P 1-5 Index Month in Review the warning, disclaimer, and disclosure at the end of this document. This report supersedes all prior reports. prior all supersedes report This document. of this the at end disclosure and disclaimer, the warning, in must read be • This information •AFSL No. 421445 658 561 151 11 ABN Ltd Pty • Research Lonsec statement. investment or statement disclosure product the read investors that potential recommend We strongly re ofback thane on the better equities US bounced back the Junequarterstrongly in G the riskof impairments.and are headwinds the ultra with Forconservative payout thebanks,ratios. the key dividendpayments,board discretionary theto thattheybanksguidancebe limiting should the economic continues.malaise written GivenAPRA’s sheetsbalance provide thusa and layer of insurance if anbeen companies, ithas opportune tostrengthen time near and beenraisingscapital have necessary tobolster solvency ofupequity raising toplanned $1.9 billion.For many, workforce, the alongon rightsizing a focuses with ( andco raising (+28.6%)announced million an$800 capital growth.cumulative thebeen have ofthethreeequivalent of past years monthsthree hyperpast of growthonline ratesinsales Kogan, including C Temple & and Webster, performersstandout isolationduring period,this onlineretailactivityto leveraged havethat are been bullis onceagain in Julyand marketStocks territory. T the dark once sharp reboundCOVID apparentis that It were many investors‘voting’ fora Australian Commentary Data source: - he S&P/ASX tickedIndex he S&P/ASX past200 6,000 points in early 5.3%) 5.3%) lobal TR Index (AUD Hgd) (AUD TR Index Aggregate Global Barclays Index Bill Bank Ausbond Bloomberg 0+ YrIndex Composite Ausbond Bloomberg Interest Fixed (AUD Hgd) NR Index Dev. EPRA/NAREIT FTSE 300A S&P/ASX Estate Real InvestmentTrusts Index (AUD) NR Markets MSCI Emerging (AUD) Index TR FTSE 100 T S&P 500 (AUD) TRIndex MSCI World Global Equities Acc Ordinaries Small S&P/ASX Index 200Accumulation S&P/ASX EquitiesAustralian - openings across theacrossopenings country. The S&P 500 roseIndex

returns provideda post e - quities term operational liquidity.For termoperational oth some Bloomberg

regarding equity indices R e

Index (AUD) Index quities -

founder sell down, while Airwaysdown,founderwhile sell Qantas at -

REIT Acc

end

& Financial

June - - COVID recoveryCOVID plan,which

low interest rate environmentrate interest low .

Index

xpected economicand data

Express. Returns greater than one year are annualised 2020 .

below references performance without including the effects ofcurrency (unless specifically stated) Index

(%)

-

19 clouds 19 cleared. s ares to be likely - - - - - 2.17% 1.22% 3.50% 2.04% 1.67% 1.00% 1.95% 2.61% 0.48% 0.01% 0.31% 1 mth 1 ity Chic.The ity

er 20.22% 23.90% 16.48% - 8.59% 4.97% 3.31% 7.16% 6.27% 2.27% 0.06% 0.53% 3 mth 3

have been underwaybeen have acceleratedand exacerbatedhas structural that shifts thanAustralian worse equities ( remaindown s globalmarkets As Australisteadied, Property over year.1.5% the rising back, bounce 5.0%the in Junequarterfalling and markets,emerginghave seen market of equities a less valuationtorelative basis.In contrast developed value companiesand are l rates, interest inlowa growth environment, small cap to continue expected benefiting from persistent low growthWhilecap companies.these companies are theglobalhasequities reboundin beenlow, by large led upbeingpermanent.end Sincerea highremainsunemploymentand job some losses may the Decembersince quarter( 2008 the Junequarter 500estimatedto havethe S&P declinedby 43.9% during and marketsbetween theeconomy,wit concernsdisconnectthere areaboutHowever,a during priceterms).the quarter(in IndexComposite economy’IndexIndustrial‘new and NASDAQ betweenthe ‘old economy’disparity Dow Jones the charge, illustratedled best bythe performance dollar US terms). sectors Thetechnologyhealthcare and over 20.5% the quarteris and over up7.5% the year(in ecurities alsoecurities back the bouncedover - - - - 22.51% 21.02% 20.84% 10.43% - - - - 7.89% 1.05% 3.50% 9.21% 3.57% 0.32% 3.53% 6 mth 6

.

- - - - 17.63% 20.71% 14.71% 21.3% for the year to date,for to significantly 21.3% the year - - - 1.53% 9.57% 5.39% 5.67% 7.68% 5.18% 0.85% 4.18% —

— 1 yr 1 on track to record to itslargeston track decline

up 17.8% andup 17.8% 30.6% respectively

in Australian propertyin the over

14.79% 11.22% ookingon moreattractive a - 1.89% 2.33% 5.63% 0.29% 6.10% 5.19% 4.73% 1.53% 5.57% 3 yr 3 conjunction with conjunction -

7.7%). Thepandemic - 69.1%) ching their March

an 13.19% June 1.62% 4.73% 5.15% 0.26% 9.89% 7.90% 5.95% 4.76% 1.73% 4.77% h earnings for h earnings listed p

5 yr 5 — quarter,but while

. roperty June 16.34% 12.85% 6.01% 2.68% 5.60% 8.14% 9.37% 5.40% 6.37% 4.57% 7.80% 10 yr 10

2020

-

P 2-5 items during theitems lockdowns. stockedconsumersand upon staplesotherhousehold hardware and Grocery sales placed best affected,mostwith been grocery Shopping sector. retaillandlordsand havemall strip years,few different past with ramificationsfor each Month in Review warning, disclaimer, and disclosure at the end of this document. This repo This this document. of attheend disclosure and disclaimer, warning, Ltd Pty Research Lonsec thanothers faringbetter although in easing lockdown conditions, some are states This estimated. allowedhas an earlier overall than tracking better outcomes health initially containment ofthe COVID inrecession ’s29 relat years. certainthat Australianalmost economy is thefirstitsin belikelyfeltto in shutdowns theitis Junequarter, - The Austr Australia Economic News S&P/ASX 200 share S&P/ASX 200 ASX 200 the unofficialsystem, rate cash a resulttheAs liquidityof excess in the moneymarket Fixed income million. $32.6 welltargeted shortofitsfell raisingmillion, $200 just its ( Centres Management from takeover bid opportunistic" Asset ARA receivedwhich Property Group, the Leading A either demand significan rentsthat retail comewill astenants underpressure emergeprogressively fromitlockdown, isanticipated 0.3% infull impact0.3% the Marchof quarterbutgiven Gold RoadResources Gold Resources Lake Silver Pizza Domino's Corp Healthcare &Paykel Fisher Afterpay performers Best Foods Collins Corp Healthcare &Paykel Fisher Healius Afterpay Bes non t t performers

- underwrittenpurchase share plan inwhich July,

-

11.2%)continued to

alianeconomyby a contracted mildrelatively

tostorm weather the s . Meanwhile, retailproperty giantMeanwhile, . Vicinity

hare -

REIT index in indexin JuneREIT Cromwellwas s hare Enterprises

m

performance for the year to performance for the month

• ovements ABN 11 151 658561 151 11 ABN . households. Businessesand trent reductionsor incentives.

- 19 virus has resulted19 has virusin

actually increased as increased actually As Australian As states

raisemoney, completing

fell tofell0.14% theendof at . - an and"unsolicited

anchored centresthe anchored

ivelysuccessful - than

• - AFSL No. 421445 expected

121.44% 143.28% 68.69% 69.72% 82.49% 17.75% 18.51% 21.86% 25.51% 28.64% to June

June

•

grade and high yield spreads tightenedhighyield spreadsgradeand June0.66%.finishquarterat to both Globally investment material experienced variations theover course of the 1.92%,at 2019 finished the March0.67%, quarterat and ye abovebenchmarkvalue fees.and The returns US10 superior selectionneededsecurity while be to will add longertoyears thanthreeprovide yield enhancement, marketbe increasinglywill onmaturitiesbond reliant level aroundthis threethe RBAexpects Given 0.25%.of rate aroundthe target three newly targeted from0.87%0.77% overrose to period. same The the The 10 atemergencycut,to 0.10%theendRBA’s of rate June. fallfrom to atrate following0.36% the ofMarch, the end ultra toJune,compared theofficial cashof rate 0.25%.This described by Governor Lowe as a worlda “where described byGovernorLowe as there’ll theoutlook for economy andinterest rateswas recently laterfindings in TheReserveJuly. Bank ofAustralia’s b benefittedhas aroundmillion employees,which 3.5 is are scheduledto payments JobKeeper end.The scheme, aheadnervously are lookingto whenSeptember the lentmajorhas further banks support.retailersHowever, inadd APRA governments. state Further lending easingby of criteria Homebuilder program,$25,000 and other incentivesby programs,the the andJobSeeker JobKeeper launch of receivedsignificant governmenthave fromthe support impact spreads. oncredit positive centralquarterbankmonetaryas a intervention had This information must be read in conjunction with the the with conjunction in must read be This information eing reviewed by Treasury,eingreviewed whichwill report its Education G8 Group CentreTravel Flight oOh!media Group Media Cross Southern Corporate Webje Coal Whitehaven Nufarm Group Media Cross Southern Worst performersWorst performersWorst ar Treasury Note, which hadendedar Treasurywhich Note, calendar year - low interest rate interestlow the 90 also caused rt supersedes all prior reports prior all supersedes rt - yearCommonwealth Government bondyield t

Travel Management Travel

ition to loan repaymentition toloan by the deferrals

for quitesome returns time, fromthe

- year bond hasmostlyyearbond been steady

. -

yearyield toremain

over theover June - day bankbill June ------66.38% 68.22% 70.27% 71.39% 80.30% 19.18% 19.81% 20.99% 24.26% 25.53%

2020 -

P 3-5 125,000. Total employmentfallen125,000. by835,000 since has in by 227,700 May, The Australian toupis preparedscale bond needed.and purchases if kept atThe RBA onhold 0.25% rates atits Julymeeting “deflationarycausing “large output and forces” gaps.” a fromvirusshadow be for the Month in Review warning, disclaimer, and disclosure at the end of this document. This repo This this document. of attheend disclosure and disclaimer, warning, Ltd Pty Research Lonsec a of secondrisk waveremains,of infections while lockdown permanent become persist. if measures be,how or will many the temporarywillof losses job the what longerclear 50.0indiover 52.6in May to June,beatingexpectationsof (results 49.0 The June,expectations27 of slightly above of1.4 million. fall,coming1.427to continue atmillion for in theweek ofexpectations riseofa mil 3 payrolls losses job back resultingfrom thelockdown. as asurprises gradualreopening the economyof clawed the US,economicdataIn for June somesaw upside electionpresidential Novembein theand Chinaare elevated,outcomethe of US tensions Meanwhile, households. thebetween USand fiscalmeasureswith continue supportbusinesses and to monthsbetowill theextentwhich governments recovery. economic An imp to continues createuncertainty shape aboutthe of T Gl restrictions. improvingdistributors the withoftrading relaxation newsector, with beverages orders fromfood wholesale concentratedimprovement in& was thelargefood buoyantto recovery conditions. ratheran improvementfrom thanrecent depths a narrowlywas focusedon some sub and sectorsindicates 51.5. territory positive June,increasing by9.9in points to The - with Februarylevels, comparisonsto of sales May theyarein stillsignificantly pre on down and andclothing cafes restaurants May.levels COVIDinWhile April,andsales March, in to continues strengthen well sales with abovepre ofSalesApril. foodandgoodsbasic household reversing expected), most (16.3% of the 17.7% fall in R May. the unemploymenthave 63.6% would been 8.1% in rate if thepar However, the participationfallingtofrom 62.9%. rate63.6% rate unemployment outbreakMarch.beganThein the coronavirus 17.7%, respectively. 17.7%, he rise in thein he rise numberCOVIDof etail sales etail obal ISM ManufacturingIndexISM ManufacturingAIG PMI

Whilethethe is result largest evermonthly itrise,

jumped 4.8millionjumped June,surpassing in

reboundedstrongly cateexpansion).However,it is notyet labour reportlabour worsedrop thanthe expected of ticipation heldticipation had rate steady at

lifted to 7.1%lifted(7.0% to expected) with -

term impact on labourmarkets termimpact • ABN 11 151 658561 151 11 ABN ortant factor comingortant factor in lion. Joblesslion.claims

showed employment showed fell

moved quite a fewa years”,quite

jumpedinfrom 43.1

Almostall the of in May in r remains unclear. r remains - 19 cases 19 globally sawmildrecoverya movedinto , jumping , 16.9%

• AFSL No. 421445

Nonfarm - 35% and35% - COVID -

The

• Germ effects,beingfinancialis and considered. YCC,of implementation asasand wellthe economic large preferfocusto on appears to forwardandguidance controlcurve (YCC).Atyield thisstage, the FOMC including tools, asset guidance, forwardpurchases,and T resulta of risewarningsas a cas in newconfirmed reimposesocialto distancing shelterin and place Someuncertainty. reversed US states course June in late events creatingother geopolitical are additional further presented picture wasmixed byelectricity resumedacrossactivity country. the morea However, theto but bouncedlockdown,backdue 8.2%May as in the truckis mileag toll Germany,industriala indicatorIn useful production of ofexpectations 7.7%.below roserate 0.1%unemployment 7.4%May, in to slightly improving sales from month showeda salessharp rebound,retail in rising the 17.8% shortof offalling expectations 80.0.Asexpected, May’s index sentiment economic the Lookingat theEuropeandata, Commission’s but reciprocate, will l Japan,possibly Canada, and BeijingChinaif to decides average. 14 days,tothe past oris equal thanthelower EU numberby theCOVIDof nationswherethe healthapproved si allowedbe the region inifthey arriving from are body,recommended thatpeopleexecutive from outside EU countries.the The European Commission, EU’s non reopenedregardingbordersshouldto whenthebe to members,otherborders EU de EuropeanAs beganUnion nations reopening their 100 105 110 This information must be read in conjunction with the the with conjunction in must read be This information he Federal Reserve’s he Federal 70 75 80 85 90 95 - scale asset scale purchases,although the rt supersedes all prior reports prior all supersedes rt any Ifo Business C

(15.0% expected), withthe(15.0% year Dec '15 deterioration in USdeteriorationin

This includelike would countriesAustralia, Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 ikely notikely includethe States. United - e index, which fell 12.2%e index,fell which Aprilin FOMC minutes 7.5% to 7.5% Jun '17 limate - Sep '17 19 cases19 per 100,000people in -

China trade relations andrelations Chinatrade

came in at 75.7cameat June,in in Dec '17 -

5.1%,while the Mar '18

Index .

batecontinued Jun '18 Sep '18 tuation, measured -

discussed policydiscussed on Dec '18

possible design possible Source: - Mar '19 year fall in yearfall in Jun '19 June Ifo Institute Sep '19 Dec '19 es.

2020

Mar '20

- Jun '20

P 4-5 to 58.4June,in to by new orders helped The gradually economy is recoveringfrom thepandemic. Economic datathat indicates the world’s second normallevels. below the locksince c Month in Review warning, disclaimer, and disclosure at the end of this document. This repo This this document. of attheend disclosure and disclaimer, warning, Ltd Pty Research Lonsec laws. security otherand banks en which placesAutonomy sanctionsonindividuals, Act, Julytoin Senate voted finalizethe The US HongKong andsparked protests subsequentwhich crackdowns. withanti pushahead new to geopoliticalAdding tensio the over.isafter pandemic until JinpingPresident Chinese Xi besaid delayedit should Healththe supportat althoughWorld Assembly, withEU, by the motion receiving the unanimous t according jumped betweendisease animalshumans", and ofanimal hosts COVID objective to isteam’s "advance the understanding of epicentre,virus. 19 StartingWuhan,the virus in team to The WorldHealthOrganisation issending (WHO) a 51.2. privatesmaller, operators,rosemodestly from to 50.7 measuresManufacturingPMI,which predominately June,following of May’s level while the 50.6, Caixin Manufacturing PMI moreChina’snormaloperations.business decadenearlya asin companies reported a return to onsumption, which has failedonsumption, hastoupwhich pick significantly Caixin GeneralCaixin Services PMI

Chinatothe investigate originsofthe COVID othe WHO. downsremainingbegan, 8 around

tities that titiesenable China’s new

was unchanged50.9broadly at in

•

- The investigationwas instigated ABN 11 151 658561 151 11 ABN 19, and 19, ascertain how the - sedition sedition laws in Hong Kong, n was Beijing’s n was decisionto

rosefrom in 55.0 May growingmost the

• official AFSL No. 421445

– - largest 12% -

• rose fromUS$0.67 rose to $0.69 as economic positive data recovery global continues. continue strengtheningtoto the US relative The Currencies ounce. (+3.0%).Zinc Gold (+6.0 Lead of intheprice Copper increase (+11.9%), Metals to 10.4% to US$41.6421.9% activity. The crudeeconomic Brent roseoilspot price wavesecondpotential of coronavirus infections on inventory prices high pushedOil Commodities sentiment otherand ofthe US weighed parts the onrisk world the COVID the sustained

This information must be read in conjunction with the the with conjunction in must read be This information

economically sensitive A rt supersedes all prior reports prior all supersedes rt

continuedtheir gains US$39.

% levels and concernslevels theimpactofof a late inmonth the -

19 althoughlockdowns, in further outbreaks ), Aluminium market’s hopesmarket’sfor aswiftrecovery from

27 per barrel.27

per barre rose3.1% in Ju e r in J r in

(+4.6%), Nickel (+3.9%)and Nickel (+4.6%), In JuneAustralian dollar the . l

unerecord despite high

overthe m andpricethe WTI ustralian dollar ustralian .

ne to US ne to o Tin (+.6%), nth $1783.68per

dollar , , with

is expected June rose

asthe an

2020

P 5-5 Month in Review content. party third to such o property isthe intellectua material such Any to copyright. subject is that material supplied party third contain also may This report Lonsec. of permission micro mechanical, (electronic, means byany or form any may, in report this part of (Cth), no Act 1968 Copyright the under than aspermitted thetempor for Lonsec. Except 20 © Copyright or this document from, or misstatement in, inaccuracy or anyerror for liability all disclaim and agents employees officers, directors, Lonsec, its noobligation assumes Lonsec notice. without change to subject but completion time of the heldat reasonably are advice and ratings conclusions, Financial i the of completeness or to the accuracy relation made in isor given undertaking or warranty person. representation, No anyother upon by Disclaimer: disc timeat and any thedocument to withdraw right reserves Lonsec process, research Lonsec’s in participant an be active longer no product issuer(s) or manager fund the Should proce research Lonsec’s product. financial a acquire to whether decision about making any product before financial each for Statement Disclosure Product or Statement Investment acquisitio possible or the to acquisition relates advice on appropriatenes its advice financial seek independent should or circumstances, financial her his ofor in light appropriate rating the based on decision an investment making Before product(s). financial sell relevant the or redeem to purchase, recommendation particular o circumstances’) needs(‘financial particular and situation financial objectives, theinvestment account into taking without Corporat the (as de Advice” to “General (NZ))limited or Act 2008 Advisers Financial inthe (as defined “classservice” a is this document Warnings: at: is found of Inter Conflicts to refer the please of interest conflicts manages Lonsec bywhich process the of an explanation For product. financial ofthis review the for adopted process research tothe processes and arrangements ser consulting Theinvestment services. consulting investment providing for product issuer or manager this fund from fees receive may and advice financial and other lists product approved portfolios, model includes inves providing for fees receives Lonsec services: Consulting Investment of Disclosure theAnalyst(s). to not are known holdings of these details but document, this to in referred product(s) this documen to in referred product(s) hold the not does Lonsec outcome. rating(s) theto not is linked fee Lonsec’s services. Lonsec other and content research to subscribing for product issuer(s) or manager criteri objective and comprehensive using document, this in out set product(s) f the researching for issuer(s) product or manager fundthe from fee a receives Lonsec date ofpublication: the at Disclosure anyfina about decision any investment making before following theread notice: Important person. It is not a “personalised service” (as defined in the Financial Advisers Act 2008 (NZ)) and does not constitute a constitute not does (NZ)) and Act 2008 Advisers Financial the in (as defined service” nota“personalised person. It is

f that third party or its content providers. The same restrictions applying above to Lonsec copyrighted material, applies applies material, copyrighted to Lonsec above applying restrictions same The content providers. its or party f third that Past perform Past http://www.lonsec.com.au/aspx/IndexedDocs/general/LonsecResearchConflictsofInterestPolicy.pdf

This document is for the exclusive use of the person to whom it is provided by Lonsec and must not be used or relied relied used or be not must and Lonsec by itprovided whom is to of theperson use theexclusive for is document This ions Act 2001(Cth)) and based solely on consideration of the investment merits of the financial product(s) alone, alone, product(s) financial the merits of investment the of consideration on solely based and Act 2001(Cth)) ions 20

- Lonsec Research Pty Ltd (ABN 11 151 658 561, AFSL No. 421445) (Lonsec). This report is subject to copyright of of to copyright is subject report (Lonsec). This AFSL No. 658561, 421445) 151 11 (ABN Ltd Pty Research Lonsec This document is published by Lonsec Research Pty Ltd ABN 11 151 658 561, AFSL No.421445 (Lonsec). Please (Lonsec).Please No.421445 561,AFSL 658 151 11 ABN Pty Ltd LonsecResearch by published is document This

copying, photo copying, nformation presented in this document, which is drawn from public information not verified by Lonsec. Lonsec. by verified not information public from drawn is which document, inthis presented nformation

any loss or damage suffered by the reader or any other person as a consequence of relying upon it. upon ofrelying consequence personasa anyother or the reader by suffered damage or loss any ance is not a reliable indicator of future performance. Any express or implied rating or advice presented in in presented advice or rating implied or Any express ofperformance. indicator future reliable a not ance is

ary copy held in a computer's cache and a single permanent copy for your personal reference or other or reference personal your for copy single permanent and cachea acomputer's held in copy ary to update this document following publication. Except for any liability which cannot be excluded, excluded, be cannot which liability any for Except publication. following document this update to copying, recording or otherwise), be reproduced, stored or transmitted without the prior written prior the transmitted without or stored reproduced, be otherwise), or copying, recording

ss relies upon the participation of the fund manager or product issuer(s). product issuer(s). or manager of thefund participation the upon ss relies ontinue future coverage of financialproduct(s). of the coverage future ontinue n of particular financial product(s), the reader should obtain and consider the consider and should obtain reader the product(s), financial particular n of (s) or advice, the reader must consider whether it is personally is it personally whether mustconsider reader the advice, (s) or t. Lonsec’s representatives and/or their associates may hold the the hold may associates their and/or representatives t. Lonsec’s ncial product mentioned in this document. document. this in mentioned product ncial

a. Lonsec may also receive a fee from the fund thefund from afee receive may also a. Lonsec tment consulting advice to clients, which which toclients, advice consulting tment vices are carried out under separate separate out under carried vices are

est Policy which which Policy est

omission omission June l

f any f any

inancial inancial s. If our s. If fined in fined

2020 the the