MARKET REPORT THE MONTHLY A SNAPSHOT OF THE KEY POINTS FOR JUNE. Aussie Shares underperformed while bonds excelled.

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1 ISSUE 6 June 204 THE MONTHLY MARKET REPORT A SNAPSHOT OF THE KEY POINTS FOR JUNE The RBA held the overnight cash rate steady at 2.50% in June as expected. The rate was also left unchanged during the July sitting. Yields on fixed income securities fell further over the month, with the 3 Month Bank Bill Swap Rate and the 0 Year Australian Bond Rate decreasing by -0.05% and -0.2% respectively. Australian Shares had a poor month, with the All Ordinaries Price and the S&P/ ASX 200 Price declining by -.68% and -.78% respectively. Australian Listed Property outperformed the broader domestic equities market, with the S&P/ASX 300 Property Price adding 0.60% over the month. Many of the major global equities markets recorded positive returns in June. While the US and Japan led gains over the month, the UK and European shares underperformed, decreasing by -.47% and -0.69% respectively. Gold prices jumped by 6.2% over the month, while oil prices expanded by 3.00% (both measured in USD). However the overall US$ CRB Spot Commodity Price fell by -0.5% in the past month. Aussie Shares underperformed while bonds excelled While global shares in many countries recorded gains over the month, Aussie shares lost ground, recording a loss of -.45%. The Australian Dollar remained above US94 and commodity prices (in AUD terms) deteriorated further in June. Iron ore was the most significant decliner of the major commodities, decreasing by 2.2% over the month. Interest rates in Australia remained at historically low levels and credit growth has picked up modestly in June. Domestic defensive assets performed well over the month on the back of falling bond yields and narrowing credit spreads. The Australian Dollar continued to appreciate against most of the major currencies. In particular, it increased by.22% against the US Dollar, 0.79% versus the Euro and 0.74% against the Japanese Yen. The Aussie Dollar depreciated by -0.85% over the British Pound. The Australian Trade Weighted (TWI) rose by 0.70% in June, indicating a further increase in Australia s international competitiveness. US equity market volatility increased by 0.7% for the month, ending the month priced at.57%, as measured by the S&P VIX. Bei Cao Analyst

2 MARKET INDICATORS Market Indicator End of Month Price Previous Month Price Month Change in Price 2 Months Ago Price 2 Month Change in Price Interest Rates Overnight Cash Rate (%) Month BBSW (%) Year Bond Rate (%) Australian Shares All Ordinaries % % S&P/ASX % % Property ASX 300 Property % % Regional Shares Dow Jones Industrials (US) % % S&P 500 (US) % % FTSE 00 (UK) % % STOXX 50 (EUR) % % TOPIX (Japan) % % Hang Seng (Hong Kong) % % Commodities US$ Gold Price % % US$ Oil Price W Texas Crude % % US$ CRB Spot Commodity % % Exchange Rates AUD / USD % % AUD / EUR % % AUD / GBP % % AUD / JPY % % TWI % % Volatility VIX % % % CASH, FIXED INCOME & CREDIT Zenith Benchmarks Yr Australian Cash UBSA Bank Bill Australian Bonds UBSA Australia Composite All Maturities Barclays Global: Australia TRI Barclays Australian Corporate TRI International Bonds Barclays Global Aggregate $A (H) Barclays Global Agg Treasuries TRI $A (H) Barclays Global Agg Corporate TRI $A (H) Emerging Markets Debt Barclays EM Hard Currency Agg TRI $A (H) SUMMARY OF STATISTICS Australian Cash gained 0.22% in June, as measured by the UBSA Bank Bill. The Australian Bond Market continued to perform sturdily over June, with the UBSA Australia Composite All Maturities increasing by 0.80%. Within the asset class, Government Bonds were again the stronger performer over the month, gaining 0.92%, while Corporate Bonds increased by 0.73%. International Bonds also increased in June, with the Barclays Global Aggregate (Hedged) $A adding 0.55% over the month. Within the Global Fixed Income space, government debt outperformed corporate debt by 0.8%. Emerging Markets Debt enjoyed another strong month, with the Barclays Emerging Market Hard Currency Aggregate Total Return $A (Hedged) gaining 0.95% in June. COMMENTARY The RBA kept the overnight cash rate on hold at 2.50% in the most recent meetings, with the Governor s statement accompanying the decision to retain the key line that the current accommodative stance of policy was likely to be appropriate for some time yet. The latest macro data shows that although economic growth has been firmer in the past year, consumer confidence reduced sharply following the federal budget. Commodity prices (in AUD) dropped by -2.9% in June, with iron ore continuing to be the driver of the recent falls. The Australian Manufacturing PMI moved down slightly, by 0.3 points to 48.9 points in June. Housing construction and new home sales expanded significantly over the past year, though the pace of increase has been moderate in recent months. Credit growth has picked up modestly in Australia and bond yields lowered further over the month. Overall, Australian Bonds enjoyed a solid 0.80% return in June, with Government Bonds gaining 0.92% to be

3 the standout performer. The yield curve has flattened substantially over the month, with the 3 Year and 0 Year Government Bond Yields decreasing by -0.3% and -0.2% respectively. Corporate debt spreads also tightened for the month, with the itraxx Australian (represents the performance of 25 Australia investment grade companies) falling from to 84.66, indicating spread compression. The US Business output boomed over the month, with the US Manufacturing PMI jumping to 57.3 in June, from 56.4 in May (a reading well above 50.0, signals a robust improvement in overall business conditions). Manufacturing output and new orders rose at the fastest pace since April 200 and job creation hit a fourmonth high. The US Consumer Confidence improved further in June, with car and light truck sales rising.2% over the month to an annualized level of 6.98 million, the highest pace since July International Bonds gained 0.55% over the month, as measured by the Barclays Global Aggregate (Hedged) $A. Treasury bonds and corporate bonds added 0.58% and 0.40% respectively in June. Government Bond Yields increased slightly over the month, with the US 0 Year and UK 0 Year yields rising by 0.09% and 0.05% respectively. Credit spreads narrowed further in June, with the High Yield and Emerging Markets debt spread shrinking by -0.6% and -0.2% respectively. Within the asset class, the Barclays Emerging Market Hard Currency Aggregate Total Return $A (Hedged) was again the best performer over the month, rising 0.95% 0.80% GOVERNMENT BONDS - CHANGE IN YIELDS 0.60% 0.40% 0.20% 0.00% -0.20% -0.40% -0.60% -0.80% Month Year AUS 3 YR -0.3% -0.38% -0.4% AUS 0 YR -0.2% -0.54% -0.22% US 3 YR 0.09% 0.00% 0.22% US 0 YR 0.05% -0.9% 0.04% UK 3 YR 0.2% 0.5% 0.62% UK 0 YR 0.0% -0.07% 0.23% JAPAN 3 YR -0.0% -0.0% -0.06% JAPAN 0 YR -0.0% -0.08% -0.29% 0.00% Global Corporate Debt - Change in Spreads -0.20% -0.40% -0.60% -0.80% -.00% -.20% -.40% -.60% -.80% Month Year AAA -0.02% -0.06% -0.4% Inv Grade -0.0% -0.8% -0.97% High Yield -0.6% -0.28% -.64% Emg Mkts -0.2% -0.37% -0.88%

4 AUSTRALIAN SHARES Zenith Benchmarks Yr Market Capitalisation S&P/ASX S&P/ASX 50 Leaders S&P/ASX Midcap S&P/ASX Small Ordinaries S&P/ASX Emerging Companies GICS Sectors S&P/ASX 300 Materials S&P/ASX 300 Industrials S&P/ASX 300 Consumer Discretionary S&P/ASX 300 Consumer Staples S&P/ASX 300 Energy S&P/ASX 300 Healthcare S&P/ASX 300 Information Technologies S&P/ASX 300 Telecommunications S&P/ASX 300 ancials ex Property S&P/ASX 300 Utilities S&P/ASX 300 Property SUMMARY OF STATISTICS Australian equities decreased by -.45% in June, as measured by the S&P/ASX 300 Accumulation. The ASX 50 Leaders and Midcap 50 were the largest contributors to the sluggish domestic equity market over the month, declining by -.52% and -.2% respectively. The Emerging Companies added.06% in June, to be the better performer. Many sectors reported losses over the month, with Consumer Staples and Healthcare deteriorating by 4.49% and -3.2% respectively to be the worst performers. Utilities and Property were the only sectors posting positive returns in June, gaining.09% and 3.00% respectively. Utilities and Property were the only sectors posing positive returns in June. COMMENTARY Australian Shares underperformed their global counterparts in June, with the S&P/ASX 300 Accumulation declining by -.45%. Some of the market falls were caused by last minute share sales, where investors sought to lock in gains and realising profits in anticipation of tax bills. The latest released data showed a sharp decrease in new home sales, which fell by -4.3% in May. Notwithstanding this, new home sales grew by 2.0% compared to the same period last year. Consumer sentiment rebounded in June, after a sharp fall post the federal budget. Softer conditions in the Chinese steel market have driven Iron ore prices down further over the past month, taking losses in commodity prices to -9.6% over the past year (in Australian Dollar terms). The S&P/ASX 50 Leaders and the S&P/ASX Midcap 50 posted negative returns in June, falling by.52% and -.2% respectively. Interestingly the S&P/ASX Emerging Markets delivered a positive return of.06%. In the first half of the year, Small and Micro caps have trailed the broader larger cap index by 4.25% and 7.4% respectively. On a sector basis, Consumer Staples contributed the majority of June s decline, with Bega Cheese Ltd (-8.29%), Select Harvests Ltd (-.6%) and Woolworths Ltd (-6.53%) being the worst performers. Bega Cheese s share price was influenced by the takeover tussle for Warrnambool Cheese and Butter. Almond producer Select Harvests stock price dropped significantly over the month due to weather issues. Supermarket giant Woolworths reported a further earnings downgrade from its loss-making hardware business and recent heath check trial scandals. The increasing level of competition from the fast-growing discounter Aldi has also taken some of Woolworths market share. The Healthcare sector was also caught in the downdraft over the month, losing -3.2%. A few examples of the poor performing companies include Mayne Pharma Group Ltd (-8.%), Mesoblast Ltd (-7.64%), and CSL Ltd ( 5.72%).

5 0% GICs SECTOR PERFORMANCE RELATIVE TO ASX 300 ACCUMULATIONN INDEX 0% -0% -20% MATERIALS INDUSTRIALS CONS DISC CONS STAP ENERGY HEALTHCARE IT TELCO FIN EX-AREIT UTILITIES PROPERTY Month 0.03% -.7% -0.3% -3.05% 0.20% -.77% -0.5% -.2% 0.32% 2.54% 4.45% -3.9% -0.94% -2.49% -0.59% 4.24% -2.80% -.09% 0.83% 0.34% 6.49% 7.99% Year 0.92% -.5% 0.22% -.28% 0.7% -6.58% -3.57% -.62% 4.66% -0.05% -6.53% This chart shows GICs Sector performance relative to the ASX 300, over the past month, quarter and year time periods. GICs Sector weightings for the ASX 300, as at 3 January 204 were as follows: Materials 7%; Industrials 7%; Consumer Discretionary 5%; Consumer Staples 8%; IT %; Telecommunication Services 5%; ancials ex-areit 37%; Property 7%; Energy 6%; Utilities 2%; Healthcare 5%. LARGE, MID AND A SMALL CAP PERFORMANCE RELATIVE TO ASX 300 ACCUMULATION INDEX -0%- 0% % -0.07% TOP % 0.04% 0% 0.33% MIDCAP % 3.50% 0.33% SMALL CAPS -3.2% -4.4% 2.5% This chart shows market capitalisation segmental performance relative to the S&P/ASX 300 Accumulation. MICRO CAPS -6.2% -2.48% Month Year

6 INTERNATIONAL SHARES Zenith Benchmarks Yr International Shares - MSCI World Ex-Au ($A) Unhedged MSCI World ($A) MSCI Small Cap World Ex Aus ($A) MSCI AC World ($A) International Shares - MSCI World ex-au (Local Currency) Local Currency MSCI World (Local Currency) MSCI World S. Cap ex-au (Loc. Curr.) MSCI AC World (Local Currency) Regional Shares - MSCI North America Local Currency MSCI Asia MSCI AC Asia ex-japan MSCI China MSCI Europe MSCI Emerging Markets MSCI India MSCI Japan Global Gold Shares in $A FTSE Gold Mines Global Resources in $A HSBC Global Mining SUMMARY OF STATISTICS The MSCI World ex-australia Unhedged AUD increased by 0.44% in June and the hedged local currency equivalent added.48% for the month. On a regional basis, India was again the strongest performer in June, increasing by 5.83%. Europe underperformed the broader market, recording a loss of -0.94% over the month. The FTSE Gold Mines $A jumped by 2.6% over the month, bringing its past year return to a positive reading of 6.87%. COMMENTARY International Shares continued to expand in June, with the MSCI World ex-australia Local Currency increasing by.48%. As expected, the US Fed continued to reduce its monthly asset purchases by a further $US 0 billion, to $US 35 billion a month starting in July 204. The committee also indicated that the federal funds rate would be held low for a considerable time after the asset purchase program ends to achieve its objectives of maximum employment and 2 percent inflation. The US released further optimistic data, with the unemployment rate falling to the lowest level since pre GFC highs in June to 6. percent. The US Services PMI jumped to 6.0 in June, up from 58.4 in May, signalling the fastest pace of expansion since late International Shares continued to expand in June, with MSCI World ex-australia Local Currency increasing by.48%. Economic activities in China also improved in June, with industrial production, retail-sales and exports all increasing over the month. The China HSBC manufacturing PMI rose above 50 for the first month this year to 50.7 in June, indicating a strong expansion in manufacturing activities. Overall the MSCI China Local Currency increased by 3.4% in June, bringing its past year returns to 5.58%. After a period of sluggish performance through April and May this year, Japanese stocks have rallied strongly in June, with the MSCI Japan Local Currency rising 4.77% over the month. Inventory levels and net trade improved over the month, as imports declined. Prime Minister Shinzo Abe unveiled the Third Arrow of reforms over the month aiming at boosting Japan s long-term economic growth through phased-in corporate tax cuts and extra support to women and foreign workers. Indian stocks surged by 5.83% in June, to be the best regional performer this year. The newly elected government Bharatiya Janata Party has announced a series of reform plans over the month, including industrial restructuring to attract private investments, reducing inflation and simplifying the taxation system. The European Share Market was the only region posting losses in June, with the MSCI Europe Local Currency declining by -0.94%. The Eurozone s industrial growth slowed over the month, with the manufacturing purchasing managers index PMI dropping to 5.8, the lowest level in 204. The geopolitical tensions in Ukraine and Iraq have also affected the Eurozone economic sentiment, dragging on the region s growth. The violence and political turmoil have brought gold back in demand, with the FTSE Gold Mines $A soaring 2.6% over the month. The HSBC Global Mining $A also increased in June, rising 3.43% to bring its yearly gain to 8.75%.

7 Zenith Benchmarks Yr Currency Spot Rates AUD / USD AUD / EUR AUD / GBP AUD / JPY Investors should note that investments in any international assets are subject to the risk of currency fluctuations. If a foreign investment is unhedged, the gain / loss from the relevant currency pair should be deducted from the return of the asset to calculate the approximate return of the investment. REGIONAL PERFORMANCE RELATIVE TO MSCI WORLD INDEX IN HEDGED $A TERMST -5% -0% -5% 0% 0..84% 5% MSCI M All Countries World ( Local Currency) vs. MSCI ACWI Sector Performance -5% -0% -5% 0% 0 5% 0% -0.0% Cons. Disc % -3.34% NORTH AMERICA 0.70% 2.75% Cons. Staples -.69% -.97% -0.62% -2.32% Energy 2.66% 5.49% 2.30% EUROPE -.37% -.5% ancials -6.48%% -2.90% -.25% ASIA EX-JAPAN % 0..83%.39% Health Care Industrials -0.3% -.7% -2.22% -0.39% 0.52% 3.0% 3.39% IT 0.97% 0.88% 7.39% JAPAN -9.67% 0.50% Materials -4.9% -.72% 0.36% EMERGING MARKETS -7.97%.0% 0.72% Teleco. Utilities -8.97% -3.83% -2.2% -2.36%.2%.3% Month Year Yrr Zenith Benchmarks Industry Sectors - MSCI ACWI Consumer Discretionary Yr Local Currency MSCI ACWI Consumer Staples MSCI ACWI Energy MSCI ACWI ancials MSCI ACWI Health Care x MSCI ACWI Industrials MSCI ACWI IT MSCI ACWI Materials MSCI ACWI Teleco. Services MSCI ACWI Utilities

8 PROPERTY & INFRASTRUCTURE Zenith Benchmarks Yr Australian Listed Property S&P/ASX 300 Property FTSE E/N Australia Global Listed Prop. $A (H) FTSE E/N Dev Global Listed Prop. (LC) FTSE E/N North America FTSE E/N Euro Zone FTSE E/N UK FTSE E/N Developed Asia FTSE E/N Japan Australian Listed Infra. S&P/ASX 300 Utilities Global Listed Infra. $A (H) UBS Global Infra. & Utilities Global EM Listed Infra - $A (H) UBS EM Infra. & Utilities SUMMARY OF STATISTICS Australian Listed Property had a strong month, with the S&P/ASX 300 Property Accumulation increasing by 3.00% in June. Australian Listed Infrastructure also performed well, with the S&P/ASX 300 Utilities rising.09%. Global Listed Property recorded positive results in most regions, with the FTSE EPRA NAREIT Developed Total Return (Hedged $A) gaining.2%. Global Listed Infrastructure rose by 2.59% in June, and the Emerging Markets equivalent was up by 4.5%, both measured in hedged Australian Dollar terms COMMENTARY Australian Listed Property was the strongest sector in the domestic equity market in June, also outperforming GREITs, with the S&P/ASX 300 Property Accumulation gaining 3.00%, while the global hedged equivalent increased by.2%. Some of the top performers in the domestic property market over the month include Ingenia Communities Group (.%), Westfield Corp (9.84%) and Astro Japan Property Group (8.9%). Ingeria s share prices rebounded in June, offseting a sharp fall in May due to concerns in delayed new retirement homes. Westfield Corp (ASX: WFD) share price soured over the month after the restructuring of Westfield Group and Westfield Retail Trust. t t t t r This chart shows Regional performance relative to the FTSE EPRA/NAREIT over month, quarter and year time periods. Regional weightings for the FTSE, as at 3 March 204 were as follows: North America 67.4%; Western Europe 8.7%; Asia Pacific 3.8%; other 0.%. Month FTSE EPRA NAREIT REGIONAL LISTED PROPERTY RETURNS -.02% 0.85% 2.57%.27% 2.58% 2.97% 4.97% 7.72% 7.52% 9.88% 9.87% 8.92% 3.28% While many regional property markets expanded over the month, UK listed properties lost by -.02% in June. Notwithstanding this, UK properties gained 3.25% over the past year to be the best performing region within the asset class. Year 2.97% 4.4% 25.% 3.25% June was a good month for listed infrastructure in many countries, with the UBS Global Infrastructure and Utilities Hedged AUD gaining 2.59%. Author: Bei Cao Zenith Investment Partners (AFSL ) Tel (03) Data source Bloomberg y 0.33% Year Month NORTH AMERICA 7.52% 7.72% 0.85% EURO ZONE 25.% 3.28% 2.57% UK 3.25% 4.97% -.02% ASIA 2.97% 9.88%.27% JAPAN 4.4% 9.87% 2.58% AUSTRALIA 0.33% 8.92% 2.97% DISCLAIMER: Zenith is the holder of Australian ancial Services License No for the purposes of providing General Advice (as defined by section 766B of Corporations Act 200). General Advice provided by Zenith is limited to Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any specific person who may read it. It is not a specific recommendation to purchase, sell or hold any relevant product(s). Zenith advises that investors should seek their own independent financial advice before making any investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation or needs. Investors should obtain a copy of, and consider, any relevant product PDS or offer document before making any decision. This advice is prepared exclusively for clients of Zenith. The material contained in this advice is subject to copyright and may not be reproduced without the consent of the copyright owner. The information contained in this advice is believed to be reliable, but its completeness and accuracy is not guaranteed. Zenith accepts no liability, whether direct or indirect arising from the use of information contained in this advice.