AVIVA INVESTOR December, 2016 IN ULIP PRODUCTS THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO SHALL BE BORNE BY THE POLICY HOLDER. THE LINKED INSURANCE PRODUCTS DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICYHOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF THE FIFTH YEAR. MARKET REVIEW PORTFOLIO RETURNS SINCE INCEPTION (Equity and Fixed Income Outlook) More More FUND PERFORMANCE Life unit Linked Life unit Linked Life unit Linked Pension unit Linked Pension unit Linked Bond Fund Index Fund Protector Fund ll Secure Fund PSU Fund Life unit Linked Life unit Linked Life unit Linked Pension unit Linked Pension unit Linked Secure Fund PSU Fund Balanced Fund ll Protector Fund Protector Fund ll Life unit Linked Life unit Linked Life unit Linked Pension unit Linked Pension unit Linked Protector Fund Infra Fund Gr owth Fund ll Balanced Fund Balanced Fund ll Life unit Linked Life unit Linked Life unit Linked Pension unit Linked Pension unit Linked Balanced Fund Wealth Builder Fund Enhancer Fund ll Growth Fund Growth Fund ll Life unit Linked Life unit Linked Life unit Linked Pension unit Linked Pension unit Linked Growth Fund Dynamic PE Fund Index Fund ll Index Fund Index Fund ll Life unit Linked Life unit Linked Life unit Linked Pension unit Linked Enhancer Fund Bond Fund ll Discontinued Policy Fund Infra Fund Disclaimer/Disclosure Aviva Life Insurance Company India Limited Aviva Towers ,Sector road,Opp.Golf Course, DLF Phase-V,Sector 43,Gurgoan,Haryana-122 003 Tel:+91(0)1242709000-01, Fax: +91(0)124 2571 214 Registered office:2nd Floor,Prakashdeep Building, 7,Tolstoy Marg, New Delhi -110 001 www.avivaindia.com As on December Life Unit Linked Life Unit Linked Life Unit Linked Pension Unit Linked Pension Unit Linked Pension Unit Linked 31,2016 Bond Fund Secure Fund Protector Fund Secure Fund Protector Fund Balanced Fund Portfolio Return 9.6% 8.4% 8.1% 8.6% 8.2% 12.2% Since Inception Benchmark Return 7.6% 7.5% 8.2% 8.1% 7.5% 10.0% Since Inception CRISIL Composite Bond CRISIL Composite Bond CRISIL Composite Bond CRISIL Composite Bond CRISIL Composite Bond CRISIL Composite Bond Benchmark Fund Index Fund Index Fund Index Fund Index Fund Index Fund Index and NIFTY 50 and NIFTY 50 and NIFTY 50 and NIFTY 50 and NIFTY 50 As on December Life Unit Linked Life Unit Linked Life Unit Linked Pension Unit Linked Pension Unit Linked Pension Unit Linked 31,2016 Balanced Fund Growth Fund Enhancer Fund Growth Fund Index Fund Infrastructure Fund Portfolio Return 13.5% 13.6% 7.8% 10.3% 6.2% 1.2% Since Inception Benchmark Return 10.7% 11.5% 5.3% 10.1% 5.9% -3.6% Since Inception CRISIL Composite Bond CRISIL Composite Bond CRISIL Composite Bond NIFTY 50 NIFTY 50 Benchmark Fund Index Fund Index Fund Index Nifty Infrastructure and NIFTY 50 and NIFTY 50 and NIFTY 50 As on December Life Unit Linked Life Unit Linked Life Unit Linked Pension Unit Linked Pension Unit Linked Pension Unit Linked 31,2016 Index Fund PSU Fund Infrastructure Fund PSU Fund Protector Fund II Balanced Fund II Portfolio Return 3.7% 3.7% 0.6% 4.0% 8.7% 7.9% Since Inception Benchmark Return 3.2% -3.3% -4.2% -3.3% 8.6% 8.6% Since Inception CRISIL Composite Bond CRISIL Composite Bond NIFTY 50 Benchmark BSE PSU Index Nifty Infrastructure BSE PSU Index Fund Index Fund Index and NIFTY 50 and NIFTY 50 As on December Life Unit Linked Life Unit Linked Life Unit Linked Pension Unit Linked Pension Unit Linked Life Unit Linked 31,2016 Bond Fund II Protector Fund II Balanced Fund II Growth Fund II Index Fund II DYNAMIC P/E FUND Portfolio Return 9.2% 8.4% 8.2% 8.8% 7.6% 8.9% Since Inception Benchmark Return 8.8% 8.6% 8.4% 8.3% 7.3% 7.8% Since Inception CRISIL Composite Bond CRISIL Composite Bond CRISIL Composite Bond CRISIL Composite Bond NIFTY 50 CRISIL Liquid Fund Index Benchmark Fund Index Fund Index and Fund Index Fund Index and NIFTY 50 and NIFTY 50 NIFTY 50 and NIFTY 50 As on December Life Unit Linked Life Unit Linked Life Unit Linked 31,2016 Growth Fund II Enhancer Fund II Index Fund II Portfolio Return 7.6% 9.3% 6.2% Since Inception Benchmark Return 7.4% 6.6% 6.6% Since Inception CRISIL Composite Bond NIFTY 50 NIFTY 50 Benchmark Fund Index and NIFTY 50 As on December Life Unit Linked Life Unit Linked 31,2016 Wealth Builder Fund Discontinued Policy Portfolio Return 7.4% 7.7% Since Inception December 2016 Equity Commentary The year 2016 turned out to be volatile and an eventful global markets and a rally in commodity prices. Crude year for the bourses. Nifty rose by 2% during CY2016. oil prices rose during the quarter wherein OPEC, The Indices witnessed dramatic movements owing to Russia and other Non-OPEC nations decided to reduce events such as “Brexit”, U.S. Presidential elections and production improve the demand supply balance.. The Demonetisation. On the domestic front, the passage of US Fed raised interest rates in its policy meeting. The the constitution amendment bill in the Rajya Sabha Fed commentary turned hawkish with some of the high that paved the way for GST improved sentiment. frequency economic growth indicators surprising on the However, the unexpected act of demonetisation of upside (including GDP, factory orders, PMI, nonfarm high-value currency notes by the government further payrolls). As indicated in its earlier policy meeting, the caused the market to pare down gains for the year. ECB agreed to add more than half a trillion Euros to its bond-buying program and extend it until at least the For the fourth quarter 2016, key benchmark indices end of 2017. S&P BSE Sensex and Nifty 50 slipped 4.45% and 4.94% to On the BSE sectoral front, barring S&P BSE Oil & Gas close at 26,626.46 points and 8,185.80 points, and S&P BSE Metal, all the indices closed in the red. respectively. S&P BSE Mid-Cap and S&P BSE Small-Cap S&P BSE Realty was the major laggard, down 16.42%, fell 8.62% and 5.75%, respectively. The fall was led by followed by S&P BSE Consumer Durables and S&P BSE government’s de-monetisation move and the U.S. Healthcare, which slipped 10.45% and 8.98%, Federal Reserve’s decision to raise key interest rates. respectively. Selling pressure was witnessed in IT stocks following U.S. President-elect’s comment on The quarter started on a positive note with the Indian U.S. visas. equity market surging on account of the repo rate cut of 25 bps by the Reserve Bank of India’s (RBI) Monetary Outlook: Policy Committee (MPC) in its policy review held on The demonetization move may continue to hurt growth Oct 4. The Committee also hinted at the fact that a for a few more months in consumer oriented sectors. normal monsoon could propel the growth momentum, The demonetization would in the medium to long term in turn pushing agricultural growth and rural demand. lead to a more healthy economy (productive due to India’s CPI continued to improve significantly from higher proportion of digital transactions and cleaner 4.3% for Sept 2016 to 3.6% for Nov 2016, a 2 year low, economy with reduced corruption and black money) led by sharp deceleration in food inflation particularly and provide a platform for structural growth. Globally vegetables on fresh arrival of kharif crops. India’s GDP the investor sentiments will continue to be swayed by growth in 2QFY17 was recorded at 7.3% YoY, slightly concerns on sustainability of recovery in US and China lower than expectations. In a surprise bold move, the and drive the market volatility in near term. Indian Government demonetised INR500 and INR1000 notes markets too will move in sync with global markets in replacing them with new high-security INR500 and the short term. However, over the medium to long INR2000 notes. Accordingly sectors which rely heavily term, Indian economic growth and earnings will drive on cash as medium of exchange – consumer Indian markets more than global issues. discretionary, cement names and NBFCs corrected sharply. PSU Banks rallied hard on expectation of Going ahead, there are sufficient catalysts for significant surge in cash deposits. Meanwhile, a global domestic economy to gain momentum and potential for rating agency forecasted a 40 bps dip in India’s growth a further uptrend in the equity markets rate to 7.2% in the second quarter of the financial year 1) Increased Rural spending and Social Capex can due to demonetisation. RBI kept the repo rate boost rural consumption unchanged at 6.25% during its Dec 2016 policy meeting 2) Increased thrust on infrastructure spends (Rail, against wide expectations of a cut, citing the Road, Power) uncertainty of demonetization impact & upside risks to 3) Domestic markets have seen earnings CPI forecast, which also hurt market sentiments. downgrade over the last two years. Overall Meanwhile, the Goods and Services Tax (GST) passage business fundamentals have improved over the itself was positive, the lack of clarity regarding GST past year and we expect healthy earnings rate for various sectors could not cheer the market. growth in FY18, partly aided by a favorable base. Developed markets bourses especially in the US rose 4) The US economy looks set for higher sharply during the quarter.