aviva investors

Microsoft PowerPoint - CI061730 - US Equity Income OEIC PPT September 2012 - FINAL AMENDED

AVIVA INVESTORS US EQUITY INCOME FUND

For investment professionals only. It is not to be viewed by or used with retail clients.

30 September 2012

CONTENTS

About River Road Portfolio Overview Investment Strategy Aviva Investors US Equity Income Fund Summary Appendix

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ABOUT RIVER ROADINTRODUCTION AS OF 30/09/2012

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Value-Oriented, Institutional Equity Manager Based in Louisville, KY Founded April 2005 with a 14+ year team history Serves clients on four continents and in 10 countries Affiliate of Aviva Investors, a $400+ billion global asset manager1

$7.05 Billion in Managed Assets2 Small Cap Value Equity $1.04 b Small-Mid Cap Value Equity $933 m Dividend All-Cap Value Equity $4.18 b

Dividend All-Cap Value $1.85 b Dividend All-Cap Value II $1.42 b Select Equity Income $923 m

Independent Value Equity $880 m Long-Short Equity $8 m

1As of 31/12/2011. 2 AUM does not include $62 m and $568 m in preliminary non-advisory assets in DAV and DAV II model portfolios, respectively.3Other includes the Long-Short Equity Strategy and internal account strategies.Source: River Road Asset Management, LLC.

IndependentValue

Long-ShortEquity

Cinnamond Moran, Johnson

Alternative Equity

Small Cap Value

SCV | SMIDDividend

All-Cap ValueDAV | DAV II | SEI

Shircliff, Beck, Akin Sanders, Forsha

Traditional Equity

Corporate Volkswagen of AmericaWellmark, Inc.Nissan North America, Inc.NiSource, Inc.Fiat USA Retirement Board

Sub-AdvisoryAston Asset Management LPBNP ParibasNorthwest & Ethical InvestmentsAviva Investors UK Fund Services Limited

Representative Client List

Taft-HartleyLocal No 8, IBEWCement Masons and Plasterers PensionHawaii Truckers - Teamsters Union Pension

Public FundsKentucky Retirement SystemsRegional Transportation Authority Pension TrustCity of Montgomery, AL ERSCity of Galveston, TX PoliceOklahoma Firefighters Pension & Retirement System

Foundation & EndowmentBattelle Memorial InstituteCornell UniversityGreater Houston Community FoundationGreat Lakes Protection FundSisters of St. Francis of Philadelphia Charitable Trust

RRAM Assets by StrategySCV

14.72% SMID 13.24%

DAV 26.18%

DAV II 20.11%

SEI 13.09%

Ind. Value

12.50%

Other30.16%

ABOUT RIVER ROADTEAM AS OF 30/09/2012

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*Founding associate; 1 Executive Committee member; 2 Management Committee member

41 associates; 15 investment professionalsNo investment professional turnover since team inception

Industry ProfessionalInvestment Management* Henry W. Sanders III, CFA1,2 EVP & Senior Portfolio Manager 23 years 29 years

Thomas S. Forsha, CFA2 Vice President & Portfolio Manager 14 years 14 years

* James C. Shircliff, CFA1,2 Chief Investment Officer 39 years 39 years* R. Andrew Beck1,2 President & CEO, Senior Portfolio Manager 13 years 21 years* J. Justin Akin Portfolio Manager 9 years 9 years

Eric K. Cinnamond, CFA Vice President & Portfolio Manager 19 years 19 years

Matt W. Moran, CFA Portfolio Manager 12 years 12 yearsDaniel R. Johnson, CFA, CPA Portfolio Manager 6 years 8 years

J. Alex Brown2 Director of Research 6 years 13 yearsErik M. Keener, CFA Equity Research Analyst 4 years 8 years

Andrew R. McIntosh, CFA Equity Research Analyst 8 years 8 yearsAshley L. Abney, CPA Equity Research Analyst 6 years 7 yearsJohn C. Watkins III Associate Equity Research Analyst 3 years 3 yearsJoe Van Cavage Associate Equity Research Analyst 3 years 3 yearsShane P. Connor Associate Equity Research Analyst 2 years 2 years

Risk ManagementGreg E. Deuser, CFA2 Chief Risk Officer 28 years 30 years

* Thomas D. Mueller, CFA, CPA1,2 COO & Chief Compliance Officer 14 years 19 yearsChristopher K. Fiorito2 Director of Trading 22 years 22 yearsWhitney B. Conn, CPA Operations Manager 6 years 16 yearsMeagan N. Snyder, JD Compliance Manager 5 years 5 years

L. Michele Robbins2 Vice President of Client & Consultant Relations 28 years 28 yearsKatrina Howard O'Leary Vice President of Client & Consultant Relations 13 years 13 yearsShannon M. Burnett2 Director of Client Services 12 years 16 years

Years Experience

Operations

Client Services

PORTFOLIO OVERVIEWABSOLUTE VALUE PHILOSOPHY

We seek excellent companies trading at compelling prices Our objective is to invest in well-managed, financially strong companies trading at compelling prices, not

mediocre businesses trading at deep discounts.

We build portfolios one company at a time We believe alpha is optimized by identifying superior fundamental business characteristics, rather than

chasing market and index trends.

We seek market inefficiencies We believe inefficiencies can be found and captured in smaller capitalization and out-of-favor securities,

and in securities with little or no formal Wall Street analyst coverage.

We are risk averse We employ a strategy of balanced diversification and a structured sell discipline that minimizes both

portfolio volatility and the potential loss of capital.

The objective of Absolute Value investing is to provide attractive, sustainable, low volatility returns over the long term.

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Deep Value Absolute Value Relative Value

PORTFOLIO OVERVIEWPHILOSOPHY WHY DIVIDENDS?

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Performance: Dividend-paying stocks outperform non-dividend payers

Numerous studies have demonstrated that dividend-paying stocks deliver higher returns (over the long-term) with lower risk than non-dividend payers.1

Conviction: Paying dividends requires real earnings

Companies that pay consistent dividends are typically financially sound and seek to maximise proper utilisation of free cash flow.

Sentiment: Dividends currently receive favourabletax treatment

The Jobs and Growth Tax Relief Reconciliation Act of 2003 lowered the top rate on qualified dividend income to 15%.

Demand: Demographic trends favour income-orientated investments

Retiring baby boomers will increasingly demand investments that offer current income and growth to keep up with inflation.

Chart shown from 31/01/1972 through 30/09/2012. 1Source: Ned Davis Research, Inc. Past performance is no guarantee of future results.

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Dividend-Paying S&P 500 StocksGain/Annum: 8.75%

Non-Dividend-Paying S&P 500 StocksGain/Annum: 1.59%

PORTFOLIO OVERVIEWTHE DIVIDEND ALL-CAP ADVANTAGE

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The small cap asset class offers a broader universe of high income stocks and features a higher weighted average yield.

Sufficient universe remains following period of substantial dividend cuts.

1Universe: U.S. listed equity; 40% > yield > 2%; mkt. cap > $1 million; data as of 09/10/2012. Source: River Road Asset Management, LLC and FactSet Research Systems Inc. Shown as supplemental information to the DAV and DAV II Composites.

# of Firms Wtd. Avg. Yield1

Mkt. Cap < $300 m 306 5.41%$300 m < Mkt. Cap < $1 b 264 5.50%$1 b < Mkt. Cap < $2 b 164 4.72%$2 b < Mkt. Cap < $15 b 354 4.01%Mkt. Cap > $15 b 206 3.57%

PORTFOLIO OVERVIEW PHILOSOPHY PORTFOLIO OVERVIEW

Dividend All-Cap Value Launched October 1, 2003 Dual objective: capital appreciation

plus current income Benchmark: Russell 3000 Value Target yield of Russell 3000 Value

plus 150 bps Emphasis on diversification

Source: River Road Asset Management, LLC and FactSet Research Systems Inc. Past performance is no guarantee of future results.

Core 2 - 4% Yield Larger Cap Stable Growth High Liquidity

High Alpha 3 - 6% Yield Smaller to Mid Cap More Inefficient Key Source of Alpha

High Yield 5%+ Yield Smaller to Mid Cap Includes Non-Traditional Equities

(i.e. REITs and MLPs) Highest Yield / Lower Appreciation Potential

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INVESTMENT STRATEGY PROCESS DIVIDEND ALL-CAP VALUE

1Historically, the market cap limit reflects minimum liquidity constraint used in portfolio construction. 2The target number of portfolio holdings is a working guideline. The actual number may vary depending on market conditions and other factors.

Step 1

Idea generationUniverseMkt. Cap > $300 M1Min 2% Yield

Systematic Research: Database Reviews

Value Line FactSet

Dynamic Research: Multiple Sources

Dividend Increases

Insider Transactions

SEC Filings Firm

Announcements

Step 3

Portfolio Construction

60 - 80 Holdings2

Bottom-Up Approach

Top-Down Risk Management

Balanced Diversification

Step 4

Sell Discipline

Position & Portfolio Risk Management Approach

Investment Becomes Overvalued

Failure to Execute Losses Develop

Step 2

Security Analysis

Working Universe300 - 400 stocks

High & Growing Dividend

Target 3% Yield Positive Growth

Rate Stable Pay-out

Ratio Financial Strength Priced at a Discount

to AV Attractive Business

Model Shareholder-

Oriented Management

Undiscovered, Underfollowed, Misunderstood

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INVESTMENT STRATEGY PROCESS STRUCTURED SELL DISCIPLINE

Investment becomes overvalued S