Risk off was the pervading theme during March. Investor concern regarding the announcement of US tariffs in early April and their impact on global economic activity undermined investor confidence. An increasingly uncertain economic backdrop led investors to re-calibrate their views of future risks and focus on equity market valuations. In addition, an Australian federal election was called for 3 rd May in a race that appears too close to call at this stage. In March the Bank of Canada cut rates by 0.25% to 2.75 whilst the European Central Bank cut its deposit facility rate by 0.25% to 2.5% as disinflation continued in the European region. The US Federal Reserve held the US Fed Funds rate at 4.25% to 4.5% at its March meeting. In Europe the German parliament approved a package focused on defence and infrastructure spending and in the process stepped away from decades of fiscal conservatism. The spending package includes the set-up of a €500 billion infrastructure fund, to be spent over the next 12 years. In China the National People’s Congress occurred with a key outcome being China’s commitment to a 5% growth target this year. Elsewhere there were widespread protests in Turkiye and unrest in the Serbian National Assembly. Australian large cap equities fell 3.30% in the month led by the Information Technology sector (-9.66%). Other sectors to fall sharply during the month were Consumer Discretionary (-6.28%) and Health Care (-4.60%). On the other hand, Communication Services (+1.74%), Utilities (+1.52%) and Materials (-0.32%) outperformed during the month. Small Cap Australian equities (-3.60%) underperformed large caps for the month. Currency hedged global equities fell 5.04% for the month as the Australian dollar gained slightly versus the US dollar at month’s end closing at US$0.6247, up from US$0.6209 a month earlier. Unhedged global equities fell 4.67% for the month. Bond yields in both Australia and the US were mixed during the month with the US 10 year bond yield finishing little changed from a month earlier at 4.21% and the US 2 year bond yield falling 11bps to 3.88%. In Australia, the Australian 2 year bond yield fell 5 bps to 3.68% whilst the Australian 10 year bond yield rose 9 bps to 4.38%. Benchmark Returns

The positive sentiment that propelled investment markets in January dissipated in February. The threat of tariffs on Mexico, Canada and China by the United States together with valuation concerns for mega-cap technology companies following announcements by DeepSeek in January and rising risks of stagflation all contributed to the more circumspect stance of investors. In February the Bank of England cut rates by 0.25% to 4.5% as inflation in the fourth quarter of 2024 reached 2.5%. In Australia, the Reserve Bank of Australia (RBA) cut the cash rate by 0.25% to 4.10%. This was the first rate cut by the RBA since November 2020. Australia’s four major retail banks were quick to react passing through the rate cut to mortgage holders post the announcement. Australian large cap equities fell 3.91% in the month led by the Information Technology sector (-12.28%). Other sectors to fall sharply during the month were Health Care (-7.66%) and Energy (-515%). On the other hand, Communication Services (+6.44%), Utilities (+3.15%) and Consumer Staples (+1.47%) outperformed during the month. Small Cap Australian equities (-2.80%) outperformed large caps for the month. Currency hedged global equities fell 0.36% for the month as the Australian dollar was largely unchanged versus the US dollar at month’s end closing at US$0.6209, down slightly from US$0.6218 a month earlier. Unhedged global equities fell 0.89% for the month. Uncertainty regarding the impact of possible tariffs by the US government impacted US consumer sentiment with the Conference Board consumer confidence index for February falling from 105.3 in January to 98.3 in February. In addition, the Conference Board’s expectations index (an indication of expectations for future spending growth) weakened to an eight month low of 72.9 raising the possibility of a period of stagflation for the US economy. Bond yields in both Australia and the US reflected the uncertainty with the US 10 year bond yield falling 33 bps to 4.21% and the US 2 year bond yield falling 21bps to 3.99%. In Australia, the Australian 2 year bond yield fell 7 bps to 3.73% whilst the Australian 10 year bond yield fell 14 bps to 4.29%. Benchmark Returns

Investment markets had a positive start to 2025. A ceasefire deal between Israel and Hamas was announced during the month and helped ease geo-political tensions. The ceasefire deal will be carried out in three stages with stage one of the ceasefire agreement expected to last 42 days. In the US the inauguration of President Trump occurred during the month and the 47 th President of the United States of America was quick to hit the ground running signing a multitude of executive orders. Towards the end of the month investors in artificial intelligence linked companies were thrown a curve ball when Chinese company, DeepSeek, released its free artificial intelligence chatbot app. The app quickly became the most downloaded free app on the Apple App Store in the US. The release of the DeepSeek app in January caused ripples for artificial intelligence related companies given the company’s claims of relatively cheap development costs together with the fact the app is open source meaning anyone can copy, download and build on it. The European Central Bank (ECB) cut its three key ECB rates by 25 bps in January as inflation expectations continued to moderate in the region. In the US, official cash rates were maintained at the US Federal Reserve’s target of 4.25% - 4.50%. The Bank of Japan raised its short-term policy rate from 0.25% to 0.50% at its January meeting – the highest level in 17 years. The first meeting of the Reserve Bank of Australia (RBA) for 2025 will be held in February with expectations building the RBA will announce a rate cut at this meeting. Australian large cap equities gained 4.45% in the month led by the Consumer Discretionary sector (+7.13%). The two worst performing sectors for the month were Utilities (2.40%) and Communication Services (1.52%). Currency hedged global equities gained 3.46% with the Australian dollar appreciating versus the US Dollar by 0.3 cents (0.48%) to close the month buying US$0.6218. Unhedged global equities returned +2.58% for the month.  Bond market performance was mixed for January. The Australian 10-year government bond yield increased by 7bps to 4.42% and the Australian 2-year government bond yield fell by 6bps to 3.80%. The US 10-year government bond yield fell by 3bps to close at 4.54% and the US 2-year government bond yield fell 4bps to 4.20%. Benchmark Returns

Investors adopted a more cautious stance in December after November’s equity market rally in response to a Trump victory in the US Presidential Election. The major contributing factor to the more circumspect positioning of investors in December was the US Federal Reserve. In December the US Federal Reserve continued to lower cash rates with a cut of 25 bps that now sees the target cash rate move to a 4.25%-4.50% range. This move was widely anticipated by investors. The surprise for investors was that the US Federal Reserve’s new median rate projection for 2025 indicated just two 25 bps cuts for the year – down from four 25 bps cuts in September. The European Central Bank (ECB) cut its three key ECB rates by 25 bps in December as inflation expectations continued to moderate in the region. In Australia the Reserve Bank of Australia (RBA) maintained the official cash rate at 4.35% as underlying inflation remains uncomfortably high. Australian large cap equities fell by 3.1% in the month led by the Materials (-4.5%) and Information Technology sectors (-4.4%). The two best performing sectors for the month were Communication Services (+1.4%) and Consumer Staples (+0.6%). Currency hedged global equities fell by 1.9% and with the Australian dollar falling versus the US Dollar by 3.2 cents (-5.0%) to close the month buying US$0.6188, unhedged equities returned +2.6%. Despite major central banks easing cash rates further in the month, bond market performance was mixed. The Australian 10-year government bond yield increased by 2bps to 4.36% and the Australian 2-year government bond yield fell by 9bps to 3.86%. The US 10-year government bond yield increased by 40bps to close at 4.57% and the US 2-year government bond yield gained 9bps to 4.24%. Benchmark Returns

In November all eyes (and markets) were focused on the US election, and with a Trump win it set the tone for a rally in developed markets. US equities posted a strong gain of 6% in USD terms with all sectors and market captilisations up. Asian equities faired worse as the potential tariffs on Chinese exports into the United States saw Asian equities and, in particular Chinese equities, sell off on negative sentiment. Further comments on the US election and implications are outlined below. The US Federal Reserve continued to lower cash rates with a cut of 25bps in November that now sees the target cash rate move to a 4.50%-4.75% range. The Bank of England also lowered cash rates by 25bps to 4.75%. The Reserve Bank of Australia left cash rates unchanged in November at 4.35%. The RBA noted that “Inflation has fallen substantially since the peak at the end of 2022 as supply chain issues have abated and higher interest rates have been working to bring aggregate demand and supply closer to balance. Underlying inflation in the September quarter is still too high. While trim mean inflation declined to 3.5% over the year it was little changed at 0.8% in the quarter”. Australian large cap equities rose by 4.0% in the month led by the IT sector (+10.5) and Utilities (+ 9.1%) with the only negative sectors being Energy (-0.7%) and Materials (-2.6%). Currency hedged global equities rose by 4.9% and with the Australian dollar falling versus the US Dollar by 1.0 cent (-1.1%) to close the month buying US$0.6512, unhedged equities returned 5.2%. With major central banks easing cash rates further in the month it was no surprise to see bond yields fall. The Australian 10-year government bond yield fell by 16bps to 4.34% and the Australian 2-year government bond yield fell by 9bps to 3.95%. The US 10-year government bond yield fell by 12bps to close at 4.17% and the US 2-year government bond yield fell by 2bps to 4.15%. What are the implications of a second Donald Trump presidency? The US election in November resulted in a resounding victory for Republicans with Donald Trump elected President and Republicans also controlling the House of Representatives and Senate. The so-called “Red Sweep” should allow for a relatively easier passage for laws to be passed and change to be implemented by Republicans. However, the window to enact change may be relatively short with mid term elections due in 2 years and the Republican majority in both the House of Representatives and Senate small. Policy agenda The policy agenda of President Trump and Republicans is key to determining any market implications. To this end, the key areas to focus on are summarised below: Immigration – Restricted immigration access to the US, tighter border controls and potential deportation of undocumented immigrants are all policies flagged pre-election by the Trump campaign. Move to “small” government – Trump has promoted a move to make government more efficient by decreasing red tape and reducing wasteful spending. Elon Musk will co-chair a newly created Department of Government Efficiency (DOGE) with an initial target of US$2 trillion in government spending cuts. Tax Cuts – Trump has stated he will seek to make 2017 personal tax cuts which are due to expire next year permanent. In addition, he has promoted a cut to the corporate tax rate with domestic profits to be taxed at a lower rate than international profits for corporations thereby encouraging companies to bring back manufacturing to the US. Trade – One of the more contentious policies is to impose large tariffs on imports from China and to a lesser extent other countries. In addition to tariffs there may be further restrictions to trade in the form of capital controls, which effectively restrict inflow and outflow of foreign capital. Foreign Affairs/Geopolitics – Trump has stated he will quickly resolve the Russia/Ukraine conflict and would move to find a resolution in the Israel – Hamas/Hezbollah conflict (although at the time of writing a ceasefire has been negotiated between Israel and Hezbollah). It is difficult to quantify the economic implications of any policy changes given we don’t know the timing of implementation and any possible retaliatory actions in relation to tariffs. For instance, deportation of undocumented immigrants has the potential to create a labour drain and tighter jobs market. However, if aggressive spending cuts are implemented on government departments this may see a significant reduction in employees and increase the unemployment rate for the US. In a broad sense the Trump policy agenda is expected to be supportive for US economic growth, complicated for international trade relations and carries the risk of higher inflation in the US. US investment markets have initially been bolstered by the “Red Sweep” with US stocks, Bitcoin and the US dollar all moving higher in November. On the flip side, Chinese equities fell in November as investor anxiety regarding tariffs was increased. US bond yields moved higher during November. Longer term, the implications are less clear with some initial thoughts summarised below. US Equities – A boost to profitability because of a potential cut in the corporate tax rate would be positive. Whether companies choose to use the increased profits to re-invest in growth or simply buy back shares will have very different implications for longer-term economic growth and share market performance. There may be opportunities for smaller US based companies to gain market share without competing head-on with cheaper imports with some industries advantaged more than others. International equities – Trade is likely to be complicated by tariffs and capital controls. For instance, if heavy tariffs are imposed on Chinese imports to the US will the Chinese move to re-direct trade to other jurisdictions or retaliate by imposing tariffs on US imports? If trade flows are re-directed we may see protectionist policies enacted across a wider number of countries and an increasing importance on bilateral agreements between nations. US government bonds – Higher inflation (particularly as a result of tariffs) together with a US budget deficit that is likely to increase will see upwards pressure on US government bond yields. Investors should watch for any signs of rating agencies becoming more concerned about the US government deficit. US dollar – Likely to continue to be supported as capital flows, attractive bond yields and relatively attractive economic growth all provide support. Finally, the unconventional nature of Donald Trump will result in surprises for investment markets over the next four years. Whilst there has been an initial positive reaction by investors to the Republican election victory investors should be mindful of valuations and ensure they are adequately diversified to best navigate the road ahead. Benchmark Returns

In October a rise in bond yields, coupled with a rising US dollar and waning impacts of the Chinese stimulus in September saw growth assets generally fall with bonds also producing negative returns. Despite the US FED starting the easing cycle in September with a 50bps cash rate cut, longer dated bond yields rose in October by ~50bps as markets priced in a more pro-growth agenda from China and also potential higher inflationary pressures in the US post the election. All eyes in the US are on the US election (5 th November) and whilst the polls show a very close call between Trump and Harris, the market implications for a new US President remain unclear. The ability of the future President to enact policy will be dependent on control of the House of Representatives and Senate and the willingness to push through policy. After five months of gains Australian large cap equities fell by 1.5% in the month with Financials and Healthcare the major positives, conversely Energy, Materials, Consumer Staples and Utilities all sold off aggressively. Currency hedged global equities fell by 0.9% and with the Australian dollar falling versus the US Dollar by 3.3 cents (-4.8%) to close the month buying US$0.65872, unhedged equities were up returning 3.9%. The Australian 10-year government bond yield rose by 51bps to 4.50% and the Australian 2-year government bond yield rose by 43bps to 4.05%. The US 10-year government bond yield rose by 50bps to close at 4.28% and the US 2-year government bond yield rose by 53bps to 4.17%.  Benchmark Returns

In September, the US Federal Reserve cut the US Fed Funds rate by 0.5% to 4.75-5.00%. US inflation appears to be under control with August data revealing US inflation at an annualised rate of 2.5% p.a. much lower than the 9% p.a. peak seen in 2022. US employment whilst resilient has softened, justifying a more accommodative monetary policy stance. The European Central Bank also cut rates in the month by 25bps to 3.50% following on from their previous 25bps cut in June due to falling inflation and slower economic growth. The surprise cut and stimulus came from China towards the end of the month. China’s economic growth has been tepid since COVID-19 related shutdowns. The property market has been in a crisis, there’s low consumer confidence, discretionary spending has fallen, overseas investment has reduced and China’s GDP growth target for the year at 5% looks to be a challenge. How did China stimulate? They reduced the amount of cash that Chinese banks must hold in reserve by 50bps, freeing up 1 trillion yuan (~A$140bn) of liquidity. China also reduced mortgage rates by an average of 50bps, reduced the downpayment required for second home purchases from 25% to 15% and they plan to issue 2 trillion yuan (~A$280bn) in special sovereign bonds to further invest in the economy. All of these actions saw Chinese equities rally (up over 20% in the month) alongside materials stocks that had been sold off aggressively on the recent Chinese economic weakness. Unfortunately, in September the Middle East conflict escalated to much more extreme levels since the conflict started back in October 2023. With the Hezbollah leader having been killed, retaliation has been high with nuclear threats rising. At the same time the Russia-Ukrainian conflict continues and without the US acting as the “world’s police”, hope is needed that both these conflicts abate with minimal further loss of lives. Markets have shrugged off both of these conflicts. However, if they continue/escalate further then supply chain issues and higher inflation risk destabilising investment markets. Australian large cap equities rose by 2.8% and in doing so closed at a new record high. The Materials sector was the strongest up 13% thanks to the Chinese central bank stimulus, Financials broadly flat and Healthcare falling the most in the month down 3.2%. Currency hedged global equities rose by +1.4% as the Australian dollar strengthened versus the US Dollar by 1.5 cents to close the month buying US$0.6913 and unhedged equities returned -0.5%  The Australian 10-year government bond yield rose by 3bps to 3.99% and the Australian 2-year government bond yield fell by 6bps to 3.62%. The US 10-year government bond yield fell by 12bps to close at 3.78% and the US 2-year government bond yield fell by 28bps to 3.64%. Benchmark Returns

In early August markets were volatile as almost simultaneously the Bank of Japan hiked interest rates at the same time as US employment data was released showing that payrolls softened. This led to the Japanese currency strengthening versus the US Dollar which in turn saw Japanese equity markets fall by over 20% in a day and US technology stocks sell off as the unwinding of the infamous “carry trade” occurred. However, by month end markets were little changed as fears of a massive unwinding of the carry trade dissipated. What is the carry trade and why is it important? Effectively the carry trade is a decades long phenomenon whereby investors borrow in a low yielding currency (i.e. the Japanese Yen which has yielded almost 0% since 2000) and invest in higher yielding assets and/or equities. When the Yen strengthened as quickly as it did in early August some investors were forced to repay their borrowings in Yen by selling the assets that had been bought with the cheap currency. Whilst the unwinding of the carry trade has the propensity to dislocate asset markets, the extent of how much needs to be unwound (if it at all needs to be unwound) is up for debate. What was witnessed within markets in August was that buyers were willing to step in and purchase assets that were sold off resulting in a rather benign month in terms of end returns. US inflation data fell to an annulised rate at the end of July of 2.9% which led to the US Federal Reserve Chair claiming that the “time has come” to start cutting US interest rates, potentially by up to 0.5% when the FED meets on the 18-19 th September. In Australia the unemployment rate rose to 4.2% in July. Importantly, this increase in unemployment was due to a record high participation rate of 67.1% indicating that there is a high number of people in jobs and looking to find jobs. The RBA held interest rates at 4.35% in August. Australian large cap equities rose by 0.7% with very few surprises in the August reporting season. Unhedged Global equities were negative in the month (-1.2%), mainly due to the weaker US Dollar as investors priced in an increased probability of a cut to the US Fed Funds rate next month. Currency hedged global equities rose by +1.8% as the Australian dollar strengthened versus the US Dollar by 2 cents to close the month buying US$0.6765  The Australian 10-year government bond yield fell by 15bps to 3.97% and the Australian 2-year government bond yield fell by 20bps to 3.67%. The US 10-year government bond yield fell by 13bps to close at 3.90% and the US 2-year government bond yield fell by 34bps to 3.92%. Benchmark Returns

Australian markets were influenced in July by a slight softening in inflation data that saw bond markets go from pricing in a potential rate hike at the next RBA meeting (5 th - 6 th August) to a potential rate cut by February. This lifted Australian equites to new highs and also saw bond yields fall (prices increase). Australia’s annual headline inflation data whilst it rose to 3.8% in the June quarter (up from 3.6% in the March quarter), the core inflation number (a key focus of the RBA) fell from an annualised rate of 4.0% to 3.9% insinuating that the RBA cash hikes may have done their job. Chinese growth ambitions softened in the month with retail sales falling due to the knock-on negative wealth effect from lower property prices and low wage growth. China still has ambitions of a 5% growth target for 2024 however the current stimulus of infrastructure investment and more recently a cut in the short- and long-term interest rates are not having the desired impact. Australian large cap equities rose by 4.2% with strong returns from the majority of sectors. Materials and Energy were negative for the month as global growth, and particularly Chinese growth, softened lowering the prices of key commodities. Global equities were positive in the month, with unhedged global equities up 4.0%, however many of the mega cap tech companies that have dominated the returns over the last year were mostly negative as investors used softer outlooks and potentially stretched valuations for some of these companies to rotate away and invest into the previously out of favour sectors. The Australian 10-year government bond yield fell by 20bps to 4.12% and the Australian 2-year government bond yield fell by 29bps to 3.88%. The US 10-year government bond yield fell by 37bps to close at 4.03% and the US 2-year government bond yield fell by 49bps to 4.26%. Benchmark Returns