Fund Review BetaShares U.S. Dollar ETF

Fund Review BetaShares U.S. Dollar ETF P 1-7 ANALYST: MATTHEW O'NEILL APPROVED BY: SAM MORRIS ISSUE DATE 10-07-2017 Key Information INVESTMENT EXCHANGE TRADED FUND (ETF) LISTED ON THE TYPE AUSTRALIAN SECURITIES EXCHANGE ASX CODE PDS OBJECTIVE USD TO TRACK THE CHANGE IN PRICE OF THE U.S. DOLLAR, RELATIVE TO THE AUSTRALIAN DOLLAR, BEFORE FEES AND EXPENSES FUND INCEPTION 01-02-2011 FUND SIZE $516.2M AS AT 28 JUNE 2017 INDEX PROVIDER UNDERLYING INDEX FUND MANAGER RESPONSIBLE ENTITY OWNERSHIP DISTRIBUTION FREQUENCY DERIVATIVE USE SECURITIES LENDING Fees MANAGEMENT FEE WM/REUTERS WM/REUTERS USD/AUD CLOSING SPOT RATE AS AT 4PM LONDON TIME BETASHARES CAPITAL LTD BETASHARES CAPITAL LTD HORIZONS ETFS 53%, BETASHARES MANAGEMENT TEAM 44.5%, PRIVATE INVESTORS 2.5% AT LEAST ANNUALLY, IF AVAILABLE NONE NO CAPPED AT 0.45% P.A. OF THE NET ASSET VALUE OF THE FUND. PAID MONTHLY. Top 10 holdings (at 31-5-2017) US DOLLARS 100% What this Rating means The Recommended Index rating indicates that Lonsec has strong conviction the financial product can generate risk adjusted returns in line with relevant objectives. The financial product is considered an appropriate entry point to this asset class or strategy. Strengths The Fund represents a convenient, relatively efficient, and transparent way to gain exposure to the performance characteristics of the U.S. dollar versus Australian dollar. BetaShares can draw on the global resources and experience of its strategic shareholders, which can help enhance the overall sustainability of the business. Weaknesses The Fund s underlying assets are U.S. denominated bank deposits, meaning investors may be able to achieve similar outcomes through foreign currency bank accounts or other banking facilities with lower ongoing fees. However, investors may not be able to access wholesale exchange rates available to the Responsible Entity or achieve the same levels of liquidity offered by the Fund. Fund Risk Characteristics BUSINESS SUSTAINABILITY RISK CAPITAL VOLATILITY SECURITY CONCENTRATION RISK SECURITY LIQUIDITY RISK LOW MODERATE HIGH Risk categories are based on Lonsec s qualitative opinion of the risks inherent in the financial product s asset class and the risks relative to other financial products in the relevant Lonsec sector universe. BIOmetrics Aggregated risks STD RISK MEASURE 1 2 3 4 5 6 7 A Standard Risk Measure score of 7 equates to a Risk Label of Very High and an estimated number of negative annual returns over any 20 year period of 6 or greater. This is a measure of expected frequency (not magnitude) of capital losses, calculated in accordance with AFSA/FSC guidelines. Features and benefits COMPLEXITY LOW MODERATE HIGH We strongly recommend that potential investors read the product disclosure statement or investment statement. Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL. No. 421445. This information must be read in conjunction with the warning, disclaimer and disclosure at the end of this document. This report supersedes all prior reports.

P 2-7 ANALYST: MATTHEW O'NEILL APPROVED BY: SAM MORRIS ISSUE DATE 10-07-2017 Fee profile FEES VS. UNIVERSE FEES VS. ASSET CLASS LOW MODERATE HIGH Fee BIOmetrics are a function of expected total fee as a percentage of expected total return. What is this Fund? BetaShares U.S. Dollar ETF (or the Fund ) implements a passive approach to tracking the performance of the U.S. dollar relative to the Australian dollar before fees and costs. Exchange Traded Funds (ETFs) are investment vehicles traded on a stock exchange like ordinary shares. ETFs are generally structured to provide investors with returns that track a particular index or asset class. BetaShares does not engage in activities designed to protect against, or profit from, fluctuations in the price of the U.S. dollar. Rather, the Fund will generally invest unit proceeds in bank accounts denominated in U.S. dollars. Using this Fund This is General Advice only and should be read in conjunction with the Disclaimer, Disclosure and Warning on the final page. Investors should be aware that the Fund provides a passive exposure to a single asset, namely the U.S. dollar. The relative value of the Fund is subject to many economic and subjective factors including U.S. domestic economic strength, regulation, geopolitical matters, monetary policy, global investment markets and sentiment, which can all influence the movements (both positive and negative) in the price of the U.S. dollar relative to the Australian dollar. Investors should note that ETFs may not perfectly replicate the performance of the relevant index / asset class, but rather aim to minimise any deviation from the underlying index, before fees and expenses as much as possible. The AUD/USD exchange rate can experience periods of extreme volatility. Investors should therefore understand that an investment in the Fund can result in negative returns and returns are dependant solely on the relationship of the relative value of the U.S. dollar and the Australian dollar. Suggested Lonsec risk profile suitability SECURE DEFENSIVE CONSERVATIVE BALANCED GROWTH HIGH GROWTH For guidance on appropriate asset allocations and risk profiles, refer to the latest Lonsec Strategic Asset Allocation Review and Risk Profile Definitions on our website. Changes Since Previous Lonsec Review Thong Nguyen was promoted to the position of Senior Portfolio Manager in 2016. Head of Quantitative Research and Portfolio Manager Thomas Reif departed BetaShares in December 2016. Lonsec notes that, prior to his departure, Reif s responsibilities had changed to focus on product development and research rather than day-to-day portfolio management. Lonsec Opinion of this Fund Established in 2009, BetaShares is a specialist provider of ETFs with approximately $4.5 billion in funds under management (FUM) across 40 exchange traded products as at June 2017. As a majority-owned subsidiary of Mirae, a large global asset management entity that operates a global ETF business, the Manager benefits from access to distribution, research and infrastructure of its parent. Lonsec considers technology and systems infrastructure to be an important factor in establishing a scalable index business. Relative to larger index managers, Lonsec notes that the technology and systems infrastructure at BetaShares is less well-developed. Lonsec believes the Fund represents a simple and transparent investment alternative for investors seeking exposure to the U.S. dollar. However, Lonsec encourages investors to carefully consider the cost efficiency of currency ETFs versus alternative investment instruments, when looking to achieve investment objectives. Investors may be able to achieve similar outcomes via foreign currency accounts at any major bank or through the use of other market instruments, such as futures, CFDs and options. However, Investors may not be able to access wholesale exchange rates available to the Responsible Entity or achieve the same levels of liquidity offered by the Fund. Being a single currency vehicle, the Fund lacks the diversification afforded to typical active currency strategies that tend to make relative value calls across a range of currency pairs. Investors should therefore understand that the returns of an investment in Fund stem solely from the relationship between the value of the U.S. dollar and the Australian dollar. The Fund is currently supported by multiple market makers and authorised participants. Lonsec believes this arrangement benefits investors, as it promotes competition and tighter spreads within the primary and secondary markets. Further, Lonsec considers these market participants to be both reputable and experienced in ETF markets. BetaShares uses a passive approach to achieve its objective of providing investors the return characteristics of the U.S. dollar. Upon the creation of new units, BetaShares will invest its assets primarily in bank deposit accounts denominated in U.S. dollars. At the time of the report, BetaShares bank with JPMorgan Chase Bank, which holds among the strongest credit ratings of US banks. Lonsec considers this approach to be very transparent, simple and prudent. Whilst BetaShares intends to only allocate the Fund s assets to U.S. dollar denominated bank deposit accounts, investors should note that the Fund is also permitted to gain exposure to the U.S. dollar by investing in short term wholesale cash management trusts (denominated in U.S. dollars). At the time of investment these vehicles would have to have the highest credit rating from one of the major credit rating agencies. Whilst Lonsec considers the

P 3-7 ANALYST: MATTHEW O'NEILL APPROVED BY: SAM MORRIS ISSUE DATE 10-07-2017 risk of highly rated cash management trusts to be relatively low, investors are encouraged to familiarise themselves with the standard risks associated with such vehicles. Lonsec has maintained the Fund s rating as Recommended Index. The rating reflects the demonstrated ability of the Fund to track the price performance of USD/AUD exchange rate over time. Lonsec notes, however, that investors may be able to achieve similar outcomes through foreign currency bank accounts or other banking facilities with lower ongoing fees. (Although, investors may not be able access the same wholesale exchange rates available to the Responsible Entity.) Lonsec notes the addition of cheaper competing ETFs now available in this space and highlights that the rating going forward is reflective of other considerations, including the fee differential, scale and track record of competing funds. People and Resources Corporate overview BetaShares Holdings was established in 2009 as a specialist provider of exchange traded products. It is 53% owned by Horizons, 45% owned by BetaShares s management team and the remainder owned by private investors. Horizons is a fully controlled subsidiary of the Mirae Asset Global Investments Group. Mirae is a Korean based asset management entity with over $100bn of FUM. Mirae is particularly active in emerging market equities and is currently expanding its ETF platform globally. The Horizons family of ETFs has over $14 billion in assets in ETFs listed across six countries. BetaShares has over $4.5bn of FUM across 40 ETF products as at June 2017. Size and experience NAME LOUIS CROUS POSITION SENIOR PORTFOLIO MANAGER EXPERIENCE INDUSTRY / FIRM 17 / 7 THONG NGUYEN PORTFOLIO MANAGER 15 / 6 DON HOANG CHAMATH DE SILVA ASSISTANT PORTFOLIO MANAGER ASSISTANT PORTFOLIO MANAGER 8 / 3 7 / 1 The BetaShares business currently employs 31 dedicated financial service professionals. More broadly, BetaShares benefits from access to the broader distribution, research, infrastructure and risk management systems and resources of its strategic partners, Horizons and Mirae. Investment Process Overview The investment objective of the Fund is to track the change in price of the U.S. dollar, relative to the Australian dollar, before fees and expenses. The Fund will invest its assets primarily in bank deposit accounts denominated in US dollars. The Fund may invest in short term U.S. dollar cash management vehicles, however the Fund is yet to do so, nor does it intend to. Interest earned on the assets of the ETF, if any, will accrue to the benefit of the Fund. STYLE COUNTERPARTY CREDIT MINIMUM FINANCIAL INSTITUTION USED PASSIVE APPROACH (PRIMARILY IN BANK DEPOSIT ACCOUNTS DENOMINATED IN U.S. DOLLARS) INVESTMENT GRADE RATING FROM A MAJOR CREDIT RATINGS AGENCY JPMORGAN CHASE BANK Replication of the index The Fund s units trade intra-day at prevailing market prices in a similar manner to other securities on the ASX. Investors generally have the same ownership rights as investors in U.S. dollars. However, as the US dollars are held in a regulated unit trust, investors who hold the product for a sufficient length of time may be able to qualify for capital gains discounts, which are not available when trading currency directly or with bank accounts. Any economic benefits such as interest earned from holding assets will accrue to the benefit of the Fund. Whilst the Fund is typically expected to have 100% of its assets in U.S. denominated bank accounts, the ETF may from time-to-time invest in short term cash management vehicles. Depository bank selection BetaShares has indicated that it will only select banks that are highly reputable and experienced global financial institutions. Counterparties must also have a minimum investment grade rating from a major credit ratings agency. The banks must also be subject to Australian prudential supervision as an Australian Authorised Deposit-taking Institution, or elsewhere on a substantially equivalent basis. At the time of publication, the deposit account in place was with JPMorgan Chase Bank. From time-to-time the Responsible Entity will assess the risk and return characteristics of the deposit account and may in the future establish additional accounts, or close existing accounts. Underlying index The Fund is benchmarked to the inverse of the AUD/USD closing spot rate as at 4pm London time (Bloomberg ticker: AUDUSD WMCD Curncy). INDEX METRIC DATA INDEX SERIES WM/REUTERS AUD/USD CLOSING SPOT RATE AS AT 4PM LONDON TIME INDEX PROVIDER WM/REUTERS Transparency Information relating the underlying assets of the Fund is available via the ASX and BetaShares website. Intraday NAV can be tracked on the BetaShares website and on IRESS with the ticker USDINAV.ETF

P 4-7 ANALYST: MATTHEW O'NEILL APPROVED BY: SAM MORRIS ISSUE DATE 10-07-2017 Liquidity The Fund offers investors liquidity via the Australian Securities Exchange (ASX), which is supported by two dedicated market makers that are obligated to provide continuous liquidity to the market by maintaining pre-agreed spreads and volumes on the ASX. Lonsec believes the structure of the Fund provides investors convenient, liquid exposure to U.S. dollars compared to alternative methods of investing. BetaShares has appointed two dedicated authorised participants to facilitate the creation and redemption of units in the Fund. Proper management of this process will ensure that the Fund s unit price trades in line with its underlying assets (its NAV) on the ASX. Due to timing discrepancies between when the ETF s NAV and market price are struck, Lonsec is unable to make a fair and accurate assessment on the extent to which the ETF s market price traded above or below the NAV. Lonsec believes that investors are more likely to transact at a fair price when ETF premiums and discounts (the difference between the market price and NAV) are small and less volatile. Underlying holdings BetaShares currently invests 100% of the Fund s gross assets with JPMorgan Chase Bank, within bank deposit accounts denominated in U.S. dollars. Fees and Indirect Costs Fee Comparison FUND NAME MER (% P.A.) BID/ASK SPREAD (%)* BETASHARES U.S DOLLAR ETF 0.45 0.01 ETFS PHYSICAL US DOLLAR ETF 0.30 0.19 * Source: ASX. Average daily bid / ask spread reported monthly over 12 months to April 2017. Bid / ask spread represents an approximate average and may not reflect the actual spread incurred. ETF investors incur both direct and indirect costs/ fees. Direct fees include the management expense ratio (MER) and brokerage incurred when buying and selling units. Indirect costs include bid / ask spreads when buying or selling units. The MER of the Fund is 0.45% p.a. As such, Lonsec encourages investors to carefully consider the cost efficiency of the Fund versus peer USD ETFs and alternative investment instruments, when looking to achieve investment similar objectives. Investors may be able to achieve similar outcomes via foreign currency accounts (e.g. HSBC, Citi and the Big 4 Australian banks). That being said, fee structures, interest rates and bid / ask spreads differ considerably. Lonsec believes the Fund offers a simplistic way of gaining exposure to US dollars. The Fund s average bid-ask spread for the 12 months to 30 April 2017 was 0.01%, reflective of the large trading volumes and liquid nature of the Fund. Performance The Fund has slightly underperformed its benchmark over the all periods assessed to 31 May 2017. The amount of underperformance has been similar to the MER charged. The Fund has delivered a consistently low tracking error of 0.04% p.a. or lower over all periods assessed. Generally, differences between the Fund s return and the spot USD/AUD rate will come down to MER and the interest earned on the USD account. 12-month rolling tracking error and excess returns over five years to 31-5-2017 Risks An investment in the Fund carries a number of standard investment risks associated with domestic and international investment markets. These include economic, political, legal, tax and regulatory risks. These and other risks are outlined in the relevant PDS and should be read in full and understood by investors. Lonsec considers the major risks to be: Performance risk The value of, and returns (if any) from an investment in a BetaShares ETF will depend upon the performance of the relevant underlying investments. There is no guarantee the value of an investment in any underlying investment will increase. Tracking error risk BetaShares seeks to minimise the tracking error against the USD/AUD it aims to match. This is a function of the effectiveness of the Responsible Entity s investment strategy. There is no guarantee that this objective will be met. Fund risk There is a risk that the Fund could terminate, that fees and expenses could change or that the Responsible Entity could be replaced. Taxation Any gain or loss on the sale of units in the Fund should generally be treated as capital for taxation purposes. Distributions Arrangements can be made to have full or partial dividends reinvested. Generally, for Australian resident investors, Unitholders will be assessable for taxation purposes on the net income of their entitlement.

P 5-7 ANALYST: MATTHEW O'NEILL APPROVED BY: SAM MORRIS ISSUE DATE 10-07-2017 Distributions (if any) are expected to be assessable as income. These comments constitute General Advice only and Lonsec advises investors to consult a taxation specialist before making a decision to invest (or not to invest) based upon these taxation considerations. Investors should refer to the BetaShares PDS for further information. Further information Further information can be obtained by calling BetaShares on 1300 487 577 or visiting: www.betashares.com.au

P 6-7 ANALYST: MATTHEW O'NEILL APPROVED BY: SAM MORRIS ISSUE DATE 10-07-2017 Quantitative Performance Analysis - annualised after-fee % returns (at 31-5-2017) Performance metrics 1 YR 2 YR 3 YR 5 YR TOTAL RETURN (% PA) -2.92 1.09 7.34 5.02 STANDARD DEVIATION (% PA) 7.87 9.86 10.17 10.21 EXCESS RETURN (% PA) -0.23-0.31-0.38-0.42 WORST DRAWDOWN (%) -5.98-9.07-9.07-9.07 TIME TO RECOVERY (MTHS) NR NR NR NR TRACKING ERROR (% PA) 0.04 0.04 0.04 0.03 FUND: BETASHARES U.S. DOLLAR ETF BENCHMARK USED: USDAUD LONDON 4PM WMR FIX TIME TO RECOVERY: NR - NOT RECOVERED, DASH - NO DRAWDOWN DURING PERIOD Growth of $10,000 over five years Premium/discount to NAV over one year Monthly excess returns over five years Traded Volume and FUM

P 7-7 ANALYST: MATTHEW O'NEILL APPROVED BY: SAM MORRIS ISSUE DATE 10-07-2017 Glossary Bid / Ask Spread The amount by which the ask price exceeds the bid price. Average % Spread = (ask-bid / midpoint as measured daily from 10.30am - 3.45pm). Absolute Deviation from NAV (daily) The average absolute difference between the Fund s market price and its NAV. It is a measure of liquidity and market efficiency. The market price is determined by using the last price of the day on the listed exchange. The valuation time for NAV ETFs is generally the close of trading on each trading day, but may vary depending on ETF product provider. Premium / Discount to NAV (daily) The amount that the Fund s market price is above the reported NAV is called the premium. The amount that the Fund s market price is below the reported NAV is called the discount. The market price is determined by using the last price of the day on the listed exchange. The valuation time for NAV ETFs is generally the close of trading on each trading day, but may vary depending on ETF product provider. Lonsec Implied Cost Indicator An indicative measure of the cost of transacting in the fund, taking into account the Management Fee, additional fees such as expense recoveries and the Bid / Ask Spread. Net Asset Value (NAV) The per share dollar amount of the fund calculated daily by dividing the closing market value of all securities in the fund, less any liabilities, by the number of fund shares outstanding. Performance Top line actual return, after fees. Standard Deviation Volatility of monthly Performance. Time to Recovery The number of months taken to recover the Worst Drawdown. Tracking Error Volatility of monthly Excess Returns against the benchmark (the Standard Deviation of monthly Excess Returns). Tracking Difference (Excess Return) Difference in return between the Fund and the benchmark. Worst Drawdown The worst cumulative loss ( peak to trough ) experienced over the period assessed. About Lonsec Lonsec Research Pty Ltd (Lonsec) is an investment research house with specialist areas of expertise, that was originally established in 1994 and the current entity was registered on 23 June 2011. From 1 July 2011, Lonsec became a fully owned subsidiary of Lonsec Fiscal Holdings Pty Ltd, a privately owned entity with a multibrand strategy of providing leading financial services research and investment execution. Lonsec believes that professional financial advisers need informed opinions on the best investment strategies and financial products to provide real value for their clients. To meet this need, Lonsec has in place an experienced research team, which draws on a robust research process to undertake in-depth assessment of managed fund products. Analyst Disclosure and Certification Analyst remuneration is not linked to the research or rating outcome. Where financial products are mentioned, the Analyst(s) may hold the financial product(s) referred to in this document, but Lonsec considers such holdings not to be sufficiently material to compromise the rating or advice. Analyst holdings may change during the life of this document. The Analyst(s) certify that the views expressed in this document accurately reflect their personal, professional opinion about the matters and financial product(s) to which this document refers. LONSEC STRONGLY RECOMMENDS THIS DOCUMENT BE READ IN CONJUNCTION WITH THE RELEVANT PRODUCT DISCLOSURE STATEMENT OR INFORMATION STATEMENT IMPORTANT NOTICE: This document is published by Lonsec Research Pty Ltd ABN 11 151 658 561, AFSL No.421445 (Lonsec). Please read the following before making any investment decision about any financial product mentioned in this document. Disclosure at the date of publication: Lonsec receives a fee from the fund manager or product issuer(s) for researching the financial product(s) set out in this document, using objective criteria. Lonsec may also receive a fee from the fund manager or product issuer(s) for subscribing to research content and other Lonsec services. Lonsec s fee is not linked to the rating(s) outcome. Lonsec does not hold the product(s) referred to in this document. Lonsec s representatives and/or their associates may hold the product(s) referred to in this document, but details of these holdings are not known to the Analyst(s). Disclosure of Investment Consulting services Lonsec receives fees for providing investment consulting advice to clients, which includes model portfolios, approved product lists and other financial advice and may receive fees from this fund manager or product issuer for providing investment consulting services. The investment consulting services are carried out under separate arrangements and processes to the research process adopted for the review of this financial product. For an explanation of the process by which Lonsec manages conflicts of interest please refer to the Conflicts of Interest Policy which is found at: http://www.lonsec.com.au/aspx/indexeddocs/general/lonsecresearchconflictsofinterestpolicy.pdf Warnings: Past performance is not a reliable indicator of future performance. Any express or implied rating or advice presented in this document is limited to General Advice (as defined in the Corporations Act 2001(Cth)) and based solely on consideration of the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs ( financial circumstances ) of any particular person. It does not constitute a recommendation to purchase, redeem or sell the relevant financial product(s). Before making an investment decision based on the rating(s) or advice, the reader must consider whether it is personally appropriate in light of his or her financial circumstances, or should seek independent financial advice on its appropriateness. If our advice relates to the acquisition or possible acquisition of particular financial product(s), the reader should obtain and consider the Investment Statement or Product Disclosure Statement for each financial product before making any decision about whether to acquire a financial product. Lonsec s research process relies upon the participation of the fund manager or product issuer(s). Should the fund manager or product issuer(s) no longer be an active participant in Lonsec s research process, Lonsec reserves the right to withdraw the document at any time and discontinue future coverage of the financial product(s). The rating in this publication relates to the fund outlined in the publication which may have related funds or be associated with other funds and platforms. The rating may only be applied to the fund outlined in this publication at first instance and whether it applies to related or associated funds and platforms should be investigated by your financial adviser before you make an investment decision in relation to the related or associated funds and platforms. You should be aware that the mandate, fees, underlying investments, the issuers of the related and associated funds and platforms may be different from the fund specified in this publication. You should satisfy yourself that the related and associated funds and platforms meet your financial circumstances, needs and objectives before making an investment decision. Disclaimer: This document is for the exclusive use of the person to whom it is provided by Lonsec and must not be used or relied upon by any other person. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this document, which is drawn from public information not verified by Lonsec. Financial conclusions, ratings and advice are reasonably held at the time of completion but subject to change without notice. Lonsec assumes no obligation to update this document following publication. Except for any liability which cannot be excluded, Lonsec, its directors, officers, employees and agents disclaim all liability for any error or inaccuracy in, misstatement or omission from, this document or any loss or damage suffered by the reader or any other person as a consequence of relying upon it. Copyright 2017 Lonsec Research Pty Ltd (ABN 11 151 658 561, AFSL No. 421445) (Lonsec). This report is subject to copyright of Lonsec. 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