Emerging Markets Bond Fund added to Aviva Funds

Article date: 5 December 2003

Aviva Funds International Ltd, the European Fund operations ofMorley Fund Management Ltd ("Morley") announced today that it wouldbe adding an Emerging Markets Bond Fund to its Aviva Funds range on8 December 2003.

Denominated in US Dollars (with non dollar currency riskhedged), the Aviva Funds - Emerging Markets Bond Fund aims toachieve capital growth and deliver income by investing in fixedinterest bonds and floating rate securities issued mainly byemerging country governments, government agencies, supra-nationaland corporate issuers.

The new fund will be managed by Jerry Brewin and Sarit Shah ofthe Emerging Debt team at Morley Fund Management. Between them,they have over 35 years experience in the investment business.Morley has been running emerging market debt portfolios on behalfof the Aviva Group for over 3 years. The pragmatic investmentprocess used by the team has delivered 2.4% (see Note 1) annualout-performance of the index (JP Morgan Global Emerging Market BondIndex) over this period.

Commenting on the launch of the new fund, Robert Woolf, Head ofEuropean Sales at Morley Fund Management, said: "With the JP MorganEmerging Market Bond Index currently yielding around 8.5% (see Note2) and a year to date return of 22% (in US dollars), this assetclass has offered strong out-performance against traditionalequities and bonds, whilst delivering excellent opportunities forrisk diversification. Emerging market debt has proven very popularamongst institutional investors, as the credit quality of the assetclass has improved (close to 50% of the asset class is nowinvestment grade). The low levels of correlation between emergingmarket debt and G7 government and corporate bonds underlines theexcellent risk diversification benefits that the Aviva Funds -Emerging Markets Bond Fund can offer to retail and institutionalinvestors alike."

Sarit Shah, fund manager at Morley Fund Management, added:"Morley believes that emerging markets debt is a proven source ofrisk diversification for investors searching for a higher yield butwho are reluctant to add to their holdings of corporate debt forprudential risk reasons."

Commenting on the outlook for the asset class Mr Shah said: "Webelieve that global economic recovery will continue to broaden outin 2004 and expect that emerging market debt will continue todeliver a higher total return than G7 government bonds."

Aviva Funds is the Luxembourg-domiciled SICAV of the Aviva Groupand prior to the addition of the new fund comprises 27 sub-funds.The Aviva Funds range includes an Emerging Countries Equity Fundwhich, with assets under management in excess of $850 million, isone of the largest Emerging Markets equity funds available inEurope.


1. Source: JP Morgan/Morley Fund Management. Norwich Union WithProfits Emerging Market Debt Fund, inception: 31/05/00. Performancefigures gross of management fees, in euro terms as at 31/10/03.

2. Source: JP Morgan at 3/12/03


For further information:
Stephen Roberts,Head of European Retail Marketing
tel: +352
fax: +352
e-mail: stephen.roberts@avivafunds.com
mobile: +352 021.265.61

Notes to Editors:

  • Key features of the Aviva Fund ? Emerging Markets BondFund:
    - Benchmark: JP Morgan Emerging Market Bond Index Global
    - Domicile: Luxembourg, UCITS qualifying
    - Base currency: US Dollars
    - Launch date: 8 December 2003
    - Dealing: Daily
    - Available Share Classes: Private (P), Retail (R), Institutional(I)
    - Initial offer price per share: $5 (P), $10 (R), $100 (I)
    - Minimum investment: $3,000 (P, R), $ 1 million (I)
    - Maximum initial charge: 6.00% (R), 5.00% (P), 0.00% (I)
    - Annual management fee: 1.75% (R), 1.25% (P), 0.65% (I)
  • Aviva Funds is the Luxembourg domiciled investment fund of theAviva Group with 27 (28 with the new fund) sub-funds ranging fromlower risk money market and bond funds through international andregional equity funds to more speculative single country and themefunds.
  • Morley Fund Management Limited is the Investment Manager ofAviva Funds and is a member of the Norwich Union Marketing Group,members of which are authorised and regulated in the UK by theFinancial Services Authority for life assurance, pensions andinvestments. Morley Fund Management Limited is an Avivacompany.
  • Aviva is the UK's largest insurance group, one of the top-fivelife insurers in Europe and has substantial positions in othermarkets round the world. Aviva is the world?s seventh-largestinsurer based on  worldwide gross written premiums.
  • Aviva's principal business activities are long-term savings,fund management and general insurance, with worldwide premiumincome and investment sales from ongoing business of more than £28billion, and over £200 billion in assets under management at 31December 2002.

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