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Norwich Union believes that the outlook forlarge cap stocks is improving.

Gerard Lane, Norwich Union investment strategist, believes thatlarge cap stocks could soon start outperforming small capstocks.

He said: “The tide could soon start turning in favour oflarge caps. Large cap yields are now about 0.5% higher thanmid-caps and when this has happened in the past, large caps haveoutperformed smaller to mid-cap shares.

“In 1999 mid-cap yields were about 0.75% better than largecaps, which is one of the reasons why small caps have done so wellover the past few years. The FTSE 250 has enjoyed tremendousreturns over the past five years and the index hit an all-time highat the end of September*.

“However, the FTSE 250 has a price earnings ratio of 12.2based on 2006 forecasts, which is expensive to the average priceearnings ratio of 11.6 in the FTSE 100.”

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*FTSE 250 reached 7936 on 30 September 2005

Press office contacts:
David Gwyer 01904452828 Out of hours 07800 699508
James Evans 01904 452791 Out of hours 07800 699525
Rob Pell 01904 452659 Out of hours 07800 699563
Cheryl Cox 01904 452617 Out of hours 07800 695275

Notes to editors:

• Norwich Union is one of the UK's biggest insurers. It is aleading provider of life and pensions products and one of thelargest Financial Adviser (FA) providers. FAs provide over 70%of the company's long-term savings business in the UK.
• Norwich Union has strategic alliances with building societiesand other leading UK brand names including CIS and The RoyalBank of Scotland Group. Norwich Union’s news releases anda selection of images are available from Aviva's internet presscentre at www.aviva.com/media.