Equity Strategy: We have been consistently investing in quality businesses with sound business models at relatively inexpensive valuations.

Our investment rationale -

• We seek to invest in companies that, in our view, have sustainability of business growth and are trading at reasonable valuations.
• Our belief that a stock's price reflects the value of the underlying company makes us patient investors and not market timers.
• We consider the company's competitive advantage and its prospects along with a host of quantitative factors
• We aim to capture long-term business cycles while investing in securities. We follow a disciplined research, which will help identify new trends early.

With this approach, we generate consistent investment returns over the long-term through the power of compounding.

Our evaluation of potential equity investments is based on:

• Sustainability of business growth and its ability to generate free cash flows and higher Return on Equity (RoE)
• Quality of Management in terms of its vision, cost and innovation competence, along with business ethics and integrity
• Business Value and whether market price is at a discount to our estimate of the underlying business value. Besides, we also consider the number of price-value mismatches to ascertain if it is a reasonably safe investment, thus reducing the risk element

We invest exclusively in top quality, sovereign bonds and corporate bonds with AAA rating. Global and domestic macro-economic variables of growth, inflation, currency variations and liquidity are considered to determine the long-term and short-term trends. The portfolio's tenure is then adjusted according to our expectation of interest rate changes. We primarily focus on maintaining excellent credit quality, evaluating a company's ability to pay interest before investing.

Extensive research and strong risk control measures form the backbone of our investment process. Our stringent investment guidelines ensure we restrict the portfolio risk and run a well-diversified portfolio backed by rigorous research.

Aviva is committed to ethical fund management practices and a process-based investment management, guided by strict investment guidelines by the IRDA. Besides, our in-house investment policies also ascertain the safety and stability of investments.

An Investment Committee guides the investment process and allows fund managers to operate within approved limits. Our strong risk management system tracks various prudential exposure norms on a daily basis. This helps us maintain excellent credit quality.

Discipline is critical for managing funds over a longer tenure. We have, therefore, set different benchmarks for our funds, closely monitoring their performance against these benchmarks to ensure consistent returns over the long-term. Our aim is to provide higher returns than the benchmarks. For this, we have delegated CRISIL to design composite benchmark indices, reflective of the asset allocations of all our funds.