Page 3 - SMA changes rationale_Best of Breed Moderate

Chester High Conviction – Bought – our conviction here has increased to levels warranting portfolio
inclusion. We like the all-cap approach which means the team can and will invest up and down the
market capitalisation spectrum. We also like the high conviction approach with a focus on companies
with predictable cash generation trading at a valuation that provides a margin of safety and history of
finding unloved and underappreciated investments.
(Moderate) Flinders Emerging Companies – Sold – a combination of effects here has seen the sale of
this fund. Firstly, as noted above, we have reduced growth assets in favour of defensive assets, and
this would’ve resulted in a slight reduction in allocation to this strategy. Secondly, the inclusion of
Chester, noted above, utilises an all-cap approach which means we now get additional mid and small
sized companies’ exposure from this manager, rendering a extremely small allocation to Flinders as
unnecessary in this portfolio.

Resolution Capital Global Property Securities – Switched – as noted above on currency, we have
switched from the unhedged currency option here to the currency hedged option, maintaining our
conviction in Resolution Capital’s long-standing approach and highly experienced team.

MFG Core Infrastructure – Sold – whilst our conviction remains here, we favour a high conviction and
deeply fundamental approach in this asset class going forward given the market and economic
backdrop. MFG largely uses a quantitative approach with a highly diversified portfolio.

ATLAS Infrastructure Australian Feeder Fund Hedged – Bought – our conviction here is one of the
highest in the peer group. We like the concentrated, high conviction, index agnostic approach here
from one of the largest investment teams in the peer group. The strong risk focus provides a
counterbalance to the highly concentrated portfolio, whilst the team can and does benefit from
insights from its parent which is a large direct infrastructure investor/adviser.

Franklin Australian Absolute Return Bond – Sold – our conviction here remains, but we prefer a
dedicated focused approach to attractively priced Australian credit securities in the forward period
whilst also preferring that interest rate exposure (ie. duration) be obtained in the portfolio via
specialist managers (eg. Western, Brandywine) given the continued heightened volatility in this part
of the market.
Yarra Enhanced Income – Bought – our conviction here is high and this is currently our preferred
manager in the Australian credit peer group. We like the large and highly experienced team here
along with the very strong support provided by their macroeconomic function and their use of other
investment teams internally. We also like the in-depth fundamentally driven credit research and the
consistent levels of income.

(Moderate) Realm Short Term Income – Bought – this is our best pick in the enhanced cash / short-
term bond peer group and has been included in the portfolio as part of the increase in defensive
assets discussed above. Their highly experienced team uses a risk-first approach to investing along
with highly active trading in seeking to deliver strong risk adjusted returns. The fund aims to deliver an
after fee return of 1.5-2% per annum over the RBA cash rate over a rolling three-year period.

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Advisory Services Pty Ltd (ABN 30 008 587 595) AFSL #234656. This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to
consider your financial situation and needs before making any decisions based on this information.