Investment Update

1. Investment Update December 2011 Quarter 1

2. General advice warning and disclaimer • This information has been provided by MLC Limited (ABN 90 000 000 402) a member of the National Group, 105–153 Miller Street, North Sydney 2060. • Any opinions expressed in this communication constitute our judgement at the time of issue and are subject to change. We believe that the information contained in this communication is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made as at the time of compilation. However, no warranty is made as to their accuracy or reliability (which may change without notice) or other information contained in this communication. • 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. • The specialist investment managers are current as at the date this communication was prepared. Investment managers are regularly reviewed and may be appointed or removed at any time without prior notice to you. • 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 Investments Limited (ABN 30 002 641 661 [include AFSL for PDSs/FSGs/Annual Reports]) 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. 2

3. Agenda Time* Activity Speaker 11:00am Welcome & Introduction Mark Montaldi 11:05am Investment Update Michael Karagianis & Andrew Connors 11:50am “Q & A” Midday Close * All times shown as Eastern Daylight Savings Time 3

4. Review of 2011 Performance 4

5. PIC 70/30 strategy - asset class returns Source: MLC Investment Management

7. The Chaser vs. a Strategic Balanced portfolioChaser closes gap, but still trails Strategic Funds

8. Key Investment Themes for 2012 8

9. Key Investment Themes for 20121. Economic prospects for 20122. China - key issues for 20123. The role of alternatives in a post-GFC portfolio4. Income investing – Investment fad or trend?5. Where to next? Australian housing market update6. Investment outlook and strategies for 2012

10. Sovereign debt levels a concern Eurozone has a critical problem – growth not austerity is the answer Source: IMF (2012 estimates)

11. Eurozone headed for a nasty recession Eurozone struggling with the myth of “expansionary austerity” Source: Datastream

12. US housing market still a problem But US economy looking a little better at the moment

13. Chinese economy is slowing Could impact on demand for commodities – expect easier policy in 2012 Source: Datastream

14. Australian growth to improve but . . . Multi-speed economy still a problem Source: Datastream

15. Debt servicing costs are still high Most of it relates to mortgage debt – creating stress for many households Source: Reserve Bank of Australia

16. Interest rates are falling Further rate cuts would be temporary however Source: Reserve Bank of Australia

17. Safe haven assets have done well Don’t expect the same in 2012 Source: Datastream

18. Safe haven strategies RBA rate cuts and falling bond yields will see future returns lower Source: Sydney Morning Herald - 24th January 2012

19. Bond yields are looking expensive Any rise in yield could hurt investors Source: Datastream

20. Simple solutions will not deliver long term Retirees will run out of funds – need more sophisticated solutions to last

21. Why invest overseas ? Growth does not always give a good guide to sharemarket performance Source: Datastream

22. Equities & credit more attractive Expected to outperform cash and bonds but with tail risks & continuing volatility Source: MLC Investment Management

23. Snapshot of Innovation The Long Term Absolute Return Portfolio (LTAR) 23

24. What is LTAR? The Challenge: Volatility has wreaked havoc to investor plans over the past few years Many investments and asset classes did not perform how they were expected to, meaning many people are now seeking new places to invest MLC Response: LTAR is different to traditional funds. It has flexibility to invest anywhere, at any time, even in none traditional asset classes. And as well as providing additional sources of returns, this also provides additional sources of diversification – to help buffer when markets are volatile.

25. Traditional Diversified FundsEquity risk dominates Portfolio 2 – 50/50 Portfolio 1 – 65/35

26. Why invest? Features and benefits

27. LTAR – Asset Allocation 27 Source: MLC Investment Management

28. Strategic Overlay PerformanceProtecting against major risks Value Added Rolling 1 yr return Value added since inception: +4.6% per annum

29. Contribution to total return

30. Daring to be different

31. “Q&A” • MLC Investment Management speakers today: • Michael Karagianis – Snr Investment Strategist • Andrew Connors – Portfolio Specialist 31