Totus Alpha Fund April 2019 Performance Update

MONTHLY PERFORMANCE REVIEW • PERFORMANCE SUMMARY (NET OF ALL FEES)

The fund finished up 3.5% in April. The ASX 300 (including divs.) finished the Totus Alpha Fund ASX300 month up 2.5%. It was pleasing to see two of our largest positions SmartGroup Accumulated Including Divs. (long) and Tesla (short) add meaningfully to performance during the month. Latest month (April) 3.5% 2.5% Fundamentals for both businesses are performing in line with our expectations Calendar year to date 1.4% 13.6% and after a difficult 6 months we are optimistic that both positions can drive One year rolling -2.1% 10.3% meaningful positive performance for the fund from current levels. Five year p.a. 14.4% 7.6% In recent weeks we have worked through conference calls with several industry professionals from the digital advertising sector (media buyers, consumers and Total since inception 226.7% 97.0% ex digital media employees). These have provided us with invaluable on the Since inception p.a. 18.2% 10.0% ground insights into 3 of our largest long positions Alphabet, Facebook and Amazon. All these businesses are benefiting from the long-term trend of ad PORTFOLIO EXPOSURE (% OF NET ASSETS) dollars following eyeballs online. After years of strong revenue growth from these

companies it was encouraging to learn about the potential for improved 350% targeting (and therefore monetization) of ads on platforms like YouTube assisted by technologies such as facial recognition and location tracking. These calls also 300% unearthed some short candidates for further work. In our view the investment 250% logic of owning these established global tech leaders over their less proven and more expensive Australian tech peers remains compelling. 200%

The Australian market looks expensive to us in general but on the back of the 150% supply disruption caused by the Vale dam disaster in January we have taken long positions in a basket of iron ore producers (FMG, RIO, BHP, MIN). These companies 100%

are all optically cheap and cum meaningful upgrades to consensus earnings 50% and further capital management if iron ore prices and dollar remain anywhere near current levels. 0% Jun-13 Jun-14 Jun-17 Jun-18 Jun-12 Jun-15 Jun-16 Oct-13 Oct-14 Oct-17 Oct-18 Oct-12 Oct-15 Oct-16 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Dec-13 Dec-14 Dec-17 Dec-18 Dec-12 Dec-15 Dec-16 Aug-12 Aug-13 Aug-14 Aug-17 Aug-18 Aug-15 Aug-16

Largest contributors in April: Smartgroup (long) +0.86%, Tesla (short) +0.85%, -50% Facebook (long) +0.80%. Largest detractors: (short) - 0.33%, Technology One (short) -0.29%, Harvey Norman (short) -0.27%. -100% Net exposure Gross exposure

PERFORMANCE CHART SINCE INCEPTION (BASE = 100) 400

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100

Totus Alpha Fund Founders Series ASX300 Accum. Index RBA Cash rate indexed

FUND INFORMATION MONTH END POSITION NUMBER & THEME EXPOSURES

Inception date 2 April 2012 Long exposure Short exposure

Domicile/Currency /AUD 63 stocks 65 stocks

91.9% 88.5% Total Return 226.7% net of all fees 180.4% (gross) 3.39% (net) Minimum Investment $250,000 Value 12% Earnings risk 19% Liquidity Monthly Bricks to clicks 21% Fads, Frauds & Failures 9%

Prime Brokers Morgan Stanley and Credit Suisse Scarce Growth 12% East Coast Housing 6%

Fund Administrator Citco PERFORMANCE QUALITY SINCE INCEPTION ASX300 Totus Alpha Fund Fund Auditor Ernst & Young Acc.

High water mark Yes. RBA cash Alpha 17.7% (annualised) Beta 0.14 Fees (from 1 July 2018) 1.5% Mgmt, 20% Perf. (over cash) Correlation 0.11 Best benchmark RBA cash Sharpe Ratio 1.11 0.71

Fund Manager Totus Alpha Management Pty Ltd Sortino ratio 2.37 1.24

Address Level 8, 139 Macquarie Street, NSW 2000 Avg Monthly Return 1.5% 0.8% Avg Return in ASX Up Month +1.8% +2.7% Email [email protected] Avg Return in ASX Down Month +0.8% -2.8% Phone +61 (2) 8072 9945 Up Months 64% 67%

Website www.totuscapital.com.au Down Months 36% 33%

MONTHLY PERFORMANCE *

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC CYTD

2012 -0.08 4.13 4.07 -2.77 -1.04 -0.34 -1.92 1.02 1.26 4.17 2013 1.13 5.31 -1.06 9.21 1.84 7.21 -3.49 2.10 6.49 14.16 6.69 -0.39 60.14 2014 -0.59 1.44 1.43 -2.15 3.99 -3.02 3.70 2.02 1.02 0.87 6.14 -2.31 12.83 2015 4.60 -0.20 5.53 -4.53 -1.76 6.33 12.21 3.00 6.15 1.52 7.37 4.50 53.51 2016 0.67 -11.27 -6.15 -1.37 9.36 -1.98 8.82 2.58 -5.31 -7.08 -4.12 2.74 -14.26 2017 -2.00 -0.46 2.18 1.59 1.01 2.05 0.99 4.45 3.42 2.83 4.88 1.78 25.00 2018 3.68 4.61 -0.99 0.48 2.81 2.03 -0.02 0.40 -0.94 -4.21 0.41 -3.76 4.17 2019 -1.10 -1.43 0.54 3.48 1.42 * All Totus performance numbers quoted in this monthly are for Founders Series Units net of all fees. Past performance should not be taken as an indicator of future performance

This document is intended for general information of wholesale clients only. This document should not be passed on to any clients within the meaning of the Corporations Act 2001 (Cth). This document has been prepared by Totus Alpha Management Pty Ltd (ACN 155 266 734) Investment Manager of the Totus Alpha Fund (Fund). Totus Alpha Management is a Corporate Authorised Representative (CAR: 419151) of Totus Capital Pty Ltd (ABN 151 256 772) AFSL: 409468. Any information or advice contained in this newsletter has been prepared without taking into consideration your objectives, financial situation or needs. All securities and financial products or instruments involve risks. Past performance results are not necessarily indicative of future results and no guarantee is being made that similar returns will be achieved by the Fund. Investment in the Totus Alpha fund may not be suitable for all investors. No offer is being made hereby. Any offer relating to units in the Totus Alpha Fund shall be made only pursuant to the Information Memorandum and Constitution of the Totus Alpha Fund which outlines the risks associated with investing in the Fund as well as other important information you must acknowledge prior to investing in the Fund.