WealthFoundations. IPS Dynamic 90 (Super & TTR) Quarterly Report. As of 31/12/2017. First quarter Market update

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1 WealthFoundations IPS Dynamic 90 (Super & TTR) Quarterly Report As of 31/12/2017 First quarter 2018 Market update It was a happy New Year for global financial markets as stocks continued to rally throughout the quarter, ending what was an already strong year on an even higher note. In the United States (US), despite 2,000 tweets and 88 games of golf, President Trump found the time to deliver on one election promise successfully passing his tax reform bill through the senate in December. The new tax measures are expected to have a positive effect on corporate earnings and economic growth, thus increasing the likelihood that the Federal Reserve (Fed) will increase rates more than anticipated in This news stimulated markets that were already trading on unprecedented highs to reach astronomical valuations by quarter end. However, as New York Fed President William Dudley once famously said, too much of a good thing is a bad thing. The average price-to-earnings Shiller (PE) ratio of shares in a country s index provides us with a long term measure of fair value for that country. The US Shiller PE ratio is now higher than it was on the eve of the Great Crash in 1929 and the dotcom bubble in 2000.If this trend continues into August, it will be the longest bull market in U.S. history. Unfortunately, bull markets rarely end without tears. While stock market valuations appear close to their peak, the prospects of a US based recession in the first half of 2018 remains unlikely. The Chinese economy also experienced a stellar quarter with the MSCI China Index delivering a return of 7.6 for the quarter and 54.3 throughout China s efforts to cut production in high-pollution industries like steel and coal also benefited Australian miners tremendously as Chinese producers sought out our higher-grade iron ore to meet demand. Nevertheless, 2018 will be a make-or-break year for China where total debt accounts for over 250 of GDP. In November the nation s top leaders came together for the 19th Communist Party Congress solidifying President Xi Jinping s reform agenda to rebalance the economy toward higher-quality, consumption-led growth and cut down on the issuance of unproductive credit. The President s increasing political power suggests few reasons to doubt his ability to achieve these goals, however bad debts in China are equivalent to a loss of approximately 20 of GDP. While China s latest growth figures have surprised on the upside, the challenges facing policymakers to address this bad debt are still steep and the potential for policy error remains high. Model update These financial market conditions have raised a critical issue: how do we make the most of late-cycle returns while preparing for what we see as the inevitable downswing? We are addressing this issue by keeping your model exposure to US shares minimal, which we feel will be the source of the downswing, and instead maximising your exposure to regions that have attractive valuations and a greater propensity for long term growth such as Europe, Asia and emerging markets. We believe our three international share managers, Stewart Investors, RARE and Antipodes, are well positioned to achieve this given their low exposure to US shares relative to peers. These fund managers also invest in high-quality and non-cyclical businesses with long investment horizons providing exposure to late-cycle returns while offering some protection on the downside. Within Australian shares, Schroders was a strong contributor to your portfolio over the quarter as their overweight position in high quality resource companies captured the recent rally in commodity prices. Hyperion was also a strong contributor as their largest holding, REA Group (realestate.com.au), benefited from the Australian residential property market rally. Justin McLaughlin Chief Investment Officer

2 WealthFoundations IPS Dynamic 90 (Super & TTR) As of 31/12/2017 Portfolio objective The WealthFoundations IPS Dynamic 90 portfolio is a portfolio of actively managed assets designed to achieve significant returns over the long term. Performance^ Since inception (p.a)** 3 years (p.a) 2 years (p.a) 1 year (p.a) 6 months () 3 months () 1 month () Total Return Volatility **Inception Date: 23/09/2014 Growth of $100 invested at inception ^ Time Period: 24/09/2014 to 31/12/ / / / / / / /2017 ^ Performance data is after applicable fees and taxes, and assumes the reinvestment of distributions. Past performance is not indicative of future performance. Due to the flexibility of rebalancing and variations between accounts, performance shown is indicative only and, for example, assumes that there are no deposits, withdrawals nor exceptions to regular rebalancing in the model portfolio. Return and risk vs. peer group Time Period: 1/01/2017 to 31/12/2017 Peer Group (5-95): Insurance and Pension Funds - Australia - Superannuation - Multisector Aggressive Return () What is a risk and return chart? The chart to the left shows the returns and associated risk of the model portfolio (darker shape) against its peers (light grey circles), over the past year. The past years return (as a percentage) is shown on the vertical axis. The risk (as measured by the standard deviation) of the investment over the past year is shown on the horizontal axis. Risk Underlying funds APIR Code Global Broad Category Group Portfolio Weighting CFS Intrastructure Fund CLAL Fixed Interest Fund CLAL Antipodes Global Fund RARE Emerging Markets Fund CLAL Listed Property Fund Hyperion Australian Shares Fund Schroders Australian Equity Opps Fund Stewart Investors Worldwide Fund CLAL Cash Fund CVW0009AU Equity CVW0006AU Fixed Income CVW2683AU Equity CVW0018AU Equity CVW0008AU Equity CVW0013AU Equity CVW0012AU Equity CVW0015AU Equity 7.50 CVW0005AU Money Market 5.00 Page 1 of 5

3 WealthFoundations IPS Dynamic 90 (Super & TTR) Performance of current underlying funds 3 Yr (p.a) 2 Yr (p.a) 1 Yr (p.a) 6 Mth () 3 Mth () 1 Mth () CFS Intrastructure Fund CLAL Fixed Interest Fund CLAL Antipodes Global Fund RARE Emerging Markets Fund CLAL Listed Property Fund Hyperion Australian Shares Fund Schroders Australian Equity Opps Fund Stewart Investors Worldwide Fund CLAL Cash Fund Please note: The CLAL Antipodes Global Fund was established 22nd March Asset class breakdown Cash 9.2 Australian Equities 19.4 Australian Fixed Interest 8.8 International Fixed Interest 5.3 Australian Property 10.0 International Equities 47.3 Equities: Market capitalisation Equities: Industry exposure Giant 21.7 Large 48.9 Mid 25.5 Small 2.9 Micro 1.0 Energy 6.3 Industrials 18.5 Consumer Staples 5.3 Financials 9.2 Telecom Services 3.3 Utilities 18.5 Materials 4.5 Consumer Discretionary 7.0 Healthcare 5.0 Information Technology 8.1 Real Estate 14.3 Equities: Geographical exposure North America 19.7 Latin America 5.6 United Kingdom 4.0 Europe developed 10.0 Australasia 38.0 Japan 5.7 Asia developed 2.2 Asia emerging 14.8 Fixed Interest: Credit quality AAA 30.5 AA 12.5 A 20.3 BBB 30.4 BB 4.1 B 1.6 Not Rated 0.5 Page 2 of 5

4 Top holdings of the underlying infrastructure, property and equity funds CVW WF-CFS Infrastructure (Super) - Top Holdings WealthFoundations National Grid PLC Transurban Group Kinder Morgan Inc P Atlantia SpA Dominion Energy Inc American Tower Corp East Japan Railway Co Enbridge Inc NextEra Energy Inc Southern Co Utilities 8.56 Industrials 7.17 Energy 6.84 Industrials 5.34 Utilities 5.06 Communication Services 4.93 Industrials 4.78 Energy 4.56 Utilities 4.49 Utilities 4.03 CVW WF-CLAL Listed Property (Super) - Top Holdings Scentre Group Westfield Corp Goodman Group Stockland Corp Ltd Dexus GPT Group Vicinity Centres Mirvac Group Charter Hall Group Investa Office Fund Real Estate Real Estate Real Estate Real Estate 9.22 Real Estate 8.32 Real Estate 7.75 Real Estate 7.39 Real Estate 7.36 Real Estate 2.36 Real Estate 1.92 CVW WF-Hyperion Australian Shares(Super) - Top Holdings Seek Ltd REA Group Ltd Cochlear Ltd Domino's Pizza Enterprises Ltd Macquarie Group Ltd BT Investment Management Ltd IRESS Ltd Brambles Ltd Technology One Ltd Technology Technology Healthcare Consumer Cyclical Financial Services 7.16 Financial Services 5.16 Technology 3.95 Industrials 3.67 Technology 3.44 Page 3 of 5

5 Top holdings of the underlying infrastructure, property and equity funds CVW WF-Stewart Investors Worldwide S (S) - Top Holdings WealthFoundations Portfolio Date: 30/09/2017 Henkel AG & Co KGaA Unilever PLC Waters Corp Merck KGaA Novo Nordisk A/S B Beiersdorf AG Ansys Inc Tata Consultancy Services Ltd Ain Holdings Inc Consumer Defensive 8.53 Consumer Defensive 6.68 Healthcare 4.53 Healthcare 4.36 Healthcare 3.92 Consumer Defensive 3.05 Technology 2.93 Technology 2.76 Consumer Defensive 2.70 CVW WF-RARE Emerging Markets (Super) - Top Holdings Malaysia Airports Holdings Bhd Bharti Infratel Ltd Gujarat State Petronet Ltd PT Jasa Marga (Persero) Tbk Class B Power Grid Corp Of India Ltd NTPC Ltd China Merchants Port Holdings Co Ltd Telesites SAB de CV B-1 Compania de Saneamento de Minas Gerais - COPASA MG Infraestructura Energetica Nova SAB de CV Industrials 6.63 Communication Services 6.33 Utilities 5.94 Industrials 5.79 Utilities 5.40 Utilities 5.11 Industrials 5.08 Communication Services 4.17 Utilities 4.16 Utilities 3.80 CVW WF-Schroder Equity Opps (Super) - Top Holdings Portfolio Date: 31/08/2017 Rio Tinto Ltd BHP Billiton Ltd Woolworths Group Ltd National Australia Bank Ltd Australia and New Zealand Banking Group Ltd Westpac Banking Corp CYBG PLC DR Commonwealth Bank of Australia Alumina Ltd Basic Materials 4.32 Basic Materials 4.26 Consumer Defensive 4.08 Financial Services 4.07 Financial Services 3.79 Financial Services 3.62 Financial Services 3.33 Financial Services 3.28 Basic Materials 3.11 Page 4 of 5

6 Top holdings of the underlying infrastructure, property and equity funds CLAL Antipodes Global Fund (Super) - Top Holdings WealthFoundations Cisco Systems Inc Ping An Insurance (Group) Co. of China Ltd H KT Corp Inpex Corp Microsoft Corp Gilead Sciences Inc Baidu Inc ADR Technology 4.01 Financial Services 3.50 Communication Services 3.47 Energy 3.39 Technology 3.34 Healthcare 3.30 Technology 3.30 Important Information This document is issued by ClearView Life Nominees Pty Ltd (ClearView) ABN AFS as Trustee for the ClearView Retirement Plan ABN which includes ClearView WealthFoundations Super and Pension, USI CVW0001AU. This document is not intended to represent investment or professional advice. This information does not take into account your individual objectives, financial circumstances or needs. You should assess whether the information is appropriate for you, having regard to your objectives, financial circumstances and needs. You should consider the disclosure documents when deciding whether or not to acquire or to continue to hold the investment. No representation or warranty is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions or other information contained in this document. This document may contain certain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of ClearView. You should not place reliance on forward-looking statements. To the maximum extent permitted by law, ClearView and its related entities and each of their respective directors, officers and agents disclaims all liability and responsibility for any direct or indirect loss or damage which may be suffered as a result of relying on anything in this document including any forward-looking statements. Past performance is not an indication of future performance. Page 5 of 5