Page 3 - Private Wealth Best of Breed Moderate PDF Factsheet

government spending and the surge in immigration. All of this didn’t help the Aussie dollar out, as it struggled to fight back against a rampaging US
dollar. This hurt Australian dollar exposed asset prices in the quarter.

The quarter was dominated by all things US as has been the case all year. The period was one of disappointment for those hoping for a continuation
of the outsized September rate cut, with the Fed putting on its bravest face in trying to talk down rate cut expectations for 2025 whilst delivering two
smaller rate cuts to round out the 2024 calendar. US inflation slightly reaccelerated in the quarter whilst better than expected jobs growth didn’t help
the Fed’s cause. US consumer sentiment also rose leading into the US election result whilst third quarter company reporting saw strong results. Whilst
investors clamoured for every word spoken by the US tech giants, there was some concern regarding the rising costs for A.I. in the period ahead.

US government bond yields rose (prices lower) on lowered rate cut expectations and an increasingly likely Trump victory. Confirmation of Trump’s
election win, with a strong mandate (both Houses), exacerbated the trend higher in yields with investors growing uneasy regarding the inflationary
effects of tariffs (on allies as well!) and the potential for another profligate four years of US government spending (waste). Rolling daily announcements
of Trump’s cabinet picks (still needing to be confirmed) also created some market volatility given the potential for these candidates to shake things up.
US voters very clearly voted for change, and whilst we’ll have to wait to see what changes can be pushed through, investors took note that the Trump
victory almost guarantees tax cuts and deregulation just like we saw in 2016. This lifted optimism in the outlook for the US economy and put further
upward pressure on the US dollar. US economic growth remained robust in the quarter whilst lawmakers averted yet another last-minute US
government shutdown.

Rounding out the rest of the globe, European economic conditions continued to weaken. UK inflation fell enough, with wages growth slowing, to allow
the Bank of England to cut rates again but this was short-lived as inflation began to then reaccelerate. The UK government budget position continued
to worsen, and this together with rampant immigration, saw polling fall sharply for the ruling party. Headline Eurozone inflation fell below target for the
first time in three years, allowing the European Central Bank to cut rates further. The French government collapsed yet again, the German government
moved to the brink of collapse as they rounded out the year with back-to-back years of negative economic growth, whilst Canada’s Justin Trudeau
rebuffed calls for an early election and held on to the leadership by the grit of his teeth. Japan moved a step closer to raising interest rates again whilst
the Bank of Japan heeded these calls as they carefully try to the thread the needle given decades of deflation and likely upward pressure on their
currency.

The quarter saw more conflict as middle east tensions rose with Israel extending their war into southern Lebanon whilst Syria unexpectedly saw one
of the fastest regime changes in modern history. Russia / Ukraine tensions also escalated as the US gave the green light for Ukraine to use US long
range missiles against Russian targets. Trade and technology security tensions also rose as the US government capped sales of advanced A.I. chips to
specific countries, and increased bans on semiconductors, which saw China retaliate.

The clear winner for the quarter was unhedged global equities, significantly currency enhanced as the AUD/USD fell to 61c, with an admirable showing
from both unhedged global infrastructure and global emerging market equities.

Portfolio Update
The Portfolio’s return for the December quarter was strong, but softer than seen in recent quarters as investors digested declining US rate cut
expectations resulting in rising bond yields, a surging US dollar, and a US election result that likely makes for a very interesting 2025.

Individual asset classes were affected by rising bond yields and/or a rising US dollar (falling Australian dollar). Australian equities and currency hedged
global equities both fell in the period as investors pared back expectations for US rate cuts in 2025 which could weaken the economic backdrop and
put lofty earnings expectations at risk. The currency moves were so severe that global equities unhedged saw exceptionally strong returns for the
quarter whilst emerging markets were also boosted by the surge in Chinese equities early in the period. Australian listed property fell sharply in
contrast to unhedged global listed property and infrastructure which had a healthy quarter, with infrastructure the pick over property.

On an absolute basis, the best and worst performing investments were as follows:

Top 3:

T. Rowe Price Global Equity

GQG Partners Global Equities

AB Global Equities

Bottom 3:

ATLAS Infrastructure Australian Feeder Fund Hedged

Resolution Capital Global Property Securities Fund Hedged

Yarra Emerging Leaders

Portfolio changes during the quarter:
There was one change to the portfolio in the period as previously communicated.