Spain: Morley responds to the growing demand for convertibles

Article date: 13 March 2008

Morley, Aviva's asset management business in the UK, is pleased to announce the launch of a new class of shares with euro hedging for the Aviva Morley Global Convertibles Fund, in response to growing demand for convertibles among European investors.

The aim of the Aviva Morley Global Convertibles Fund is to outperform its benchmark index (UBS Global Costed Focus Index), by investing in convertible bonds and preferential convertible shares. The fund was worth over US$1 billion as at 31 December 2007 and is the second largest fund of Aviva Morley SICAV.

The class of shares with euro hedging is targeted at European investors, to give them the opportunity of buying into the fund through one type of stock in dollars, without hedging, or in euros with hedging. This new class of shares will reduce exposure to exchange rates and also help to overcome the current shortage of convertibles in Europe and enable investors to get into new markets.

The fund, which received Standard & Poor's AA rating in March last year, has been managed by David Clott, Shawn Mato and Tom Wills since its launch in April 2002. The goal of the managing team is to identify convertible values that offer potential gains on rising stock markets, as well as protection against losses on falling stock markets.

This strategy of capitalising on asymmetric profit opportunities has proved extremely attractive to investors in periods of stock market volatility. Last year, the fund outperformed the MSCI World Index* after demand for convertibles increased due to turbulence in the credit markets and fluctuations in global stock market indices.

Mr Wills said: "We are at a very interesting stage in the market cycle for convertibles, which help to limit risk by protecting portfolios faced with a possible downward trend and, at the same time, giving the opportunity to benefit from an upward trend when the market value of a company's stock increases.

"The demand for convertibles is increasing in almost all types of markets due to the concern aroused by stock market volatility. Moreover, share issues grew strongly last year in the United States, the UK and Asia.

"We believe that our class of shares with euro hedging will help us to capitalise on the growth in demand for convertibles in Europe, where share issues lagged behind those in other parts of the world.

"The Aviva Morley Global Convertibles Fund is one of the 10 largest SICAV sub-funds of global convertible funds in Europe** and is top decile in terms of profitability in the sector, according to Bloomberg*. We are confident that the convertible bonds will continue to yield increased profits this year and we believe that we can maintain the excellent growth path in profitability that we offer our clients."

-ends-

*Source: Bloomberg, 5 March 2008
**Source: FERI, 6 March 2008

For further information, please contact:
Grupo Albión  91 531 23 88
Belén Carballeda bcarballeda@grupoalbion.net
Nuria Zapico  nzapico@grupoalbion.net

Notes to editors:

Morley
Morley is Aviva's UK asset management business.  As at 31 December 2007, the companies making up the Morley Group manage approximately €223 billion through a global network of offices.

Morley manages funds for institutions and private individuals.  It also manages various investment funds for private individuals marketed in the United Kingdom under the Norwich Union brand and in Europe under the Morley brand.

The property team manages more than €43 billion of property assets in the UK and Europe.

Aviva Investors
On 28 February 2008, Aviva announced the merger of all its asset management businesses to create a single, integrated, worldwide management company, to be known as Aviva Investors, which will be formally launched in September 2008.

Aviva Investors will be the global asset management business of the Aviva Group, the fifth largest insurance company in the world. The companies that make up Aviva Investors will have a portfolio of assets under management of £316 billion (€442 billion), as at 28 February 2008, and significant growth potential.

The company will trade under a single brand name and will have more than 1,300 employees in 15 countries, in the United Kingdom, Europe, North America and Asia. When the integration is approved by the regulatory authorities, Aviva Investors will incorporate businesses in the United Kingdom (Morley Fund Management), North America (Aviva Capital Management, MFM International and Aviva Investment Canada), France (Aviva Gestion d'Actifs), Australia (Portfolio Partners), Poland (CUIM Polska), Ireland (Hibernian Investment Managers), Spain (Aviva Gestión SGIIC (Gestora)) and Romania (CertInvest), and will work in partnership with Delta Lloyd Asset Management in the Netherlands.

The fund
Past performance does not guarantee future performance. The value of investment in the fund can go up or down and can fluctuate due to exchange rate fluctuations. The distribution and offer of these shares may be restricted in law by some authorities.
 
The content of this press release does not constitute any recommendation or offer in any jurisdiction where said offer is not authorised or to any person who is not legally entitled to fulfil said offer or invitation.

You may request free copies of the Full Prospectus and the Simplified Prospectus, the Annual Report and Accounts of SICAV through Morley Fund Management Limited, from the following address: No. 1 Poultry, London EC2R 8EJ; or from Aviva Fund Services, at the following address: 34 avenue de la Liberté, 4th floor, L-1930 Luxembourg. R.C.S. Luxembourg B25708.

Awards recently won by Morley

  • Morley G7 Fund, Best Fixed Yield Hedge Fund of the Year - 2007 Eurohedge Award
  • Best Property Manager and Excellence in Financial Information - 2007 Institutional Management - Europe Award
  • Top Management Company of the Year, according to the Thomson Excel SRI 2007 Report
  • Property Manager of the Year - 2007 UK Pensions Award
  • Morley G7 Fund, Best Fixed Wquity Hedge Fund of the Year - 2006 Eurohedge Award.
  • Equity End User of the Year, 2006 Derivatives Week magazine DEAL Award. 
  • Property Fund Manager of the Year - 2006 Pensions Management Award
  • Best Commitment to the Improvement of Administrative Training - 2006 Engaged Investor Award
  • Property Fund Manager of the Year - 2006 Property Week Award
  • Socially Responsible Investment Provider of the Year - 2006 Global Pensions Award 
  • Company of the Year and Investor of the Year - 2005 Central European Property Award
  • Property Manager of the Year - 2005 UK Pensions Award

Aviva
The integration of a global asset management business is one of Aviva's strategic priorities. For this reason, Aviva investors will be a cornerstone of Aviva's business structure, made up of long-term savings, general insurance and asset management.

Aviva is the European market leader in life assurance and pensions and a distinguished player in other global markets, which makes it the fifth largest insurance group in the world in terms of gross premiums as at 31 December 2006. 

Aviva's principal activities are long-term savings, fund management and general insurance, which generates total sales worldwide of £49.2 billion, with assets under management of £364 billion as at 31 December 2007.

The press section of the Aviva website (www.aviva.com/media) contains images and information about the company, its products and a press release archive.

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