Despite last year's fallout in the small-cap sector, investors in Gartmore Growth Opportunities still managed to make money. In fact, as fund manager Gervais Williams puts it, the last year has been "a cracking one" for the fund, with performance way past the 20 per cent mark.
While Mr Williams is bullish on the outlook for small caps, he does not expect a repeat of the past year's figures. "In July 2007 we were frightened by the prospects for the market, so we very bravely bought 'insurance' in the form of puts. When things collapsed in October last year we closed these puts, taking a huge profit on them - this pushed up our performance by a significant measure," he explains.
While the fund is currently not holding any derivatives, Mr Williams still keeps "an eye on the macro economic horizon" and says he is steering well clear of property which he labels "ghastly". He is also holding very little in financials and consumer stocks.