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  • MLC MasterKey Investment Service Fundamentals

    Fund SnapshotMLC Wholesale IncomeBuilder

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    Australian Shares 99.7%Other 0.3%

    Key Information

    APIR Code MLC0264AU


    Product Size as at 31 Jan 2015$274.75M

    Commencement Date22 Jan 1998

    Fund Overview

    About the FundThe Fund aims to provide returns from companies that are expected to delivera growing dividend stream over time.

    The Fund is expected to generate tax effective returns by:

    investing in companies expected to have high franking levels, andcarefully managing the realisation of capital gains.

    You can assess the performance of the Fund against the S&P/ASX 200 AllIndustrials Accumulation Index over rolling 4 year periods.

    Fund Breakdown

    By Asset Class as at 28 Feb 2015The information displayed reflects the actual asset allocation based on the holdings within the fund at the effective date.

    By Manager as at 28 Feb 2015

    Asset Class Manager Percentage Investment Amount

    Australian Shares Antares 29.7% $2,966

    Maple Brown Abbott 70.0% $7,000

    Other Other 0.3% $34

    Total 100.0% $10,000

  • MLC MasterKey Investment Service Fundamentals

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    Stock HoldingsTop Stocks for Fund as at 31 Jan 2015The Top Stocks for Fund have a one month reporting delay.

    Stock Description Industry Country Percentage Investment Amount

    NATIONAL AUSTRALIA BANK Financials Australia 9.4% $940

    ANZ BANKING GROUP Financials Australia 9.4% $937

    WESTPAC BANKING CORP Financials Australia 9.0% $904

    TELSTRA CORP Telecommunication Services Australia 8.6% $857

    WESFARMERS Consumer Staples Australia 5.9% $592

    COMMONWEALTH BANK OF AUSTRALIA Financials Australia 5.9% $588

    SUNCORP-METWAY Financials Australia 3.3% $330

    TOLL HOLDINGS Industrials Australia 3.0% $300

    AMP Financials Australia 3.0% $299

    STOCKLAND TRUST Real Estate Investment Trusts (REITs) Australia 2.7% $271


    Historical PerformanceAbsolute Fund Returns as at 28 Feb 2015Returns for periods one year or greater are calculated on an annualised basis. All returns are calculated using end ofmonth redemption prices assuming all distributions are reinvested and are net of management fees which may includeadministration fees, issuer fees and investment fees and prior to any individual tax considerations, and do not allow forinitial entry fees.

    The returns outlined below represent historical performance only and is not an indication of future performance. The valueof an investment may rise or fall with changes in the market. Returns are calculated in accordance with FSC Standard No6.

    3 month 6 month 1 Year 3 Years 5 Years 10 Years Since Inception22 Jan 1998

    Fund Performance 14.4% 12.4% 20.9% 22.0% 12.3% 8.2% 9.3%

    Growth 13.1% 10.2% 13.9% 15.3% 6.6% 2.2% 4.5%

    Distribution 1.3% 2.2% 7.0% 6.7% 5.7% 6.0% 4.8%

  • MLC MasterKey Investment Service Fundamentals

    Fund SnapshotMLC Wholesale IncomeBuilder

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    CommentariesFund Commentary

    As at 28 February 2015

    The fund produced a total return of 14.6% (before fees and tax) in the quarter to 28 February 2015. This was 0.7% abovethe 13.9% return of the S&P/ASX200 All Industrials Accumulation Index. Over the year to 28 February, the index returned20.9% and the fund returned 21.8% (before fees and tax), 0.9% above the index return.

    The February quarter was a very positive return period, with a strong gain in February (6.9%) adding to positive returns inDecember (2.1%) and January (3.3%). All sector indices recorded gains in the quarter, though industrials continued tooutperform resources. The ASX200 All Industrials Accumulation Index rose 13.9%, nearly double the 7.1% return of theASX200 All Resources Accumulation Index.

    The Reserve Bank of Australias decision to reduce the cash rate by 0.25% to 2.25% meant investors continued tosupport sectors that have dividends considered sustainable and an attractive dividend yield compared to bonds and termdeposits. These sectors included real estate investments trusts (REITs, 16.7%), Financials ex-REITs (14.7%), Utilities(16.7%) and Telecommunications (13.7%).

    Toll Holdings Limited (58.5%) was one of the best performers within the ASX100 due to a surprise takeover bid fromJapan Post.

    The profit reporting period confirmed many companies are experiencing tough operating conditions. Profit growth wasachieved more through cost reduction strategies than growth in sales, which remains weak, particularly fordomestically-focused companies. Woolworths Limited surprised the market late in the quarter by downgrading its fiscalyear 2015 profit outlook.

    The fund received growing dividends from a number of companies this quarter, including National Australia Bank,Westpac and ANZ Banking Group. Each bank paid a dividend that was higher than last years corresponding dividend.ANZs 95 cents per share (cps) interim dividend was 4.4% higher than last years, while National Australia Banks 99 cpsinterim dividend was higher by 2.1%. Westpacs 92 cps interim dividend was 4.5% higher than last years. However, itchose not to repeat the special dividend it paid in December 2014.

    Other companies that paid dividends to the fund this quarter were Harvey Norman, Charter Hall Retail REIT, ScentreGroup and Stockland Group.

    Contributors to the funds total return this quarter included overweight positions in Toll Holdings Limited, Incitec PivotLimited and ResMed Inc.

    Detractors from total returns included:

    an overweight position in Metcash Limitedan overweight position in Suncorp Group Limited, andnot investing in Macquarie Group Limited.

    Over the year, sector returns in the Australian share market also varied considerably. The worst performers were Energy(-11.9%) and Materials (-3.1%), due to significant falls in the prices of oil and bulk commodities such as iron ore. Despitethe strength of the US economy, slower growth in China and ongoing economic weakness in Japan and Europe led toconcerns that these prices may fall further.

    Sector performances in the Industrials market this year were generally positive, with Consumer Staples the only exception(-1.5%), due mainly to poor performances by Woolworths (-14.9%) and Coca-Cola Amatil (-7.9%). The best sectorperformers were those with positive profit momentum (Healthcare, 32%) or sustainable dividends and dividend yieldsgreat than bonds and term deposits (REITs, 35.4%; Telecommunications, 32.4%; Financials ex REITs, 22%).

    In the year to 31 January, contributors to the funds total return included:

    an overweight position in Toll Holdings Limited,an underweight holding in Woolworths Limited, andan overweight position in ResMed Inc.

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    Detractors from total returns included:

    investing in BHP Billiton Limitedan overweight position in Metcash Limited, andnot investing in Westfield Corporation.

    Note:- Please refer to the Market commentary for an overview of what happened in domestic and global markets over thequarter.- Fund commentary for this fund will be updated two to three weeks after the end of the month

  • MLC MasterKey Investment Service Fundamentals

    Fund SnapshotMLC Wholesale IncomeBuilder

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    Market Commentary

    As at February 2015

    Returns to 28 February 2015*

    Asset class 3 mth (%) 1yr (%) 3yr (%) 5yr (%) 10yr (%)

    Cash 0.7 2.7 3.1 3.8 4.8

    Australian bonds 3.6 10.3 7.1 7.3 6.7

    Global investment grade bonds (hedged) 2.5 9.7 7.3 8.3 7.8

    A-REITs 16.4 34.9 23.1 14.9 3.1

    Global REITs (hedged) 7.8 26.2 19.6 18.6 na

    Australian shares 12.6 14.2 15.8 9.5 8.1

    Global shares (hedged) 4.7 17.6 18.0 15.2 9.3

    Global shares (unhedged) 11.2 23.6 24.9 14.3 7.1

    Sources: Datastream, MLC Investment Management. *Annualised returns except for 3 month.

    Benchnark data include UBS Bank Bill Index (Cash), UBS Composite Index (Aust bonds) Barclays Global Aggregate hedged to A$ (Global bonds),S&P/ASX200 A-REIT Accumulation Index (A-REITs), MLC Global property strategy benchmark hedged to A$ (Global REITs), S&P/ASX200Accumulation index (Aust shares) and MLC global equity strategy benchmark (MSCI All Country Indices hedged and unhedged in A$).

    Global share investors enjoyed solid returns in the three months to the end of February. This was largely due to verystrong gains in eurozone and Japanese share markets, despite both economies generally experiencing weaker thanexpected economic conditions. The Bank of Japans massive program of quantitative easing (QE) is continuing and inJanuary, the European Central Bank announced a QE program, commencing in March and lasting until at leastSeptember 2016. Emerging share markets performed positively, but underperformed markets in the developed worldover the quarter.

    For Australian investors, unhedged global share returns were again boosted by a weaker Australian dollar, which fell by afurther 8% against its US counterpart over the quarter. Unhedged global shares have now outperformed hedged globalshares over the last three years, although the Australian dollars previous strength continues to detract from the longerterm performance of unhedged global shares.

    The Australian shares performed very strongly over the quarter, despite a further fall in the price of iron ore. The localmarket enjoyed a return of 12.6 % for the quarter, largely driven by solid gains in financial and materials shares.

    For fixed income investors, returns were very strong over the quarter. Yields in most major world bo