Page 2 - SMA changes rationale_Specialist Growth Moderate

Restructuring Infrastructure Assets

Why we are making the change

The current property / infrastructure portfolio only carried an exposure to listed infrastructure, and
not listed property, given our greater conviction in infrastructure historically. However, our outlook
for the listed property sector has improved as cash rates have peaked and the economic backdrop has
not been as negative as originally expected. Most of the larger listed property companies have low
levels of leverage and/or do not have debt due for some time, which means they have locked in low
borrowing costs. We have reduced the listed infrastructure exposure in the portfolio to enable the
inclusion of listed property exposure, at equal weighting, while maintaining the overall allocation
here.

Changes to Underlying Investments

Why we are making the change

We have reviewed the underlying holdings to ensure the portfolio continued to contain our highest
conviction picks and their associated blending (portfolio construction) remained appropriate
considering our expectations of the forward period. This review resulted in the following changes to
the investment lineup:

South32 (S32) – Sold – our patience here has worn too thin and the weak expected forward metrics of
the company mean the company now falls outside of our screened investable universe. Whilst we can
override this for an already held stock, we’re not confident enough in the outlook for the business to
do so.

James Hardie (JHX) – Sold – the company’s share price has moved well above our expectations and
our assessment of fair value, more importantly. As such, we’ve sold this stock to allocate to new ideas
with better upside opportunities. These are the stock sales we like.

Newmont (NEM) – Bought – US Newmont Goldcorp recently acquired Australia’s largest gold miner in
Newcrest, creating the world’s largest gold mining company. We liked the acquisition given the
strengths of both companies and their positions on the gold mining cost curve. Whilst we think the
gold price remains well supported, we’re attracted to the significant disconnect between the gold
price and gold mining companies, the latter which trades a significant discount to both the gold price
and long-term historical differences.

Lynas Rare Earths (LYC) – Bought – the company explores, develops, mines, and processes rare earth
minerals which are used in an ever-widening source of applications. The company’s main asset is in
WA whilst processing is largely done offshore. Outside of China, Lynas is one of the largest miners and
processes of rare earths in the world. Current applications for rare earths include industrial processes,
glass manufacturing, automotive emission control, energy storage, electronics, lighting, and medical.
The stock is trading cheaply versus our assessed valuation.

Vanguard MSCI Australian Small Companies ETF (VSO) – Sold – whilst our conviction here remains, the
reduction in growth assets in favour of defensive assets, has pushed the allocation to this fund below
levels we would consider material enough to retain in this portfolio.