MC0541-V028-10-09-Global Cautious Income fund.indd by hjkuiw354


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    Global Cautious Income Fund

    As at 30 September 2009

Investment objective                                                         Performance % (Share Class A - Income shares)
To achieve a target income rate, after the deduction of
applicable management fees and allowable additional fund
expenses, equal to the greater of 5.50% per annum or the

                                                                              Indexed Performance
prevailing Bank of England base rate plus 1.00% per annum.                                      105

Fund manager comment                                                                                95

The list of countries to emerge from recession lengthened in                                        85
September as the global recovery gathered pace and equity                                           75
markets posted another positive month. Buoyed by better-than-
expected economic news, the MSCI World closed higher over                                           65
                                                                                                      Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep
the period.                                                                                          2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009

Within the equities portfolio, Gannett, America’s largest
newspaper publisher, proved among the month’s best
performing stocks after the company said it had reduced its
debts by $195m and made significant savings by consolidating
its advertising production. By the end of the month the                                                                1          3          6              1       Since
company’s shares had soared after its Q3 profits forecast                                                            month      months     months          year   inception
exceeded analysts’ expectations. The portfolio’s holdings in                    Global Cautious                     4.68%      14.86%     35.28%      10.98%      -1.21%
Legal and General also rallied on the back of reports that the                  Income A - Inc
UK insurer had prepared documents to ward off a potential                       Source: Aviva Investors/Lipper Hindsight, bid to bid, net income reinvested (GBP), as
takeover bid. L&G also benefited from a rally among insurers                    at 30/09/09.
after a string of analysts raised their outlook for the sector.                 Past performance is not a guide to the future. Performance data does not include
                                                                                initial charges.
Other contributors included Motorola which sought to reverse
the slowdown in its mobile phone sales by introducing its first
device to be powered by Google’s Android software. The move
was described as a ‘milestone’ by Deutsche Bank which was
among a list of analysts to raise the company’s share rating.                Asset breakdown
Over the period, UnitedHealth Group, the leading US insurer by
sales, detracted as the US government unveiled plans to revamp                                                                  Cash
health care and tighten regulation of the insurance industry.                                                                 3.42%

Corporate bonds enjoyed another positive month in September
as the rally that began in March continued, although the                                                                                        37.28%
pace of credit spread tightening was once again slower than
the previous month. Sector-wise, performance was mixed
with financials leading the way, particularly names within the                                             Corporate Bonds
insurance space. In the subordinated financials market there was
a further strong rally in September, though markets softened a
few points from the highs later on.

                                                                             Fund managers

Outlook                                                                                                      Iyad Farah - Co-Fund Manager
For rest of 2009, we expect the global marketplace to remain                                                 Iyad has overall responsibility for the active quant process
challenging. Within the equity markets, continued volatility is                                              and management of Active Quant funds.
expected in the short-term and the portfolio is well-placed to
withstand this. Overall, we remain confident that the fund will
be able to achieve its annual income target.                                                                 Mark Wauton - Co-Fund Manager
                                                                                                             As a head of the credit team, Mark has responsibility for
                                                                                                             overseeing the fund management of a range of retail and
                                                                                                             institutional credit funds.

Source of market data: Aviva Investors/Lipper Hindsight
Top ten holdings - equities (% of total fund)                                          %       Top ten holdings - fixed interest (% of total fund)                                    %
 Occidental Petroleum                                                                0.83      Euro Investments Bank 5.375% 2021                                                 4.08
 Aviva                                                                               0.82      KFW International Finance 5.55% 2021                                              3.69
 EMC                                                                                 0.78      Treasury 4.75% 2020                                                               2.02
 Swedish Match                                                                       0.76      Barclays Bank 10% 2021                                                            1.49
 Smith & Nephew                                                                      0.73      JP Morgan Chase 5.375% 2016                                                       1.14
 Jabil Circuit                                                                       0.73      HSBC Finance 6.25% 2019                                                           1.12
 Logica                                                                              0.70      Morgan Stanley 5.75% 2017                                                         1.09
 Barclays                                                                            0.70      Standard Chartered Bank 7.75% 2018                                                1.06

 Legal & General                                                                     0.67       Iberdrola Finanzas 7.375% 2024                                                   1.02

 Tesco                                                                               0.64      Anheuser Busch Inbev 6.5% 2017                                                    0.99

Equities sector breakdown                                                                     Credit breakdown
                          Information                                                                                            CC Unrated
                                                  Energy                                                                       0.29% 1.42%
                          Technology             10.48%
                                                          Materials                                                    C
                                                           7.6%                                                     20.36%
                  Utilities                                                                                                                                 A
                  7.08%                                     Industrials
                                                              7.57%                                                                                      38.15%
             4.69%                                           Consumer                                                BBB
                                                            Discretionary                                          27.19%
                                                              12.95%                                                                                     AA
                           15.51%                                                                                                                      6.62%
                                                   Consumer                                                                BB
                                        Health                                                                           0.56%
                                         Care       Staples                                                                       B           AAA
                                        8.16%       9.44%                                                                      2.26%         23.15%

Fund facts - share class A
 Fund manager                                    Iyad Farah/Dominic White              Fund structure                     Open-ended, sub-fund of Aviva Investors Funds ICVC
 Fund size                                       £182.9m                               Domicile                           UK

 Price1                                          82.94p (inc)         97.50p (acc)     No. options                        9

 Forecasted yield     2
                                                 5.5%                                  No. equities                       84

 Distribution rate (pence per share)             1.1291 (inc)         1.3076 (acc)     No. corporate bonds                75
 Minimum initial investment                      £5,000                                Launch date                        30 June 2006
 Minimum additional investment                   £1,000                                Distribution dates                 10 Feb/May/Aug/Nov
 Initial charge   3
                                                 4.5%                                  IMA sector                         Specialist

 Annual management charge                        1.25%                                 Share type                         Income and accumulation

 Investment available 4                          OEIC & ISA

 1. The dealing prices are published daily on or please call the fund information number below.
 2. Aviva Investors believes that disclosure of a Distribution Yield and an Underlying Yield for the Fund based on calculations as recommended by the Investment Management
 Association would be inappropriate because those calculations cannot take into consideration the income earned as a result of the fund manager’s strategy of writing covered
 call options on a significant part of the Fund’s portfolio. The figure quoted therefore represents the best estimate of income over a twelve month period including all charges
 and is gross of tax. Basic rate taxpayers investing outside of ISA products will receive a net of tax distribution which will be 20% lower than the gross rate and have no further
 liability. Higher rate taxpayers will be subject to further tax on their distributions. Please note that yields and income may vary on a monthly basis.
 3. A performance fee may also be payable to the Fund manager. Please refer to the full or simplified prospectus for more details.
 4. ISA options are only available via ISA managers. Aviva Investors is not an ISA manager for this fund.

Contact information for investment professionals
For further information call 0800 0154773 (telephone calls will be recorded for training and monitoring purposes).

Except where stated otherwise, the source of all information is Aviva Investors. All figures quoted are as at 30 September 2009 unless otherwise
The opinions expressed are based on our internal forecasts and should not be relied upon as indicating any guarantee of return from an investment in
this fund.
The value of an investment in this fund and any income from it can go down as well as up. Investors may not get back the original amount invested.
The information contained within this document should not be construed as a recommendation to purchase or sell stocks. Full details including the
risks and charges that apply when investing in the fund can be found in the Simplified Prospectus which is available together with the Report & Ac-
counts of the Company free of charge from us on request.

Aviva Investors is a business name of Aviva Investors UK Fund Services Limited.
Registered in England No. 1973412. Authorised and regulated by the Financial Services Authority.
Registered address: No. 1 Poultry, London EC2R 8EJ. An Aviva company.

CI03061 10/2009

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