Product Assessment. BetaShares Managed Risk Global Share Fund (managed fund) Report data as at 31 Aug 2017 Rating issued on 04 Oct 2017

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1 Report data as at 31 Aug 2017 Rating issued on 04 Oct 2017 Product Assessment Highly Recommended Recommended Approved Not Rated Redeem BetaShares Managed Risk Global Share Fund (managed fund) APIR Code ASX:WRLD Asset / Sub-Asset Class International Shares Exchange Traded Fund - ETF Investment Style Index Investment Objective To provide exposure to a broadly diversifed portfolio of global shares listed on the stock exchanges of the world's major developed economies and reduce the volatility of the Fund's equity inversetment returns and cushion downside risk. Zenith Assigned Benchmark MSCI World Index $A Net Returns (% p.a.) 1 yr 6 mth 3 mth Fund Benchmark Median Income (% p.a.) Income Total FY to 30 Jun VIEWPOINT & RATING The Fund is an Exchange Traded Fund (ETF) that is uniquely positioned in seeking to provide investors with an exposure to global equities whilst also incorporating a dynamic derivative overlay strategy. The overlay is managed by Milliman Pty Limited (Milliman), that is structured to reduce overall portfolio volatility and minimise capital losses in declining markets. With a longer time horizon to assess the efficacy of the risk overlay strategy, Zenith's confidence has increased, particularly with respect to the responsiveness of the overlay strategy during stressed equity environments. The Fund's issuer is BetaShares Capital Ltd (BetaShares), a specialist provider of ETFs which was established in 2009 and first launched a listed product in BetaShares is a wholly owned subsidiary of BetaShares Holdings Pty Ltd which is a subsidiary of Mirae Asset Global Investment Group (Mirae). As at 31 August 2017, BetaShares had $4.2 billion in funds under management across 42 managed products. Mirae, established in 1997, is a large Asian asset manager based in South Korea that managed in excess of $US 100 billion in assets as at 31 August Mirae offers global support to BetaShares, through its 85% stake in Horizons ETFs, as well as strategic direction at the board level. Milliman is responsible for the management of the Milliman Managed Risk Strategy (MMRS). Milliman provides investment advisory, hedging, and consulting services on $US 160 billion in global assets, as at 30 September Based in Sydney, the BetaShares investment team of four is led by Chief Investment Officer Louis Crous. Crous has over 14 years experience in financial services from prior roles at nabinvest and Rand Merchant Bank. Crous is responsible for the day-to-day operational control of all BetaShares ETFs. Zenith notes that the BetaShares product suite has expanded rapidly in recent years and while it has not presented any adverse issues to date, Zenith believes the investment team is less well resourced compared to peers. Although the Fund's approach is traditionally process based, which limits the threat of key person risk, Zenith believes a degree of key person risk rests with Crous. The Fund gains exposure to global equities by holding U.S listed ETFs. The equities component of the Fund seeks to replicate the performance the MSCI World Index, which is weighted by market capitalisation. The MMRS is managed separately from the equity portfolio. The derivative overlay is structured to cap the Fund's volatility (as measured by the Standard Deviation) at 12% p.a. In addition, the MMRS seeks to reduce capital losses in market downturns, whilst allowing for a material participation in market upswings. Although Milliman has a long and successful track record managing dynamic protection strategies, Zenith believes that the dynamic protection strategy employed in the Fund may not provide high levels of protection in certain market environments. This is specifically the case around market gap events, whereby the hedging system may not be responsive enough to protect capital. However, Zenith notes that the only way to improve the level of protection is through the use of options, which we recognise is significantly more costly to implement. NOTE: Zenith ratings applied to ETFs do not take into account price volatility or direction and do not represent a buy/sell recommendation based on an ETF's valuation. Potential investors should make their own determination of the appropriateness of prevailing trading prices when utilising ETFs. FUND FACTS Net equity exposure can vary between 0% and 100% Hedging is used to for downside protection Market capitalisation of approximately $41 million as at 31 August 2017 ABSOLUTE RISK (SECTOR) VERY HIGH HIGH MODERATE LOW VERY LOW RELATIVE RISK (FUND WITHIN SECTOR) Geared Active - Benchmark Unaware Active - Benchmark Aware Index - Enhanced/Fundamental Index Fees (% p.a., Incl. GST) Management Cost: 0.54% INCOME DISTRIBUTIONS PER MONTH QUARTER 6 MONTH ANNUM INVESTMENT TIMEFRAME 1-2 YRS 3-4 YRS 5-6 YRS 7+ YRS Zenith charges a fee to the Product Issuer to produce this report. For further information please refer to the Disclaimer & Disclosure at the end of this report.

2 APPLICATIONS OF INVESTMENT SECTOR CHARACTERISTICS The Zenith International Shares - Exchange Traded Funds sector consists of all ETFs investing in offshore equities markets (global or country funds). The sector incorporates a range of ETF styles including: Market Beta ETFs; Alternative Beta ETFs; and Active ETFs. These products may encompass a range of strategies across the market capitalisation spectrum or adopt sector specific themes. Zenith benchmarks all ETFs against their specific benchmarks as well as against a relevant International Equities Index as an additional yardstick where relevant. International equities offer Australian investors the ability to access a broader opportunity set, with the potential to invest in sectors not represented or not well represented in the Australian market. Given international markets are not perfectly correlated with the Australian market, International equities also affords portfolio diversification benefits. Global Long Short consists of funds that invest in international equities. Each long/short manager uses vastly different investment processes, with some managers being fundamentally driven, others using quantitative tools, while others have trading style biases. Funds in this sector employ active extension or variable beta investment styles. Active extension funds can be used in place of a traditional long only fund where the investor wishes to increase the active risk of their fund allocations in equities. That is, the fund can build a higher conviction portfolio by shorting stocks that it thinks will underperform and use the proceeds to invest long in stocks that may outperform. Variable beta funds can be used by investors to vary market risk compared to a long only fund that must be close to fully invested. Variable beta funds can decrease their market exposures to protect against market falls (by increasing shorts or cash holdings). In general, investing in quality variable beta funds should provide investors a smoother return profile than simply investing in the index. Funds in this sector vary by geographic concentration, investment style and fund structure. Some funds may focus on particular regions and fundamental analysis, whilst others may have a broad investment mandate focusing on thematic trends. PORTFOLIO APPLICATIONS International equities provide investors with a broad exposure to industries and countries. With such a broad universe, it is expected that managers can deliver superior returns to Australian equities and more conservative asset classes. However, the expectation of greater returns comes with increased volatility, especially when currency is factored in. Therefore, it is recommended that investors adopt a longer time frame when investing in international equities. It is also recommended that investments in international equities be blended with domestic equities and other non-correlated asset classes such as fixed income to diversify the impact of a downturn in the global economy. The Fund is considered suitable for investors with a high risk tolerance, seeking investment returns that are comprised primarily of capital growth. Whilst Zenith believes that the MMRS is likely to reduce the volatility of the underlying portfolio, given the risks inherent in a global equities, Zenith considers an appropriate investment horizon to be at least five years. Zenith believes the Fund is a relatively unique product within the global equities sector. The Fund aims to reduce losses in market downturns whilst allowing for material participation in market upswings. Given the Fund's asymmetric return/risk profile, Zenith believes the Fund may be held as an investor's standalone exposure to global equities. However, the Fund may underperform peers in certain market conditions, that is, flat or strong rising markets. As the Fund emphasises capital preservation, it benefits from the effect of compounding returns. That is, the Fund will typically lose less in market downturns, which means that a lower return is required to recover the losses. The Fund is expected to exhibit moderate levels of portfolio turnover owing to its use of derivatives. The Fund may therefore suit individuals on higher marginal tax rates looking primarily for growth rather than income (i.e. a lower level of income distributions will be paid out). RISKS OF THE INVESTMENT SECTOR RISKS Funds within the International Equities - Exchange Traded Products sector are exposed to the following broad risks: MARKET DOWNTURN: The biggest risk for all global equities based products is a significant downturn across global equities markets, which could lead to periods of negative performance. This risk can be significantly reduced by investors adopting a medium to long-term (5+ years) investment time frame. REGULATORY/SOVEREIGN RISK: Given the diversity of the global equity investment universe from both a country and sector/industry point of view, the Fund is exposed to regulatory, political and sovereign and risk. AUD CURRENCY RISK: The Australian dollar (AUD) has historically experienced declines during weaker market environments, and appreciation in market upturns. For funds that maintain an unhedged currency exposure, an appreciating AUD is likely to have a negative impact on a fund s total return. Conversely, an unhedged fund is likely to benefit relative to hedged global equities funds in periods where the AUD depreciates. Zenith believes that over the long-term, the currency impact on performance will be minimal and therefore does not advocate retail investors making active currency decisions based on near-term currency predictions. For investors who are concerned about the short-term risks associated with taking fully unhedged or hedged currency positions, Zenith suggests blending hedged and unhedged global equity exposures to reduce short-term volatility. LIQUIDITY RISK: In some cases, global equities may present low liquidity in particular regions. Emerging markets and small cap stocks may display low liquidity due to low volume and fewer market participants than the major bourses. Page 2 of 9

3 FUND RISKS Zenith has identified the following key risks associated with the Fund. Other risks may also exist and accordingly the following list is not intended to be all inclusive. CAPITAL RISK: Zenith notes that the retail unit trust has only recently been established. Accordingly, there is an insufficient time horizon over which to assess the Fund's drawdown profile. Investors should note that the underlying Fund's assets are entirely invested in the equity asset class. As such, Zenith would expect the Fund's performance outcomes to exhibit equity like characteristics. However given the use of the MMRS, Zenith anticipates that, over the market cycle, the Fund would exhibit superior drawdown control relative to a global equity benchmark. KEY PERSON RISK: Notwithstanding the passive and quantitative investment approach employed by BetaShares and Milliman, Zenith notes that key departures may still have a material impact while the team remains small. Specifically, Zenith believes key person risk is evident with Chief Investment Officer, Louis Crous. PERFORMANCE RISK: Investors should be aware that in an upward trending, high volatility market environment, this strategy is likely to underperform the broader equity market. This occurs as the implicit cost associated with the Fund's hedging strategy will detract from the returns achieved by the underlying investment strategy. Conversely, the Fund would be expected to outperform in a downward trending equity market characterised by higher volatility. MARKET EXPOSURE RISK: Like most funds in this asset class, one of the key risks to the Fund's performance, is a sustained downturn in global equities markets. However, given the Fund may take an effective market exposure of as low as 0%, it is expected to exhibit a return profile that is less sensitive to market movements. INVESTMENT MODEL RISK: Due to the quantitative nature of the Fund's dynamic protection strategy, Zenith believes the potential exists for the Fund to underperform around market inflection points. More specifically, the dynamic protection strategies rely upon historical data to forecast future volatility, an input used to determine hedging levels. If forecasts for volatility are inaccurate, the Fund's market exposure may be significantly lower before a strong market upswing, thereby leading to a meaningful drag in performance. Conversely, the Fund may not be at or near the maximum level of hedging before a significant market downturn. DERIVATIVE RISK: There are multiple risks associated with the use of derivatives; for example, the value of the derivative may not move in line with the underlying asset or a particular derivative may be difficult or costly to trade. Zenith believes these risks are somewhat mitigated due to the Fund engaging in only exchange traded futures which are highly liquid and inexpensive to trade, relative to other derivative contracts. Exchange traded futures are also less susceptible to counterparty risk. QUALITATIVE DUE DILIGENCE ORGANISATION Established in 2009, BetaShares Capital Ltd (BetaShares) is a specialist provider of ETFs and first launched a listed product in BetaShares is a wholly owned subsidiary of BetaShares Holdings Pty Ltd (BSH) which is a subsidiary of Mirae Asset Global Investment Group (Mirae), with material minority stakes held by the BetaShares management team (currently 44.5%) and private investors (2.5%). As at 31 August 2017, BetaShares had $4.7 billion in funds under management across 42 managed products. Mirae, established in 1997, is a large Asian asset manager based in South Korea managed in excess of $US 100 billion in assets as at 31 August Mirae offers global support to BetaShares, through its 85% stake in Horizons ETFs, as well as strategic direction at the board level. Horizons ETFs (formally BetaPro Management Inc.) offers to market a broad ETF product range including equities, fixed income, commodities and currencies, overlaid with a range of styles such as leveraged, inverse, inverse leveraged, spreads and volatility. Horizons ETFs had more than $US 6.6 billion in assets under management as of 31 August As a result of the partnership with Mirae/Horizons ETFs, BetaShares' management team has greater access to global information regarding best practices, trading techniques, infrastructure, risk management systems and market information than would perhaps otherwise be possible. Although BetaShares' technology, systems and resources are not as sophisticated as the majority of its ETF peers, Zenith believes Mirae's strategic ownership and operational support enable it to meet the Fund's objective. The BetaShares Board has four members, David Nathanson, Alex Vynokur, Thomas Park and Taeyong Lee. Respectively, Park and Lee are Mirae's Head of Global Business Strategy and Global Head of ETF Business. Though Zenith notes the presence of Mirae Directors on the BetaShares Board as a positive, we would prefer to see at least some level of independent representation if not an independent majority as we believe this to be a best practice initiative. The Fund's market capitalisation was approximately $41 million as at 31 August INVESTMENT PERSONNEL Name Title Tenure Louis Crous Chief Investment Officer 8 Yr(s) Thong Nguyen Portfolio Manager 6 Yr(s) Don Hoang Chamath De Silva Assistant Portfolio Manager Assistant Portfolio Manager 3 Yr(s) 1 Yr(s) BetaShares currently have a staff of 34 located in their Sydney and Melbourne offices with four team members making up the investment team. All BetaShares ETFs are under the day to day operational control of its Chief Investment Officer, Louis Crous. Crous has over 14 years experience in financial services from prior roles at nabinvest and Rand Merchant Page 3 of 9

4 Bank. Supporting Crous is Senior Portfolio Manager, Thong Nguyen. Nguyen has 12 years experience including previous roles at Three Pillars Portfolio Managers. In addition, further support is provided by two Assistant Portfolio Manager's Don Hoang and Chamath De Silva. Zenith notes the departure of BetaShares' Head of Quantitative Research & Portfolio Manager, Thomas Reif, in May Though Zenith views Reif's departure as disappointing we acknowledge his limited tenure. That said, the BetaShares product suite has expanded rapidly in recent years and while it has not presented any adverse issues to date, Zenith believes the investment team is less well resourced compared to peers. Although the Fund's approach is traditionally process based, which limits the threat of key person risk, Zenith sees a degree of key person risk with Crous. Overall, Zenith believes the experience of the portfolio management team is adequate. However, we believe that the BetaShares investment team has less experience in ETF management than their larger peers. Milliman The management of the derivative overlay strategy is outsourced to Milliman. Milliman has over 130 investment personnel located in Chicago, London and Sydney. The personnel who oversee the divisions primarily responsible for the management of the derivative overlay strategy include: Head of Financial Risk Management Ken Mungen, Head of Portfolio Management Adam Schenk, and Head of Capital Markets Ram Kelkar. Zenith believes Milliman is highly experienced with regards to risk management strategies. INVESTMENT OBJECTIVE AND PHILOSOPHY The Fund aims to provide long-term capital growth through an exposure to international equity markets, while utilising a risk management strategy which is structured to reduce overall portfolio volatility and minimise losses in declining markets. To achieve this objective, BetaShares can hold international equities directly or through units of U.S. listed ETFs. BetaShares combines the equity investment approach with an external risk management strategy that is outsourced to Milliman. The International equities component of the Fund aims to provide passive exposure to a broadly diverisified portfolio of global shares included in the MSCI World Index. The overlay is employed to cap the Fund's volatility level at 12% p.a. Believing that higher volatility is often associated with falling equity markets, and vice versa, Milliman will adjust the strategy's net market exposure based on internally derived estimates of forward volatility. In addition, the MMRS seeks to reduce capital losses in market downturns through a dynamic derivative overlay strategy, whilst allowing for material participation in market upswings. SECURITY SELECTION BetaShares' security selection process is primarily driven by index constituent changes or ETF selection. To achieve the requisite exposure to global equities, BetaShares will hold units in U.S. ETFs, or shares in the underlying index constituents. BetaShares will only invest in ETFs that obtain their investment exposure substantially through direct investment in the underlying global shares. When assessing ETFs for inclusion in the equity component of the Fund, BetaShares gives consideration to the record of the ETF in tracking its stated benchmark, fees/costs, liquidity, geographical coverage and spreads. PORTFOLIO CONSTRUCTION The dynamic protection outsourcing agreement between BetaShares and Milliman results in capital being allocated to the underlying ETFs and the balance allocated to a cash account to provide a margin against the Fund's futures position. Milliman acts as the sub-advisor to the Fund. By holding a balance of ETFs, it is anticipated that the Fund will provide exposure to virtually all securities that comprise the MSCI World Index at their appropriate constituent weight within the Index. As at June , the Fund's underlying portfolio gained exposure to global equities through the Vanguard S&P 500 ETF (NYSEARCA: VOO) and Schwab International Equity ETF (NYSEARCA: SCHF). However, Zenith believes the underlying ETF providers offer size and scale, which is a significant advantage in the space, allowing the fund to save on transactions costs that would be incurred should trades be made on the open market. Accordingly, Zenith believes BetaShares is able to construct the portfolio in a cost effective manner, aided by the substantial resources and crossing networks of the underlying ETF providers. The dynamic protection strategy is managed separately from the share portfolio, and is achieved through the use of the following futures contracts: S&P 500 Index TOPIX Index FTSE Index DJ Euro Stoxx Index The protection strategy seeks to cap the Fund s volatility, as defined by the Standard Deviation, at 12% p.a. Accordingly, if Milliman forecasts the Fund's volatility to be 24%, the Fund would be 50% hedged. However, if volatility was expected to be 8%, Milliman will not use futures to lever the fund up to meet the volatility objective. Zenith notes that the 12% p.a. volatility cap was determined by BetaShares in conjunction with Milliman, with consideration given to the results of backtested data. As such, we believe this cap may not be optimal going forward. Moreover, Zenith believes that the MMRS may fail to adequately provide capital protection in the event that the volatility of certain markets become dislocated from each other. That is, the MMRS estimates volatility of the index holistically, rather than at a regional level. As such, there may be a mismatch in the desired level of hedging when certain regions become larger/smaller contributors to overall risk relative to their respective index weightings. However, Zenith notes that the volatility across regions have been historically highly correlated. Page 4 of 9

5 In addition to volatility targeting, Milliman seeks to create an asymmetric risk/return profile by dynamically altering the Fund's market exposure. Through the use of a systematic and proprietary trading system, Milliman aims to reduce losses in market downturns whilst enabling participation in market upswings. Milliman's MMRS is structured in such a way whereby protection is added and removed, initially at a gradual pace, and subsequently at an exponential rate as volatility continues to increase, or a serious market correction occurs. Zenith understands that in markets with no clear positive or negative direction, the MMRS will typically be patient in removing protection after a period of sustained volatility. Zenith believes the potential exists for the Fund to underperform around market inflection points. More specifically, the Fund s dynamic protection strategies rely upon historical data to forecast future volatility, which is in turn an input used to determine hedging levels. If forecasts for volatility are inaccurate, for example at a point of market inflection when historical data is not an accurate reflection of the current environment, the Fund's market exposure may not be positioned appropriately. In the situation where there is a period of lower volatility followed by a rapid market correction, the Fund is likely to participate in most of the downturn, whilst missing the benefit of a subsequent equity market rally. Conversely, the Fund may not be at or near the maximum level of hedging before a significant market downturn. The dynamic protection strategy will be able to alter market exposure from a minimum of 0% to a maximum of 100%. That is, the Fund may short sell futures contracts up to 100% of the Fund. Zenith notes that the Fund may be implicitly geared, as the capital that is allocated to Milliman may result in an exposure of 100%. Zenith believes the underlying strategy is managed according to a disciplined and highly repeatable process. Whilst Zenith notes that Milliman has a long and successful track record managing dynamic protection strategies, investors should be aware that the dynamic protection strategy employed in the Fund may not provide high levels of protection in certain market environments. This is specifically the case around market gap events, whereby the hedging system may not be responsive enough to protect capital. However, Zenith notes that the only way to improve the level of protection is through the use of options, which we recognise is significantly more costly to implement. RISK MANAGEMENT Portfolio Constraints Description Equity Exposure (%) 0% to 100% Overall, Zenith believes the risk management systems and constraints allow the Fund to produce the desired outcomes for investors. INVESTMENT FEES Exchange Traded Funds (ETFs), contain a variety of explicit and implicit costs to the investor. Investors should be aware that poor ETF selection and/or trade execution can diminish any advantage gained by the lower management cost exhibited by ETFs in comparison to managed funds more broadly. Management Cost The management cost for the Fund is 0.54% p.a. with no performance fee. Overall, Zenith considers the management cost for the Fund to be high relative to its peers. However, currently there are few comparable ETFs offered in the Australian market with a similar managed risk strategy used by the Fund. Zenith believes the Fund's fee structure is competitive against Fund's utilizing similar strategies in the global equities market. Bid/ask spread As listed products, investors are exposed to bid/ask spreads as an intangible cost of investment and divestment. The bid/ask spread is primarily a function of market liquidity in fund units as well as the presence of the maximum bid/ask spreads which are maintained by authorised participants and market makers. It should be noted that as a safeguard in the absence of a natural market in which two investors are transacting in the Fund, market makers ensure the maximum spread is limited to a pre-agreed spread limit. It is important to note however that bid/ask spreads tend to be at their highest and most volatile at the start and end of the trading day and decreases during the course of the day s trade as efficiency improves. Investors are able to use Indicative Net Asset Values (INAV) as an indication of the underlying fair value of an ETF during trading hours. As at 31 July 2017, the Fund has demonstrated trading spreads in-line with peers in the International Shares Global (Unhedged) ETF sector. Volatility (% p.a.) 12% To manage risks, the Fund employs a dynamic protection strategy which aims to provide an asymmetric risk/return profile. To implement the dynamic protection strategy Milliman uses a proprietary trading system, with a physical trading team used to implement trades. Whilst Zenith is cognisant that Milliman's trading process is not used as an explicit return source, Zenith believes that a fully automated trading approach is generally more robust. Page 5 of 9

6 Market Makers fulfil the role of generating necessary liquidity on the secondary market by providing continuous bid and offer prices acting as both the purchaser or seller of the ETF units, and applying for additional ETF units, where necessary, to meet investor demand. BetaShares currently use three market makers for the Fund. Authorised Participants (APs) comprise the entities which are approved by the ETF Issuer to purchase ETF units in the primary market. BetaShares currently uses two AP's for the Fund. Page 6 of 9

7 PERFORMANCE ANALYSIS Report data: 31 Aug 2017, product inception: Jan 2016 Monthly Performance History (%, net of fees) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC FUND YTD BENCHMARK YTD Growth of $10,000 ABSOLUTE PERFORMANCE ANALYSIS Benchmark: MSCI World Index $A Return Incpt. 1 yr 6 mth 3 mth Fund (% p.a.) Benchmark (% p.a.) Median (% p.a.) Ranking within Sector Incpt. 1 yr 6 mth 3 mth Fund Ranking 40 / / / / 69 Quartile 4th 3rd 3rd 3rd Standard Deviation Incpt. 1 yr 6 mth 3 mth Monthly Histogram Fund (% p.a.) Benchmark (% p.a.) Median (% p.a.) Downside Deviation Incpt. 1 yr 6 mth 3 mth Fund (% p.a.) Benchmark (% p.a.) Median (% p.a.) Risk/Return Incpt. 1 yr 6 mth 3 mth Sharpe Ratio - Fund Sortino Ratio - Fund Minimum and Maximum Returns (% p.a.) NOTE ON PERFORMANCE - Performance data contained in this report is based on an ETF's end of day Net Asset Value (NAV) as opposed to the last market price. Zenith has elected to use NAV over last price as this eliminates extraneous trading noise which typically occurs at the end of the trading day. While we see this as a cleaner approach to assessing ETF performance, readers should be aware that actual performance of an ETF may differ depending on the timing of investment and divestment of holdings. All commentary below is as at 31 August The Fund aims to perform in line with the MSCI World (ex Australia) Index over rolling five year periods before fees and taxes with lower volatility and improved risk adjusted returns over a full market cycle. Given the December 2015 inception of the Fund, there is currently insufficient performance history to conduct any meaningful analysis. Page 7 of 9

8 RELATIVE PERFORMANCE ANALYSIS Alpha Statistics Incpt. 1 yr 6 mth 3 mth Excess Return (% p.a.) % Monthly Excess (All Mkts) % Monthly Excess (Up Mkts) % Monthly Excess (Down Mkts) Beta Statistics Incpt. 1 yr 6 mth 3 mth Beta R-Squared Tracking Error (% p.a.) Correlation Risk/Return Incpt. 1 yr 6 mth 3 mth Information Ratio All commentary below is as at 31 August Given the December 2015 inception of the Fund, there is currently insufficient performance history to conduct any meaningful analysis. However, given the expected payoff profile of the MMRS, Zenith anticipates that the strategy would display a stronger consistency of outperformance during falling markets as compared to rising markets. DRAWDOWN ANALYSIS Drawdown analysis assesses the relative riskiness of a Fund versus the benchmark, in reference to capital preservation. The maximum Drawdown is recorded as the percentage decline in the value of a portfolio from peak to trough (before a new peak is achieved). All Drawdown analysis is calculated commencing from the inception date of the Fund in question, and Drawdown analysis for the Fund and benchmark(s) are calculated independently. That is, the largest drawdown for the Fund and benchmark(s) will not always refer to the same time period. Drawdown Analysis Fund Benchmark Max Drawdown (%) Months in Max Drawdown 2 3 Months to Recover - 2 Worst Drawdowns Fund Benchmark All commentary below is as at 31 August Zenith notes that the Fund has only recently been established. Accordingly, there is an insufficient time horizon over which to assess the Fund's drawdown profile. However given the use of the MMRS, Zenith anticipates that, over the market cycle, the Fund would exhibit superior drawdown control relative to its equity benchmark. INCOME/GROWTH ANALYSIS Income / Growth Returns Income Growth Total FY to 30 Jun % 10.34% 11.77% The Fund does not target a specific level of income. However, the Fund aims to pay distributions semi-annually. The Fund is expected to exhibit moderate levels of portfolio turnover owing to its use of derivatives. Zenith believes the Fund may therefore suit individuals on higher marginal tax rates looking primarily for growth. REPORT CERTIFICATION Date of issue: 4 Oct 2017 Role Analyst Title Author Jacob Smart Investment Analyst Sector Lead Dugald Higgins Senior Investment Analyst Authoriser Bronwen Moncrieff Head of Research RATING HISTORY As At Rating 4 Oct 2017 Recommended 17 Oct 2016 Approved 19 Feb 2016 Not Rated - Screened Out Last 5 years only displayed. Longer histories available on request Page 8 of 9

9 DISCLAIMER AND DISCLOSURE Zenith Investment Partners (ABN ) is the holder of Australian Financial Services Licence and is authorised to provide general financial product advice. This Product Assessment Report (report) has been prepared by Zenith exclusively for Zenith clients and should not be relied on by any other person. Any advice or rating contained in this report is limited to General Advice for Wholesale clients only, based solely on the assessment of the investment merits of the financial product. This report is current as at the date of issue until it is updated, replaced or withdrawn and is subject to change at any time without notice in line with Zenith s regulatory guidelines. Zenith clients are advised to check the currency of reports and ratings via Zenith s website for updates. Any advice contained in this report 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 the relevant product(s). Investors should seek their own independent financial advice, obtain a copy of, and consider any relevant PDS or offer document and consider the appropriateness of this advice in light of their own objectives prior to making any investment decision. Zenith charges an upfront flat fee to the Product Issuer, Fund Manager or other related party to produce research on funds that conform to Zeniths Research Methodology. Zenith s fee and Analyst remuneration are not linked to the rating outcome in any way. Views expressed in Zenith reports accurately reflect the personal, professional, reasonable opinion of the Analyst who has prepared the report. Zenith may also receive a fee for other non-research related services such as subscription fees for Zenith s research services and/or for the provision of investment consultancy services. Conflicts management arrangements are in place where Zenith provides research services to financial advisory businesses who provide financial planning services to investors and are also associated entities of the product issuers, with any such conflicts of interest disclosed within reports as appropriate. Full details regarding such arrangements are outlined in Zenith s Conflicts of Interest Policy /ConflictsOfInterestPolicy Zenith s research process seeks to identify investment managers considered to be the best of breed through a comprehensive, multi-dimensional selection process. Zenith utilises both quantitative and qualitative factors in its ratings models. Models maximise commonality across different asset classes while retaining flexibility for specialist asset classes and strategies. The selection process is rigorous in both its qualitative and quantitative analysis and each component is equally weighted. Zenith does not manage any proprietary assets and as such Zenith is able to choose investment managers with absolute independence and objectivity. More detailed information regarding Zenith s research process, coverage and ratings is available on Zenith s website /ResearchMethodology This report is subject to copyright and may not be reproduced without the consent of the copyright owner. The information contained in this report has been prepared in good faith and is believed to be reliable at the time it was prepared, however, no representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this report. Except for any liability which cannot be excluded, Zenith does not accept any liability, whether direct or indirect arising from the use of information contained in this report. Past performance is not an indication of future performance. Full details regarding the methodology, ratings definitions and regulatory compliance are available at /RegulatoryGuidelines 2017 Zenith Investment Partners. All rights reserved. Zenith has charged BetaShares Capital a fee to produce this report. Page 9 of 9