Fact Sheet 31.03.2018 Update OBJECTIVE Capital Appreciation CHARACTERISTICS The Fund seeks to invest in emerging markets companies with above-average returns on equity, strong balance sheets and consistent, above-average earnings growth, resulting in a focused portfolio of leading companies. FUND FACTS AND STATISTICS APIR Code Total Net Assets (A$Million) ETL0387AU A$3.1 Number of Holdings 54 Wgtd Avg Mkt Cap ($BB) $82.6 Unwgtd Median Mkt Cap ($BB) $12.8 Trailing 1-Year Turnover (%) 56.6 Cash(%) 2.4 Inception Date 9 December 2013 Minimum Purchase Amount A$500,000 Management Fee 1.10% ABOUT INVESTMENT MANAGEMENT AT WILLIAM BLAIR William Blair is committed to building enduring relationships with our clients and providing expertise and solutions to meet their evolving needs. We work closely with private and public pension funds, insurance companies, endowments, foundations, sovereign wealth funds, high-net worth individuals and families, as well as financial advisors. 100% active employee-owned firm Fundamentally driven active management with a time-tested investment process Portfolio management across equities, fixed income, multi-asset and alternative strategies organized by market capitalizations and styles A$87.6 billion in assets as of 31 December 2017, with many of the largest and most sophisticated plans around the world entrusting us with their portfolios WHY CONSIDER THIS FUND? Provides focused investments in leading companies in terms of products, services, and execution Historically consumer-focused, reflecting a growing opportunity set Managed by a seasoned team with decades of emerging markets experience INVESTMENT PERFORMANCE (%IN A$)(Period ending 31 March 2018) Life of Fund 1 MTH YTD 1Y 3Y 5Y 10Y (09.12.2013) Fund -0.14 2.21 28.13 7.01 10.40 MSCI Emerging Markets IMI Index (net) 1-0.30 3.41 24.24 8.66 10.08 CALENDAR YEAR PERFORMANCE (% IN A$) 2017 2016 2015 2014 2013 Fund 32.66 3.26-3.17 11.34 1.46 MSCI Emerging Markets IMI Index (net) 1 27.09 11.72-4.30 6.93 0.67 Since inception of Fund on 09.12.2013 through 31.12.2013 Past performance is not a reliable indicator of future performance. This document has been prepared and issued by William Blair Investment Management, L.L.C. ("William Blair") and is intended for the general information to 'wholesale clients' (as defined in the Corporations Act 2001). William Blair is exempt from holding on Australian Financial Services License pursuant to ASIC Class Order 03/1100 'Relief for US SEC regulated financial service providers'. Equity Trustees Limited ( Equity Trustees ) (ABN 46 004 031 298) AFSL 240975, is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT), is the Responsible Entity for the (ARSN 166 588 389). This publication has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. We do not express any view about the accuracy or completeness of information that is not prepared by us and no liability is accepted for any errors it may contain. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. You should obtain a copy of the product disclosure statement before making a decision about whether to invest in this product. This document is neither an offer to sell nor a solicitation of any offer to acquire interests in any investment. Before making any investment decision, you should consider whether the investment is appropriate in light of those matters. William Blair provides no warranty as to the accuracy, reliability and completeness of the information in this document and you rely on this information at your own risk. To the extent permitted by law, William Blair, Equity Trustees, nor any of its related parties, directors, employees, agents, disclaims all liability to any person relying on the information contained in this document in respect of any loss or damage (including consequential loss or damage) however caused, which may be suffered or arise directly or indirectly in respect of such information. The targeted rates of return included in this document are hypothetical returns, and are for illustrative purposes only. Past performance is not a reliable indicator of future performance. The return of capital is not guaranteed. Applications can only be accepted on an application form attached to a current Product Disclosure Statement.
31.03.2018 Update Fact Sheet TOP TEN HOLDINGS (%) 2, 3 Company Industry Country % of Fund Tencent Holdings Limited Internet Software & China 6.4 Services Taiwan Semiconductor Semiconductors Taiwan 5.9 Manufacturing Company, Ltd. & Semiconductor Equipment Samsung Electronics Co., Ltd. Technology Hardware & Equipment Korea 5.7 Alibaba Group Holding Limited Internet Software & Services China 4.9 Ping An Insurance (Group) Insurance China 3.4 Company of China, Ltd. Naspers Limited Media South Africa 2.9 CP ALL Public Company Limited Food & Staples Retailing Thailand 2.5 Petroleo Brasileiro S.A. - Petrobras Oil, Gas & Consumable Fuels Brazil 2.3 The Bidvest Group Limited Industrial ConglomeratesSouth Africa 2.2 Yum China Holdings, Inc. Hotels, Restaurants & China 2.1 Leisure Total Top 10 38.3 SECTOR DIVERSIFICATION (%) 2, 3 Sector Type Fund Index 2 Information Technology 28.8 27.8 Financials 27.7 24.0 Consumer Discretionary 16.9 9.5 Consumer Staples 9.7 6.4 Industrials 6.0 5.2 Materials 5.0 7.3 Energy 2.4 7.2 Health Care 1.8 2.8 Telecommunication Services 1.7 4.6 Real Estate 0.0 2.8 Utilities 0.0 2.4 GEOGRAPHIC DIVERSIFICATION (%) 2, 3 Region Fund Index 1 Asia 68.0 73.0 Europe, Mid-East, Africa 14.9 14.6 Latin America 17.1 12.4 2, 3* MARKET CAP DIVERSIFICATION (%) Market Cap Fund Index 1 > $15.0B 56.5 48.0 PORTFOLIO MANAGEMENT $4.0B - $15.0B 38.9 32.4 < $4.0B 4.6 19.6 Todd McClone, CFA Started in Industry: 1992 Education: B.A., Univ. of Wisconsin-Madison Jack Murphy, CFA Started in Industry: 1996 Education: B.A., Villanova University All data is calculated in U.S. dollars unless otherwise indicated. Past performance is not a reliable indicator of future performance. 1 The MSCI Emerging Markets Index (net) is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. This series approximates the minimum possible dividend reinvestment. For more information on the index, please visit the website at www.msci.com. 2 Top ten holdings are shown as % of total net assets. Sector, Market Cap and Geographic Diversification charts show % of investments for the Fund and its benchmark Index and exclude cash equivalents. 3 Information about the Fund s holdings should not be considered investment advice. There is no guarantee that the Fund will continue to hold any one particular security or stay invested in any one particular sector. Holdings are subject to change at any time. * These amounts are calculated using float-adjusted market capitalizations. William Blair Investment Management, LLC and the investment management division of William Blair & Company, L.L.C. are collectively referred to as "William Blair." For more information, contact: Alex Rolfe William Blair Lev 26, 1 Bligh Street, Sydney, NSW 2000 +612 8226 8571 arolfe@williamblair.com 6529632
Fund Performance & Positioning The underperformed its benchmark, the MSCI Emerging Markets Index (net), during the first quarter. First quarter underperformance was driven by a combination of allocation and stock selection effects. An underweight allocation to Energy, coupled with below average stock selection within the Telecommunication Services and Real Estate sectors weighed on relative returns. Within the Telecommunication Services sector, Telekomunikasi Indonesia Persero hampered relative performance. Telekomunikasi Indonesia is the principal provider of telecom services in Indonesia, offering traditional voice as well as faster-growing but still underdeveloped data offerings. The share price declined after the company reported weaker FY17 results below consensus estimates, primarily driven by nonmobile revenues and higher than-expected operating expenses. Within the Real Estate sector, Emaar Properties PJSC detracted from relative results. Emaar Properties is the largest publicly-listed property developer and manager of leasing and hospitality assets in the Middle East. The share price came under some pressure after the company reported slightly weaker 4Q net income below consensus expectations. Partially offsetting these detrimental effects was the underweight allocation to the Telecommunication Services sector, coupled with above average stock selection within the Energy and Health Care sectors. Within Energy, Brazilian oil and gas company Petrobras contributed to relative returns, benefiting from a broader rally in Brazilian equities amid improving investor sentiment. Petrobras s fourth quarter earnings results benefited from strength in the refining segment, as lower refining costs boosted margins. During the period, Financials exposure was increased through the purchases of China Merchants Bank, HDFC Standard Life Insurance and Grupo Financiero Galicia. Information Technology exposure Top 10 Holdings as of 31.03.2018 Company Name % of Fund Tencent Holdings Limited 6.4% Taiwan Semiconductor Manufacturing 5.9% Company, Ltd. Samsung Electronics Co., Ltd. 5.7% Alibaba Group Holding Limited 4.9% Ping An Insurance (Group) Company of 3.4% China, Ltd. Naspers Limited 2.9% CP ALL Public Company Limited 2.5% Petroleo Brasileiro S.A. - Petrobras 2.3% The Bidvest Group Limited 2.2% Yum China Holdings, Inc. 2.1% Total of Top 10 38.3% was also increased during the period. These increases were offset primarily by reductions to Consumer Discretionary, Industrials and Telecom. From a geographic perspective, the China weighting was increased during the quarter, offset primarily by reductions in Brazil, Korea and India. Market Review & Outlook The benign environment of low equity market volatility and uninterrupted monthly gains came to an abrupt halt in late January. Worries about the extended bull market and narrow leadership culminated in heavy selling pressure following reports that a handful of niche equity volatility-linked ETF products had suffered significant losses, stoking fears of broader risk contagion. The MSCI ACWI IMI fell nearly 9% in USD terms from its peak on January 26 to February 8 and traded within a +/- 5% range through the end of March. As the quarter progressed, volatility was increasingly driven by worries that the Trump administration s pursuit of protectionist measures would ignite a trade war with China and potentially negate the positive effects of fiscal stimulus on U.S. economic growth. On the heels of the Russian election meddling
inquiry, Facebook endured a growing backlash following revelations that user data had been exploited by U.K. data analytics company Cambridge Analytica. Amid the fallout and intensifying regulatory scrutiny of data privacy standards, investors were left reassessing implications for not only prospective margins and valuation multiples of the social media platform companies, but equity market leadership more broadly. The MSCI ACWI IMI declined 0.97% during the quarter in USD terms. Emerging markets (EM) equities outperformed their developed market counterparts, gaining 1.11% as measured by the MSCI EM IMI. U.S. equities fared better than non-u.s. developed markets equities overall, but there was significant variation in relative results across different countries. Currency effects also had a significant impact on total USD returns for the quarter. For example, Japanese equities declined 5.28% in local currency terms, but gained 0.33% in USD terms as the yen strengthened. Although negative for the quarter, Continental Europe and U.K. equity returns were also bolstered by favorable currency effects, as the euro and pound sterling appreciated versus the dollar. Within EM, Brazil (+11.61%) and Russia (+9.42%) were the top performing MSCI index constituent countries, bolstered by a rally in Energy stocks. In contrast, India (-8.02%) lagged as financials stocks were hit by negative sentiment following revelations of fraud at state-run Punjab National Bank, the country s fourth-largest lender. Underlying recent volatility is the cyclical transition out of recovery to expansion. Global growth remains broad based and robust, but it is no longer accelerating. Global manufacturing PMIs began to roll over from unsustainably elevated levels in February and March. Current, still elevated, readings suggest that we may have another month or two of further deceleration ahead. Anytime the economic growth trajectory changes, the markets rightly question the duration and direction of near-term economic fundamentals. That is one reason why markets are more volatile during expansions, as compared to recoveries. In times of economic expansion such as the current one, we expect companies to post robust earnings growth. In the U.S., where economic expansion is thought to be more advanced, market leadership has been quite narrow and returns, though high, have been of poor quality. Over the past five years, greater than 50% of U.S. EPS growth came from share buybacks, while 68% of total return was explained by P/E multiple expansion and only 16% by earnings growth. Earnings growth has been relatively muted, apart from select technology companies. Looking ahead, we expect strong, broadly distributed earnings growth to underpin equities performance across both developed and emerging markets. Multiples may come under pressure in select areas, as growth today is as good as it gets in other words, no longer accelerating. While there may not be an obvious, market leading sector, we believe companies from across the full spectrum of industries are likely to generate good returns in the months ahead. While the underlying economic fundamentals argue for broader based (if more volatile) markets, current U.S.-China trade tensions are likely to amplify market swings in the current quarter. Specifically, the U.S. administration s stated objective of reducing the bilateral trade deficit with China by $100 billion implies a 30%+ reduction. The cost to the U.S. economy of implementing something this large in an election year suggests that this is another tactic to gain leverage in negotiations. Even if no new substantial tariffs are introduced and existing supply chains and trade patterns remain largely intact, the news flow associated with the need to position negotiations for the domestic audience suggests uncertainty and market volatility in the months ahead. In the longer term, this style of negotiating highlights that U.S.-China relations have transitioned to a more confrontational path, which cannot be positive for developing closer economic ties or trade flows. 7003313
This document has been prepared and issued by William Blair & Company, LLC ( William Blair ) and is intended for the general information of wholesale clients (as defined in the Corporations Act 2001). William Blair is exempt from holding an Australian Financial Services Licence pursuant to ASIC Class Order 03/1100 Relief for US SEC regulated financial service providers. Equity Trustees Limited (ABN 46 004 031 298, AFSL 240975) is the Responsible Entity of the (ARSN 166 588 389). This document is neither an offer to sell or a solicitation of any offer to acquire interests in any investment. The information contained in this document is of a general nature only. In preparing this document, William Blair has not taken into account the investment objectives, financial situation and needs of any particular person. Before making any investment decision, you should consider whether the investment is appropriate in light of those matters. William Blair provides no warranty as to the accuracy, reliability and completeness of the information in this document and you rely on this information at your own risk. To the extent permitted by law, William Blair disclaims all liability to any person relying on the information contained in this document in respect of any loss or damage (including consequential loss or damage) however caused, which may be suffered or arise directly or indirectly in respect of such information. The targeted rates of return included in this document are hypothetical returns, and are for illustrative purposes only. Past performance is not a reliable indicator of future performance. The return of capital is not guaranteed. Applications can only be accepted on an application form attached to a current Product Disclosure Statement. William Blair Investment Management, LLC and the investment management division of William Blair & Company, L.L.C. are collectively referred to as William Blair. 7003313