Privilege Portfolio teams up with Standard & Poor s for Guide to Convertibles

Article date: 12 December 2002

Privilege Portfolio, the Luxembourg fund range of the AvivaGroup, has teamed up with Standard and Poor’s as sponsors ofa guide to convertible bonds.

The “Guide to Convertibles” will be available fromPrivilege Portfolio through a dedicated website( from 16 December and will initiallybe published in English and Swedish.

The guide has been independently written by Standard &Poor’s and is aimed primarily at investment professionals whowish to increase their knowledge of this little-known asset class.The attraction of Convertibles for investors is that they providehigher risk-adjusted returns than both equities and fixed interestbonds, with equity-like returns in rising markets and bond-typeprotection in falling markets.

Commenting on the guide, Robert Woolf, Managing Director, AvivaFunds International Ltd, said: “Convertible Bonds provide adefensive alternative to equities when market conditions areuncertain and subject to high volatility, but the majority ofinvestors are unaware of the advantages that Convertiblesoffer.

"By sponsoring the S&P Guide to Convertibles, we hope tobreak down some of the confusion surrounding convertibles so thatinvestors and investment professionals are more informed and canunderstand the important role they can play in a well balancedinvestment portfolio.”

The Privilege Portfolio-Global Convertibles Fund was launched inApril 2002 and boasts assets under management in excess of EUR 250million, making it one of the largest global convertibles fund inEurope. Over the first six months from launch, the PrivilegePortfolio-Global Convertibles Fund outperformed its benchmark– the UBS Global Focus Index – by 3.5% (source:Bloomberg).

David Clott, manager of the Privilege Portfolio-GlobalConvertibles Fund at Morley Fund Management’s associateoffice in Boston, commented: "Convertibles continue to demonstratetheir viability with recent performance. Worldwide markets haveenjoyed a significant rebound, with a gain of 5.3% for the MSCIGlobal Equities Index in November. Convertibles compare extremelywell on this front, with the UBS Global Focus Index rising 5.4%,outperforming worldwide equities during the month!

"From May 31st of this year, the MSCI has lost 13.9%, while theUBS Global Focus Index is down by 6.1%, which represents only 44%of the downside in equity values. Additionally, over the same sixmonth time period, the Privilege Portfolio-Global Convertibles Fundhas participated in only 31% of the fall in the MSCI GlobalEquities Index, demonstrating the defensive nature of Convertiblesin the current volatile market conditions.”


For further information:

Stephen Roberts, Head of European Retail Marketing
Tel: +352
Fax: +352
GSM: +352 021.265.611

Notes to Editors:

  • The value of an investment in the Privilege Portfolio fundscan fall as well as rise. The investor may not get back theoriginal amount invested.
  • The information contained within this document should not beconstrued as a recommendation to purchase or sell stocks.
  • Privilege Portfolio is the Luxembourg domiciled investmentfund of the Aviva Group with 28 sub-funds ranging from lower riskmoney market and bond funds through international and regionalequity funds to more speculative single country and themefunds.
  • Morley Fund Management Limited is the Investment Adviser toPrivilege Portfolio and is a member of the Norwich Union MarketingGroup, members of which are regulated in the UK by the FinancialServices Authority for life assurance, pensions and investments.Morley Fund Management Limited is an Aviva company.
  • Aviva is the UK's largest insurance group, one of the top-five life insurers in Europe and has substantial positions inother markets around the world. Aviva is the world’sseventh- largest insurer based on worldwide gross writtenpremiums.
  • Aviva’s principal business activities are long-termsavings, fund management and general insurance, with worldwidepremium income and investment sales from ongoing business of morethan £28 billion, and over £200 billion in assets under managementat 31 December 2001.

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