)
AEP Industries, Inc., 9.88%, 11/15/07. . . 625,000 587,500
Crown Euro Holdings SA, 10.88%,
03/01/13 (c). . . . . . . . . . . . . . 1,000,000 1,077,500
Georgia Pacific Corp., 9.38%,
02/01/13 (c). . . . . . . . . . . . . . 1,250,000 1,375,000
IMC Global, Inc., 11.25%, 06/01/11 . . . . 1,000,000 1,135,000
Iron Mountain, Inc., 7.75%, 01/15/15 . . . 500,000 537,500
----------
4,712,500
----------
- ------------------------------------------------------------------
COSMETICS / TOILETRIES (2.4%)
Armkel, LLC, 9.50%, 08/15/09 . . . . . . . 1,250,000 1,400,000
Elizabeth Arden, Inc., 11.75%, 02/01/11. . 1,000,000 1,100,000
----------
2,500,000
----------
FOOD & BEVERAGE (1.1%)
B&G Foods, Inc., 9.63%, 08/01/07 . . . . . 950,000 979,688
Land O Lakes, Inc., 8.75%, 11/15/11. . . . 350,000 224,000
----------
1,203,688
----------
- ------------------------------------------------------------------
GAMING (5.6%)
Chumash Casino & Resort, 9.00%,
07/15/10 (c). . . . . . . . . . . . . . 1,000,000 1,070,000
Isle Of Capri Casinos, 8.75%, 04/15/09 . . 1,250,000 1,315,625
Park Place Entertainment Corp.,
8.13%, 05/15/11 . . . . . . . . . . . . 1,250,000 1,321,875
Penn National Gaming, Inc., 11.13%,
03/01/08. . . . . . . . . . . . . . . . 1,000,000 1,102,500
Station Casinos, Inc., 9.88%, 07/01/10 . . 1,000,000 1,102,500
----------
5,912,500
----------
- ------------------------------------------------------------------
HEALTHCARE (6.2%)
Ameripath, Inc., 10.50%, 04/01/13 (c). . . 1,150,000 1,219,000
Extendicare Health Services, 9.35%,
12/15/07. . . . . . . . . . . . . . . . 1,000,000 810,000
Iasis Healthcare Corp., 13.00%,
10/15/09. . . . . . . . . . . . . . . . 1,250,000 1,393,750
Omnicare, Inc., 8.13%, 03/15/11. . . . . . 1,000,000 1,090,000
Pacificare Health Systems, 10.75%,
06/01/09 . . . . . . . . . . . . . . . . 1,000,000 1,107,500
Res-Care, Inc., 10.63%, 11/15/08 . . . . . 1,000,000 895,000
----------
6,515,250
----------
- ------------------------------------------------------------------
INDUSTRIALS (1.0%)
Werner Holdings Co., Inc., 10.00%,
11/15/07 . . . . . . . . . . . . . . . . 1,000,000 1,025,000
----------
- ------------------------------------------------------------------
LEISURE (3.7%)
Cinemark USA, Inc., 9.00%, 02/01/13
(c). . . . . . . . . . . . . . . . . . 100,000 108,000
Intrawest Corp., 10.50%, 02/01/10. . . . . 1,000,000 1,085,000
Regal Cinemas, Inc., 9.38%, 02/01/12 . . . 1,000,000 1,100,000
Six Flags, Inc., 8.88%, 02/01/10 . . . . . 545,000 545,000
Six Flags, Inc., 9.75%, 04/15/13 (c) . . . 1,000,000 1,042,500
----------
3,880,500
----------
- ------------------------------------------------------------------
MACHINERY/EQUIPMENT (2.0%)
Fairchild Semiconductor Corp.,
10.38%, 10/01/07 . . . . . . . . . . . . 1,000,000 1,055,000
NMHG Holdings Co., 10.00%, 05/15/09. . . . 1,000,000 1,070,000
----------
2,125,000
----------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 59
STATEMENT OF INVESTMENTS(Continued)
April 30, 2003 (Unaudited)
GARTMORE HIGH YIELD BOND FUND (Continued)
CORPORATE BONDS (CONTINUED)
PRINCIPAL VALUE
AMOUNT
- ---------------------------------------------------------------------------
MEDIA (1.6%)
Paxson Comm., 0.00%, 01/15/09. . . . . $ 750,000 $ 630,000
Sinclair Broadcast Group, Inc.,
8.00%, 03/15/12. . . . . . . . . . . 1,000,000 1,055,000
-----------
1,685,000
-----------
- ---------------------------------------------------------------------------
METALS & MINING (0.8%)
Steel Corp., 7.88%, 02/15/09 . . . . . 1,000,000 887,500
-----------
- ---------------------------------------------------------------------------
OIL & GAS (10.1%)
Amerigas Partners LP, 8.88%,
05/20/11 . . . . . . . . . . . . . . 1,000,000 1,080,000
Pipeline Co., 8.88%, 03/15/10 (c). . . 900,000 994,500
Citgo Petroleum Corp., 11.38%,
02/01/11 (c) . . . . . . . . . . . 750,000 836,250
Paso Corp., 7.88%, 06/15/12 (c). . . . 1,000,000 885,000
Paso Energy Partners, 10.63%,
12/01/12 (c). . . . . . . . . . . . 1,000,000 1,149,999
Forest Oil Corp., 8.00%, 06/15/08. . . 1,000,000 1,060,000
Giant Industries, 11.00%, 05/15/12 . . 625,000 593,750
Grant Prideco, Inc., 9.63%, 12/01/07 . 1,000,000 1,105,000
Grey Wolf, Inc., 8.88%, 07/01/07 . . . 1,000,000 1,031,250
Southern Natural Gas, 8.88%,
03/15/10 (c) . . . . . . . . . . . . 725,000 801,125
Williams Cos, Inc., 7.13%, 09/01/11. . 1,000,000 945,000
-----------
10,481,874
-----------
- ---------------------------------------------------------------------------
PUBLISHING (2.6%)
Media East, LLC, 9.88%, 11/15/09 (c) . 750,000 858,750
Garden State Newspapers, Inc.,
8.63%, 07/01/11 . . . . . . . . . . 750,000 774,375
Hollinger International, 9.00%,
12/15/10. . . . . . . . . . . . . . 1,000,000 1,070,000
-----------
2,703,125
-----------
- ---------------------------------------------------------------------------
RADIO BROADCASTING (0.3%)
Satellite Radio, Inc., 0.00%,
12/31/09. . . . . . . . . . . . . . 500,000 352,500
-----------
- ---------------------------------------------------------------------------
RETAIL (1.9%)
National Group, Inc., 8.88%,
05/15/12 . . . . . . . . . . . . . . 950,000 866,875
Mothers Work, Inc., 11.25%,
08/01/10. . . . . . . . . . . . . . 1,000,000 1,095,000
-----------
1,961,875
-----------
- ---------------------------------------------------------------------------
SERVICES (4.3%)
Allied Waste North America, Inc.,
10.00%, 08/01/09. . . . . . . . . . 1,500,000 1,603,125
Synagro Technologies, Inc., 9.50%,
04/01/09 . . . . . . . . . . . . . 1,000,000 1,075,000
Marine Services, Inc., 8.88%,
05/15/12. . . . . . . . . . . . . . 1,000,000 875,000
United Rentals, Inc., 9.25%,
01/15/09 . . . . . . . . . . . . . 1,000,000 960,000
-----------
4,513,125
-----------
- ---------------------------------------------------------------------------
SUPERMARKET (2.5%)
Great Atlantic & Pac Tea, 9.13%,
12/15/11 . . . . . . . . . . . . . 625,000 537,500
Ingles Markets, Inc., 8.88%, 12/01/11. 1,000,000 1,020,000
Stater Brothers Holdings, Inc.,
10.75%, 08/15/06. . . . . . . . . . 1,000,000 1,062,500
-----------
2,620,000
-----------
- ---------------------------------------------------------------------------
TECHNOLOGY (1.7%)
AMI Semiconductor, Inc., 10.75%,
02/01/13 (c). . . . . . . . . . .. 670,000 726,950
Amkor Technology, Inc., 9.25%,
02/15/08. . . . . . . . . . . . . 1,000,000 1,067,500
-----------
1,794,450
-----------
- ---------------------------------------------------------------------------
TELECOMMUNICATION SERVICES (8.2%)
Fairpoint Communications, 11.88%,
03/01/10 (c). . . . . . . . . . . . 350,000 388,500
Insight Midwest, 9.75%, 10/01/09. . . 1,000,000 1,072,500
Level 3 Communications, Inc.,
11.00%, 03/15/08. . . . . . . . . . 500,000 415,000
Lucent Technologies, 6.45%,
03/15/29. . . . . . . . . . . . . . 500,000 367,500
Nextel Communications, 9.50%,
02/01/11. . . . . . . . . . . . . 1,750,000 1,911,875
Nextel Partners, Inc., 12.50%,
11/15/09. . . . . . . . . . . . . 1,000,000 1,090,000
Nortel Networks, Ltd., 6.13%,
02/15/06. . . . . . . . . . . . . . 750,000 726,563
Sprint Capital Corp., 8.38%,
03/15/12. . . . . . . . . . . . . 1,000,000 1,112,500
Time Warner Telecommunication, Inc.,
9.75%, 07/15/08. . . . . . . . . . 500,000 420,000
TSI Telecommunication, 12.75%,
02/01/09. . . . . . . . . . . . . 1,000,000 980,000
-----------
8,484,438
-----------
- ---------------------------------------------------------------------------
TEXTILES/APPAREL (2.6%)
GFSI, Inc., 9.63%, 03/01/07. . . . . 1,000,000 830,000
Levi Straus & Co., 11.63%,
01/15/08. . . . . . . . . . . . . . 500,000 422,500
Levi Straus & Co., 12.25%,
12/15/12 (c). . . . . . . . . . . . 500,000 415,000
Russell Corp., 9.25%, 05/01/10. . . . 1,000,000 1,085,000
-----------
2,752,500
-----------
- ---------------------------------------------------------------------------
TRANSPORTATION (1.0%)
Petroleum Helicopters, Inc.,
9.38%, 05/01/09. . . . . . . . . . 1,000,000 1,095,000
-----------
- ---------------------------------------------------------------------------
UTILITIES (6.9%)
AES Corp., 8.38%, 08/15/07. . . . . . 200,000 183,000
AES Corp., 9.38%, 09/15/10. . . . . . 660,000 646,800
Aquila, Inc., 7.63%, 11/15/09. . . . 625,000 515,625
Calpine Corp., 7.88%, 04/01/08. . . 1,000,000 715,000
Calpine Corp., 8.50%, 02/15/11. . . 500,000 365,000
CMS Energy Corp., 9.88%,
10/15/07. . . . . . . . . . . . . 1,000,000 1,040,000
Dynegy Holdings, Inc., 8.75%,
02/15/12. . . . . . . . . . . . . 1,000,000 950,000
Edison Mission, 9.88%, 04/15/11. . . 1,500,000 1,327,500
Legrand, 10.50%, 02/15/13 (c). . . . 750,000 810,000
PSEG Energy Holdings, 7.75%,
04/16/07. . . . . . . . . . . . . . 625,000 654,688
-----------
7,207,613
-----------
TOTAL CORPORATE BONDS 101,333,781
-----------
YANKEE BONDS (1.0%)
- ---------------------------------------------------------------------------
BROADCASTING (1.0%)
Spanish Broadcasting System, Inc.,
9.63%, 11/01/09. . . . . . . . . . 1,000,000 1,057,500
-----------
TOTAL YANKEE BONDS 1,057,500
-----------
- --------------------------------------------------------------------------------
60 SEMIANNUAL REPORT 2003
WARRANTS (0.0%)
SHARES OR
PRINCIPAL
AMOUNT VALUE
- -----------------------------------------------------------------
COMMUNICATION/FIXED (0.0%)
Maxcom Telecommunications SA 270 $ 0
(c) 0
------------
- -----------------------------------------------------------------
COMMUNICATION/ISP (0.0%)
Metricom, Inc. (b) 4,000 0
------------
TOTAL WARRANTS 0
------------
PREFERRED STOCKS (0.0%)
COMMUNICATION/ISP (0.0%)
Rhythms Netconnections, Inc. (c) 10,000 0
------------
TOTAL PREFERRED STOCKS 0
------------
TOTAL INVESTMENTS (COST $96,069,713)
(A) - 97.6% 102,391,281
OTHER ASSETS IN EXCESS OF LIABILITIES -
2.4% 2,464,432
------------
NET ASSETS - 100.0% $104,855,713
------------
------------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Defaulted Security
(c) Represents a restricted security acquired and eligible for resale under
rule 144A, which limits the resale to certain qualified buyers.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 61
GARTMORE MILLENNIUM GROWTH FUND
Class A Shares symbol: NMGAX
Class B Shares symbol: NMGBX
Class C Shares symbol: GMGCX
Class D Shares symbol: NMCGX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned 3.06%* versus
8.19% for its benchmark, the Russell MidCap Growth Index.
For broader comparison, the average return for this Fund's peer category
(Mid-Cap Growth) was 4.04%, according to Lipper, an independent company that
provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
Global equity markets rallied during April driven by improving corporate
profits, attractive stock valuations and greater investor confidence in the
viability of economic recovery. Additional monetary stimulus from the European
Central Bank and the Federal Reserve-including an unexpected half-point rate
reduction in November-fueled the rally.
The economy grew slightly during the period. However, consumer confidence, which
had suffered a steady decline for four months, dramatically improved in April,
primarily due to a swift resolution in the U.S.-led war in Iraq.
The Fund's 5% position in cash greatly detracted from performance, primarily due
to the rally in April. The Fund's negative sector allocations more than offset
the positive contribution from stock strong selections. For example, the Fund
was underweight in the utilities sector, which rose 66%, driven by Calpine Corp.
and The AES Corp. An overweight position in the distribution services sector
also hurt returns, even though stock selection was stronger than that of the
Index. On a positive note, the Fund's strong stock selection and overweight
position in the commercial services sector enhanced performance. Holdings such
as Exult, Inc., a provider of comprehensive management of human resources
departments, and Iron Mountain Inc., a full-service provider of records and
information management services, as well were the largest contributors to Fund
returns.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
Top holdings such as software company Amdocs Ltd and Cox Radio, the
third-largest broadcasting company in the United States, both benefited the Fund
by achieving strong earnings results. The Advisory Board Co., one the Fund's
largest health-care positions, continued to grow due to recurring revenues,
lucrative value, lack of competition and high cash reserve.
HOW IS THE FUND POSITIONED?
With the quick resolution of the war with Iraq, we are starting to see signs of
improving economic conditions. The Fund remains positioned to take advantage of
an economic turnaround, and we have increased our holdings in the commercial
services and consumer durables sectors, which we believe will be strong leaders
as the economy improves. We also plan to maintain a significant position in the
health-care sector, due to strong demand for products and services.
PORTFOLIO MANAGERS: Aaron Harris and Nicholas Ford
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $17,617,883
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Years Ended April 30, 2003)
1 YR. 5 YR. 10 YR.
- --------------------------------------------
Class A1 w/o SC2 -21.93% -11.70% 2.81%
w/SC3 -26.39% -12.74% 2.21%
- --------------------------------------------
Class B1 w/o SC2 -22.37% -12.66% 2.25%
w/SC4 -26.25% -12.92% 2.25%
- --------------------------------------------
Class C1 w/o SC2 -22.35% -12.00% 2.64%
w/SC5 -23.91% -12.17% 2.54%
- --------------------------------------------
Class D. w/o SC2 -21.60% -11.44% 2.96%
w/SC6 -25.11% -12.25% 2.49%
- --------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 These returns include performance based on Class D shares, which was
achieved prior to the creation of Class A and Class B (5/11/98) and Class C
(3/1/01) shares. These returns have been restated for sales charges but not
for fees applicable to these classes of shares, which include a 0.25%
(Class A) or 1.00% (Class B and Class C) 12b-1 fee. Had Class A, Class B or
Class C been in existence for the time periods presented, the performance
for such classes would have been lower as a result of their additional
expenses.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
6 A 4.50% front-end sales charge was deducted. See legend on first page of
this report.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS RUSSELL
DATE D MID CAP GROWTH CPI
- ---------------------------------------------------------
4/30/1993. 9,550 10,000 10,000
10/31/1993 10,306 11,859 10,275
10/31/1994 11,019 12,161 10,543
10/31/1995 13,396 15,109 10,839
10/31/1996 15,996 17,821 11,164
10/31/1997 19,780 22,207 11,396
10/31/1998 20,790 22,747 11,566
10/31/1999 23,558 31,314 11,862
10/31/2000 36,894 43,425 12,271
10/31/2001 15,864 24,847 12,532
10/31/2002 12,369 20,471 12,786
4/30/2003. 12,786 22,148 13,079
Comparative performance of $10,000 invested in Class D shares of the Gartmore
Millennium Growth Fund, the Russell Mid Cap Growth Index (Russell Mid Cap
Growth)(a), and the Consumer Price Index (CPI)(b) over a 10-year period ended
04/30/03. Unlike the Fund, the returns for these indices do not reflect any
fees, expenses, or sales charges.
(a) The Russell Mid Cap Growth is an unmanaged index of companies with higher
forecasted growth values. The stocks are also members of the Russell 1000
Growth Index.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
62 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE MILLENNIUM GROWTH FUND
COMMON STOCKS (96.1%)
SHARES OR
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------
ADVERTISING (1.2%)
Getty Images, Inc. (b). . . . . . . . . 5,945 $ 201,238
----------
- --------------------------------------------------------------
AUTOMOTIVE (0.5%)
United Rentals, Inc. (b). . . . . . . . 7,689 79,197
----------
- --------------------------------------------------------------
BIOTECHNOLOGY (1.2%)
Chiron Corp. (b). . . . . . . . . . . . 1,950 79,619
Genzyme Corp. (b) . . . . . . . . . . . 3,252 130,990
----------
210,609
----------
- --------------------------------------------------------------
BUSINESS SERVICES (7.0%)
Administaff, Inc. (b) . . . . . . . . . 11,171 71,383
Checkfree Corp. (b) . . . . . . . . . . 6,500 179,205
Cintas Corp.. . . . . . . . . . . . . . 4,195 150,601
Corporate Executive Board (b) . . . . . 4,778 195,849
Ecolab, Inc.. . . . . . . . . . . . . . 1,980 101,158
Exult, Inc. (b) . . . . . . . . . . . . 10,100 72,619
Iron Mountain, Inc. (b) . . . . . . . . 4,302 171,435
MPS Group, Inc. (b) . . . . . . . . . . 13,710 92,543
Portfolio Recovery Associates, Inc
(b). . . . . . . . . . . . . . . . . 7,086 193,377
----------
1,228,170
----------
- --------------------------------------------------------------
CAPITAL GOODS (0.8%)
Danaher Corp. . . . . . . . . . . . . . 1,253 86,432
Surebeam Corp. Class A (b). . . . . . . 18,924 54,501
----------
140,933
----------
- --------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (7.4%)
3Com Corp. (b). . . . . . . . . . . . . 29,800 154,960
Affiliated Computer Services
Class A (b). . . . . . . . . . . . . 3,400 162,180
Cognos, Inc. (b). . . . . . . . . . . . 6,260 169,896
Factset Research Systems, Inc.. . . . . 5,168 179,846
First Data Corp.. . . . . . . . . . . . 3,590 140,836
Packeteer, Inc. (b) . . . . . . . . . . 22,600 295,608
Veritas Software Corp. (b). . . . . . . 8,800 193,688
----------
1,297,014
----------
- --------------------------------------------------------------
CONSUMER SERVICES (0.5%)
Mattel, Inc.. . . . . . . . . . . . . . 4,322 93,960
----------
- --------------------------------------------------------------
DISTRIBUTION (1.1%)
Fastenal Co.. . . . . . . . . . . . . . 5,664 195,918
----------
EDUCATION (1.8%)
Career Education Corp. (b). . . . . . . 3,116 187,365
University of Phoenix Online (b). . . . 2,712 119,708
----------
307,073
----------
- --------------------------------------------------------------
ELECTRONICS (1.1%)
Flextronics International Ltd. (b). . . 13,300 116,375
Gentex Corp. (b). . . . . . . . . . . . 2,384 71,997
----------
188,372
----------
- --------------------------------------------------------------
ENTERTAINMENT (0.6%)
International Game Technologies (b) . . 1,205 103,992
----------
- --------------------------------------------------------------
ENVIRONMENTAL SERVICES (0.9%)
Waste Connections, Inc. (b) . . . . . . 4,673 157,200
----------
- --------------------------------------------------------------
FINANCIAL/MISCELLANEOUS (6.2%)
Ambac Financial Group, Inc. . . . . . . 2,281 133,096
Capital One Financial Corp. . . . . . . 2,374 99,399
Charter One Financial, Inc. . . . . . . 4,440 128,982
Chicago Mercantile Exchange . . . . . . 200 11,308
Commerce Bancorp, Inc.. . . . . . . . . 4,470 181,795
Federated Investors, Inc. . . . . . . . 3,368 91,913
Idine Rewards Network, Inc. (b) . . . . 7,000 68,250
Investment Technology Group, Inc. (b) . 6,400 91,456
Investors Financial Services Corp.. . . 5,150 112,322
Moodys, Inc.. . . . . . . . . . . . . . 1,696 81,900
Synovus Financial Corp. . . . . . . . . 4,528 88,160
----------
1,088,581
----------
- --------------------------------------------------------------
FOOD & BEVERAGE (2.7%)
Performance Food Group Co. (b). . . . . 5,374 188,520
Weight Watchers International, Inc. (b) 2,384 112,000
Whole Foods Market, Inc. (b). . . . . . 2,898 172,025
----------
472,545
----------
- --------------------------------------------------------------
HEALTHCARE SERVICES (9.9%)
American HealthCorp.. . . . . . . . . . 8,387 207,075
Caremark Rx, Inc. (b) . . . . . . . . . 9,200 183,172
Express Scripts, Inc. Class A (b) . . . 2,095 123,521
Icon Plc ADR (b). . . . . . . . . . . . 6,341 164,232
Stericycle, Inc. (b). . . . . . . . . . 9,325 366,379
Stryker Corp. . . . . . . . . . . . . . 2,556 171,278
The Advisory Board Co. (b). . . . . . . 14,526 531,941
----------
1,747,598
----------
- --------------------------------------------------------------
HOSPITALS (1.9%)
Amsurg Corp. (b). . . . . . . . . . . . 5,233 135,901
Health Management Associates, Inc.
Class A. . . . . . . . . . . . . . . 5,503 93,881
Vistacare, Inc. Class A (b) . . . . . . 5,332 107,973
----------
337,755
----------
- --------------------------------------------------------------
HOTELS & MOTELS (0.6%)
Marriott International, Inc.. . . . . . 3,053 109,633
----------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 63
STATEMENT OF INVESTMENTS(Continued)
April 30, 2003 (Unaudited)
GARTMORE MILLENNIUM GROWTH FUND (Continued)
COMMON STOCKS (CONTINUED)
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------
INSURANCE - LIFE & HEALTH (3.9%)
Anthem, Inc. (b). . . . . . . . . . . 4,664 $ 320,138
Lincoln National Corp.. . . . . . . . 3,744 119,658
WellPoint Health Networks, Inc. (b) . 3,327 252,652
----------
692,448
----------
- ------------------------------------------------------------
MEDICAL LABORATORIES (1.2%)
Laboratory Corp. of America
Holdings (b) . . . . . . . . . . . 3,032 89,323
Waters Corp. (b). . . . . . . . . . . 4,649 111,622
----------
200,945
----------
- ------------------------------------------------------------
MEDICAL PRODUCTS (4.3%)
Biomet, Inc.. . . . . . . . . . . . . 5,725 174,384
Dentsply International, Inc.. . . . . 2,715 101,677
Henry Schein, Inc. (b). . . . . . . . 1,815 78,317
St. Jude Medical, Inc. (b). . . . . . 2,390 125,379
STAAR Surgical. . . . . . . . . . . . 10,000 85,400
Varian Medical Systems, Inc. (b). . . 1,275 68,672
Zimmer Holdings, Inc. (b) . . . . . . 2,741 128,553
----------
762,382
----------
- ------------------------------------------------------------
MINING (0.7%)
Newmont Mining Corp.. . . . . . . . . 4,357 117,726
----------
- ------------------------------------------------------------
MULTIMEDIA (2.5%)
Cox Radio (b) . . . . . . . . . . . . 14,650 334,166
Insight Communications Co., Inc. (b). 7,168 98,417
----------
432,583
----------
- ------------------------------------------------------------
OIL & GAS (3.9%)
Burlington Resources, Inc.. . . . . . 2,933 135,827
Nabors Industries Ltd. (b). . . . . . 2,520 98,784
Noble Energy, Inc.. . . . . . . . . . 4,755 157,866
Pride International, Inc. (b) . . . . 9,820 152,406
Smith International, Inc. (b) . . . . 4,142 147,290
----------
692,173
----------
- ------------------------------------------------------------
PHARMACEUTICALS (3.1%)
Allergan, Inc.. . . . . . . . . . . . 2,783 195,505
IVAX Corp. (b). . . . . . . . . . . . 5,310 85,332
Medicis Pharmaceutical Corp.
Class A (b). . . . . . . . . . . . 2,987 172,171
Mylan Laboratories, Inc.. . . . . . . 3,219 91,001
----------
544,009
----------
- ------------------------------------------------------------
RECREATIONAL VEHICLES (1.4%)
Polaris Industries, Inc.. . . . . . . 1,346 71,163
Monaco Coach Corp. (b). . . . . . . . 13,229 178,856
----------
250,019
----------
- ------------------------------------------------------------
RESTAURANTS (4.0%)
California Pizza Kitchen (b). . . . . 8,700 175,392
Darden Restaurants, Inc.. . . . . . . 3,869 67,746
Starbucks Corp. (b) . . . . . . . . . 8,448 198,444
The Cheesecake Factory, Inc. (b). . . 4,946 156,244
YUM! Brands, Inc. (b) . . . . . . . . 4,376 108,087
----------
705,913
----------
- ------------------------------------------------------------
RETAIL (12.8%)
Advance Auto Parts, Inc. (b). . . . . 2,455 122,112
Amazon Co., Inc. (b). . . . . . . . . 5,400 154,818
AutoZone, Inc. (b). . . . . . . . . . 864 69,820
Bed Bath & Beyond, Inc. (b) . . . . . 5,580 220,466
Coach, Inc. (b) . . . . . . . . . . . 2,194 95,461
Family Dollar Stores, Inc.. . . . . . 2,946 100,724
Fred's, Inc.. . . . . . . . . . . . . 3,854 125,062
Furniture Brands International, Inc.
(b). . . . . . . . . . . . . . . . 12,035 285,830
Guitar Center, Inc. (b) . . . . . . . 7,558 175,043
La-Z-Boy, Inc.. . . . . . . . . . . . 3,696 72,183
Newell Rubbermaid, Inc. . . . . . . . 2,756 84,003
Rent-A-Center, Inc. (b) . . . . . . . 1,585 101,757
Tiffany & Company . . . . . . . . . . 3,265 90,571
Tractor Supply Co. (b). . . . . . . . 4,888 207,007
Williams Sonoma, Inc. (b) . . . . . . 9,739 252,045
Wm. Wrigley Jr. Co. . . . . . . . . . 1,491 84,555
----------
2,241,457
----------
- ------------------------------------------------------------
SEMICONDUCTORS (1.8%)
Cypress Semiconductor Corp. (b) . . . 4,600 40,112
Sigma Designs, Inc. (b) . . . . . . . 40,960 270,336
----------
310,448
----------
- ------------------------------------------------------------
TECHNOLOGY (2.8%)
Applied Films Corp. (b) . . . . . . . 10,300 224,025
PerkinElmer, Inc. . . . . . . . . . . 19,200 190,464
Scan Source, Inc. (b) . . . . . . . . 4,088 81,392
----------
495,881
----------
- ------------------------------------------------------------
TELECOMMUNICATIONS (4.3%)
Amdocs Ltd. (b) . . . . . . . . . . . 12,700 224,282
Corvis Corp. (b). . . . . . . . . . . 114,000 80,826
Enterasys Networks, Inc. (b). . . . . 84,000 201,600
JDS Uniphase Corp. (b). . . . . . . . 43,100 139,213
Sonus Networks, Inc. (b). . . . . . . 36,600 117,120
----------
763,041
----------
- --------------------------------------------------------------------------------
64 SEMIANNUAL REPORT 2003
COMMON STOCKS (CONTINUED)
SHARES OR
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------
THERAPEUTICS (2.8%)
Abgenix, Inc. (b) . . . . . . . 10,214 $ 97,033
Gilead Sciences, Inc. (b) . . . 3,566 164,535
Medimmune, Inc. (b) . . . . . . 6,353 224,071
-----------
485,639
-----------
- -------------------------------------------------------
TRANSPORTATION (1.2%)
JetBlue Airways Corp. (b) . . . 3,813 119,843
Knight Transportation, Inc. (b) 3,760 90,616
-----------
210,459
-----------
TOTAL COMMON STOCKS 16,864,911
-----------
COMMERCIAL PAPER (4.3%)
FIRE, MARINE, & CASUALTY INSURANCE (4.3%)
Allstate Corp., 1.36%, 05/01/03. . . . $753,000 752,972
-----------
TOTAL COMMERCIAL PAPER 752,972
-----------
TOTAL INVESTMENTS
(COST $16,566,597) (A) - 100.4% 17,617,883
-----------
LIABILITIES IN EXCESS OF OTHER ASSETS
- (0.4)% (65,469)
-----------
NET ASSETS - 100.0% $17,552,414
-----------
-----------
COMMON STOCKS SHORT POSITIONS (9.1%)
BUSINESS SERVICES (.4%)
Open Text Corp. (b) . . . . . 2,600 74,620
74,620
-------
- ----------------------------------------------
COMPUTER SOFTWARE & SERVICES (1.8%)
BMC Software, Inc. (b). . . . 8,800 131,296
ESS Technology, Inc. (b). . . 27,000 186,840
-------
318,136
-------
- ----------------------------------------------
FINANCIAL/MISCELLANEOUS (.8%)
Jefferies Group, Inc. . . . . 3,500 135,870
-------
135,870
-------
- ----------------------------------------------
HOTELS & MOTELS (.5%)
Four Seasons Hotels, Inc. . . 2,700 81,459
-------
81,459
-------
- ----------------------------------------------
OIL & GAS (.9%)
Nicor, Inc. . . . . . . . . . 5,400 162,324
-------
162,324
-------
- ----------------------------------------------
STEEL PRODUCERS (2.2%)
Nucor Corp. . . . . . . . . . 9,600 392,160
-------
392,160
-------
COMMON STOCKS SHORT POSITIONS (CONTINUED)
- -----------------------------------------------------
TECHNOLOGY (1.9%)
Ask Jeeves, Inc. (b) . . . . . 9,800 $ 80,654
LookSmart, Ltd. (b). . . . . . 15,300 51,561
Electronic Data Systems Corp.. 11,400 206,910
----------
339,125
----------
- -----------------------------------------------------
TELECOMMUNICATIONS (.5%)
Brightpoint, Inc. (b). . . . . 5,800 88,392
----------
TOTAL COMMON STOCK SHORT POSITIONS
(PROCEEDS $1,536,850) - 9.1% $1,592,086
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 65
GARTMORE VALUE OPPORTUNITIES FUND
Class A Shares symbol: GVOAX
Class B Shares symbol: GVOBX
Class C Shares symbol: GVOCX
Institutional Service Class symbol: GVOIX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned 4.59%* versus
7.55% for its benchmark, the Russell 2000 Index.
For broader comparison, the average return for this Fund's peer category
(Small-Cap Value Funds) was 6.07%, according to Lipper, an independent company
that provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
The Fund rebounded nicely in the latter part of 2002 but under performed
modestly in the first quarter of 2003. One reason was that we positioned the
Fund less defensively than the market. In addition, the negative performance of
several stocks overwhelmed the generally positive returns of the rest of the
portfolio.
Some of these stocks, in hindsight, were simply poor investment choices in this
uncertain environment. A few stock-specific issues simply were beyond our
control or analysis. In some cases, we believed the future fundamentals of a
company were threatened and we sold those stocks. A good example of this was
AmeriCredit Corp., an auto financing company. In other cases, when we believed
that a company's fundamentals were intact, we maintained the Fund's position in
that stock.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
As of April 30, 2003, the Fund's top holdings were Wisconsin Energy Corp.,
Webster Financial Corp. and BankAtlantic Bancorp, Inc. Wisconsin Energy is
engaged in the generation, transmission and distribution of electric energy, gas
and steam. Favorable weather conditions, strong acquisitions, and core business
growth contributed to the company's stable results. Webster Financial is a bank
holding company that had solid loan, deposit and earnings growth. BankAtlantic
is a diversified financial services company that continued to see robust core
deposit growth and credit quality improvement.
HOW IS THE FUND POSITIONED?
In this post-war environment, investors are focusing again on the state of the
economy. Although uncertainty is still high, we believe that now is the time to
begin shifting the portfolio to stocks that have significant upside potential,
rather than remain in the safety of stocks that have limited downside potential.
Thus, we are moving the portfolio in that direction. We acknowledge that clarity
is limited, but we think the market already is discounting this uncertainty,
given the price and favorable risk/reward picture of many stocks.
Our portfolio shift may be early, but we believe that when clarity replaces
uncertainty, we will likely have completed most of the Fund's repositioning. We
are adhering to the discipline that has served us well over the years and have
no reason to believe that this time will be any different.
PORTFOLIO MANAGER: NorthPointe Capital - Subadviser
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $22,931,171
APRIL 30, 2003
AVERAGE ANNUAL TOTAL RETURN
(For Periods Ended April 30, 2003)
1 YR. INCEPTION1
- ------------------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 -18.70% 5.34%
w/SC3 -23.38% 3.49%
- ------------------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 -19.27% 4.70%
w/SC4 -23.30% 3.89%
- ------------------------------------------------------------
Class C5 . . . . . . . . . . w/o SC2 -19.24% 4.71%
w/SC6 -20.83% 4.40%
- ------------------------------------------------------------
Institutional Service Class7 -18.59% 5.64%
- ------------------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on December 29, 1999.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 These returns include performance based on Class B shares, which was
achieved prior to the creation of Class C shares (3/1/01). These returns
have been restated for sales charges but not for fees applicable to Class C
shares. Had Class C been in existence for the time periods presented, the
performance of Class C shares would have been similar assuming similar
expenses.
6 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted from the one year return because it is charged when you sell Class
C shares within the first year after purchase.
7 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS RUSSELL
DATE A 2000 CPI
- -----------------------------------------------------
12/29/1999 9,425 10,000 10,000
10/31/2000 11,723 9,953 10,339
10/31/2001 11,621 8,689 10,559
10/31/2002 10,721 7,683 10,772
4/30/2003. 11,213 8,264 11,020
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Value Opportunities Fund, Russell 2000 Index (Russell 2000)(a), and the Consumer
Price Index (CPI)(b) since inception. Unlike the Fund, the returns for these
indices do not reflect any fees, expenses, or sales charges.
(a) The Russell 2000 is compromised of approximately 2000 companies with small
market capitalizations relative to the market capitalizations of other U.S.
companies.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
66 SEMIANNUAL REPORT 2003
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE VALUE OPPORTUNITIES FUND
COMMON STOCKS (92.3%)
SHARES VALUE
- --------------------------------------------------------------
ADVERTISING AGENCIES (0.5%)
R.H. Donnelley Corp. (b) . . . . . . . . . 3,900 $ 116,454
----------
- --------------------------------------------------------------
AEROSPACE (1.3%)
Alliant Techsystems, Inc. (b). . . . . . . 3,300 177,276
Orbital Sciences Corp. (b) . . . . . . . . 27,900 155,682
----------
332,958
----------
- --------------------------------------------------------------
AIR TRANSPORT (0.5%)
SkyWest, Inc.. . . . . . . . . . . . . . . 9,202 117,694
----------
- --------------------------------------------------------------
AUTO PARTS-AFTER MARKET (0.6%)
Aftermarket Technology Corp. (b) . . . . . 12,900 137,514
----------
- --------------------------------------------------------------
AUTO PARTS-ORIGINAL EQUIPMENT (0.3%)
Collins & Aikman Corp. (b) . . . . . . . . 16,100 67,137
----------
- --------------------------------------------------------------
BANKS-OUTSIDE NEW YORK CITY (5.3%)
BOK Financial Corp. (b). . . . . . . . . . 7,490 270,089
Community First Bankshares, Inc. . . . . . 10,600 285,363
East West Bancorp, Inc.. . . . . . . . . . 8,773 296,965
First Niagara Financial Group Inc. . . . . 9,200 111,780
NetBank, Inc.. . . . . . . . . . . . . . . 12,000 119,760
Provident Financial Group, Inc.. . . . . . 10,960 259,204
----------
1,343,161
----------
- --------------------------------------------------------------
BIOTECHNOLOGICAL RESEARCH & PRODUCTION (1.6%)
Enzon Pharmaceuticals, Inc. (b). . . . . . 13,300 182,476
Invitrogen Corp. (b) . . . . . . . . . . . 3,400 111,180
Serologicals Corp. (b) . . . . . . . . . . 10,300 95,069
----------
388,725
----------
- --------------------------------------------------------------
BUILDING-AIR CONDITIONING (0.5%)
York International Corp. . . . . . . . . . 4,800 114,720
----------
- --------------------------------------------------------------
CASINOS & GAMBLING (0.8%)
Scientific Games Corp. Class A (b) . . . . 30,900 201,468
----------
- --------------------------------------------------------------
CHEMICALS (0.8%)
Lubrizol Corp. . . . . . . . . . . . . . . 6,100 192,821
----------
- --------------------------------------------------------------
COMMUNICATIONS TECHNOLOGY (2.0%)
Harris Corp. . . . . . . . . . . . . . . . 6,200 177,072
Scientific-Atlanta, Inc. . . . . . . . . . 11,500 186,875
Symbol Technologies, Inc.. . . . . . . . . 11,200 122,416
----------
486,363
----------
- --------------------------------------------------------------
COMPUTER SERVICES, SOFTWARE & SYSTEMS (4.5%)
Autodesk, Inc. . . . . . . . . . . . . . . 10,900 169,604
CACI International, Inc. Class A (b) . . . 5,300 185,129
Hyperion Solutions Corp. (b) . . . . . . . 4,500 127,260
J.D. Edwards & Co. (b) . . . . . . . . . . 13,800 165,324
Microstrategy, Inc. (b). . . . . . . . . . 5,000 137,650
Novell, Inc. (b) . . . . . . . . . . . . . 54,800 150,700
Parametric Technology Corp. (b). . . . . . 55,700 183,810
----------
1,119,477
----------
- --------------------------------------------------------------
COMPUTER TECHNOLOGY (2.1%)
Advanced Digital Information Corp. (b) . . 19,200 153,984
Intergraph Corp. (b) . . . . . . . . . . . 12,900 263,160
Unisys Corp. (b) . . . . . . . . . . . . . 9,400 97,760
----------
514,904
----------
- --------------------------------------------------------------
CONSTRUCTION (0.7%)
Chicago Bridge and Iron Co. N.V. . . . . . 8,200 164,000
----------
- --------------------------------------------------------------
CONSUMER PRODUCTS (0.4%)
International Flavors & Fragrances, Inc. . 3,200 101,696
----------
- --------------------------------------------------------------
CONTAINERS & PACKAGING-PAPER & PLASTIC (0.8%)
Temple-Inland, Inc.. . . . . . . . . . . . 4,500 203,850
----------
- --------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.7%)
BISYS Group, Inc. (b). . . . . . . . . . . 10,200 172,176
----------
- --------------------------------------------------------------
DIVERSIFIED MATERIALS & PROCESSING (1.6%)
Armor Holdings, Inc. (b) . . . . . . . . . 7,700 92,785
Ball Corp. . . . . . . . . . . . . . . . . 1,600 89,856
Engelhard Corp.. . . . . . . . . . . . . . 9,000 220,950
----------
403,591
----------
- --------------------------------------------------------------
DRUG & GROCERY STORE CHAINS (0.3%)
SUPERVALU, Inc.. . . . . . . . . . . . . . 4,800 79,056
----------
- --------------------------------------------------------------
DRUGS & PHARMACEUTICALS (0.4%)
American Pharmaceutical Partners, Inc. (b) 4,500 105,075
----------
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.6%)
A.O. Smith Corp.. . . . . . . . . . . . . . 5,200 155,064
----------
- --------------------------------------------------------------
ELECTRONICS (0.4%)
Aeroflex, Inc. (b) . . . . . . . . . . . . 20,700 111,366
----------
- --------------------------------------------------------------
ELECTRONICS-INSTRUMENTS & GAUGES (1.0%)
Itron, Inc. (b). . . . . . . . . . . . . . 7,000 140,140
Tektronix, Inc. (b). . . . . . . . . . . . 5,600 105,112
----------
245,252
----------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 67
STATEMENT OF INVESTMENTS(Continued)
April 30, 2003 (Unaudited)
GARTMORE VALUE OPPORTUNITIES FUND (Continued)
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ------------------------------------------------------------------
ELECTRONICS-SEMI-CONDUCTORS/COMPONENTS (0.8%)
Atmel Corp. (b). . . . . . . . . . . . . . . . 55,700 $ 102,488
Fairchild Semiconductors International, Inc.
(b) . . . . . . . . . . . . . . . . . . . . 8,000 94,960
----------
197,448
----------
- ------------------------------------------------------------------
ELECTRONICS:TECHNOLOGY (1.5%)
EDO Corp.. . . . . . . . . . . . . . . . . . . 6,500 122,525
Herley Industries, Inc. (b). . . . . . . . . . 7,000 113,127
Trimble Navigation Ltd. (b). . . . . . . . . . 5,300 133,825
----------
369,477
----------
- ------------------------------------------------------------------
ENGINEERING & CONTRACTING SERVICES (0.4%)
Jacobs Engineering Group, Inc. (b) . . . . . . 2,700 111,105
----------
- ------------------------------------------------------------------
FERTILIZERS (0.7%)
IMC Global, Inc. . . . . . . . . . . . . . . . 19,100 173,046
----------
- ------------------------------------------------------------------
FINANCIAL DATA PROCESSING SERVICES & SYSTEMS (0.7%)
NDC Health Corp. . . . . . . . . . . . . . . . 9,000 173,250
----------
- ------------------------------------------------------------------
FINANCIAL-MISCELLANEOUS (0.4%)
New Century Financial Corp.. . . . . . . . . . 2,500 92,075
----------
- ------------------------------------------------------------------
FOOD/BEVERAGE PRODUCTS (0.6%)
Adolph Coors Co. . . . . . . . . . . . . . . . 2,900 155,237
----------
- ------------------------------------------------------------------
FOODS (1.4%)
Hormel Foods Corp. . . . . . . . . . . . . . . 6,800 156,468
NBTY, Inc. (b) . . . . . . . . . . . . . . . . 12,800 198,400
----------
354,868
----------
- ------------------------------------------------------------------
HEALTHCARE SERVICES (4.3%)
AdvancePCS (b) . . . . . . . . . . . . . . . . 8,700 261,522
AMERIGROUP Corp. (b) . . . . . . . . . . . . . 7,600 221,312
Apria Healthcare Group, Inc. (b) . . . . . . . 11,900 279,055
Community Health Systems, Inc. (b) . . . . . . 6,800 129,200
Select Medical Corp. (b) . . . . . . . . . . . 11,100 187,812
----------
1,078,901
----------
- ------------------------------------------------------------------
HOMEBUILDING (0.5%)
Beazer Homes USA, Inc. (b) . . . . . . . . . . 1,900 133,475
----------
- ------------------------------------------------------------------
HOUSEHOLD FURNISHINGS (0.6%)
La-Z-Boy, Inc. . . . . . . . . . . . . . . . . 7,900 154,287
----------
- ------------------------------------------------------------------
HOUSEHOLD PRODUCTS (0.9%)
Dial Corp. . . . . . . . . . . . . . . . . . . 10,800 224,964
----------
- ------------------------------------------------------------------
IDENTIFICATION CONTROL & FILTER DEVICES (1.4%)
Hubbell, Inc.. . . . . . . . . . . . . . . . . 5,800 186,180
Pall Corp. . . . . . . . . . . . . . . . . . . 7,300 154,176
----------
340,356
----------
- ------------------------------------------------------------------
INSURANCE-MULTI-LINE (2.4%)
Reinsurance Group of America, Inc. . . . . . . 11,000 315,150
StanCorp Financial Group, Inc. . . . . . . . . 5,100 273,870
----------
589,020
----------
- ------------------------------------------------------------------
INSURANCE-PROPERTY & CASUALTY (2.5%)
IPC Holdings Ltd.. . . . . . . . . . . . . . . 9,500 326,325
ProAssurance Corp. (b) . . . . . . . . . . . . 5,800 150,162
RLI Corp.. . . . . . . . . . . . . . . . . . . 4,918 145,327
----------
621,814
----------
- ------------------------------------------------------------------
MACHINERY-CONSTRUCTION & HANDLING (0.3%)
The Manitowoc Co.. . . . . . . . . . . . . . . 4,500 83,700
----------
- ------------------------------------------------------------------
MACHINERY-INDUSTRIAL/SPECIALTY (0.8%)
Joy Global, Inc. (b) . . . . . . . . . . . . . 7,100 87,827
Kennametal, Inc. . . . . . . . . . . . . . . . 3,700 116,513
----------
204,340
----------
- ------------------------------------------------------------------
MACHINERY-OIL WELL EQUIPMENT & SERVICES (1.9%)
Key Energy Services, Inc. (b). . . . . . . . . 23,800 239,666
Rowan Co., Inc.. . . . . . . . . . . . . . . . 11,400 233,700
----------
473,366
----------
- ------------------------------------------------------------------
MEDICAL & DENTAL INSTRUMENTS & SUPPLIES (1.6%)
Cyberonics, Inc. (b) . . . . . . . . . . . . . 8,100 184,923
Owens & Minor, Inc.. . . . . . . . . . . . . . 12,000 223,200
----------
408,123
----------
- ------------------------------------------------------------------
METAL FABRICATING (0.3%)
Maverick Tube Corp. (b). . . . . . . . . . . . 4,229 75,234
----------
- ------------------------------------------------------------------
MISCELLANEOUS MATERIALS & PROCESSING (0.6%)
USEC, Inc. . . . . . . . . . . . . . . . . . . 27,200 152,320
----------
- ------------------------------------------------------------------
MULTIMEDIA (0.8%)
Metro-Goldwyn-Mayer Inc. (b) . . . . . . . . . 17,100 190,665
----------
- ------------------------------------------------------------------
OIL-CRUDE PRODUCERS (1.7%)
Newfield Exploration Co. (b) . . . . . . . . . 8,800 302,632
XTO Energy, Inc. . . . . . . . . . . . . . . . 5,866 114,387
----------
417,019
----------
- ------------------------------------------------------------------
OPTICAL NETWORKING (0.4%)
Agere Systems Inc. (b) . . . . . . . . . . . . 49,000 87,710
----------
- ------------------------------------------------------------------
PAINTS & COATINGS (1.5%)
RPM International, Inc.. . . . . . . . . . . . 14,900 184,164
Valspar Corp.. . . . . . . . . . . . . . . . . 4,500 194,355
----------
378,519
----------
- --------------------------------------------------------------------------------
68 SEMIANNUAL REPORT 2003
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ------------------------------------------------------------
PAPER (0.5%)
Bowater, Inc.. . . . . . . . . . . . . . . 2,900 $112,897
--------
- ------------------------------------------------------------
PHARMACEUTICALS (0.8%)
Millenium Pharmaceuticals (b). . . . . . . 17,900 196,900
--------
- ------------------------------------------------------------
POLLUTION CONTROL & ENVIRONMENTAL SERVICES (0.6%)
Headwaters, Inc. (b) . . . . . . . . . . . 9,700 159,080
--------
- ------------------------------------------------------------
PRODUCTION TECHNOLOGY EQUIPMENT (0.4%)
Photronics, Inc. (b) . . . . . . . . . . . 8,100 101,817
--------
- ------------------------------------------------------------
PUBLISHING - NEWSPAPERS (1.1%)
Enterprises, Inc.. . . . . . . . . . . . . 7,400 265,438
--------
- ------------------------------------------------------------
RADIO & TV BROADCASTERS (1.8%)
Cumulus Media, Inc. (b). . . . . . . . . . 11,372 196,053
Emmis Communications Corp. Class A (b) . . 6,000 113,820
Sinclair Broadcast Group, Inc. Class A (b) 13,600 144,160
--------
454,033
--------
- ------------------------------------------------------------
RAILROADS (0.7%)
Genesee & Wyoming, Inc. Class A (b). . . . 10,550 182,515
--------
- ------------------------------------------------------------
ESTATE INVESTMENT TRUSTS (REIT) (4.0%)
& Associates Properties, Inc.. . . . . . . 7,300 309,885
Developers Diversified Realty Corp.. . . . 6,500 163,800
Marriott Corp. (b) . . . . . . . . . . . . 12,400 95,728
Liberty Property Trust . . . . . . . . . . 7,200 225,288
Green Realty Corp. . . . . . . . . . . . . 5,800 186,934
--------
981,635
--------
- ------------------------------------------------------------
RENTAL & LEASING SERVICES-CONSUMER (0.4%)
Dollar Thrifty Automotive Group, Inc. (b). 5,600 91,896
--------
- ------------------------------------------------------------
RESTAURANTS (0.3%)
Darden Restaurants, Inc. . . . . . . . . . 4,400 77,044
--------
- ------------------------------------------------------------
RETAIL (3.2%)
AnnTaylor Stores Corp. (b) . . . . . . . . 4,900 115,934
Lots, Inc. (b) . . . . . . . . . . . . . . 12,000 150,240
Claire's Stores, Inc.. . . . . . . . . . . 5,600 145,544
Group 1 Automotive, Inc. (b) . . . . . . . 2,800 77,028
Linens 'n Things, Inc. (b) . . . . . . . . 5,600 118,664
Sonic Automotive, Inc. (b) . . . . . . . . 4,500 77,625
Men's Wearhouse, Inc. (b). . . . . . . . . 6,200 103,230
--------
788,265
--------
- ------------------------------------------------------------
SAVINGS & LOAN (4.0%)
BankAtlantic Bancorp, Inc. Class A . . . . 31,500 362,880
Downey Financial Corp. . . . . . . . . . . 6,700 294,130
Webster Financial Corp.. . . . . . . . . . 8,800 330,352
--------
987,362
--------
- ------------------------------------------------------------
SECURITIES BROKERAGE & SERVICES (2.8%)
Affiliated Managers Group, Inc. (b). . . . 2,600 120,406
Friedman Billings Ramsey Group, Inc. . . . 29,200 320,616
Legg Mason, Inc. . . . . . . . . . . . . . 5,200 282,360
--------
723,382
--------
- ------------------------------------------------------------
SERVICES: COMMERCIAL (1.8%)
MPS Group, Inc. (b). . . . . . . . . . . . 31,478 212,477
Waste Connections, Inc. (b). . . . . . . . 6,700 225,388
--------
437,865
--------
- ------------------------------------------------------------
STEEL (0.3%)
Carpenter Technology Corp. . . . . . . . . 5,200 67,912
--------
- ------------------------------------------------------------
TECHNOLOGY (0.3%)
Network Associates, Inc. (b) . . . . . . . 7,000 80,010
--------
- ------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT (0.5%)
Arris Group, Inc. (b). . . . . . . . . . . 21,600 84,262
Nextel Partners, Inc. Class A (b). . . . . 6,900 40,089
--------
124,351
--------
- ------------------------------------------------------------
TEXTILE APPAREL MANUFACTURERS (0.6%)
Quiksilver, Inc. (b) . . . . . . . . . . . 4,200 136,920
--------
- ------------------------------------------------------------
TOYS (1.0%)
Hasbro, Inc. . . . . . . . . . . . . . . . 15,300 244,800
--------
- ------------------------------------------------------------
TRANSPORTATION-MISC. (0.9%)
Tidewater, Inc.. . . . . . . . . . . . . . 8,200 220,580
--------
- ------------------------------------------------------------
TRUCKERS (1.5%)
J.B. Hunt Transport Services, Inc. (b) . . 7,100 245,305
Yellow Corp. (b) . . . . . . . . . . . . . 4,600 122,820
--------
368,125
--------
- ------------------------------------------------------------
UTILITIES - ELECTRIC (4.0%)
Black Hills Corp.. . . . . . . . . . . . . 3,200 91,136
DQE, Inc.. . . . . . . . . . . . . . . . . 16,700 227,120
NSTAR. . . . . . . . . . . . . . . . . . . 7,100 306,720
Wisconsin Energy Corp. . . . . . . . . . . 13,700 360,721
--------
985,697
--------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 69
STATEMENT OF INVESTMENTS(Continued)
April 30, 2003 (Unaudited)
GARTMORE VALUE OPPORTUNITIES FUND (Continued)
COMMON STOCKS (CONTINUED)
SHARES VALUE
- -------------------------------------------------------------
UTILITIES-GAS DISTRIBUTORS (3.5%)
New Jersey Resources Corp. . . . . . . . 8,200 $ 280,850
Questar Corp.. . . . . . . . . . . . . . 9,300 280,860
Western Gas Resources, Inc.. . . . . . . 8,500 311,780
-----------
873,490
-----------
- -------------------------------------------------------------
UTILITIES-WATER (0.6%)
American States Water Co.. . . . . . . . 5,972 154,316
-----------
TOTAL COMMON STOCKS 22,931,171
-----------
TOTAL INVESTMENTS (COST $23,023,209)
(A) - 92.3% 22,931,171
OTHER ASSETS IN EXCESS OF LIABILITIES -
(7.7)% 1,900,307
-----------
NET ASSETS - 100.0% $24,831,478
-----------
-----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes a non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
70 SEMIANNUAL REPORT 2003
GARTMORE
MICRO CAP EQUITY FUND
Class A Shares symbol: GMEAX
Class B Shares symbol: GMEBX
Class C Shares symbol: GMECX
Institutional Service Class symbol: GMESX
Institutional Class symbol: GMEIX
HOW DID THE FUND PERFORM?
For the six-month period ended April 30, 2003, the Fund returned 18.98%* versus
19.89% for its benchmark, the Wilshire Micro Cap Equity Index.
For broader comparison, the average return for this Fund's peer category
(Small-Cap Core Funds) was 5.55%, according to Lipper, an independent company
that provides mutual fund data and analysis.
WHAT MARKET/ECONOMIC AND PORTFOLIO-SPECIFIC FACTORS AFFECTED PERFORMANCE?
We can segment the behavior of the market for the period into three parts. The
first segment, which began on November 1, 2002, was a continuation of the
bear-market rally that began in October. The market was oversold and
consequently experienced relief rally that lasted into early December. The
Russell 2000 Growth Index gained 10.10% between October 30 and December 2.
The second segment began in early December 2002 and lasted until early March
2003. News from the Middle East dominated during this period. The market never
likes uncertainty, and the Russell 2000 Growth Index sold off, losing 15.90%
between Oct. 30, 2002, and March 12, 2003.
We are still in the third segment, which began on March 12; through April 30,
2003, the Index had gained 15.90%. For this war-related rally to be sustainable,
the corporate profit picture needs to improve.
DESCRIBE THE FUND'S TOP HOLDINGS AND ANY SIGNIFICANT TRANSACTIONS MADE DURING
THE PERIOD.
Stock selection in the consumer discretionary, financials, and information
technology sectors helped performance. In relation to the Index, we slightly
underweighted information technology (24.70% versus 25.10%), and slightly
overweighted consumer discretionary (14.30% versus 13.50%) and financials
(17.80% versus 15.90%).
Our top four contributing stocks during the quarter were Elite Information
Group, Inc., which we acquired during the period; TTM Technologies, Inc.; USANA
Health Sciences, Inc.; and Metrologic Instruments, Inc. Our bottom four
contributing stocks were Women First HealthCare, Inc., which missed expectations
(we subsequently sold the stock); Radyne ComStream, Inc.; and RMH Teleservices,
Inc.
HOW IS THE FUND POSITIONED?
We do not plan to make significant sector bets. Rather, we rely on stock
selection to determine the Fund's risk/reward profile. Our current goal is to
create a portfolio that is well suited for an uncertain market. We seek
high-quality, reasonably priced growth stocks of companies with strong balance
sheets and sustainable competitive advantages. We avoid bottom-fishing, because
those stocks may perform well in the early stage of a rally but are subject to
above-average volatility. In general, we have been able to avoid "blow-ups"
(companies whose stocks drop dramatically after failing to meet expectations).
Our ability to minimize risks rather than maximize rewards has contributed to
the Fund's positive results.
PORTFOLIO MANAGER: Carl P. Wilk, CFP
* Performance of Class A shares without sales charge and assuming all
distributions are reinvested.
PORTFOLIO MARKET VALUE: $2,379,812
APRIL 30, 2003
AGGREGATE TOTAL RETURN
(For Period Ended April 30, 2003)
INCEPTION1
- ---------------------------------------------------
Class A. . . . . . . . . . . w/o SC2 2.80%
w/SC3 -3.11%
- ---------------------------------------------------
Class B. . . . . . . . . . . w/o SC2 2.20%
w/SC4 -2.80%
- ---------------------------------------------------
Class C. . . . . . . . . . . w/o SC2 2.20%
w/SC5 0.20%
Institutional Service Class6 3.00%
- ---------------------------------------------------
Institutional Class6 . . . . 3.00%
- ---------------------------------------------------
All figures showing the effect of a sales charge reflect the maximum charge
possible, because it has the most dramatic effect on performance data.
1 Fund commenced operations on June 27, 2002.
2 These returns do not reflect the effects of sales charges (SC).
3 A 5.75% front-end sales charge was deducted.
4 A 5.00% contingent deferred sales charge (CDSC) was deducted. The CDSC
declines to 0% after 6 years.
5 A 1.00% front-end sales charge was deducted. A CDSC of 1.00% was also
deducted because it is charged when you sell Class C shares within the
first year after purchase.
6 Not subject to any sales charges.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND WHEN REDEEMED, SHARES
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
CLASS WILSHIRE
DATE A MICRO CAP EQUITY CPI
- ------------------------------------------------------
6/27/2002. 9,425 10,000 10,000
10/31/2002 8,143 8,232 10,078
4/30/2003. 9,689 9,869 10,309
Comparative performance of $10,000 invested in Class A shares of the Gartmore
Micro Cap Equity Fund, Wilshire Micro Cap Equity Index(a), and the Consumer
Price Index (CPI)(b) since inception. Unlike the Fund, the returns for these
indices do not reflect any fees, expenses, or sales charges.
(a) The Wilshire Micro Cap Equity Index is a capitalization-weighted index that
measures small-cap stocks in the bottom "half" of the Wilshire 5000 Index.
(b) The CPI represents changes in prices of a basket of goods and services
purchased for consumption by urban households.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 71
STATEMENT OF INVESTMENTS
April 30, 2003 (Unaudited)
GARTMORE MICRO CAP EQUITY FUND
COMMON STOCKS (97.0%)
SHARES VALUE
- ---------------------------------------------------------
APPAREL (3.0%)
Perry Ellis International, Inc. (b) . . 2,000 $ 37,918
Weyco Group, Inc. . . . . . . . . . . . 700 35,700
--------
73,618
--------
- ---------------------------------------------------------
AUTO PARTS & EQUIPMENT (2.3%)
Monro Muffler, Inc. (b) . . . . . . . . 1,200 26,880
TBC Corp. (b) . . . . . . . . . . . . . 1,800 28,800
--------
55,680
--------
- ---------------------------------------------------------
BANK HOLDINGS COMPANIES (5.7%)
Bank of the Ozarks, Inc.. . . . . . . . 800 27,200
Capitol Bancorp Ltd.. . . . . . . . . . 1,100 23,365
Cascade Bancorp . . . . . . . . . . . . 1,400 22,191
Macatawa Bank Corp. . . . . . . . . . . 1,600 40,960
Royal Bancshares of Pennsylvania, Inc.
Class A.. . . . . . . . . . . . . . . 1,339 27,249
--------
140,965
--------
- ---------------------------------------------------------
BANKING (2.1%)
Mercantile Bank Corp. . . . . . . . . . 1,165 30,872
Tower Financial Corp. (b) . . . . . . . 1,507 20,797
--------
51,669
--------
- ---------------------------------------------------------
COMPUTER SOFTWARE & SERVICES (6.3%)
Computer Programs & Systems, Inc. (b) . 1,100 21,241
Eidos PLC ADR (b) . . . . . . . . . . . 20,400 42,840
Elite Information Group, Inc. (b) . . . 2,400 33,480
Logility, Inc. (b). . . . . . . . . . . 7,400 24,420
Ross Systems, Inc. (b). . . . . . . . . 2,500 31,625
--------
153,606
--------
- ---------------------------------------------------------
DISTRIBUTION (2.3%)
C2, Inc. (b). . . . . . . . . . . . . . 2,240 23,184
ScanSource, Inc. (b). . . . . . . . . . 1,700 33,847
--------
57,031
--------
- ---------------------------------------------------------
ELECTRONICS (3.7%)
Signal Technology Corp. (b) . . . . . . 4,300 56,717
TTM Technologies, Inc. (b). . . . . . . 7,000 32,970
--------
89,687
--------
- ---------------------------------------------------------
ENTERTAINMENT (3.8%)
Acres Gaming, Inc. (b). . . . . . . . . 4,800 44,880
Shuffle Master, Inc. (b). . . . . . . . 2,100 48,090
--------
92,970
--------
- ---------------------------------------------------------
FINANCIAL (5.4%)
Commercial Capital Bancorp, Inc. (b). . 4,200 54,600
Maxcor Financial Group, Inc. (b). . . . 3,900 29,913
World Acceptance Corp. (b). . . . . . . 4,500 48,780
--------
133,293
--------
- ---------------------------------------------------------
FOOD & RELATED (6.7%)
Jarden Corp. (b). . . . . . . . . . . . 1,800 53,100
Lifeway Foods, Inc. (b) . . . . . . . . 4,400 30,140
Nutraceutical International Corp. (b) . 4,600 38,410
Stake Technology Ltd. (b) . . . . . . . 8,300 41,500
--------
163,150
--------
- ---------------------------------------------------------
HEALTHCARE (4.6%)
American Medical Security Group, Inc.
(b) . . . . . . . . . . . . . . . . . 3,149 53,533
National Medical Health Card Systems,
Inc. (b) . . . . . . . . . . . . . . 4,100 35,670
Option Care, Inc. (b) . . . . . . . . . 2,500 23,325
--------
112,528
--------
- ---------------------------------------------------------
HOUSEWARES (1.5%)
Lifetime Hoan Corp. . . . . . . . . . . 5,400 36,828
--------
- ---------------------------------------------------------
INSURANCE (2.1%)
21ST Century Holdings Co. . . . . . . . 3,900 50,778
--------
- ---------------------------------------------------------
INTERNET (2.5%)
eUniverse, Inc. (b) . . . . . . . . . . 7,500 28,800
SupportSoft, Inc. (b) . . . . . . . . . 9,900 32,670
--------
61,470
--------
- ---------------------------------------------------------
MANUFACTURING (2.4%)
Culp, Inc. (b). . . . . . . . . . . . . 6,700 34,840
U.S. Industries, Inc. (b) . . . . . . . 5,200 24,700
--------
59,540
--------
- ---------------------------------------------------------
MEDICAL (3.4%)
Interpore International, Inc. (b) . . . 4,300 38,313
Neogen Corp. (b). . . . . . . . . . . . 2,800 45,416
--------
83,729
--------
- ---------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES (3.8%)
Cantel Medical Corp. (b). . . . . . . . 1,900 25,935
Lifeline Systems, Inc. (b). . . . . . . 1,100 26,521
Osteotech, Inc. (b) . . . . . . . . . . 4,000 41,840
--------
94,296
--------
- ---------------------------------------------------------
OIL & GAS (6.4%)
Callon Petroleum Co. (b). . . . . . . . 9,100 42,406
Comstock Resources, Inc. (b). . . . . . 4,300 47,730
Harvest Natural Resources, Inc. (b) . . 5,500 28,050
Lufkin Industries, Inc. . . . . . . . . 1,700 37,706
--------
155,892
--------
- ---------------------------------------------------------
PHARMACEUTICALS (3.1%)
Bradley Pharmaceuticals, Inc. (b) . . . 2,300 33,143
Del Laboratories, Inc. (b). . . . . . . 1,840 42,614
--------
75,757
--------
- --------------------------------------------------------------------------------
72 SEMIANNUAL REPORT 2003
COMMON STOCKS (CONTINUED)
SHARES VALUE
- ------------------------------------------------------------
POLLUTION CONTROL (0.9%)
Duratek, Inc. (b). . . . . . . . . . . . 2,200 $ 21,846
----------
- ------------------------------------------------------------
SEMICONDUCTORS (4.9%)
Diodes, Inc. (b) . . . . . . . . . . . . 2,600 39,650
Microsemi Corp. (b). . . . . . . . . . . 1,500 17,595
OSI Systems, Inc. (b). . . . . . . . . . 1,400 21,182
White Electronic Designs Corp. (b) . . . 5,300 41,499
----------
119,926
----------
- ------------------------------------------------------------
SERVICES (2.9%)
Digital Generation Systems, Inc. (b) . . 12,000 40,800
Labor Ready, Inc. (b). . . . . . . . . . 4,700 30,315
----------
71,115
----------
- ------------------------------------------------------------
TECHNOLOGY (10.4%)
Digi International, Inc. (b) . . . . . . 15,000 63,601
Merge Technologies, Inc. (b) . . . . . . 5,100 41,616
Metrologic Instruments, Inc. (b) . . . . 3,000 56,400
Orbital Sciences Corp. (b) . . . . . . . 7,900 44,082
Sonic Solutions (b). . . . . . . . . . . 3,200 24,000
Tessco Technologies, Inc. (b). . . . . . 4,200 27,300
----------
256,999
----------
- ------------------------------------------------------------
TELECOMMUNICATIONS (3.4%)
Radyne ComStream, Inc. (b) . . . . . . . 15,700 36,267
Regent Communications, Inc. (b). . . . . 4,500 26,955
RMH Teleservices, Inc. (b) . . . . . . . 3,900 21,216
----------
84,438
----------
- ------------------------------------------------------------
TRANSPORTATION (3.4%)
Boyd Brothers Transportation, Inc. (b) . 6,800 23,596
Dynamex, Inc. (b). . . . . . . . . . . . 10,900 59,405
----------
83,001
----------
TOTAL COMMON STOCKS 2,379,812
----------
TOTAL INVESTMENTS (COST $2,057,514) (A)
- 97.0% 2,379,812
OTHER ASSETS IN EXCESS OF LIABILITIES -
3.0% 72,991
----------
NET ASSETS - 100.0% $2,452,803
----------
----------
(a) See notes to financial statements for unrealized appreciation
(depreciation) of securities.
(b) Denotes non-income producing security.
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 73
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 2003 (Unaudited)
- ---------------------------------------------------------------------------------------------------------
GARTMORE GARTMORE GARTMORE VALUE GARTMORE
HIGH YIELD MILLENNIUM OPPORTUNITIES MICRO CAP
BOND FUND GROWTH FUND FUND EQUITY FUND
- ---------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $96,069,713;
16,566,597; $23,023,209
and $2,057,514; respectively). . . . . . $102,391,281 $ 17,617,883 $ 22,931,171 $ 2,379,812
Cash . . . . . . . . . . . . . . . . . . . 675,964 1,624,470 2,005,730 53,265
Interest and dividends receivable. . . . . 2,514,007 - 9,795 348
Receivable for capital shares issued . . . 77,463 - - -
Receivable for investments sold. . . . . . 221,250 344,735 81,871 68,937
Receivable from adviser. . . . . . . . . . 7,885 9,328 3,853 2,701
Prepaid expenses and other assets. . . . . 19,953 17,942 14,674 6,461
- ---------------------------------------------------------------------------------------------------------
Total Assets . . . . . . . . . . . . . . . 105,907,803 19,614,358 25,047,094 2,511,524
- ---------------------------------------------------------------------------------------------------------
LIABILITIES:
Securities sold short, at value
(proceeds $1,536,850). . . . . . . . . . - 1,592,086 - -
Distributions payable. . . . . . . . . . . 729,811 - - -
Payable for investments purchased. . . . . 256,472 395,773 179,989 54,861
Accrued expenses and other payables
Investment advisory fees . . . . . . . . . 46,029 14,281 13,627 2,352
Fund administration and transfer
agent fees . . . . . . . . . . . . . . . 12,460 21,928 6,336 569
Distribution fees. . . . . . . . . . . . . 2,111 3,273 3,838 163
Administrative servicing fees. . . . . . . 113 186 2,186 -
Other. . . . . . . . . . . . . . . . . . . 5,094 34,417 9,640 776
- ---------------------------------------------------------------------------------------------------------
Total Liabilities. . . . . . . . . . . . . 1,052,090 2,061,944 215,616 58,721
- ---------------------------------------------------------------------------------------------------------
NET ASSETS . . . . . . . . . . . . . . . . $104,855,713 $ 17,552,414 $ 24,831,478 $ 2,452,803
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
REPRESENTED BY:
Capital. . . . . . . . . . . . . . . . . . $139,687,112 $ 58,380,558 $ 27,108,293 $ 2,333,188
Accumulated net investment
income (loss) . . . . . . . . . . . . . - (92,025) 8,274 (14,314)
Accumulated net realized gains
(losses) from investment transactions . (41,152,967) (41,732,170) (2,193,051) (188,369)
Net unrealized appreciation
(depreciation) on investments. . . . . 6,321,568 996,051 (92,038) 322,298
- ---------------------------------------------------------------------------------------------------------
NET ASSETS . . . . . . . . . . . . . . . . $104,855,713 $ 17,552,414 $ 24,831,478 $ 2,452,803
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
NET ASSETS:
Class A Shares . . . . . . . . . . . . . . $ 4,447,306 $ 4,875,214 $ 9,631,261 $ 432,875
Class B Shares . . . . . . . . . . . . . . 595,518 2,893,318 2,332,938 62,949
Class C Shares . . . . . . . . . . . . . . 1,137,036 53,477 127,670 51,078
Class D Shares . . . . . . . . . . . . . . - 9,730,405 - -
Institutional Service Class Shares . . . . 98,675,853 - 12,739,609 51,511
Institutional Class Shares . . . . . . . . - - - 1,854,390
- ---------------------------------------------------------------------------------------------------------
Total. . . . . . . . . . . . . . . . . . . $104,855,713 $ 17,552,414 $ 24,831,478 $ 2,452,803
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
74 SEMIANNUAL REPORT 2003
- ----------------------------------------------------------------------------------------------------------------
GARTMORE GARTMORE GARTMORE VALUE GARTMORE
HIGH YIELD MILLENNIUM OPPORTUNITIES MICRO CAP
BOND FUND GROWTH FUND FUND EQUITY FUND
- ----------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of shares authorized):
Class A Shares . . . . . . . . . . . . . . . . . . 663,231 556,227 834,972 42,090
Class B Shares . . . . . . . . . . . . . . . . . . 88,835 350,301 203,341 6,162
Class C Shares . . . . . . . . . . . . . . . . . . 169,504 6,469 11,153 5,000
Class D Shares . . . . . . . . . . . . . . . . . . - 1,094,831 - -
Institutional Service Class Shares . . . . . . . . 14,581,399 - 1,097,285 5,000
Institutional Class Shares . . . . . . . . . . . . - - - 180,000
- ----------------------------------------------------------------------------------------------------------------
Total. . . . . . . . . . . . . . . . . . . . . . . 15,502,969 2,007,828 2,146,751 238,252
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE:
Class A Shares . . . . . . . . . . . . . . . . . . $ 6.71 $ 8.76 $ 11.53 $ 10.28
Class B Shares (a) . . . . . . . . . . . . . . . . $ 6.70 $ 8.26 $ 11.47 $ 10.22
Class C Shares (b) . . . . . . . . . . . . . . . . $ 6.71 $ 8.27 $ 11.45 $ 10.22
Class D Shares . . . . . . . . . . . . . . . . . . $ - $ 8.89 $ - $ -
Institutional Service Class Shares . . . . . . . . $ 6.77 $ - $ 11.61 $ 10.30
Institutional Class Shares . . . . . . . . . . . . $ - $ - $ - $ 10.30
MAXIMUM OFFERING PRICE PER SHARE
(100%/(100%-maximum sales charge)
of net asset value adjusted to the nearest cent):
Class A Shares . . . . . . . . . . . . . . . . . . $ 7.04 $ 9.29 $ 12.23 $ 10.91
Class C Shares . . . . . . . . . . . . . . . . . . $ 6.78 $ 8.35 $ 11.57 $ 10.32
Class D Shares . . . . . . . . . . . . . . . . . . $ - $ 9.31 $ - $ -
- ----------------------------------------------------------------------------------------------------------------
Maximum Sales Charge - Class A Shares. . . . . . . 4.75% 5.75% 5.75% 5.75%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Maximum Sales Charge - Class C Shares. . . . . . . 1.00% 1.00% 1.00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Maximum Sales Charge - Class D Shares. . . . . . . - 4.50% - -
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
(a) For Class B shares, the redemption price per share varies by length of time
shares are held.
(b) For Class C shares, the redemption price per share is reduced by 1.00% for
shares held less than one year. See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 75
STATEMENTS OF OPERATIONS
For the Six Months Ended April 30, 2003 (Unaudited)
- ----------------------------------------------------------------------------------------------------
GARTMORE GARTMORE GARTMORE VALUE GARTMORE
HIGH YIELD MILLENNIUM OPPORTUNITIES MICRO CAP
BOND FUND GROWTH FUND FUND EQUITY FUND
- ----------------------------------------------------------------------------------------------------
IINVESTMENT INCOME:
Interest income. . . . . . . . . . . . $ 4,670,194 $ 4,368 $ 10,612 $ 199
Dividend income. . . . . . . . . . . . - 29,563 196,526 2,673
- ----------------------------------------------------------------------------------------------------
Total Income . . . . . . . . . . . . . 4,670,194 33,931 207,138 2,872
- ----------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees . . . . . . . 255,016 88,146 81,502 13,151
Fund administration and transfer
agent fees . . . . . . . . . . . . . 77,613 14,607 23,733 5,152
Distribution fees Class A. . . . . . . 3,248 5,853 11,737 428
Distribution fees Class B. . . . . . . 2,222 14,117 11,446 227
Distribution fees Class C. . . . . . . 1,550 236 622 225
Administrative servicing fees Class A. 613 1,318 1,818 -
Administrative servicing fees
Institutional Service Class. . . . . 459 - 11,849 -
Registration and filing fees . . . . . 20,405 16,484 18,967 11,205
Printing fees. . . . . . . . . . . . . 608 19,854 5,683 66
Other. . . . . . . . . . . . . . . . . 13,310 9,348 3,233 304
- ----------------------------------------------------------------------------------------------------
Total expenses before reimbursed
expenses . . . . . . . . . . . . . . 375,044 169,963 170,590 30,758
Expenses reimbursed. . . . . . . . . . (41,734) (44,007) (16,687) (13,572)
- ----------------------------------------------------------------------------------------------------
Total Expenses . . . . . . . . . . . . 333,310 125,956 153,903 17,186
- ----------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) . . . . . 4,336,884 (92,025) 53,235 (14,314)
- ----------------------------------------------------------------------------------------------------
REALIZED/UNREALIZED GAINS
(LOSSES) FROM INVESTMENTS:
Net realized gains (losses) on
investment transactions . . . . . . 336,896 (1,134,539) (1,046,379) 65,420
Net change in unrealized
appreciation/depreciation
on investments . . . . . . . . . . . 10,450,805 1,735,147 2,087,345 339,459
- ----------------------------------------------------------------------------------------------------
Net realized/unrealized gains
(losses) on investments. . . . . . 10,787,701 600,608 1,040,966 404,879
- ----------------------------------------------------------------------------------------------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . $15,124,585 $ 508,583 $ 1,094,201 $ 390,565
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
76 SEMIANNUAL REPORT 2003
STATEMENTS OF CHANGES IN NET ASSETS
GARTMORE HIGH YIELD GARTMORE MILLENNIUM
BOND FUND GROWTH FUND
- --------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss). . . . . . $ 4,336,884 $ 8,460,248 $ (92,025) $ (283,910)
Net realized gains (losses)
on investment transactions . . . . . 336,896 (19,169,645) (1,134,539) (4,610,659)
Net change in unrealized
appreciation/depreciation
on investments. . . . . . . . . . . . 10,450,805 7,123,532 1,735,147 (630,467)
- --------------------------------------------------------------------------------------------------
Change in net assets resulting
from operations. . . . . . . . . . . 15,124,585 (3,585,865) 508,583 (5,525,036)
- --------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS FROM:
Net investment income . . . . . . . . . (117,956) (206,503) - -
DISTIBUTIONS TO CLASS B
SHAREHOLDERS FROM:
Net investment income . . . . . . . . . (18,679) (24,154) - -
DISTRIBUTIONS TO CLASS C
SHAREHOLDERS FROM:
Net investment income . . . . . . . . . (12,301) (1,013) - -
DISTRIBUTIONS TO INSTITUTIONAL SERVICE
CLASS SHAREHOLDERS FROM:
Net investment income . . . . . . . . . (4,187,948) (8,228,578) - -
- --------------------------------------------------------------------------------------------------
Change in net assets from
shareholder distributions . . . . . . (4,336,884) (8,460,248) - -
- --------------------------------------------------------------------------------------------------
Change in net assets from
capital transactions . . . . . . . . 8,691,088 8,488,263 (1,077,829) (2,070,305)
- --------------------------------------------------------------------------------------------------
Change in net assets. . . . . . . . . . 19,478,789 (3,557,850) (569,246) (7,595,341)
NET ASSETS:
Beginning of period . . . . . . . . . . 85,376,924 88,934,774 18,121,660 25,717,001
- --------------------------------------------------------------------------------------------------
End of period . . . . . . . . . . . . . $104,855,713 $ 85,376,924 $17,552,414 $ 18,121,660
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 77
STATEMENTS OF CHANGES IN NET ASSETS
GARTMORE VALUE GARTMORE MICRO CAP
OPPORTUNITIES FUND EQUITY FUND
- -----------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER 31, 2002 APRIL 30, 2003 OCTOBER 31, 2002 (A)
- -----------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss) . . . $ 53,235 $ 99,646 $ (14,314) $ (7,229)
Net realized gains (losses)
on investment transactions. . . (1,046,379) (1,093,179) 65,420 (253,789)
Net change in unrealized
appreciation/depreciation
on investments . . . . . . . . . 2,087,345 (1,769,834) 339,459 (17,161)
- -----------------------------------------------------------------------------------------------------------------
Change in net assets resulting
from operations . . . . . . . . 1,094,201 (2,763,367) 390,565 (278,179)
- -----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO CLASS A
SHAREHOLDERS FROM:
Net investment income. . . . . . . (22,723) (48,959) - -
Net realized gains on investments. - (136,060) - -
DISTIBUTIONS TO CLASS B
SHAREHOLDERS FROM:
Net investment income. . . . . . . (469) (2,418) - -
Net realized gains on investments. - (34,742) - -
DISTRIBUTIONS TO CLASS C
SHAREHOLDERS FROM:
Net investment income. . . . . . . (19) (122) - -
Net realized gains on investments. - (1,496) - -
DISTRIBUTIONS TO INSTITUTIONAL
SERVICE CLASS SHAREHOLDERS FROM:
Net investment income. . . . . . . (32,141) (65,769) - -
Net realized gains on investments. - (121,033) - -
- -----------------------------------------------------------------------------------------------------------------
Change in net assets from
shareholder distributions. . . . . (55,352) (410,599) - -
- -----------------------------------------------------------------------------------------------------------------
Change in net assets from
capital transactions. . . . . .. 509,941 2,720,695 67,595 2,272,822
- -----------------------------------------------------------------------------------------------------------------
Change in net assets . . . . . . . 1,548,790 (453,271) 458,160 1,994,643
NET ASSETS:
Beginning of period. . . . . . . . 23,282,688 23,735,959 1,994,643 -
- -----------------------------------------------------------------------------------------------------------------
End of period. . . . . . . . . . . $ 24,831,478 $ 23,282,688 $ 2,452,803 $ 1,994,643
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
(a) For the period from June 27, 2002 (commencement of operations) through
October 31, 2002.
See notes to financial statements.
- --------------------------------------------------------------------------------
78 SEMIANNUAL REPORT 2003
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE HIGH YIELD BOND FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT TOTAL END OF
OF PERIOD INCOME INVESTMENTS ACTIVITIES INCOME DISTRIBUTIONS PERIOD
- -------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 10.00 0.86 (2.04) (1.18) (0.86) (0.86) $ 7.96
October 31, 2000 (d)
Year Ended . . . . . . $ 7.96 0.84 (1.10) (0.26) (0.84) (0.84) $ 6.86
October 31, 2001
Year Ended . . . . . . $ 6.86 0.61 (0.87) (0.26) (0.61) (0.61) $ 5.99
October 31, 2002
Six Months Ended . . . $ 5.99 0.29 0.72 1.01 (0.29) (0.29) $ 6.71
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 10.00 0.80 (2.04) (1.24) (0.80) (0.80) $ 7.96
October 31, 2000 (d)
Year Ended . . . . . . $ 7.96 0.78 (1.10) (0.32) (0.78) (0.78) $ 6.86
October 31, 2001
Year Ended . . . . . . $ 6.86 0.56 (0.88) (0.32) (0.56) (0.56) $ 5.98
October 31, 2002
Six Months Ended . . . $ 5.98 0.26 0.72 0.98 (0.26) (0.26) $ 6.70
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 8.07 0.40 (1.21) (0.81) (0.40) (0.40) $ 6.86
October 31, 2001 (e)
Year Ended . . . . . . $ 6.86 0.56 (0.87) (0.31) (0.56) (0.56) $ 5.99
October 31, 2002
Six Months Ended . . . $ 5.99 0.26 0.72 0.98 (0.26) (0.26) $ 6.71
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . $ 10.00 0.87 (1.99) (1.12) (0.87) (0.87) $ 8.01
October 31, 2000 (d)
Year Ended . . . . . . $ 8.01 0.87 (1.10) (0.23) (0.86) (0.86) $ 6.92
October 31, 2001
Year Ended . . . . . . $ 6.92 0.63 (0.88) (0.25) (0.63) (0.63) $ 6.04
October 31, 2002
Six Months Ended . . . $ 6.04 0.30 0.73 1.03 (0.30) (0.30) $ 6.77
April 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
NET ASSETS EXPENSES INCOME (PRIOR TO (PRIOR TO
AT END OF TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- -------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . (12.48%) (f) $ 2,804 0.95% (g) 12.35% (g) 1.15% (g) 12.15% (g) 76.93%
October 31, 2000 (d)
Year Ended . . . . . . (3.59%) $ 2,801 0.95% 11.10% 1.11% 10.94% 83.79%
October 31, 2001
Year Ended . . . . . . (4.27%) $ 2,002 0.97% 9.20% 1.09% 9.08% 93.27%
October 31, 2002
Six Months Ended . . . 17.16% (f) $ 4,447 1.00% (g) 9.07% (g) 1.10% (g) 8.98% (g) 54.47%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . (13.02%) (f) $ 188 1.70% (g) 13.09% (g) 3.46% (g) 11.33% (g) 76.93%
October 31, 2000 (d)
Year Ended . . . . . . (4.31%) $ 244 1.70% 10.35% 2.43% 9.62% 83.79%
October 31, 2001
Year Ended . . . . . . (5.11%) $ 355 1.70% 8.46% 1.83% 8.33% 93.27%
October 31, 2002
Six Months Ended . . . 16.78% (f) $ 596 1.70% (g) 8.40% (g) 1.80% (g) 8.31% (g) 54.47%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . (10.15%) (f) $ 5 1.70% (g) 10.05% (g) 8.58% (g) 3.17% (g) 83.79%
October 31, 2001 (e)
Year Ended . . . . . . (4.96%) $ 53 1.70% 8.55% 1.97% 8.28% 93.27%
October 31, 2002
Six Months Ended . . . 16.75% (f) $ 1,137 1.70% (g) 7.93% (g) 1.78% (g) 7.84% (g) 54.47%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . (11.80%) (f) $ 88,639 0.70% (g) 11.46% (g) 0.83% (g) 11.33% (g) 76.93%
October 31, 2000 (d)
Year Ended . . . . . . (3.19%) $ 85,885 0.70% 11.30% 0.76% 11.24% 83.79%
October 31, 2001
Year Ended . . . . . . (4.12%) $ 82,967 0.70% 9.38% 0.79% 9.29% 93.27%
October 31, 2002
Six Months Ended . . . 17.35% (f) $ 98,676 0.70% (g) 9.37% (g) 0.79% (g) 9.28% (g) 54.47%
April 30, 2003
(Unaudited)
- -------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated
(c) Portfolio turnover is calculated on the basis of the Fund as whole without
distinguishing among the classes of shares.
(d) For the period from December 29, 1999 (commencement of operations) through
October 31, 2000.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Not annualized.
(g) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 79
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE MILLENNIUM GROWTH FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET
ASSET VALUE, NET GAINS FROM NET ASSET VALUE,
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT REALIZED TOTAL END OF
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES GAINS DISTRIBUTIONS PERIOD
- --------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . $ 19.67 (0.03) (1.97) (2.00) - - $ 17.67
October 31, 1998 (d)
Year Ended . . . . . . $ 17.67 (0.03) 2.30 2.27 (0.24) (0.24) $ 19.70
October 31, 1999
Year Ended . . . . . . $ 19.70 (0.27) 10.63 10.36 (1.37) (1.37) $ 28.69
October 31, 2000 (e)
Year Ended . . . . . . $ 28.69 (0.16) (15.19) (15.35) (2.41) (2.41) $ 10.93
October 31, 2001
Year Ended . . . . . . $ 10.93 (0.14) (2.29) (2.43) - - $ 8.50
October 31, 2002
Six Months Ended . . . $ 8.50 (0.05) 0.31 0.26 - - $ 8.76
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . $ 19.67 (0.07) (2.06) (2.13) - - $ 17.54
October 31, 1998 (d)
Year Ended . . . . . . $ 17.54 (0.12) 2.26 2.14 (0.24) (0.24) $ 19.44
October 31, 1999
Year Ended . . . . . . $ 19.44 (0.42) 10.59 10.17 (1.37) (1.37) $ 28.24
October 31, 2000 (e)
Year Ended . . . . . . $ 28.24 (0.22) (15.21) (15.43) (2.41) (2.41) $ 10.40
October 31, 2001
Year Ended . . . . . . $ 10.40 (0.19) (2.18) (2.37) - - $ 8.03
October 31, 2002
Six Months Ended . . . $ 8.03 (0.07) 0.30 0.23 - - $ 8.26
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . $ 13.46 (0.07) (2.98) (3.05) - - $ 10.41
October 31, 2001 (f)
Year Ended . . . . . . $ 10.41 (0.19) (2.18) (2.37) - - $ 8.04
October 31, 2002
Six Months Ended . . . $ 8.04 (0.07) 0.30 0.23 - - $ 8.27
April 30, 2003
(Unaudited)
CLASS D SHARES
Year Ended . . . . . . $ 22.87 (0.06) 1.29 1.23 (6.49) (6.49) $ 17.61
October 31, 1998 (d)
Year Ended . . . . . . $ 17.61 (0.02) 2.34 2.32 (0.24) (0.24) $ 19.69
October 31, 1999
Year Ended . . . . . . $ 19.69 (0.14) 10.57 10.43 (1.37) (1.37) $ 28.75
October 31, 2000 (e)
Year Ended . . . . . . $ 28.75 (0.11) (15.20) (15.31) (2.41) (2.41) $ 11.03
October 31, 2001
Year Ended . . . . . . $ 11.03 (0.11) (2.32) (2.43) - - $ 8.60
October 31, 2002
Six Months Ended . . . $ 8.60 (0.04) 0.33 0.29 - - $ 8.89
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME (LOSS)
NET ASSETS EXPENSES INCOME (LOSS) (PRIOR TO (PRIOR TO
AT END OF TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . (10.17%) (g) $ 305 1.23% (h) (0.70%) (h) 2.21% (h) (1.68%) (h) 46.33%
October 31, 1998 (d)
Year Ended . . . . . . 12.98% $ 1,244 1.25% (0.24%) 1.83% (0.82%) 36.58%
October 31, 1999
Year Ended . . . . . . 56.20% $ 22,612 1.47% (0.95%) 1.67% (1.15%) 330.32%
October 31, 2000 (e)
Year Ended . . . . . . (57.29%) $ 6,601 1.63% (1.00%) 2.75% (2.12%) 698.74%
October 31, 2001
Year Ended . . . . . . (22.23%) $ 4,880 1.59% (1.27%) 2.20% (1.88%) 432.60%
October 31, 2002
Six Months Ended . . . 3.06% (g) $ 4,875 1.53% (h) (1.13%) (h) 2.04% (h) (1.65%) (h) 193.02%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . (10.83%) (g) $ 251 2.00% (h) (1.47%) (h) 2.98% (h) (2.45%) (h) 46.33%
October 31, 1998 (d)
Year Ended . . . . . . 2.33% $ 918 2.00% (1.01%) 2.59% (1.60%) 36.58%
October 31, 1999
Year Ended . . . . . . 55.97% $ 7,608 2.10% (1.57%) 2.35% (1.82%) 330.32%
October 31, 2000 (e)
Year Ended . . . . . . (58.60%) $ 3,985 2.23% (1.60%) 3.67% (3.04%) 698.74%
October 31, 2001
Year Ended . . . . . . (22.79%) $ 3,005 2.25% (1.94%) 2.90% (2.59%) 432.60%
October 31, 2002
Six Months Ended . . . 2.86% (g) $ 2,893 2.22% (h) (1.82%) (h) 2.73% (h) (2.34%) (h) 193.02%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . (22.66%) (g) $ 52 2.23% (h) (1.76%) (h) 4.38% (h) (3.91%) (h) 698.74%
October 31, 2001 (f)
Year Ended . . . . . . (22.77%) $ 45 2.25% (1.94%) 2.90% (2.59%) 432.60%
October 31, 2002
Six Months Ended . . . 2.86% (g) $ 53 2.22% (h) (1.82%) (h) 2.75% (h) (2.35%) (h) 193.02%
April 30, 2003
(Unaudited)
CLASS D SHARES
Year Ended . . . . . . 5.11% $ 9,022 0.93% (0.30%) 1.57% (0.94%) 46.33%
October 31, 1998 (d)
Year Ended . . . . . . 13.31% $ 9,865 1.00% (0.09%) 1.53% (0.62%) 36.58%
October 31, 1999
Year Ended . . . . . . 56.61% $ 36,090 1.10% (0.55%) 1.30% (0.75%) 330.32%
October 31, 2000 (e)
Year Ended . . . . . . (57.00%) $ 15,079 1.30% (0.69%) 2.51% (1.90%) 698.74%
October 31, 2001
Year Ended . . . . . . (22.03%) $ 10,192 1.27% (0.97%) 1.90% (1.60%) 432.60%
October 31, 2002
Six Months Ended . . . 3.37% (g) $ 9,730 1.22% (h) (0.82%) (h) 1.73% (h) (1.34%) (h) 193.02%
April 30, 2003
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as whole without
distinguishing among the classes of shares.
(d) Shares first offered to the public on May 11, 1998. Upon a Trust
Reorganization on May 11, 1998, the existing shares of the fund were
renamed Class D Shares.
(e) Net investment income (loss) is based on average shares outstanding during
the period.
(f) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(g) Not annualized.
(h) Annualized.
See notes to financial statements
- --------------------------------------------------------------------------------
80 SEMIANNUAL REPORT 2003
GARTMORE VALUE OPPORTUNITIES FUND
INVESTMENT ACTIVITIES DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------------------
NET
REALIZED
NET AND
ASSET UNREALIZED TOTAL
VALUE, NET GAINS FROM NET NET
BEGINNING INVESTMENT REDEMPTION (LOSSES) ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME (LOSS) FEES INVESTMENTS ACTIVITIES INCOME GAINS DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended. . . . $ 10.00 0.06 - 2.38 2.44 (0.07) - (0.07)
October 31,
2000 (d)
Year Ended. . . . . $ 12.37 0.10 - (0.20) (0.10) (0.10) - (0.10)
October 31,
2001
Year Ended. . . . . $ 12.17 0.05 0.01 (0.98) (0.92) (0.05) (0.15) (0.20)
October 31,
2002
Six Months Ended
April 30, 2003
(Unaudited) . . . $ 11.05 0.04 - 0.47 0.51 (0.03) - (0.03)
CLASS B SHARES
Period Ended. . . . $ 10.00 0.01 - 2.37 2.38 (0.02) - (0.02)
October 31,
2000 (d)
Year Ended. . . . . $ 12.36 0.02 - (0.20) (0.18) (0.02) - (0.02)
October 31,
2001
Year Ended. . . . . $ 12.16 (0.03) 0.01 (0.98) (1.00) (0.01) (0.15) (0.16)
October 31,
2002
Six Months Ended
April 30, 2003
(Unaudited) . . . $ 11.00 (0.01) - 0.48 0.47 - - -
CLASS C SHARES
Period Ended. . . . $ 13.08 0.01 - (0.93) (0.92) (0.03) - (0.03)
October 31,
2001 (e)
Year Ended. . . . . $ 12.13 (0.03) 0.01 (0.97) (0.99) (0.01) (0.15) (0.16)
October 31,]
2002
Six Months Ended
April 30, 2003
(Unaudited) . . . $ 10.98 (0.01) - 0.48 0.47 - - -
INSTITUTIONAL
SERVICE CLASS
SHARES
Period Ended. . . . $ 10.00 0.07 - 2.40 2.47 (0.05) - (0.05)
October 31,
2000 (d)
Year Ended. . . . . $ 12.42 0.13 - (0.19) (0.06) (0.12) - (0.12)
October 31,
2001
Year Ended. . . . . $ 12.24 0.07 0.01 (0.98) (0.90) (0.07) (0.15) (0.22)
October 31,
2002
Six Months Ended
April 30, 2003
(Unaudited) . . . $ 11.12 0.04 - 0.48 0.52 (0.03) - (0.03)
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
RATIO RATIO RATIO RATIO OF NET
OF OF NET OF INVESTMENT
NET NET EXPENSES INVESTMENT EXPENSES INCOME (LOSS)
ASSET ASSETS TO INCOME (LOSS) (PRIOR TO REIM- (PRIOR TO REIM-
VALUE, AT END OF AVERAGE TO AVERAGE BURSEMENTS) BURSEMENTS)
END OF TOTAL PERIOD NET NET TO AVERAGE TO AVERAGE PORTFOLIO
PERIOD RETURN (A) (000S) ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended. . . . $ 12.37 24.38% (f) $ 2,460 1.35% (g) 0.62% (g) 6.59% (g) (4.62%) (g) 119.39%
October 31,
2000 (d)
Year Ended. . . . . $ 12.17 (0.87%) $ 10,789 1.35% 0.69% 2.07% (0.03%) 139.75%
October 31,
2001
Year Ended. . . . . $ 11.05 (7.75%) $ 9,766 1.31% 0.39% 1.48% 0.22% 108.62%
October 31,
2002
Six Months Ended
April 30, 2003
(Unaudited) . . . $ 11.53 4.59% (f) $ 9,631 1.29% (g) 0.49% (g) 1.43% (g) 0.35% (g) 39.93%
CLASS B SHARES
Period Ended. . . . $ 12.36 23.79% (f) $ 751 1.95% (g) 0.10% (g) 7.70% (g) (5.65%) (g) 119.39%
October 31,
2000 (d)
Year Ended. . . . . $ 12.16 (1.45%) $ 2,708 1.95% 0.09% 3.06% (1.02%) 139.75%
October 31,
2001
Year Ended. . . . . $ 11.00 (8.39%) $ 2,362 1.98% (0.28%) 2.22% (0.52%) 108.62%
October 31,
2002
Six Months Ended
April 30,2003
(Unaudited) . . . $ 11.47 4.29% (f) $ 2,333 2.00% (g) (0.21%) (g) 2.14% (g) (0.36%) (g) 39.93%
CLASS C SHARES
Period Ended. . . . $ 12.13 (7.08%) (f) $ 108 1.95% (g) (0.01%) (g) 3.29% (g) (1.35%) (g) 139.75%
October 31,
2001 (e)
Year Ended. . . . . $ 10.98 (8.31%) $ 133 1.99% (0.30%) 2.23% (0.54%) 108.62%
October 31,
2002
Six Months Ended
April 30, 2003
(Unaudited) . . . $ 11.45 4.30% (f) $ 128 2.00% (g) (0.21%) (g) 2.14% (g) (0.35%) (g) 39.93%
INSTITUTIONAL
SERVICE CLASS
SHARES
Period Ended. . . . $ 12.42 24.72% (f) $ 4,441 1.00% (g) 0.98% (g) 5.99% (g) (4.01%) (g) 119.39%
October 31,
2000 (d)
Year Ended. . . . . $ 12.24 (0.49%) $ 10,130 1.00% 1.07% 1.81% 1.26% 139.75%
October 31,
2001
Year Ended. . . . . $ 11.12 (7.56%) $ 11,022 1.16% 0.52% 1.40% 0.28% 108.62%
October 31, 2002
Six Months Ended
April 30, 2003
(Unaudited) . . . $ 11.61 4.69% (f) $ 12,740 1.21% (g) 0.57% (g) 1.35% (g) 0.43% (g) 39.93%
- ---------------------------------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as whole without
distinguishing among the classes of shares.
(d) For the period from December 29, 1999 (commencement of operations) through
October 31, 2000.
(e) For the period from March 1, 2001 (commencement of operations) through
October 31, 2001.
(f) Not annualized.
(g) Annualized
See notes to financial statements.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 81
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GARTMORE MICRO CAP EQUITY FUND
INVESTMENT ACTIVITIES
- --------------------------------------------------------------------------------------------------------------------------
NET
REALIZED AND
NET UNREALIZED TOTAL NET ASSET NET ASSETS
ASSET VALUE, NET GAINS FROM VALUE, AT END OF
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT END OF TOTAL PERIOD
OF PERIOD INCOME (LOSS) INVESTMENTS ACTIVITIES PERIOD RETURN (A) (000S)
- --------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . . $ 10.00 (0.04) (1.32) (1.36) $ 8.64 (13.60%) (f) $ 310
October 31, 2002 (d) (e)
Six Months Ended . . . . $ 8.64 (0.08) 1.72 1.64 $ 10.28 18.98% (f) $ 433
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . . $ 10.00 (0.06) (1.33) (1.39) $ 8.61 (13.90%) (f) $ 43
October 31, 2002 (d)
Six Months Ended . . . . $ 8.61 (0.08) 1.69 1.61 $ 10.22 18.70% (f) $ 63
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . . $ 10.00 (0.06) (1.33) (1.39) $ 8.61 (13.90%) (f) $ 43
October 31, 2002 (d)
Six Months Ended . . . . $ 8.61 (0.10) 1.71 1.61 $ 10.22 18.70% (f) $ 51
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . . $ 10.00 (0.03) (1.33) (1.36) $ 8.64 (13.60%) (f) $ 43
October 31, 2002 (d)
Six Months Ended . . . . $ 8.64 (0.06) 1.72 1.66 $ 10.30 19.21% (f) $ 52
April 30, 2003
(Unaudited)
INSTITUTIONAL CLASS
SHARES
Period Ended . . . . . . $ 10.00 (0.03) (1.33) (1.36) $ 8.64 (13.60%) (f) $ 1,556
October 31, 2002 (d)
Six Months Ended . . . . $ 8.64 (0.06) 1.72 1.66 $ 10.30 19.21% (f) $ 1,854
April 30, 2003
(Unaudited)
- --------------------------------------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF NET RATIO OF INVESTMENT
RATIO OF INVESTMENT EXPENSES INCOME
EXPENSES INCOME (LOSS) (PRIOR TO (LOSS) (PRIOR TO
TO AVERAGE TO AVERAGE REIMBURSEMENTS) REIMBURSEMENTS)
NET NET TO AVERAGE TO AVERAGE PORTFOLIO
ASSETS ASSETS NET ASSETS (B) NET ASSETS (B) TURNOVER (C)
- ------------------------------------------------------------------------------------------------------
CLASS A SHARES
Period Ended . . . . . . 1.80% (g) (1.32%) (g) 8.73% (g) (8.25%) (g) 56.08%
October 31, 2002 (d) (e)
Six Months Ended . . . . 1.80% (g) (1.53%) (g) 3.09% (g) (2.82%) (g) 102.97%
April 30, 2003
(Unaudited)
CLASS B SHARES
Period Ended . . . . . . 2.55% (g) (2.04%) (g) 8.46% (g) (7.95%) (g) 56.08%
October 31, 2002 (d)
Six Months Ended . . . . 2.55% (g) (2.27%) (g) 3.84% (g) (3.56%) (g) 102.97%
April 30, 2003
(Unaudited)
CLASS C SHARES
Period Ended . . . . . . 2.55% (g) (2.04%) (g) 8.46% (g) (7.95%) (g) 56.08%
October 31, 2002 (d)
Six Months Ended . . . . 2.55% (g) (2.27%) (g) 3.84% (g) (3.57%) (g) 102.97%
April 30, 2003
(Unaudited)
INSTITUTIONAL SERVICE
CLASS SHARES
Period Ended . . . . . . 1.55% (g) (1.04%) (g) 7.45% (g) (6.94%) (g) 56.08%
October 31, 2002 (d)
Six Months Ended . . . . 1.55% (g) (1.27%) (g) 2.83% (g) (2.56%) (g) 102.97%
April 30, 2003
(Unaudited)
INSTITUTIONAL CLASS
SHARES
Period Ended . . . . . . 1.55% (g) (1.04%) (g) 7.46% (g) (6.95%) (g) 56.08%
October 31, 2002 (d)
Six Months Ended . . . . 1.55% (g) (1.27%) (g) 2.84% (g) (2.56%) (g) 102.97%
April 30, 2003
(Unaudited)
- ------------------------------------------------------------------------------------------------------
(a) Excludes sales charge.
(b) During the period certain fees were waived and/or reimbursed. If such
waivers/reimbursements had not occurred, the ratios would have been as
indicated.
(c) Portfolio turnover is calculated on the basis of the Fund as whole without
distinguishing among the classes of shares.
(d) For the period from June 27, 2002 (commencement of operations) through
October 31, 2002.
(e) Net investment income (loss) is based on average shares outstanding during
the period.
(f) Not annualized
(g) Annualized.
See notes to financial statements.
- --------------------------------------------------------------------------------
82 SEMIANNUAL REPORT 2003
NOTES TO FINANCIAL STATEMENTS
April 30, 2003 (Unaudited)
1. ORGANIZATION
Gartmore Mutual Funds (the "Trust") is an open-end management investment
company. Prior to January 25, 2002 the Trust was named Nationwide Mutual Funds.
The Trust was created under the laws of Ohio as an Ohio business trust pursuant
to a Declaration of Trust dated as of October 30, 1997, as subsequently amended,
and is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Trust operates thirty-seven (37) separate series, or mutual
funds, each with its own investment objectives and strategies. This report
contains the financial statements and financial highlights of the funds listed
below (individually a "Fund", collectively the "Funds"):
- Gartmore Global Financial Services Fund ("Global Financial Services")
- Gartmore Global Health Sciences Fund ("Global Health Sciences")
- Gartmore Global Technology and Communications Fund ("Global Technology
and Communications")
- Gartmore Global Utilities Fund ("Global Utilities")
- Gartmore Nationwide Leaders Fund ("Nationwide Leaders")
- Gartmore U.S. Growth Leaders Fund ("U.S. Growth Leaders")
- Gartmore Worldwide Leaders Fund ("Worldwide Leaders")
- Gartmore Emerging Markets Fund ("Emerging Markets")
- Gartmore International Growth Fund ("International Growth")
- Gartmore International Small Cap Growth Fund ("International Small Cap
Growth")
- Gartmore High Yield Bond Fund ("High Yield Bond")
- Gartmore Millennium Growth Fund ("Millennium Growth")
- Gartmore Value Opportunities Fund ("Value Opportunities")
- Gartmore Micro Cap Equity Fund ("Micro Cap Equity")
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America ("GAAP"). The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses for the
period. Actual results could differ from those estimates.
(A) SECURITY VALUATION
Securities for which market quotations are readily available are valued at
current market value as of Valuation Time. Valuation Time is as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m.
Eastern time). Equity securities are valued at the last quoted sale price
or, if there is no sale price, the last quoted bid price provided by an
independent pricing service approved by the Board of Trustees. Prices are
taken from the primary market or exchange in which each security trades.
Debt and other fixed income securities (other than short-term obligations)
are valued at the last quoted bid price and/or by using a combination of
daily quotes and matrix evaluations provided by an independent pricing
service, the use of which has been approved by the Funds' Board of
Trustees. Short-term debt securities such as commercial paper and U.S.
Treasury Bills having a remaining maturity of 60 days or less at the time
of purchase are considered to be "short-term" and are valued at amortized
cost which approximates market value.
Securities for which market quotations are not readily available, or for
which an independent pricing service does not provide a value or provides a
value that does not represent fair value in the judgement of the Funds'
investment adviser or designee, are valued at fair value under procedures
approved by the Funds' Board of Trustees.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 83
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2003 (Unaudited)
(B) REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with an entity which is a
member of the Federal Reserve System or which is a "primary dealer'' (as
designated by the Federal Reserve Bank of New York) in U.S. Government
obligations. The repurchase price generally equals the price paid by a Fund
plus interest negotiated on the basis of current short-term rates, which
may be more or less than the rate on the underlying portfolio securities.
The seller under a repurchase agreement is required to maintain the value
of the collateral held pursuant to the agreement at a market value equal to
or greater than the repurchase price (including accrued interest).
Collateral subject to repurchase agreements is held by the Funds' custodian
or another qualified sub-custodian or in the Federal Reserve/Treasury
book-entry system.
(C) FOREIGN CURRENCY TRANSACTIONS
The accounting records of the Funds are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars at the current rate of
exchange to determine the value of investments, assets and liabilities.
Purchases and sales of securities, and income and expenses are translated
at the prevailing rate of exchange on the respective date of such
transactions. The Funds do not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments
from fluctuations arising from changes in market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain or
loss from investments and foreign currencies.
(D) RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES
Investments in securities of foreign issuers carry certain risks not
ordinarily associated with investments in securities of U.S. issuers. Such
risks include future political and economic developments, and the possible
imposition of exchange controls or other foreign governmental laws and
restrictions. In addition, with respect to certain countries, there is the
possibility of expropriation of assets, confiscatory taxation, political or
social instability or diplomatic developments, which could adversely affect
investments in those countries.
Certain countries may also impose substantial restrictions on investments
in their capital markets by foreign entities, including restrictions on
investments in issuers of industries deemed sensitive to relevant national
interests. These factors may limit the investment opportunities available
and result in a lack of liquidity and a high price volatility with respect
to securities of issuers from developing countries.
(E) FORWARD FOREIGN CURRENCY CONTRACTS
Certain Funds may enter into forward foreign currency exchange contracts in
connection with planned purchases or sales of securities or to hedge the
U.S. dollar value of portfolio securities denominated in a particular
currency. The Funds could be exposed to risks if the counter parties to the
contracts are unable to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The forward foreign currency contracts are adjusted by the
daily exchange rate of the underlying currency and any gains or losses are
recorded for financial statement purposes as unrealized gains or losses
until the contract settlement date.
(F) FUTURES CONTRACTS
Certain Funds may invest in financial futures contracts ("futures
contracts") for the purpose of hedging their existing portfolio securities
or securities they intend to purchase against fluctuations in value caused
by changes in prevailing market interest rates or prices. Futures contracts
may also be entered into for non-hedging purposes. Upon entering into a
futures contract, these Funds are required to pledge to the broker an
amount of cash and/or other assets equal to a certain percentage of the
contract amount (initial margin deposit). Subsequent payments, known as
"variation margin'', are made each day, depending on the daily fluctuations
in the fair value of the underlying security. A gain or loss equal to the
daily variation margin is recognized on a daily basis.
A "sale'' of a futures contract means a contractual obligation to deliver
the securities or foreign currency called for by the contract at a fixed
price at a specified time in the future. A "purchase'' of a futures
contract means a contractual obligation to acquire the securities or
foreign currency at a fixed price at a specified time in the future.
- --------------------------------------------------------------------------------
84 SEMIANNUAL REPORT 2003
Should market conditions change unexpectedly, the Funds may not achieve the
anticipated benefits of the futures contracts and may realize a loss. The
use of futures transactions for hedging purposes involves the risk of
imperfect correlation in movements in the price of futures contracts,
interest rates and the value/Market Value of the underlying hedged assets.
(G) SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the date the security is
purchased or sold ("trade date''). Securities gains and losses are
calculated on the identified cost basis. Interest income is recognized on
the accrual basis and includes, where applicable, the amortization or
accretion of premium or discount. Dividend income is recorded on the
ex-dividend date.
(H) FEDERAL INCOME TAXES
It is the policy of each Fund to qualify or continue to qualify as a
regulated investment company by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of net investment income
and net realized capital gains sufficient to relieve it from all, or
substantially all, federal income taxes.
As of April 30, 2003, the tax cost of securities and the breakdown of
unrealized appreciation (depreciation) for each Fund was as follows:
TAX NET UNREALIZED
COST OF UNREALIZED UNREALIZED APPRECIATION
FUND SECURITIES APPRECIATION DEPRECIATION (DEPRECIATION)
- -------------------------------------------------------------------------------------------
Global Financial Services $2,624,321 $199,675 $(72,228) $127,447
- -------------------------------------------------------------------------------------------
Global Health Sciences 4,316,620 285,277 (11,354) 273,923
- -------------------------------------------------------------------------------------------
Global Technology and
Communications 3,243,036 237,651 (32,493) 205,158
- -------------------------------------------------------------------------------------------
Global Utilities 2,148,506 207,621 (51,403) 156,218
- -------------------------------------------------------------------------------------------
Nationwide Leaders 2,310,745 143,640 (89,231) 54,409
- -------------------------------------------------------------------------------------------
U.S. Growth Leaders 4,156,941 366,106 (8,126) 357,980
- -------------------------------------------------------------------------------------------
Worldwide Leaders 3,254,623 232,649 (44,829) 187,820
- -------------------------------------------------------------------------------------------
Emerging Markets 5,013,622 549,496 (304,000) 245,496
- -------------------------------------------------------------------------------------------
International Growth 5,106,554 339,196 (204,385) 134,811
- -------------------------------------------------------------------------------------------
International Small Cap Growth 3,678,547 199,557 (342,844) (143,287)
- -------------------------------------------------------------------------------------------
High Yield Bond 96,069,713 8,256,679 (1,935,111) 6,321,568
- -------------------------------------------------------------------------------------------
Millennium Growth 16,566,597 1,630,036 (578,750) 1,051,286
- -------------------------------------------------------------------------------------------
Value Opportunities 23,023,209 1,994,540 (2,086,578) (92,038)
- -------------------------------------------------------------------------------------------
Micro Cap Equity 2,057,514 403,581 (81,283) 322,298
- -------------------------------------------------------------------------------------------
(I) DISTRIBUTIONS TO SHAREHOLDERS
Net investment income, if any, is declared daily and paid monthly for the
High Yield Bond Fund and is declared and paid quarterly for all other
Funds. For all Funds, distributable net realized capital gains, if any, are
declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance
with federal income tax regulations, which may differ from GAAP. These
"book/tax" differences are considered either permanent or temporary in
nature. In accordance with AICPA (American Institute of Certified Public
Accountants) Statement of Position 93-2, permanent differences (i.e.,
reclassification of market discounts, gain/loss, paydowns and
distributions) are reclassified within the capital accounts based on their
nature for federal income tax purposes; temporary differences do not
require reclassification. These reclassifications have no effect upon the
net asset value of the respective Funds. To the extent distributions exceed
current and accumulated earnings and profits for federal income tax
purposes, they are reported as distributions of paid-in-capital.
(J) EXPENSES
Expenses directly attributable to a Fund are charged to that Fund. Expenses
not directly attributable to a Fund are allocated proportionately among
various or all funds within the Trust in relation to the net assets of each
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 85
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2003 (Unaudited)
fund or on another reasonable basis. Once expenses are charged to a Fund,
they are allocated to the classes based on total settled shares outstanding
of each class for the High Yield Bond Fund and based on relative net assets
of each class for all other Funds. Expenses specific to a class (such as
12b-1 and administrative services fees) are charged to that class.
(K) CAPITAL SHARE TRANSACTIONS
Transactions in capital shares of the Funds were as follows:
GLOBAL FINANCIAL SERVICES GLOBAL HEALTH SCIENCES
- ----------------------------------------------------------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER 31, 2002 (A) APRIL 30, 2003 OCTOBER 31, 2002
- ----------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
CAPITAL TRANSACTIONS:
CLASS A SHARES
Proceeds from shares issued $ 11,330 $ 757,960 $ 2,762,528 $ 1,846,790
Dividends reinvested. . . . 1,596 180 - -
Cost of shares redeemed . . (5,137) (1,205) (1,995,208) (919,357)
- ----------------------------------------------------------------------------------------------------------
7,789 756,935 767,320 927,433
- ----------------------------------------------------------------------------------------------------------
CLASS B SHARES
Proceeds from shares issued 3,146 758,252 2,910 56,389
Dividends reinvested. . . . 179 - - -
Cost of shares redeemed . . (15) - (3,499) (5,009)
- ----------------------------------------------------------------------------------------------------------
3,310 758,252 (589) 51,380
- ----------------------------------------------------------------------------------------------------------
CLASS C SHARES
Proceeds from shares issued 2,007 750,000 35,630 56,444 (b)
Dividends reinvested. . . . 177 - - -
Cost of shares redeemed . . - - - -
- ----------------------------------------------------------------------------------------------------------
2,184 750,000 35,630 56,444
- ----------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS SHARES
Proceeds from shares issued - 750,000 1,080,504 1,134,534
Dividends reinvested. . . . 2,031 258 - -
Cost of shares redeemed . . - - (698,998) (368,019)
- ----------------------------------------------------------------------------------------------------------
2,031 750,258 381,506 766,515
- ----------------------------------------------------------------------------------------------------------
Change in net assets from
capital transactions . . $ 15,314 $ 3,015,445 $ 1,183,867 $ 1,801,772
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES
Issued. . . . . . . . . . . 1,251 75,796 330,332 212,615
Reinvested. . . . . . . . . 178 18 - -
Redeemed. . . . . . . . . . (568) (119) (239,837) (110,724)
- ----------------------------------------------------------------------------------------------------------
861 75,695 90,495 101,891
- ----------------------------------------------------------------------------------------------------------
CLASS B SHARES
Issued. . . . . . . . . . . 345 75,798 350 6,163
Reinvested. . . . . . . . . 20 - - -
Redeemed. . . . . . . . . . (2) - (416) (569)
- ----------------------------------------------------------------------------------------------------------
363 75,798 (66) 5,594
- ----------------------------------------------------------------------------------------------------------
CLASS C SHARES
Issued. . . . . . . . . . . 215 75,000 4,251 7,115 (b)
Reinvested. . . . . . . . . 20 - - -
Redeemed. . . . . . . . . . - - - -
- ----------------------------------------------------------------------------------------------------------
235 75,000 4,251 7,115
- ----------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS SHARES
Issued. . . . . . . . . . . - 75,000 127,548 128,673
Reinvested. . . . . . . . . 226 25 - -
Redeemed. . . . . . . . . . - - (83,176) (44,086)
- ----------------------------------------------------------------------------------------------------------
226 75,025 44,372 84,587
- ----------------------------------------------------------------------------------------------------------
Total change in shares. . . 1,685 301,518 139,052 199,187
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
(a) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002.
(b) For the period from September 23, 2002 (commencement of operations) through
October 31, 2002.
- --------------------------------------------------------------------------------
86 SEMIANNUAL REPORT 2003
GLOBAL TECHNOLOGY AND COMMUNICATIONS GLOBAL UTILITIES
- --------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2003 OCTOBER 31, 2002 APRIL 30, 2003 OCTOBER 31, 2002 (A)
- ---------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
CAPITAL TRANSACTIONS:
CLASS A SHARES
Proceeds from shares issued. . . . $ 1,162,582 $ 1,007,143 $ 4,822 $ 753,888
Dividends reinvested . . . . . . . - - 3,287 4,321
Cost of shares redeemed. . . . . . (1,022,709) (741,147) (2,003) -
- ---------------------------------------------------------------------------------------------------------------------
139,873 265,996 6,106 758,209
- ---------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Proceeds from shares issued. . . . 21,590 174,582 - 753,502
Dividends reinvested . . . . . . . - - 2,128 2,276
Cost of shares redeemed. . . . . . (19,748) (115,522) - -
- ---------------------------------------------------------------------------------------------------------------------
1,842 59,060 2,128 755,778
- ---------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Proceeds from shares issued. . . . 445 12,155 - 750,000
Dividends reinvested . . . . . . . - - 2,116 2,258
Cost of shares redeemed. . . . . . (2,989) (11,605) - -
- ---------------------------------------------------------------------------------------------------------------------
(2,544) 550 2,116 752,258
- ---------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Proceeds from shares issued. . . . 2,623,360 815,980 - 750,000
Dividends reinvested . . . . . . . - - 3,654 5,057
Cost of shares redeemed. . . . . . (2,223,697) (387,381) - -
- ---------------------------------------------------------------------------------------------------------------------
399,663 428,599 3,654 755,057
- ---------------------------------------------------------------------------------------------------------------------
Change in net assets from
capital transactions. . . . . . $ 538,834 $ 754,205 $ 14,004 $ 3,021,302
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES
Issued . . . . . . . . . . . . . . 442,914 318,887 651 75,449
Reinvested . . . . . . . . . . . . - - 448 561
Redeemed . . . . . . . . . . . . . (384,506) (250,629) (279) -
- ---------------------------------------------------------------------------------------------------------------------
58,408 68,258 820 76,010
- ---------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Issued . . . . . . . . . . . . . . 8,408 47,203 - 75,409
Reinvested . . . . . . . . . . . . - - 291 286
Redeemed . . . . . . . . . . . . . (7,566) (31,693) - -
- ---------------------------------------------------------------------------------------------------------------------
842 15,510 291 75,695
- ---------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Issued . . . . . . . . . . . . . . 170 3,330 - 75,000
Reinvested . . . . . . . . . . . . - - 288 284
Redeemed . . . . . . . . . . . . . (1,155) (4,077) - -
- ---------------------------------------------------------------------------------------------------------------------
(985) (747) 288 75,284
- ---------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS SHARES
Issued . . . . . . . . . . . . . . 980,246 267,045 - 75,000
Reinvested . . . . . . . . . . . . - - 498 660
Redeemed . . . . . . . . . . . . . (849,333) (130,531) - -
- ---------------------------------------------------------------------------------------------------------------------
130,913 136,514 498 75,660
- ---------------------------------------------------------------------------------------------------------------------
Total change in shares . . . . . . 189,178 219,535 1,897 302,649
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
(a) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 87
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2003 (Unaudited)
NATIONWIDE LEADERS U.S. GROWTH LEADERS WORLDWIDE LEADERS
- ------------------------------------------------------------------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2003 2002 (A) 2003 2002 2003 2002
- ------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
CAPITAL TRANSACTIONS:
CLASS A SHARES
Proceeds from shares issued $ 106,874 $ 1,287,688 $ 670,421 $ 699,590 $ 1,642,357 $ 639,337
Dividends reinvested. . . . 3,461 580 - - - -
Cost of shares redeemed . . (98,553) (297,727) (202,211) (343,424) (447,042) (543,700)
- ------------------------------------------------------------------------------------------------------------------
11,782 990,541 468,210 356,166 1,195,315 95,637
- ------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Proceeds from shares issued 44,047 354,422 205,470 164,910 35,659 26,576
Dividends reinvested. . . . 477 - - - - -
Cost of shares redeemed . . (25,751) (7,510) (76,662) (134,890) (1,803) (5,212)
- ------------------------------------------------------------------------------------------------------------------
18,773 346,912 128,808 30,020 33,856 21,364
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Proceeds from shares issued 1,980 259,408 71,033 9,220 148 5,950
Dividends reinvested. . . . 368 - - - - -
Cost of shares redeemed . . (10) - (15) (10) (1,985) (4,409)
- ------------------------------------------------------------------------------------------------------------------
2,338 259,408 71,018 9,210 (1,837) 1,541
- ------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS SHARES
Proceeds from shares issued 476,536 1,533,873 3,418,755 1,074,088 361,683 614,293
Dividends reinvested. . . . 3,661 660 - - - -
Cost of shares redeemed . . (320,256) (625,720) (2,649,073) (552,183) (348,232) (367,946)
- ------------------------------------------------------------------------------------------------------------------
159,941 908,813 769,682 521,905 13,451 246,347
- ------------------------------------------------------------------------------------------------------------------
Change in net assets from
capital transactions . . $ 192,834 $ 2,505,674 $ 1,437,718 $ 917,301 $ 1,240,785 $ 364,889
- ------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES
Issued. . . . . . . . . . . 11,573 123,956 113,254 106,909 318,773 113,499
Reinvested. . . . . . . . . 368 62 - - - -
Redeemed. . . . . . . . . . (10,687) (29,784) (35,134) (58,286) (86,843) (98,266)
- ------------------------------------------------------------------------------------------------------------------
1,254 94,234 78,120 48,623 231,930 15,233
- ------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Issued. . . . . . . . . . . 4,612 34,516 35,890 25,684 7,347 4,489
Reinvested. . . . . . . . . 51 - - - - -
Redeemed. . . . . . . . . . (2,686) (763) (13,227) (21,982) (336) (914)
- ------------------------------------------------------------------------------------------------------------------
1,977 33,753 22,663 3,702 7,011 3,575
- ------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Issued. . . . . . . . . . . 217 25,878 12,420 1,349 29 958
Reinvested. . . . . . . . . 39 - - - - -
Redeemed. . . . . . . . . . (1) - (3) (2) (396) (692)
- ------------------------------------------------------------------------------------------------------------------
255 25,878 12,417 1,347 (367) 266
- ------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE
CLASS SHARES
Issued. . . . . . . . . . . 51,060 145,343 586,209 178,325 67,658 101,508
Reinvested. . . . . . . . . 389 70 - - - -
Redeemed. . . . . . . . . . (34,965) (63,252) (462,157) (98,479) (65,882) (63,578)
- ------------------------------------------------------------------------------------------------------------------
16,484 82,161 124,052 79,846 1,776 37,930
- ------------------------------------------------------------------------------------------------------------------
Total change in shares. . . 19,970 236,026 237,252 133,518 240,350 57,004
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
(a) For the period from December 18, 2001 (commencement of operations) through
October 31, 2002.
- --------------------------------------------------------------------------------
88 SEMIANNUAL REPORT 2003
INTERNATIONAL
EMERGING MARKETS INTERNATIONAL GROWTH SMALL CAP GROWTH
- -------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2003 2002 2003 2002 2003 2002
- -------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
CAPITAL TRANSACTIONS:
CLASS A SHARES
Proceeds from shares issued $ 6,811,546 $ 2,559,508 $ 2,675,977 $ 1,926,538 $ 3,030,994 $ 990,938
Cost of shares redeemed . . (5,976,196) (1,636,863) (2,412,249) (1,845,740) (1,896,576) (877,999)
- -------------------------------------------------------------------------------------------------------------------
835,350 922,645 263,728 80,798 1,134,418 112,939
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Proceeds from shares issued 83,007 179,227 268 60,334 3,930 23,113
Cost of shares redeemed . . (99,078) (28,266) (1,573) (9,139) (10,665) (1,632)
- -------------------------------------------------------------------------------------------------------------------
(16,071) 150,961 (1,305) 51,195 (6,735) 21,481
- -------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Proceeds from shares issued 149 8,593 1,943 6,237 17 6,569
Cost of shares redeemed . . (25) (5,606) - (4,133) (2,588) (815)
- -------------------------------------------------------------------------------------------------------------------
124 2,987 1,943 2,104 (2,571) 5,754
- -------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Proceeds from shares issued - - - - 433,286 -
Cost of shares redeemed . . - - - - (425,710) -
- -------------------------------------------------------------------------------------------------------------------
- - - - 7,576 -
- -------------------------------------------------------------------------------------------------------------------
Change in net assets from
capital transactions . . $ 819,403 $ 1,076,593 $ 264,366 $ 134,097 $ 1,132,688 $ 140,174
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES
Issued. . . . . . . . . . . 973,471 346,425 514,233 360,001 568,267 168,018
Redeemed. . . . . . . . . . (863,742) (231,308) (462,631) (343,270) (354,263) (147,517)
- -------------------------------------------------------------------------------------------------------------------
109,729 115,117 51,602 16,731 214,004 20,501
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Issued. . . . . . . . . . . 11,731 22,917 42 10,157 339 3,387
Redeemed. . . . . . . . . . (14,117) (4,010) (307) (1,548) (1,972) (250)
- -------------------------------------------------------------------------------------------------------------------
(2,386) 18,907 (265) 8,609 (1,633) 3,137
- -------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Issued. . . . . . . . . . . 21 1,081 383 1,000 - 952
Redeemed. . . . . . . . . . (4) (629) - (649) (513) (139)
- -------------------------------------------------------------------------------------------------------------------
17 452 383 351 (513) 813
- -------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Issued. . . . . . . . . . . - - - - 78,544 -
Redeemed. . . . . . . . . . - - - - (78,544) -
- -------------------------------------------------------------------------------------------------------------------
- - - - - -
- -------------------------------------------------------------------------------------------------------------------
Total change in shares. . . 107,360 134,476 51,720 25,691 211,858 24,451
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 89
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2003 (Unaudited)
HIGH YIELD BOND MILLENNIUM GROWTH
- --------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2003 2002 2003 2002
- --------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
CAPITAL TRANSACTIONS:
CLASS A SHARES
Proceeds from shares issued. . . . $ 5,113,137 $ 1,271,594 $ 527,005 $ 13,206,448
Dividends reinvested . . . . . . . 95,707 207,420 - -
Cost of shares redeemed. . . . . . (3,110,787) (2,018,887) (675,666) (13,398,898)
- --------------------------------------------------------------------------------------------
2,098,057 (539,873) (148,661) (192,450)
- --------------------------------------------------------------------------------------------
CLASS B SHARES
Proceeds from shares issued. . . . 252,819 208,860 197,675 681,157
Dividends reinvested . . . . . . . 10,316 11,715 - -
Cost of shares redeemed. . . . . . (75,987) (66,638) (379,379) (741,182)
- --------------------------------------------------------------------------------------------
187,148 153,937 (181,704) (60,025)
- --------------------------------------------------------------------------------------------
CLASS C SHARES
Proceeds from shares issued. . . . 1,029,992 53,673 7,693 15,182
Dividends reinvested . . . . . . . 3,406 659 - -
Cost of shares redeemed. . . . . . (2,431) (3,107) (283) (7,940)
- --------------------------------------------------------------------------------------------
1,030,967 51,225 7,410 7,242
- --------------------------------------------------------------------------------------------
CLASS D SHARES
Proceeds from shares issued. . . . - - 303,323 814,520
Cost of shares redeemed. . . . . . - - (1,058,197) (2,639,592)
- --------------------------------------------------------------------------------------------
- - (754,874) (1,825,072)
- --------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Proceeds from shares issued. . . . 1,899,054 700,743 - -
Dividends reinvested . . . . . . . 4,170,597 8,347,627 - -
Cost of shares redeemed. . . . . . (694,735) (225,396) - -
- --------------------------------------------------------------------------------------------
5,374,916 8,822,974 - -
- --------------------------------------------------------------------------------------------
Change in net assets from
capital transactions. . . . . . $ 8,691,088 $ 8,488,263 $(1,077,829) $ (2,070,305)
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES
Issued . . . . . . . . . . . . . . 803,816 199,181 63,072 1,256,053
Reinvested . . . . . . . . . . . . 15,315 30,906 - -
Redeemed . . . . . . . . . . . . . (490,261) (304,053) (81,089) (1,285,516)
- --------------------------------------------------------------------------------------------
328,870 (73,966) (18,017) (29,463)
- --------------------------------------------------------------------------------------------
CLASS B SHARES
Issued . . . . . . . . . . . . . . 40,119 32,180 25,043 67,781
Reinvested . . . . . . . . . . . . 1,653 1,775 - -
Redeemed . . . . . . . . . . . . . (12,250) (10,158) (48,733) (76,927)
- --------------------------------------------------------------------------------------------
29,522 23,797 (23,690) (9,146)
- --------------------------------------------------------------------------------------------
CLASS C SHARES
Issued . . . . . . . . . . . . . . 160,488 8,532 953 1,439
Reinvested . . . . . . . . . . . . 545 101 - -
Redeemed . . . . . . . . . . . . . (383) (452) (36) (886)
- --------------------------------------------------------------------------------------------
160,650 8,181 917 553
- --------------------------------------------------------------------------------------------
CLASS D SHARES
Issued . . . . . . . . . . . . . . - - 35,801 76,945
Redeemed . . . . . . . . . . . . . - - (125,622) (258,845)
- --------------------------------------------------------------------------------------------
- - (89,821) (181,900)
- --------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Issued . . . . . . . . . . . . . . 294,148 107,379 - -
Reinvested . . . . . . . . . . . . 662,296 1,240,448 - -
Redeemed . . . . . . . . . . . . . (106,930) (35,623) - -
- --------------------------------------------------------------------------------------------
849,514 1,312,204 - -
- --------------------------------------------------------------------------------------------
Total change in shares . . . . . . 1,368,556 1,270,216 (130,611) (219,956)
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
90 SEMIANNUAL REPORT 2003
VALUE OPPORTUNITIES MICRO CAP EQUITY
- --------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
2003 2002 2003 2002 (A)
- --------------------------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
CAPITAL TRANSACTIONS:
CLASS A SHARES
Proceeds from shares issued. . . . $ 2,393,088 $ 7,912,562 $ 56,029 $ 322,822
Dividends reinvested . . . . . . . 22,453 182,684 - -
Cost of shares redeemed. . . . . . (2,950,760) (7,877,056) (10) -
- --------------------------------------------------------------------------------------------
(535,219) 218,190 56,019 322,822
- --------------------------------------------------------------------------------------------
CLASS B SHARES
Proceeds from shares issued. . . . 151,951 740,913 11,576 50,000
Dividends reinvested . . . . . . . 458 36,879 - -
Cost of shares redeemed. . . . . . (276,678) (890,048) - -
- --------------------------------------------------------------------------------------------
(124,269) (112,256) 11,576 50,000
- --------------------------------------------------------------------------------------------
CLASS C SHARES
Proceeds from shares issued. . . . 4,048 70,023 - 50,000
Dividends reinvested . . . . . . . 18 1,617 - -
Cost of shares redeemed. . . . . . (14,952) (30,189) - -
- --------------------------------------------------------------------------------------------
(10,886) 41,451 - 50,000
- --------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Proceeds from shares issued. . . . 3,049,519 7,395,551 - 50,000
Dividends reinvested . . . . . . . 32,141 164,892 - -
Cost of shares redeemed. . . . . . (1,901,345) (4,987,133) - -
- --------------------------------------------------------------------------------------------
1,180,315 2,573,310 - 50,000
- --------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Proceeds from shares issued. . . . - - - 1,800,000
- --------------------------------------------------------------------------------------------
- - - 1,800,000
- --------------------------------------------------------------------------------------------
Change in net assets from
capital transactions. . . . . . $ 509,941 $ 2,720,695 $ 67,595 $ 2,272,822
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
CLASS A SHARES
Issued . . . . . . . . . . . . . . 215,864 599,011 6,260 35,831
Reinvested . . . . . . . . . . . . 2,002 14,142 - -
Redeemed . . . . . . . . . . . . . (267,032) (615,686) (1) -
- --------------------------------------------------------------------------------------------
(49,166) (2,533) 6,259 35,831
- --------------------------------------------------------------------------------------------
CLASS B SHARES
Issued . . . . . . . . . . . . . . 13,537 57,262 1,162 5,000
Reinvested . . . . . . . . . . . . 41 2,852 - -
Redeemed . . . . . . . . . . . . . (24,961) (68,176) - -
- --------------------------------------------------------------------------------------------
(11,383) (8,062) 1,162 5,000
- --------------------------------------------------------------------------------------------
CLASS C SHARES
Issued . . . . . . . . . . . . . . 368 5,297 - 5,000
Reinvested . . . . . . . . . . . . 2 125 - -
Redeemed . . . . . . . . . . . . . (1,336) (2,213) - -
- --------------------------------------------------------------------------------------------
(966) 3,209 - 5,000
- --------------------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Issued . . . . . . . . . . . . . . 273,695 551,980 - 5,000
Reinvested . . . . . . . . . . . . 2,853 12,684 - -
Redeemed . . . . . . . . . . . . . (170,652) (400,810) - -
- --------------------------------------------------------------------------------------------
105,896 163,854 - 5,000
- --------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Issued . . . . . . . . . . . . . . - - - 180,000
- --------------------------------------------------------------------------------------------
- - - 180,000
- --------------------------------------------------------------------------------------------
Total change in shares . . . . . . 44,381 156,468 7,421 230,831
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
(a) For the period from June 27, 2002 (commencement of operations) through
October 31, 2002.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 91
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2003 (Unaudited)
3. TRANSACTIONS WITH AFFILIATES
Under the terms of the Investment Advisory Agreements, Gartmore Global Asset
Management Trust ("GGAMT") or Gartmore Mutual Fund Capital Trust ("GMF") manages
the investment of the assets and supervises the daily business affairs of their
respective Funds (as shown in table below). GMF is a wholly owned subsidiary of
Gartmore Global Investments, Inc. ("GGI"), a holding company. GGI is a wholly
owned subsidiary of GGAMT. GGAMT is a wholly owned subsidiary of Nationwide
Corporation. All of the common stock of Nationwide Corporation is held by
Nationwide Mutual Insurance Company (95.3%) and Nationwide Mutual Fire Insurance
Company (4.7%), each of which is a mutual company owned by its policyholders.
GMF and GGAMT also provides investment management evaluation services in
initially selecting and monitoring on an ongoing basis the performance of the
subadviser, if applicable, for the Funds it advises. The subadvisers manage
each of their respective Fund's investments and have the responsibility for
making all investment decisions for the applicable Funds. The adviser and
subadviser, if applicable, for each Fund is as follows:
FUND ADVISER SUBADVISER
- ---------------------------------------------------------------------------
Global Financial Services. . . . . . GGAMT Gartmore Global Partners (a)
- ---------------------------------------------------------------------------
Global Health Sciences . . . . . . . GMF n/a
- ---------------------------------------------------------------------------
Global Technology and Communications GMF n/a
- ---------------------------------------------------------------------------
Global Utilities . . . . . . . . . . GGAMT Gartmore Global Partners (a)
- ---------------------------------------------------------------------------
Nationwide Leaders . . . . . . . . . GMF n/a
- ---------------------------------------------------------------------------
U.S. Growth Leaders. . . . . . . . . GMF n/a
- ---------------------------------------------------------------------------
Worldwide Leaders. . . . . . . . . . GGAMT Gartmore Global Partners (a)
- ---------------------------------------------------------------------------
Emerging Markets . . . . . . . . . . GGAMT Gartmore Global Partners (a)
- ---------------------------------------------------------------------------
International Growth . . . . . . . . GGAMT Gartmore Global Partners (a)
- ---------------------------------------------------------------------------
International Small Cap Growth . . . GGAMT Gartmore Global Partners (a)
- ---------------------------------------------------------------------------
High Yield Bond. . . . . . . . . . . GMF n/a
- ---------------------------------------------------------------------------
Millennium Growth. . . . . . . . . . GMF n/a
- ---------------------------------------------------------------------------
Value Opportunities. . . . . . . . . GMF NorthPointe Capital, LLC (a)
- ---------------------------------------------------------------------------
Micro Cap Equity . . . . . . . . . . GMF n/a
- ---------------------------------------------------------------------------
(a) Affiliate of GMF and GGAMT.
- --------------------------------------------------------------------------------
92 SEMIANNUAL REPORT 2003
Under the terms of the Investment Advisory Agreements, each Fund pays their
respective adviser an investment advisory fee based on that Fund's average daily
net assets. From such fees, pursuant to the subadvisory agreements, the adviser
pays fees to the subadviser. Additional information regarding the investment
advisory fees and subadvisory fees for GGAMT, GMF and the subadvisers, where
applicable, is as follows for the six months ended April 30, 2003:
TOTAL FEES PAID TO
FUND FEE SCHEDULE FEES RETAINED SUBADVISER
- -----------------------------------------------------------------------------------------------
Global Financial Services . . . . . . All Assets 1.00% 0.50% 0.50%
- -----------------------------------------------------------------------------------------------
Global Health Sciences. . . . . . . . All Assets 1.00% 1.00% -
- -----------------------------------------------------------------------------------------------
Global Technology and Communications. All Assets 0.98% 0.98% -
- -----------------------------------------------------------------------------------------------
Global Utilities. . . . . . . . . . . All Assets 0.80% 0.40% 0.40%
- -----------------------------------------------------------------------------------------------
Nationwide Leaders. . . . . . . . . . Up to $500 million 0.90% 0.90% -
On the next $1.5 billion 0.80% 0.80% -
On $2 billion and more 0.75% 0.75% -
- -----------------------------------------------------------------------------------------------
U.S. Growth Leaders(a). . . . . . . . Up to $500 million 0.90% 0.90% -
On the next $1.5 billion 0.80% 0.80% -
On $2 billion and more 0.75% 0.75% -
- -----------------------------------------------------------------------------------------------
Worldwide Leaders . . . . . . . . . . All Assets 1.00% 0.50% 0.50%
- -----------------------------------------------------------------------------------------------
Emerging Markets. . . . . . . . . . . All Assets 1.15% 0.575% 0.575%
- -----------------------------------------------------------------------------------------------
International Growth. . . . . . . . . All Assets 1.00% 0.50% 0.50%
- -----------------------------------------------------------------------------------------------
International Small Cap Growth. . . . All Assets 1.10% 0.55% 0.55%
- -----------------------------------------------------------------------------------------------
High Yield Bond . . . . . . . . . . . Up to $250 million 0.55% 0.55% -
On the next $750 million 0.525% 0.525% -
On the next $1 billion 0.50% 0.50% -
On the next $3 billion 0.475% 0.475% -
On $5 billion and more 0.45% 0.45% -
- -----------------------------------------------------------------------------------------------
Millennium Growth . . . . . . . . . . Up to $250 million 1.03% 1.03% -
On the next $750 million 1.00% 1.00% -
On the next $1 billion 0.97% 0.97% -
On the next $3 billion 0.94% 0.94% -
On $5 billion and more 0.91% 0.91% -
- -----------------------------------------------------------------------------------------------
Value Opportunities . . . . . . . . . Up to $250 million 0.70% - 0.70%
On the next $750 million 0.675% - 0.675%
On the next $1 billion 0.65% - 0.65%
On the next $3 billion 0.625% - 0.625%
On $5 billion and more 0.60% - 0.60%
- -----------------------------------------------------------------------------------------------
Micro Cap Equity. . . . . . . . . . . All Assets 1.25% 1.25% -
- -----------------------------------------------------------------------------------------------
(a) The U.S. Growth Leaders Fund pays GMF a base management fee (as shown
above) which may be adjusted upward or downward each quarter depending on
the Fund's performance relative to its benchmark, the S&P 500 Index. Thus,
if the Fund outperforms its benchmark by 12% or more over a 36 month
period, the Fund will pay higher management fees. Conversely, if the Fund
underperforms its benchmark by 12% or more over a 36 month period, the Fund
will pay lower management fees. No adjustment will take place if the under
or overperformance is less than 12% and GMF will receive the applicable
base fee. The adjustment described above will be phased in over a 24 month
period beginning after the first year of operations. The base fee is either
increased or decreased by the following amounts at each breakpoint:
FEE
FEE SCHEDULE ADJUSTMENT
- -------------------------------------
Up to $500 million . . . +/- 0.22%
- -------------------------------------
On the next $1.5 billion +/- 0.18%
- -------------------------------------
On $2 billion and more . +/- 0.16%
- -------------------------------------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 93
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2003 (Unaudited)
Effective July 1, 2002, GMF or GGAMT, where applicable, and the Funds have
entered into written contracts ("Expense Limitation Agreements") limiting
operating expenses (excluding any taxes, interest, brokerage fees, extraordinary
expenses, Rule 12b-1 fees and administrative services fees) from exceeding the
amounts listed in the table below until at least February 29, 2004:
FUND EXPENSE CAPS AMOUNT
- -----------------------------------------------------------
Global Financial Services. . . . . . All Classes 1.40%
- -----------------------------------------------------------
Global Health Sciences . . . . . . . All Classes 1.25%
- -----------------------------------------------------------
Global Technology and Communications All Classes 1.40%
- -----------------------------------------------------------
Global Utilities . . . . . . . . . . All Classes 1.20%
- -----------------------------------------------------------
Nationwide Leaders . . . . . . . . . All Classes 1.20%
- -----------------------------------------------------------
U.S. Growth Leaders. . . . . . . . . All Classes 1.30%
- -----------------------------------------------------------
Worldwide Leaders. . . . . . . . . . All Classes 1.40%
- -----------------------------------------------------------
Emerging Markets . . . . . . . . . . All Classes 1.55%
- -----------------------------------------------------------
International Growth . . . . . . . . All Classes 1.40%
- -----------------------------------------------------------
International Small Cap Growth . . . All Classes 1.37%
- -----------------------------------------------------------
High Yield Bond. . . . . . . . . . . All Classes 0.70%
- -----------------------------------------------------------
Millennium Growth. . . . . . . . . . All Classes 1.20%
- -----------------------------------------------------------
Value Opportunities. . . . . . . . . All Classes 1.00%
- -----------------------------------------------------------
Micro Cap Equity . . . . . . . . . . All Classes 1.55%
- -----------------------------------------------------------
Prior to July 1, 2002, GMF or GGAMT, where applicable, and the Funds had entered
into Expense Limitation Agreements limiting operating expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses, Rule 12b-1 fees and
administrative services fees) from exceeding the amounts listed in the table
below:
- -------------------------------------------------------------------------------------------------------------
EXPENSE CAPS
- -------------------------------------------------------------------------------------------------------------
INSTITUTIONAL INSTITUTIONAL
CLASS A CLASS B CLASS C CLASS D SERVICE CLASS CLASS
FUND SHARES SHARES SHARES SHARES SHARES SHARES
- -------------------------------------------------------------------------------------------------------------
Global Financial Services . . . . 1.70% 2.30% 2.30% n/a 1.40% n/a
- -------------------------------------------------------------------------------------------------------------
Global Health Sciences(a) . . . . 1.75% 2.35% 2.35% n/a 1.25% n/a
- -------------------------------------------------------------------------------------------------------------
Global Technology and . . . . . . 1.73% 2.33% 2.33% n/a 1.40% n/a
Communications(a)
- -------------------------------------------------------------------------------------------------------------
Global Utilities. . . . . . . . . 1.50% 2.10% 2.10% n/a 1.20% n/a
- -------------------------------------------------------------------------------------------------------------
Nationwide Leaders. . . . . . . . 1.20% 1.20% 1.20% n/a 1.20% n/a
- -------------------------------------------------------------------------------------------------------------
U.S. Growth Leaders(a). . . . . . 1.60% 2.20% 2.20% n/a 1.30% n/a
- -------------------------------------------------------------------------------------------------------------
Worldwide Leaders(a). . . . . . . 1.75% 2.35% 2.35% n/a 1.42% n/a
- -------------------------------------------------------------------------------------------------------------
Emerging Markets(a) . . . . . . . 2.15% 2.75% 2.75% n/a 1.82% n/a
- -------------------------------------------------------------------------------------------------------------
International Growth(a) . . . . . 1.85% 2.45% 2.45% n/a 1.52% n/a
- -------------------------------------------------------------------------------------------------------------
International Small Cap Growth(a) 1.85% 2.45% 2.45% n/a 1.52% 1.37%
- -------------------------------------------------------------------------------------------------------------
High Yield Bond(a). . . . . . . . 0.95% 1.70% 1.70% n/a 0.70% n/a
- -------------------------------------------------------------------------------------------------------------
Millennium Growth(a). . . . . . . 1.63% 2.23% 2.23% 1.30% n/a n/a
- -------------------------------------------------------------------------------------------------------------
Value Opportunities(a). . . . . . 1.35% 1.95% 1.95% n/a 1.00% n/a
- -------------------------------------------------------------------------------------------------------------
(a) Prior to March 1, 2002, these expense limitations included Rule 12b-1 and
administrative services fees.
- --------------------------------------------------------------------------------
94 SEMIANNUAL REPORT 2003
GMF or GGAMT may request and receive reimbursement from a Fund of the advisory
fees waived and other expenses reimbursed by them pursuant to the Expense
Limitation Agreements at a later date not to exceed five fiscal years from
commence ment of operations if the Fund has reached a sufficient asset size to
permit reimbursement to be made without causing the total annual operating
expense ratio of the Fund to exceed the limits set forth above. No reimbursement
will be made unless: (i) the Fund's assets exceed $100 million; (ii) the total
annual expense ratio of the Class making such reimbursement is less than the
limit set forth above; and (iii) the payment of such reimbursement is approved
by the Board of Trustees on a quarterly basis. Except as provided for in the
Expense Limitation Agreements, reimbursement of amounts previously waived or
assumed by GMF or GGAMT is not permitted. As of the six months ended April 30,
2003, the cumulative potential reimbursements were as follows:
FUND AMOUNT EXPIRES
- -----------------------------------------------------------------
Global Financial Services. . . . . . $ 79,242 December 18, 2006
- -----------------------------------------------------------------
Global Health Sciences . . . . . . . 170,717 December 29, 2005
- -----------------------------------------------------------------
Global Technology and Communications 379,766 June 30, 2005
- -----------------------------------------------------------------
Global Utilities . . . . . . . . . . 81,172 December 18, 2006
- -----------------------------------------------------------------
Nationwide Leaders . . . . . . . . . 92,761 December 28, 2006
- -----------------------------------------------------------------
U.S. Growth Leaders. . . . . . . . . 314,954 June 30, 2005
- -----------------------------------------------------------------
Worldwide Leaders. . . . . . . . . . 244,954 August 30, 2005
- -----------------------------------------------------------------
Emerging Markets . . . . . . . . . . 227,547 August 30, 2005
- -----------------------------------------------------------------
International Growth . . . . . . . . 247,667 August 30, 2005
- -----------------------------------------------------------------
International Small Cap Growth . . . 265,491 December 21, 2005
- -----------------------------------------------------------------
High Yield Bond. . . . . . . . . . . 290,764 December 29, 2004
- -----------------------------------------------------------------
Millennium Growth. . . . . . . . . . 55,998 February 29, 2004
- -----------------------------------------------------------------
Value Opportunities. . . . . . . . . 380,740 December 29, 2004
- -----------------------------------------------------------------
Micro Cap Equity . . . . . . . . . . 52,804 June 27, 2007
- -----------------------------------------------------------------
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act,
Gartmore Distribution Services, Inc. ("GDSI"), the Funds' Distributor, is
compensated by the Funds for expenses associated with the distribution of Class
A, Class B and Class C shares of the Funds. Prior to October 1, 2002, Nationwide
Securities, Inc. ("NSI") served as the Funds' Distributor. These fees are based
on average daily net assets of the respective class of the Funds at an annual
rate not to exceed 0.25% for Class A shares and 1.00% for Class B and Class C
shares.
Pursuant to an Underwriting Agreement, GDSI (NSI prior to October 1, 2002)
serves as principal underwriter of the Funds in the continuous distribution of
their shares and receives commissions in the form of a front-end sales charge on
the Class A, Class C and Class D shares. Such fees are deducted from and are not
included in proceeds from sales of Class A, Class C and Class D shares. From
such fees, GDSI pays sales commissions, salaries, and other expenses in
connection with generating new sales of Class A, Class C and Class D shares of
the Funds. GDSI also receives fees for services as principal underwriter for
Class B shares of the Funds. Such fees are contingent deferred sales charges
("CDSCs") ranging from 1% to 5% imposed on redemptions of Class B shares which
may cause the current value of a shareholder's account to fall below the total
purchase payments. The CDSC, if applicable, will be imposed on redemptions made
within 6 years of the purchase. In addition, Class C shares also have a CDSC of
1% imposed on redemptions of Class C shares made within one year of purchase.
For the six months ended April 30, 2003, GDSI received commissions of $59,181
from front-end sales charges of Class A, Class C and Class D shares and from
CDSC fees from Class B and Class C shares of the Funds, of which $28,857 was
reallowed to affiliated broker-dealers of the Funds.
The Funds (except for the High Yield Bond Fund) assess a 2.00% (1.50% for the
Millennium Growth, Value Opportunities and Micro Cap Equity Funds) redemption
fee on all classes of shares that are purchased and are sold or exchanged within
90 days of purchase (within 30 days for the Nationwide Leaders and U.S. Growth
Leaders Funds). The redemption fee is paid directly to the applicable Fund and
is designed to offset brokerage commissions, market impact and other costs
associated with short-term trading of Fund shares. For purposes of determining
whether the redemption fee applies, the shares that were held the longest will
be redeemed first. This redemption fee is in addition to any CDSCs that may be
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 95
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2003 (Unaudited)
applicable at the time of sale. The redemption fee may not apply in certain
circumstances, such as redemptions or exchanges of shares held in certain
omnibus accounts or retirement plans that cannot implement the redemption fee.
The fee does not apply to shares purchased through reinvested dividends or
capital gains. For the six months ended April 30, 2003 the International Small
Cap Growth had contributions to capital in the amount of $8,558 due to
collection fees. Under the terms of a Fund Administration Agreement, Gartmore SA
Capital Trust ("GSA") provides for various administrative and accounting
services. Gartmore Investors Services, Inc. ("GISI"), an indirect subsidiary of
GSA, serves as Transfer Agent and Dividend Disbursing Agent for each of the
Funds. Effective December 1, 2001, the fees for the services provided under both
agreements are combined and calculated based on the Trust's average daily net
assets according to the fee schedule below. The fees are then allocated
proportionately among all funds within the Trust in relation to the average
daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees
for its services.
COMBINED FEE SCHEDULE*
- ---------------------------------------------
Up to $1 billion . . . . . . . . . . . 0.25%
- ---------------------------------------------
1 billion and more up to $3 billion . 0.18%
- ---------------------------------------------
3 billion and more up to $4 billion . 0.14%
- ---------------------------------------------
4 billion and more up to $5 billion . 0.07%
- ---------------------------------------------
5 billion and more up to $10 billion. 0.04%
- ---------------------------------------------
10 billion and more up to $12 billion 0.02%
- ---------------------------------------------
12 billion or more. . . . . . . . . . 0.01%
- ---------------------------------------------
* The assets of the Gartmore Investor Destinations Aggressive, Gartmore
Investor Destinations Moderately Aggressive, Gartmore Investor Destinations
Moderate, Gartmore Investor Destinations Moderately Conservative and
Gartmore Investor Destinations Conservative Funds ("Investor Destinations
Funds") are excluded from the Trust asset level amount in order to
calculate this asset based fee. The Investor Destinations Funds do not pay
any part of this fee.
Prior to December 1, 2001, the fees for the Fund Administration Agreement were
calculated for each Fund based on the fee schedule below:
FUND ADMINISTRATION FEE SCHEDULE*
- ----------------------------------------
Up to $250 million. . . . . . . . 0.07%
- ----------------------------------------
On the next $750 million. . . . . 0.05%
- ----------------------------------------
On $1 billion and more. . . . . . 0.04%
- ----------------------------------------
* The Fund Administration fee for all Funds except Millennium Growth was
subject to a minimum of $75,000 per Fund per year.
Prior to December 1, 2001, GISI received fees at $20 per account for Class A,
Class B, Class C and Class D shares and 0.01% of the average daily net assets of
the Institutional Class and Institutional Service Class shares of each of the
applicable Funds.
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. to
provide sub-administration and sub-transfer agency services, respectively, to
the Funds.
Under the terms of an Administrative Services Plan, the Funds may pay fees to
servicing organizations, such as broker-dealers, including Nationwide Financial
Services, and financial institutions, which agree to provide administrative
support services to the shareholders of certain classes. These services include,
but are not limited to, the following: establishing and maintaining shareholder
accounts, processing purchase and redemption transactions, arranging bank wires,
performing shareholder sub-accounting, answering inquiries regarding the Funds,
and other such services. These fees are based on an annual rate of up to 0.25%
of the average daily net assets of the Class A, Class D and Institutional
Service Class of shares of each of the applicable Funds.
- --------------------------------------------------------------------------------
96 SEMIANNUAL REPORT 2003
As of April 30, 2003, the advisers or affiliates of the advisers directly held
the percentage indicated of the shares outstanding of the applicable Fund:
FUND % OF SHARES OUTSTANDING OWNED
- --------------------------------------------------------------------
Global Financial Services. . . . . . 99%
- --------------------------------------------------------------------
Global Health Sciences . . . . . . . 43%
- --------------------------------------------------------------------
Global Technology and Communications 39%
- --------------------------------------------------------------------
Global Utilities . . . . . . . . . . 100%
- --------------------------------------------------------------------
Nationwide Leaders . . . . . . . . . 39%
- --------------------------------------------------------------------
U.S. Growth Leaders. . . . . . . . . 27%
- --------------------------------------------------------------------
Worldwide Leaders. . . . . . . . . . 62%
- --------------------------------------------------------------------
Emerging Markets . . . . . . . . . . 64%
- --------------------------------------------------------------------
International Growth . . . . . . . . 93%
- --------------------------------------------------------------------
International Small Cap Growth . . . 68%
- --------------------------------------------------------------------
High Yield Bond. . . . . . . . . . . 92%
- --------------------------------------------------------------------
Micro Cap Equity . . . . . . . . . . 84%
- --------------------------------------------------------------------
As a result of certain trading errors that occurred in April of 2003, the Global
Technology and Communications Fund was reimbursed $29,920 by GMF to offset
losses realized on the disposal of investments.
4. BANK LOANS
Prior to April 7, 2003, the Trust had an unsecured bank line of credit of
$50,000,000. Borrowings under this arrangement bear interest at the Federal
Funds rate plus 0.50%. These interest costs are included in custodian fees in
the Statements of Operations. No compensation balances were required under the
terms of the line of credit. For the period from April 7, 2003 to April 30,
2003, the Trust did not maintain an unsecured bank line of credit. There were no
unsecured bank loans outstanding as of April 30, 2003.
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the six
months ended April 30, 2003, are summarized as follows:
FUND PURCHASES SALES
- --------------------------------------------------------------
Global Financial Services. . . . . . $ 2,454,428 $ 2,524,352
- --------------------------------------------------------------
Global Health Sciences . . . . . . . 11,820,838 10,931,410
- --------------------------------------------------------------
Global Technology and Communications 16,629,534 16,323,727
- --------------------------------------------------------------
Global Utilities . . . . . . . . . . 1,054,662 1,060,511
- --------------------------------------------------------------
Nationwide Leaders . . . . . . . . . 1,261,560 1,012,923
- --------------------------------------------------------------
U.S. Growth Leaders. . . . . . . . . 15,155,851 13,968,054
- --------------------------------------------------------------
Worldwide Leaders. . . . . . . . . . 7,222,848 6,832,794
- --------------------------------------------------------------
Emerging Markets . . . . . . . . . . 4,040,310 3,549,561
- --------------------------------------------------------------
International Growth . . . . . . . . 6,581,289 6,804,364
- --------------------------------------------------------------
International Small Cap Growth . . . 2,630,021 1,834,799
- --------------------------------------------------------------
High Yield Bond. . . . . . . . . . . 57,217,429 49,551,946
- --------------------------------------------------------------
Millennium Growth. . . . . . . . . . 31,897,168 34,769,543
- --------------------------------------------------------------
Value Opportunities. . . . . . . . . 9,368,422 8,795,110
- --------------------------------------------------------------
Micro Cap Equity . . . . . . . . . . 2,241,601 2,171,503
- --------------------------------------------------------------
6. PORTFOLIO INVESTMENT RISKS
Credit and Market Risk. Funds that invest in high yield and emerging market
instruments are subject to certain additional credit and market risks. The
yields of high yield and emerging market debt obligations reflect, among other
things, perceived credit risk. The Funds' investment in securities rated below
investment grade typically involves risks not associated with higher rated
securities including, among others, greater risk of not receiving timely and/or
ultimate payment of interest and principal, greater market price volatility and
less liquid secondary market trading. The consequences of political, social,
economic or diplomatic changes may have disruptive effects on the market prices
of emerging markets investments held by the Funds.
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 97
SUPPLEMENTAL INFORMATION (Unaudited)
April 30, 2003
SHAREHOLDER MEETING
On December 16, 2002, a Special Meeting of the shareholders of the Gartmore
Global Technology and Communications Fund (the "Fund") was held. The matters
considered at the meeting, together with the actual vote tabulations relating to
such matters are as follows:
ISSUE 1:
To amend the Fund's fundamental policy regarding industry concentration to
permit the Fund to concentrate its investments in issuers in technology and/or
communications industries. These industries include: hardware and equipment;
information technology; software; consulting and services; consumer electronics;
defense technology; broadcasting; and communication equipment.
For Against Abstain
- -------------------------
690,889 3,215 1,038
- -------------------------
ISSUE 2:
To amend the Fund's fundamental policy, regarding diversification to change the
Fund from a "diversified" to a "non-diversified" fund.
For Against Abstain
- -------------------------
686,953 6,470 1,719
- -------------------------
- --------------------------------------------------------------------------------
98 SEMIANNUAL REPORT 2003
MANAGEMENT INFORMATION (Unaudited)
TRUSTEES WHO ARE NOT INTERESTED PERSONS (AS DEFINED IN THE 1940 ACT) OF THE
FUNDS APRIL 30, 2003
TERM OF NUMBER OF
OFFICE PORTFOLIOS
NAME, POSITION(S) WITH TRUST - PRINCIPAL IN FUND OTHER
ADDRESS, HELD LENGTH OF OCCUPATION(S) COMPLEX DIRECTORSHIPS
AND WITH TIME DURING PAST OVERSEEN HELD BY
AGE FUND SERVED1 5 YEARS BY TRUSTEE TRUSTEE2
- ----------------------------------------------------------------------------------------------------------------------
Charles E. Allen. . . . Trustee Since Mr. Allen is Chairman, Chief 82 None
July Executive Officer and President
8162 E. Jefferson Ave., 2000 of Graimark Realty Advisors, Inc.
#15B (real estate development,
Detroit, MI 48214 investment and asset management).
Age 55
- ----------------------------------------------------------------------------------------------------------------------
Paula H.J.. . . . . . . Trustee Since Ms. Cholmondeley is Vice 82 None
Cholmondeley July President and General Manager
2000 of Special Productsat Sappi Fine
c/o Sappi Fine Paper Paper North America. Prior
225 Franklin Street to 1998, she held various positions
Boston, MA 02110 with Owens Corning, including
Vice President and General Manager
Age 55 of the Residential Insulation Division
(1997 to 1998)
- ----------------------------------------------------------------------------------------------------------------------
C. Brent DeVore . . . . Trustee Since Dr. DeVore is President of 82 None
May Otterbein College.
111 N. West Street 1998
Westerville, OH 43081
Age 62
- ----------------------------------------------------------------------------------------------------------------------
Robert M. Duncan. . . . Trustee Since Since 1999, Mr. Duncan has 82 None
April worked as an arbitration and
1397 Haddon Road 1987 mediation consultant.
Columbus, OH 43209 From 1996 to 1999, he was
Commissioner of the Ohio
Age 76 Elections Commission.
- ----------------------------------------------------------------------------------------------------------------------
Barbara L. Hennigar . . Trustee Since Retired; Ms. Hennigar is the 82 None
July former Chairman of Oppenheimer
6363 So. Sicily Way 2000 Funds Services and Shareholder
Aurora, CO 80016 Services Inc. Ms. Hennigar held
this position from October 1999
Age 67 to June, 2000. Prior to that,
she served as President and Chief
Executive Officer of Oppenheimer
Funds Services.
- ----------------------------------------------------------------------------------------------------------------------
Thomas J. Kerr, IV. . . Trustee Since Dr. Kerr is President Emeritus of 82 None
October Kendall College.
4890 Smoketalk Lane 1971
Westerville, OH 43081
Age 69
- ----------------------------------------------------------------------------------------------------------------------
Douglas F. Kridler. . . Trustee Since Mr. Kridler is the President and 82 None
September Chief Executive Officer of the
2355 Brixton Road 1997 Columbus Foundation (a foundation
Columbus, OH 43221 which Manages over 1,000 individual
endowment funds). Prior to
Age 47 January 31, 2002, Mr. Kridler was
the President of the Columbus
Association for the Performing
Arts and Chairman of the Greater
Columbus Convention and Visitors
Bureau.
- ----------------------------------------------------------------------------------------------------------------------
Mark L. Lipson. . . . . Trustee Since Since July 2000, Mr. Lipson is the 82 None
March Chairman of LGVI, LLC (a private
1620 26th Street 2003 equity firm that develops technology
Suite 300 based solutions for the investment
Santa Monica, CA 90272 advisory/asset management
industry). Prior to this, Mr. Lipson
Age 53 was the former Chairman & CEO
of Northstar Holdings, Inc. from
November 1993 to December
1999, a former Trustee of the
Northstar Funds from November
1993 to July 2000 and a SVP
of Reliastar Financial Corporation
from November 1993 to
December 1999
- ----------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2003 SEMIANNUAL REPORT 99
MANAGEMENT INFORMATION (Unaudited)
TRUSTEES WHO ARE NOT INTERESTED PERSONS (AS DEFINED IN THE 1940 ACT) OF THE
FUNDS APRIL 30, 2003 (CONTINUED)
NAME, POSITION(S) TERM OF OFFICE PRINCIPAL NUMBER OF OTHER
ADDRESS, HELD WITH TRUST - OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
AND WITH LENGTH OF DURING PAST IN FUND COMPLEX HELD BY
AGE FUND TIME SERVED1 5 YEARS OVERSEEN BY TRUSTEE TRUSTEE2
- --------------------------------------------------------------------------------------------------------------------------
David C. Wetmore. . . Trustee Since Mr. Wetmore is the Managing 82(3) None
May Director of Updata Capital, Inc.,
26 Turnbridge Drive 1995 a venture capital firm.
Long Cove Plantation
Hilton Head, SC 29928
Age 54
- --------------------------------------------------------------------------------------------------------------------------
TRUSTEES AND OFFICERS WHO ARE INTERESTED PERSONS (AS DEFINED IN THE 1940 ACT) OF
THE FUNDS APRIL 30, 2003
TERM OF NUMBER OF
OFFICE PRINCIPAL PORTFOLIOS OTHER
NAME, POSITION(S) WITH TRUST - OCCUPATION(S) IN FUND DIRECTORSHIPS
ADDRESS, HELD LENGTH DURING PAST COMPLEX HELD
AND WITH OF TIME 5 YEARS OVERSEEN BY
AGE FUND SERVED1 BY TRUSTEE TRUSTEE2
- ------------------------------------------------------------------------------------------------------------------
Paul J. Hondros. . Trustee Since Mr. Hondros is President and Chief 82(3) None
and July Executive Officer of Gartmore
Gartmore Global. . Chairman 2000 Distribution Services, Inc. ("GDSI")*,
Investments, Inc. Gartmore Investors Services, Inc.*,
Gartmore Morley Capital
1200 River Road, Management, Inc.*, Gartmore Morley
Conshohocken, PA Financial Services, Inc.,* NorthPointe
19428 Capital, LLC*, GGAMT*, GGI*, GMF*,
and GSA* and a Director of
Age 54 Nationwide Securities, Inc.* as well
as several entities within Nationwide
Financial Services, Inc.* Prior to
that, Mr. Hondros served as
President and Chief Operations
Officer of Pilgrim Baxter and
Associates, Ltd., an investment
management firm, and its affiliated
investment management arm,
Pilgrim Baxter Value Investors, Inc.
and as Executive Vice President to
the PBHG Funds, PBHG Insurance
Series Funds and PBHG Adviser
Funds.
- ------------------------------------------------------------------------------------------------------------------
Arden L. Shisler . Trustee Since Mr. Shisler is President and Chief 82 None
February Executive Officer of K&B Transport,
1356 North Wenger 2000 Inc., a trucking firm, Chairman of
Rd. The Board for Nationwide Mutual
Dalton, OH 44618 Insurance Company* and a
Director of Nationwide
Age 61 Financial Services, Inc.*
- ------------------------------------------------------------------------------------------------------------------
Gerald J. Holland. Treasurer Since Mr. Holland is Senior Vice 82 None
March President - Chief Administrative
Gartmore Global 2001 Officer for GGI*, GMF*, GSA* and
Investments, Inc. GDSI.* From July2000 to March
2002 he was Senior Vice President
1200 River Road, - Operations for GGI, GMF and
Conshohocken, PA GSA. Prior to July 2000, he
19428 was Vice President for First Data
Investor Services, an investment
Age 51 company service provider.
- ------------------------------------------------------------------------------------------------------------------
Eric E. Miller . . Secretary Since Mr. Miller is Senior Vice President, 82 None
December Chief Counsel for GGI*, GMF*, and
Gartmore Global 2002 GSA*. Prior to August 2002, he was
Investments, Inc. a Partner with Stradley Ronon
Stevens & Young, LLP.
1200 River Road
Conshohocken, PA
19428
Age 49
- ------------------------------------------------------------------------------------------------------------------
1 The term of office length is until a director resigns or reaches a
mandatory retirement age of 70. The Trust adopted a five-year
implementation period for any Trustee 65 or older as of the adoption of
this policy.
2 Directorships held in (1) any other investment companies registered under
the 1940 Act, (2) any company with a class of securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or (3) any company subject to the requirements of
Section 15(d) of the Exchange Act.
3 Mr. Wetmore serves as an independent member, and Mr. Hondros serves as a
member, of the Administrative Committee for The AlphaGen Caelum Fund LLC,
The AlphaGen Caelum Fund LDC, The Healthcare Fund LLC and The Healthcare
Fund LDC, four hedge funds managed by Gartmore SA Capital Trust ("GSA").
* This position is held with an affiliated person or principal underwriter of
the Funds.
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100 SEMIANNUAL REPORT 2003
Asset allocation is widely regarded as the key strategy for investment success.
That's because diversifying your investments among various asset classes helps
to mitigate risk potential and can increase the return potential of your overall
portfolio. In fact, studies have shown that more than 90% of the variability of
returns associated with an overall portfolio across time is driven by the power
of asset allocation.* At Gartmore Funds, we offer you a full menu of
specialized funds and solid core funds that can serve as the building blocks you
need for diversified asset allocation strategies and powerful performance
potential.
[GRAPHIC OMITTED]
The above chart is not intended to indicate the future risk or return levels for
these fund categories.
SECTOR SERIES
Gartmore Global Financial Services Fund
Gartmore Global Health Sciences Fund1,2
Gartmore Global Technology and Communications Fund1,2
Gartmore Global Utilities Fund1,2
LEADERSHIP SERIES
Gartmore Nationwide Leaders Fund1
Gartmore U.S. Growth Leaders Fund1
Gartmore Worldwide Leaders Fund1,2
INTERNATIONAL SERIES
Gartmore Emerging Markets Fund2
Gartmore International Growth Fund2
Gartmore International Small Cap Growth Fund2,3
CONCEPT SERIES
Gartmore High Yield Bond Fund4
Gartmore Micro Cap Equity Fund3
Gartmore Millennium Growth Fund
Gartmore Value Opportunities Fund3
CORE EQUITY SERIES
Gartmore Growth Fund
Gartmore Large Cap Value Fund
Gartmore Mid Cap Growth Fund
Gartmore Total Return Fund
CORE ASSET ALLOCATION SERIES
Gartmore Investor Destinations Aggressive Fund
Gartmore Investor Destinations Moderately Aggressive Fund
Gartmore Investor Destinations Moderate Fund
Gartmore Investor Destinations Moderately Conservative Fund
Gartmore Investor Destinations Conservative Fund
CORE FIXED INCOME SERIES
Gartmore Bond Fund
Gartmore Government Bond Fund5
Gartmore Money Market Fund6
Gartmore Morley Enhanced Income Fund
Gartmore Tax-Free Income Fund7
1. Funds that concentrate on specific sectors or a relatively small number of
securities may be subject to greater volatility than a more diversified
investment.
2. International investing involves additional risks, including currency
fluctuations, political instability and foreign regulations, all of which
are magnified in emerging markets.
3. Small-cap stocks have higher risks than the stocks of larger, more
established companies and have significant short-term price volatility.
4. High-yield funds are typically subject to greater risk and price volatility
than funds that invest in higher-rated debt securities.
5. While the fund invests primarily in securities of the U.S. government and
its agencies, the fund's value is not guaranteed by these entities.
6. An investment in a money market fund is not insured or guaranteed by the
FDIC or any other government agency. Although the money market fund seeks
to preserve the value of your investment at $1.00 per share, it is possible
to lose money by investing in the money market fund.
7. For some investors, income from the fund may be subject to state and local
taxes, and the Federal Alternative Minimum Tax.
* Sources: Ibbotson and Kaplan, "Does Asset Allocation Policy Explain 40, 90,
or 100 Percent of Performance?", Financial Analysts Journal
(January/February 2000); Brinson Hood Beebower Study (1991).
[Logo]
1200 River Road, Suite 1000
Conshohocken, PA 19428
888-223-2116
WWW.GARTMOREFUNDS.COM
Gartmore Funds Shareholder Services:
800-848-0920
GG-0093 6/03
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ITEM 2. CODE OF ETHICS.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer, or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
THIS DISCLOSURE IS NOT APPLICABLE. THIS DISCLOSURE IS EFFECTIVE
ONLY FOR ANNUAL REPORTS WITH PERIODS ENDING ON OR AFTER JULY 15,
2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of directors has determined
that the registrant either:
(i) Has at least one audit committee financial expert serving on
its audit committee; or
(ii) Does not have an audit committee financial expert serving on
its audit committee.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit
committee financial expert and whether that person is
"independent." In order to be considered "independent" for
purposes of this Item, a member of an audit committee may not,
other than in his or her capacity as a member of the audit
committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or
other compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as
defined in Section 2(a)(19) of the 1940 Act (15 U.S.C.
80a-2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph
(a)(1)(ii) of this Item, it must explain why it does not have an
audit committee financial expert.
THIS DISCLOSURE IS NOT APPLICABLE. THIS DISCLOSURE IS EFFECTIVE
ONLY FOR ANNUAL REPORTS WITH PERIODS ENDING ON OR AFTER JULY 15,
2003.
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ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for
each of the last two fiscal years for professional services rendered
by the principal accountant for the audit of the registrant's annual
financial statements or services that are normally provided by the
accountant in connection with statutory and regulatory filings or
engagements for those fiscal years.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees
billed in each of the last two fiscal years for assurance and related
services by the principal accountant that are reasonably related to
the performance of the audit of the registrant's financial statements
and are not reported under paragraph (a) of this Item. Registrants
shall describe the nature of the services comprising the fees
disclosed under this category.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in
each of the last two fiscal years for professional services rendered
by the principal accountant for tax compliance, tax advice, and tax
planning. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed
in each of the last two fiscal years for products and services
provided by the principal accountant, other than the services reported
in paragraphs (a) through (c) of this Item. Registrants shall describe
the nature of the services comprising the fees disclosed under this
category.
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the
audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X.
(f) If greater than 50 percent, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal
accountant's full-time, permanent employees.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted with
or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant for each of the last
two fiscal years of the registrant.
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services
that were rendered to the registrant's investment adviser (not
including any subadviser whose role is primarily portfolio management
and is subcontracted with or overseen by another investment adviser),
and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii)
of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
THIS DISCLOSURE IS NOT APPLICABLE. THIS DISCLOSURE IS EFFECTIVE
ONLY FOR ANNUAL REPORTS WITH PERIODS ENDING ON OR AFTER DECEMBER
15, 2003.
ITEMS 5-6. [RESERVED]
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ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report
on this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940, as amended (15 U.S.C. 80a-2(a)(3)), and
the rules thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
THIS DISCLOSURE IS NOT APPLICABLE TO THE REGISTRANT, WHICH IS AN OPEN-END
MANAGEMENT INVESTMENT COMPANY.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive
officer or officers and principal financial officer or officers, or
persons performing similar functions, about the effectiveness of the
registrant's disclosure controls and procedures (as defined in Rule
30a-2(c) under the Act (17 CFR 270.30a-2(c))) based on their
evaluation of these controls and procedures as of a date within 90
days of the filing date of the report that includes the disclosure
required by this paragraph.
THE CERTIFYING OFFICERS, WHOSE CERTIFICATIONS ARE INCLUDED
HEREWITH, HAVE EVALUATED THE REGISTRANT'S DISCLOSURE CONTROLS AND
PROCEDURES WITHIN NINETY (90) DAYS OF THE FILING DATE OF THIS
REPORT. THIS EVALUATION BY THE CERTIFYING OFFICERS: (A) DID NOT
IDENTIFY ANY INSTANCES WHERE THE REGISTRANT'S DISCLOSURE CONTROLS
AND PROCEDURES WERE DEEMED TO BE INADEQUATELY DESIGNED; AND (B)
INDICATED THAT THE REGISTRANT'S DISCLOSURE CONTROLS AND
PROCEDURES ARE OPERATING EFFECTIVELY TO ENSURE THAT:
i. MATERIAL INFORMATION RELATING TO THE REGISTRANT,
INCLUDING THE REGISTRANT'S CONSOLIDATED SUBSIDIARIES,
IS MADE KNOWN TO THESE ENTITIES BY OTHERS WITHIN THOSE
ENTITIES, PARTICULARLY DURING THE PERIOD IN WHICH THIS
REPORT IS BEING PREPARED; AND
ii. INFORMATION THAT IS REQUIRED TO BE DISCLOSED BY THE
REGISTRANT IN THE REPORTS THAT THE REGISTRANT FILES OR
SUBMITS UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED (THE "1934 ACT"), IS RECORDED, PROCESSED,
SUMMARIZED, AND REPORTED WITHIN THE TIME PERIODS
SPECIFIED IN THE SECURITIES AND EXCHANGE COMMISSION'S
RULES AND FORMS.
(b) There were no significant changes in the registrant's internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
THERE ARE NO SIGNIFICANT DEFICIENCIES OR MATERIAL WEAKNESSES IN
THE REGISTRANT'S INTERNAL CONTROLS AS OF THE DATE OF THE MOST
RECENT EVALUATION OF THESE INTERNAL CONTROLS, AND THERE HAVE BEEN
NO SIGNIFICANT CHANGES IN THE REGISTRANT'S INTERNAL CONTROLS OR
IN OTHER FACTORS THAT COULD SIGNIFICANTLY AFFECT THESE CONTROLS
SUBSEQUENT TO THE DATE OF THEIR MOST RECENT EVALUATION.
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ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Exhibit A: Any code of ethics, or amendment thereto, that is the
subject of the disclosure required by Item 2, to the extent that the
registrant intends to satisfy the Item 2 requirements through filing
of an exhibit.
THIS DISCLOSURE IS NOT APPLICABLE. THIS DISCLOSURE IS EFFECTIVE
ONLY FOR ANNUAL REPORTS WITH PERIODS ENDING ON OR AFTER JULY 15,
2003.
(b) Exhibit B: A separate certification for each principal executive
officer and principal financial officer of the registrant as required
by Rule 30a-2 under the Act (17 CFR 270.30a-2).
SEE ATTACHED SEPARATE CERTIFICATION FOR EACH OF THE PRINCIPAL
EXECUTIVE OFFICER AND THE PRINCIPAL FINANCIAL OFFICER OF THE
REGISTRANT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: GARTMORE MUTUAL FUNDS
By: /s/ GERALD J. HOLLAND
Name: Gerald J. Holland
Title: Treasurer
Date: 7/2/03
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ PAUL J. HONDROS
Name: Paul J. Hondros
Title: President & Chairman of the Board
Date: 7/2/03
By: /s/ GERALD J. HOLLAND
Name: Gerald J. Holland
Title: Treasurer
Date: 7/2/03
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