Emerging Markets Bond Fund added to Aviva Funds

Aviva Funds International Ltd, the European Fund operations of Morley Fund Management Ltd ("Morley") announced today that it would be adding an Emerging Markets Bond Fund to its Aviva Funds range on 8 December 2003.

Denominated in US Dollars (with non dollar currency risk hedged), the Aviva Funds - Emerging Markets Bond Fund aims to achieve capital growth and deliver income by investing in fixed interest bonds and floating rate securities issued mainly by emerging country governments, government agencies, supra-national and corporate issuers.

The new fund will be managed by Jerry Brewin and Sarit Shah of the 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 behalf of the Aviva Group for over 3 years. The pragmatic investment process used by the team has delivered 2.4% (see Note 1) annual out-performance of the index (JP Morgan Global Emerging Market Bond Index) over this period.

Commenting on the launch of the new fund, Robert Woolf, Head of European Sales at Morley Fund Management, said: "With the JP Morgan Emerging Market Bond Index currently yielding around 8.5% (see Note 2) and a year to date return of 22% (in US dollars), this asset class has offered strong out-performance against traditional equities and bonds, whilst delivering excellent opportunities for risk diversification. Emerging market debt has proven very popular amongst institutional investors, as the credit quality of the asset class has improved (close to 50% of the asset class is now investment grade). The low levels of correlation between emerging market debt and G7 government and corporate bonds underlines the excellent risk diversification benefits that the Aviva Funds - Emerging Markets Bond Fund can offer to retail and institutional investors alike."

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

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

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

Notes:

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

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

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For further information:
Stephen Roberts, Head of European Retail Marketing
tel: +352 40.28.20.319
fax: +352 40.83.58.319
e-mail: stephen.roberts@avivafunds.com
mobile: +352 021.265.61

Notes to Editors:

• Key features of the Aviva Fund - Emerging Markets Bond Fund:
  - 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 the Aviva Group with 27 (28 with the new fund) sub-funds ranging from lower risk money market and bond funds through international and regional equity funds to more speculative single country and theme funds.
• Morley Fund Management Limited is the Investment Manager of Aviva Funds and is a member of the Norwich Union Marketing Group, members of which are authorised and regulated in the UK by the Financial Services 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 in other markets round the world. Aviva is the world's seventh-largest insurer based on  worldwide gross written premiums.
• Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide premium income and investment sales from ongoing business of more than £28 billion, and over £200 billion in assets under management at 31 December 2002.