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Ausbil Investment Ausbil Australian Emerging Management Limited ABN 26 076 316 473 AFSL 229722 Leaders Fund Level 27 225 George Street Sydney NSW 2000 Monthly performance update GPO Box 2525 Sydney NSW 2001 July 2020 Phone 61 2 9259 0200 Fax 61 2 9259 0222

‘We have now entered the FY 2020 reporting Fund Characteristics season in which companies will reveal the full Returns1 as at 31 July 2020 impact, so far, of Covid-19 on this year’s financial Period Fund Bench- Out/Under Return1 mark2 performance performance and balance sheets’ % % % 1 month 3.44 1.85 1.59 Performance Review 3 months 13.77 13.14 0.64 Fund performance for July 2020 was +3.44% (net of fees), versus the 6 months -9.97 -8.32 -1.65 benchmark return of +1.85%. The benchmark is represented by a FYTD 3.44 1.85 1.59 composite, 70% of the S&P/ASX MidCap 50 Accumulation Index, and CYTD -6.89 -4.39 -2.49 30% of the S&P/ASX Small Ordinaries Accumulation Index. 1 year -8.26 -4.05 -4.21 At a sector level, the overweight positions in the Materials, Financials 3 years pa 3.96 7.14 -3.18 and Information Technology sectors added to relative performance. The underweight positions in Industrials, Health Care and Real Estate also 5 years pa 6.03 9.36 -3.32 added to relative performance. Conversely, the overweight positions in 7 years pa 8.14 10.26 -2.13 the Consumer Staples and Communication Services sectors detracted 10 years pa 7.44 7.94 -0.51 from relative performance. The underweight positions in the Energy, 15 years pa 6.97 6.25 0.73 Consumer Discretionary and Utilities sectors also detracted value. Since inception pa 9.97 8.62 1.35 At a stock level, the overweight positions in , NextDC, Galaxy Date: April 2002 Resources, Super Retail, Northern Star Resources, OZ Minerals, Megaport and Charter Hall Group contributed to relative performance. Top 10 Stock Holdings The nil position in Qube also added value. Conversely, the overweight 2 positions in TPG Telecom, Waste Management, , Name Fund Index Tilt and Challenger detracted from relative performance. % % % The nil positions in ALS and Mineral Resources, and the underweight 7.02 4.67 2.35 exposures to Alumina and also detracted value. 4.98 3.02 1.96 Market Review Northern Star Resources 4.95 3.43 1.51 NextDC 4.22 1.56 2.66 During the month of July, markets remained resilient in the face of Lynas Corporation 3.83 0.24 3.58 ongoing deterioration in the local Covid-19 experience, with the new ResMed Inc 3.75 3.04 0.71 wave of infections in Victoria showing little sign of slowing, and the implementation of localised lockdowns. Both the NSW/Victoria and TPG Telecom 3.71 0.90 2.82 NSW/Queensland borders were closed to help halt further spreading. Appen 3.48 0.59 2.89 Charter Hall Group 3.45 1.47 1.98 Despite this, the mid and small-cap market generated a gain of +1.9% Cleanaway Waste Management 3.39 1.29 2.10 in July (as measured by the blended 70% S&P/ASX Midcap 50 Index and 30% S&P/ASX Small Ordinaries Index). Strength continued in Materials (+4.9%) on the back of steady, ongoing demand for Iron Ore, Sector Tilts Zinc, Nickel and Copper, with demand for Gold rising as a hedge for Sector Fund Index2 Tilt risk supporting companies like Northern Star Resources (+15.7%), and % % % a rebound in demand for battery and electronic metals such as Lithium Energy 1.17 2.72 -1.55 benefitting Galaxy (+42.0%), and improved Rare Earths demand driving Lynas (+15.3%). Materials 28.20 23.16 5.04 Industrials 10.67 12.41 -1.73 Outlook Consumer Discretionary 8.15 12.41 -4.26 We have now entered the FY 2020 reporting season in which companies Consumer Staples 3.88 3.44 0.44 will reveal the full impact, so far, of Covid-19 on this year’s financial Health Care 6.30 7.42 -1.12 performance and balance sheets. Many companies have withdrawn Financials 11.35 11.16 0.20 guidance over the last quarter, so August will reveal both negative Information Technology 19.87 17.98 1.89 and positive stories. Since the onset and intensification of Covid, consensus numbers have ceased to be meaningful so this mechanism Communication Services 4.82 1.80 3.01 for helping iterate towards sensible expectations and valuations is not Utilities 0.00 2.26 -2.26 functioning. This has added more volatility to prices. We are likely to Real Estate 3.45 5.22 -1.78 see companies punished for negative surprises, and others rewarded Cash 2.14 0.00 2.14 for maintaining strong balance sheets and delivering earnings growth. Total 100.00 100.00 0.00 In terms of dividends, while we expect dividends to temporarily contract somewhat with earnings, we believe most of this contraction, including 1. Fund returns are net of fees and gross of taxes. for banks, has already been priced by the market. 2. The composite benchmark is 70% S&P/ASX Midcap 50 Accumulation Index and 30% S&P/ASX Small Ordinaries Accumulation Index.

1 Ausbil Investment Management Limited Level 27 225 George Street Sydney NSW 2000 Toll Free 1800 287 245

Unless otherwise specified, any information contained in this publication is current as at the date of this report and is prepared by Ausbil Investment Management Limited (ABN 26 076 316 473 AFSL 229722) (Ausbil). Ausbil is the issuer of the Ausbil Australian Emerging Leaders Fund (ARSN 089 995 442) (Fund). This report contains general information only and the information provided is factual only and does not constitute financial product advice. It does not take account of your individual objectives, financial situation or needs. Before acting on it, you should seek independent financial and tax advice about its appropriateness to your objectives, financial situation and needs. Securities and sectors mentioned in this monthly report are presented to illustrate companies and sectors in which the Fund has invested and should not be considered a recommendation to purchase, sell or hold any particular security. Holdings are subject to change daily. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance. Unless otherwise stated, performance figures are calculated net of fees and assume distributions are reinvested. Due to rounding the figures in the holdings, breakdowns may not add up to 100%. No guarantee or warranty is made as to the accuracy, adequacy or reliability of any statements, estimates, opinions or other information contained herein (any of which may change without notice) and should not be relied upon as a representation express or implied as to any future or current matter. You should consider the Product Disclosure Statement which is available at www.ausbil.com.au before acquiring or investing in the fund. Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or disseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. Further information is available at www.msci.com. A short notice on the COVID-19 public health event, and how it can impact investments Given the currently evolving issues around the Coronavirus (or Covid-19) globally, which has officially been designated a pandemic by the World Health Organisation, we wish to notify that, as with many firms, business may be disrupted. A public health crisis, pandemic, epidemic or outbreak of a contagious disease, such as the recent outbreak of Coronavirus (or Covid-19) in Australia, Italy, China, South Korea, the United States and other countries, could have an adverse impact on global, national and local economies, which in turn could negatively impact investment returns in any of Ausbil Investment Management Limited’s registered managed investment schemes (the Funds). Disruptions to commercial activity relating to the imposition of quarantines or travel restrictions (or more generally, an inability on behalf of authorities to contain this pandemic) may adversely impact any investment, including by delaying or causing supply chain disruptions or by causing staffing shortages. The outbreak of Coronavirus has contributed to, and may continue to contribute to, volatility in financial markets. The impact of a public health crisis such as the Coronavirus (or any future pandemic, epidemic or outbreak of a contagious disease) is difficult to predict, which presents material uncertainty and risk with respect to any investment or fund performance.

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