Superannuation Products

1. Superannuation Products client investment update 30 June 2014

2. General advice warning and disclaimer Thisinformation has been provided by MLC Limited (ABN 90 000 000 402) a member of the National Australia Bank group of companies, 105–153 Miller Street, North Sydney 2060. This communication contains general information and may constitute general advice. Any advice in this communication has been prepared without taking account of individual objectives, financial situation or needs. It should not be relied upon as a substitute for financial or other specialist advice. Before making any decisions on the basis of this communication, you should consider the appropriateness of its content having regard to your particular investment objectives, financial situation or individual needs. You should obtain a Product Disclosure Statement or other disclosure document relating to any financial product issued by MLC Nominees Pty Ltd (ABN 93 002 814 959) as trustee of The Universal Super Scheme (ABN 44 928 361 101), and consider it before making any decision about whether to acquire or continue to hold the product. A copy of the Product Disclosure Statement or other disclosure document is available upon request by phoning the MLC call centre on 132 652 or on our website at mlc.com.au. An investment in any product offered by a member company of the National Australia Bank group of companies does not represent a deposit with or a liability of the National Australia Bank Limited ABN 12 004 044 937 or other member company of the National Australia Bank group and is subject to investment risk including possible delays in repayment and loss of income and capital invested. None of the National Australia Bank Limited, MLC Limited, MLC Investments Limited or other member company in the National Australia Bank group guarantees the capital value, payment of income or performance of any financial product referred to in this publication. Past performance is not indicative of future performance. The value of an investment may rise or fall with the changes in the market. Please note that all performance reported is before management fees and taxes, unless otherwise stated.

3. Table of contents 1. Market performance Investment Futures Framework 2. 3. Activity this quarter 4. More analysis of returns Where to find client tools 5.

4. 1. Market performance

5. 1. Market performance All asset classes delivered positive returns. Australian shares lagged global in the quarter.

6. 1. Market performance A sharply lower iron ore price has hurt Australian mining stocks in 2014. Source: IMF

7. 1. Market performance A strong year for most global share markets. While China’s economy continues to outperform, its share market continues to lag. Source: Iress

8. 1. Market performance Since 2009, US share prices seem to have been driven by QE or hopes for more QE! Source: Datastream, MLC

9. 2. Investment Futures Framework Things we worry about • Australia – are we that well placed ? • China in transition • “Tapering” – who’s most vulnerable? • Geopolitics • US Corporate profits • Euro-zone – not out of the woods yet? • Safe havens that still aren’t that safe • An (eventual) inflationary resolution

10. 2. Investment Futures Framework Our scenarios didn’t change over the quarter Three speed global economy (China soft landing) Higher (Mild) inflationary resolution Developed market austerity, recession, stagnation Early re-leveraging Probability Extended quantitative easing Sovereign yield re-rating Reform China hard landing Inflation shock Two speed recovery Extended risk aversion Lower One speed slow growth world Stagflation For a description of each scenario, please refer to ‘MLC’s scenario insights & portfolio positioning’, July 2014.

11. 2. Investment Futures Framework - MLC Inflation Plus positions • Unchanged positions: • Higher foreign currency exposure • Defensive global shares (instead of broad market global shares) • No direct allocation to long duration traditional bonds

12. 2. Investment Futures Framework - MLC Horizon 4 Balanced positions

13. 2. Investment Futures Framework - MLC Index Plus Balanced positions

14. 2. Investment Futures Framework - Potential returns Potential returns are generally in a tighter range because of the rise in share prices and decline in bond yields during the quarter.

15. 3. Activity this quarter – Changes to MLC Inflation Plus Moderate asset allocation Adjustments to increase defensive positioning and further protect against inflation risks and uncertainty about growth asset returns 15

16. 3. Activity this quarter – Changes to MLC Horizon 4 Balanced asset allocation Adjustments to increase defensive positioning as we believe market risk is increasing 16

17. 3. Activity this quarter – Changes to MLC Index Plus Balanced asset allocation Adjustmentstoincreasedefensivepositioningaswebelievemarketriskisincreasing 17

18. 3. Activity this quarter – Changes to managers Visit mlc.com.au for details of strategy changes. Click on Adviser site, MLC Investments tab and Latest News 18

19. 4. More analysis of returns • MLC Inflation Plus portfolio returns • Relative to benchmark • Contributors to returns • MLC Horizon portfolio returns • Relative to benchmark • Contributors to returns • Benchmark indices • Relative to peers • MLC Index Plus portfolio returns • Relative to benchmark • Contributors to returns • Asset class fund returns • Relative to benchmark

20. 4. MLC Inflation Plus - Returns relative to benchmark 20 Source: MLC

21. 4. MLC Inflation Plus Assertive - Returns relative to benchmark Delivered 4% pa real return over 7 years to 30 June 2014. Currently on track to deliver target return over shorter time frames. Source: MLC

22. 4. MLC Inflation Plus Assertive - Contributors to returns Source: MLC

23. 4. B. MLC Horizon - Returns relative to benchmark 23 Source: MLC

24. 4. B. MLC Horizon 4 Balanced Portfolio - Returns relative to benchmark Has more consistently outperformed over longer timeframes. 24 Source: MLC

25. 4. B. MLC Horizon - Contributors to returns Key contributors to most portfolios over the quarter • fixed income • global shares (unhedged) • Australian shares • global shares (hedged) Keycontributorstomostportfoliosovertheyear • fixed income • global shares (unhedged) • Australian shares • global shares (hedged)

26. 4. B. MLC Horizon - Benchmark indices from 1 July 2014

27. 4. B. MLC Horizon - Relative to peers – quartile performance rankings for MLC Super Fundamentals Returns are above median over all timeframes Source: Morningstar Direct Peer universe is the MLC Morningstar Superannuation Universe

28. 4. B. MLC Horizon - Relative to peers 28

29. 4. C. MLC Index Plus - Returns relative to benchmark Source: MLC 29

30. 4. C. MLC Index Plus - Contributors to returns Key contributors to all portfolios over the quarter • fixed income • global shares (unhedged) • global shares (hedged) Keycontributorstoallportfoliosovertheyear • fixed income • global shares (unhedged) • Australian shares • global shares (hedged)

31. 4. C. MLC Index Plus - Benchmark indices from 1 July 2014

32. 4. D. Asset class funds - Relative to benchmark 32 Source: MLC

33. 5. Where to find client tools Client investment update presentation Quarterlyupdateonourinvestmentpositions, detailed report for financial advisers and a summary report for clients Client report on fund performance for the quarter and year, updated monthly available on Fund Profile Tool Scenario insights and portfolio positioning Fund performance commentaries Outlineofchangestoourinvestmentstrategies, includingclientlettersandothertools Commentaryoncurrenteventsandinvestmentissuesforyourclients Strategy updates Monthlycommentaryoneconomicandmarketdevelopments, availableasvideoandclientQ&A Economic updates Marketupdatepreparedforcalendarandfinancialyearsforyourclients Year in review Ourmanagersoutlinetheirrationaleforpurchasingspecificcompanies, updatedquarterly Stock stories HighlightsofMLC’sinvestmentmanagers’ insightsonmarketsandtheirpositions, updatedquarterly Manager insights Presentation of fund performance, updated quarterly Investment insights and news Go to mlc.com.au, then click on Adviser site, MLC Investments, Commentaries