In March equities moved higher and many markets continued making new all-time highs as bond yields fell slightly driven by the further expectation that central bank rate cuts are due to occur in 2024. However, the Bank of England, the European Central Bank and the US Federal Reserve are yet to cut rates after their recent tightening cycles. The Bank of Japan (BOJ) raised rates in March which is their first rate hike in 17 years and they have finally moved away from negative interest rates. Inflation has exceeded the BOJ’s 2% target over the year. The BOJ statement was “dovish” in its tone and markets shrugged off the rise to a cash rate of 0-0.1%. Conversely, the Swiss National Bank was the first “G7” (a group of seven advanced industrial economies) central bank to cut rates with a reduction of 0.25% to 1.50%. The US Federal Reserve (FED) held rates steady in March. However, they did slightly raise their growth and inflation expectations for 2024. Despite the increase in inflation and growth expectations FED members are still forecasting three rate cuts in 2024. The RBA met on the 19th March and left the cash rate unchanged at 4.35%. The RBA noted that “while recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range. The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out”. Australian large cap Equities rose by 3.1%, the only sector that didn’t advance was Communication Services (-0.6%). Australian Real Estate Investment Trusts (A-REITs) rose by 9.7% and Energy (+5.3%) and Utilities (+4.8%) also performed well. Hedged global equities rose by 3.4% whilst unhedged global equities rose by 3.0%, the Australian dollar was relatively flat in March buying US$0.6521. One dynamic seen in markets in March was small and midcap companies, that over the last 12 months have underperformed, outperformed large caps - the belief that a recession will be avoided, funding costs will reduce and profit taking in the large cap names that have done well assisted this cohort of stocks.  The Australian 10-year government bond yield decreased by 15bps to 3.99% and the 2-year government bond yield decreased by 6bps to 3.68%. The US 10-year government bond yield fell by 5bps to close at 4.21% and the US 2-year government bond yield fell by 2bps to 4.63%.year government bond yield rose by 22bps to close at 4.25% and the US 2-year government bond yield rose by 43bps to 4.65%. Benchmark Returns

In February as per in January the US and Australian equity markets continued to move higher and achieve further new all-time highs. During the month US inflation fell to 3.1% annually from 3.4% driven by a decline in petrol prices. Offsetting lower petrol prices were higher housing and food costs. It’s worth noting that Core Inflation (which excludes volatile items such as food and energy) was flat at 3.9% annually. Australian inflation was reported late in February and came in at 3.4% annually, the same level as the prior month. The conclusion from these data prints is that whilst inflation is to a degree contained, there’s still a way to go before inflation is back between 2-3%. Longer dated bond yields rose in the month reflecting this dynamic. The RBA kept the cash rate on hold in February at 4.35%. The US Federal Reserve didn’t meet in February. Investor focus remains on how many rate cuts will occur throughout 2024 and 2025 and potential opportunities in bonds as markets reflect these changes. As an aside the RBA will no longer meet 11 times a year opting for eight times a year with the meeting held over two days, the next meeting is scheduled for March 18 th -19 th . Australian large cap Equities rose by 0.9% driven by the Information Technology (up 19.5%) and Consumer Discretionary (up 9.2%) stocks with the Materials and Energy sectors the laggards falling by 6.0% and 5.0% respectively. Hedged global equities rose by 4.7% whilst unhedged global equities rose by 5.9%, as the Australian dollar weakened by 1% in the month to US$0.6496. US equities were the standout (+5.3% in USD terms) as some of the larger technology companies released earnings and outlook statements that re-ignited investor fervour for those companies exposed to the Artificial Intelligence theme. The Australian 10-year government bond yield increased by 8bps to 4.15% and the 2-year government bond yield decreased by 1.5bps to 3.74%. The US 10-year government bond yield rose by 22bps to close at 4.25% and the US 2-year government bond yield rose by 43bps to 4.65%. Benchmark Returns

In January the US and Australian equity markets achieved new all-time highs delivering returns for the 12 months to 31st January in their local currencies of 20% and 7% respectively. US equities were lifted by the strength of the “Magnificent 7” labelled stocks being Microsoft, Meta Platforms, Tesla, Apple, Alphabet, Amazon, and NVIDIA. The rally in equities was driven by cooling inflation coupled with the expectation that a hard landing, i.e. a recession, will be avoided and that cash rate reductions will start to occur soon. Therefore, risks to equity returns going forward have lessened. Bond yields didn’t move significantly in January noting that in December yields fell significantly reflecting the future potential cash rate reductions due in 2024 and 2025. The US Federal Reserve (FED) met in January and elected to maintain its current 5.25-5.5% cash rate setting. Despite low inflation in the US employment is still very strong. The market is expecting lower cash rates in 2024, however the FED needs to ensure that they do not create a second wave of higher inflation that will be even harder to tame. At the end of January the Australian Bureau of Statistics reported that inflation in Australia for the December 2023 quarter rose 0.6% and 4.1% annually. The Reserve Bank of Australia (RBA) did not meet in January. Australian large cap Equities rose by 1.1% driven by the Energy sector and Financials (both up ~5%) whilst the Material sector fell by ~5%). Hedged global equities rose by 1.8% whilst unhedged global equities rose by 4.5%, as the Australian dollar weakened by 4% in the month to US$0.6565. The Australian 10-year government bond yield increased by 12bps to 4.07% and the 2-year government bond yield increased by 4bps to 3.75%. The US 10-year government bond yield rose by 16bps to close at 4.04% and the US 2-year government bond yield fell by 4bps to 4.21%. Key Developments Post Month-End The RBA met on the 6th February and elected to retain the current cash rate at 4.35% noting that "While there are encouraging signs, the economic outlook is uncertain and the Board remains highly attentive to inflation risks. The central forecasts are for inflation to return to the target range of 2-3 per cent in 2025, and to the midpoint in 2026". Benchmark Returns

In December bond yields continued their retreat (prices increased) which in-turn caused growth asset prices to also increase further. This rapid change in direction of bond yields over the last two months has helped to deliver a 5% return in passive fixed income investments for the year and has also seen strong gains from growth assets with Australian equities up ~12% and International equities (both currency hedged and unhedged) up over 20% in the last 12 months. Both the Reserve Bank of Australia (RBA) and the US Federal Reserve (FED) kept interest rates on hold in December at 4.35% and 5.25-5.50% respectively. However, with US inflation now running at an annualised rate of 2% in the third quarter (down from 4% at the start of the year), members of the FED indicated that at least three rate cuts were on the cards for 2024 and a further four cuts penciled in for 2025 causing bond yields to rally. Australia’s unemployment rate increased ever so slightly in November to 3.9%. The increase in the unemployment rate was due to more people seeking work which led to a record high participation rate – something the RBA will be keen to understand better before they consider a potential cash rate cut. Australian large cap Equities rose by 7.2% with all sectors positive. Real Estate and Healthcare where the best performing sectors delivering 11% and 9% respectively for the month. Hedged global equities rose by 3.9% whilst unhedged global equities rose by 1.8%, as the Australian dollar strengthened by 3% in the month to US$0.6812. The Australian 10-year government bond yield decreased by 46bps to 3.96% and the 2-year government bond yield decreased by 40bps to 3.71%. The US 10-year government bond yield fell by 45bps to close at 3.88% and the US 2-year government bond yield decreased by 43bps to 4.25%. Benchmark Returns

November saw a large reduction in bond yields as the market took a better-than-expected US inflation print to conclude that the US Federal Reserve has beaten inflation, are done with further rate hikes and that a pivot (cash rate cuts) are on the cards for early 2024. The result of this change in belief saw a rally in growth assets, in particular bond proxies such as listed real estate and infrastructure, and the US Dollar weakened. US inflation year on year to October slowed from 3.3% to 3.2% which triggered a rally in bond yields and equities- this was the total opposite of what happened in October when US GDP was strong, and the market reacted by pricing in a higher for longer cash rate outlook with yields rising and equities selling off. The best example of this market volatility over the last two months can be seen in Australian listed real estate trusts (AREITs) whose prices were down 5.8% in October but rallied 11.0% in November. Australian inflation fell in October to an annual pace of 4.9%. It was the first time in almost two years that inflation has fallen below 5%, and much softer than the figure of 5.6% for the year to September. With a cash rate at 4.35% and inflation running at an annualized rate 4.9% monetary policy would appear accommodative. However, the rate of change indicates inflation may be peaking and therefore the RBA can be less hawkish on their cash rate outlook. Australian large cap Equities rose by 4.8% with Healthcare the standout returning 11.7% and the Energy sector the weakest falling 7.4% as the oil price fell in the month. Hedged global equities rose by 8.0% whilst unhedged global equities rose by 4.4%, as the Australian dollar strengthened by 4% over the month to US$0.6605. The Australian 10-year government bond yield decreased by 51bps to 4.41% and the 2-year government bond yield decreased by 35bps to 4.11%. The US 10-year government bond yield fell by 60bps to close at 4.33% and the US 2-year government bond yield decreased by 41bps to 4.68%. Key Developments Post Month-End The RBA met on 5th December and decided to keep the cash rate at 4.35% The RBA noted that: “Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market”. Benchmark Returns

October was marred by the start of the Israel-Gaza conflict with the devastating and continuing loss of lives for those in and around the conflict zone. This conflict currently shows no signs of abating and, coupled with the ongoing Russia/Ukraine conflict, is impacting investors’ confidence with investors finding haven in assets such as the US Dollar and gold with the latter briefly rising above the key US$2,000/oz level. The US third quarter Gross Domestic Product was higher than expected, expanding at an annual rate of 4.9% due to increased consumer and government spending. This surge in production activity saw US bond yields lift higher as markets react to the “higher for longer” cash rate rhetoric. In Australia, the resilience of consumers to higher cash rates saw the quarterly inflation print lifting to 1.2% in July-September (annualised at 5.4%), giving the Reserve Bank of Australia the green light for a Melbourne Cup Day rate hike after being on hold for the last four months. Growth assets sold off in the month due to the uncertainty around the Israel-Gaza conflict coupled with the further rise in bond yields as economies continue to shrug off the rising interest rate environment, further testing central bankers’ resolve. Australian large cap Equities fell by 3.6% with only the Utilities sector in the black. US reporting season had no major surprises however future guidance was a little weaker than anticipated. Hedged global equities fell by 2.7% whilst unhedged global equities declined 1.0%, as the Australian dollar declined by 1.5% over the month to US$0.6337. Australian Real Estate Investment Trusts (AREITs) declined by 5.8% due to their valuations being impacted rising bond yields. The Australian 10-year government bond yield increased by 44bps to 4.93% and the 2-year government bond yield increased by 38bps to 4.46%. The US 10-year government bond yield rose by 36bps to close at 4.93% and the US 2-year government bond yield increased by 4bps to 5.08%. Key Developments Post Month-End The RBA met on 7th November and decided to increase the cash rate by 0.25% to 4.35% with the market also pricing in a chance of another rise 0f 0.25% in December. The RBA noted that “inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago. The latest reading on CPI inflation indicates that while goods price inflation has eased further, the prices of many services are continuing to rise briskly. While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected”. Benchmark Returns

Equity markets were weaker in the month as signs of slower economic growth, both internationally and domestically, weighed on investors’ minds. The combination of volatile bond yields, economic data indicating softer economic growth, Chinese property concerns and a mixed financial reporting season all contributed to equity markets falling in August. The US employment data showed that non-farm payrolls (a widely accepted measure of US labor strength) increased which in turn saw the unemployment rate drop to decades low of 3.5%. However, later on in the month US job openings fell to their lowest level in 2.5 years and the Job Openings and Labour Turnover Survey report (JOLTS) showed that the number of people quitting their jobs also fell indicating some fracturing within the labour market. In China a continuation of their property crisis saw their largest private lender report a first half loss of US$6.7bn, this coupled with falling exports and weaker consumer spending prompted the Chinese central bank to lower their cash rate. Expectations are for further rate cuts and additional stimulus to help restore confidence, especially when you consider that youth unemployment in urban areas was at 20% in June, a data point that China omitted from publishing in July. Australian annual inflation in July fell from 5.4% to 4.9% which implies that the RBA’s decision to hold rates at 4.10% in August was well considered. Cooling inflation coupled with a slowing Chinese economy and the interest rate differential between Australia and the US saw the Australian dollar down 3.8% against the US dollar over the month buying US$0.6470 at the end of the month. Australian Equities fell by 0.70% with only Consumer Discretionary, Real Estate and Energy in the black. Hedged global equities fell by -1.9% but the significantly weaker Australian dollar led to a 1.6% gain for unhedged global equity investors The Australian 10-year government bond yield fell by 3bps to 4.03% and the 2-year government bond yield fell by 14bps to 3.79%. The US 10-year government bond yield rose by 15bps to close at 4.11% and the US 2-year government bond yield fell by 1bps to 4.87%. Key Developments Post Month-End The RBA met on 5th September and decided to leave the current cash rate at 4.10% noting that “the recent data are consistent with inflation returning to the 2–3 per cent target range over the forecast horizon and with output and employment continuing to grow. Inflation is coming down, the labour market remains strong and the economy is operating at a high level of capacity utilisation, although growth has slowed". Benchmark Returns

Investment markets were up in July due to optimism regarding evidence of softening inflation. However, this didn’t stop some central banks from tightening monetary policy further. The US Federal Reserve raised interest rates in July to a range of 5.25-5.50% along with the European Central Bank raising rates to 3.75% the highest level since the year 2000. The Reserve Bank of Australia kept rates on hold in July. US equities were one of the best performing markets and were buoyed by earnings that met the previously lowered analyst expectations and also helped by stronger than expected Gross Domestic Product (GDP) that recorded a 2.4% annual growth rate for the June quarter, up strongly from economists’ predictions. Globally the energy sector benefitted from strong economic data and production cuts from the group Organization of the Petroleum Exporting Countries Plus (OPEC+). Australian Equities gained 2.8% led by the energy sector that was up 8.8% with the Healthcare sector being negative for the month along with Consumer Staples. Currency-hedged international equities were up 2.8% with both Asian and European equities contributing to global equity returns. Unhedged international equities gained 2.1% and the Australian dollar was slightly up (+0.8%) against the US dollar buying US$0.6717 at the end of the month. The Australian 10-year government bond yield rose by 4bps to 4.06% and the 2-year government bond yield fell by 28bps to 3.94%. The US 10-year government bond yield rose by 12bps to close at 3.96% and the US 2-year government bond yield fell by 2bps to 4.88%. Key Developments Post Month-End The RBA met on 1st August and decided to leave the current cash rate at 4.10% noting that “the higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month”. Benchmark Returns

In June investment markets brushed off the potential for further interest rate hikes as economies appear to be weathering the higher inflation and higher cash rate regime much better than central bankers had anticipated. The US Federal Reserve kept rates on hold in June as inflation for the year to the end of May printed 4.0%, down 0.9% for the year ending the prior month. Despite the US FED Funds rate increasing strongly over last 12 months economic growth remains resilient with US GDP growing at an annualized rate of 2.0% to the end of March 2023, revised up from a rate of 1.3%. The Bank of England raised the UK cash rate by 0.5% to 5.0% as core inflation for the year to May came in at 7.1% (up from 6.8% in April). The European Central Bank delivered a 0.25% rate hike in June which sees the European cash rate lift to 3.5%. The RBA met on 6 th June and elected to increase the cash rate by 0.25% to 4.10%. Australian unemployment fell in May to 3.6% with jobs gained well ahead of expectations. Persistently strong employment data coupled with strong retail sales in May (with discretionary spending and dining out strong) will concern the RBA as the rate hikes over the last 12 months are not having their desired impact yet. The Australian Bureau of Statistics’ May monthly inflation indicator came in at an annualised rate of 5.6% which was a decline from April’s print of 6.8%. US equities were up strongly in the month (S&P500 +6.5%) which was driven by a handful of mega-cap stocks. The Australian share market increased over the month (+1.9%) led by Materials and Information Technology stocks whereas the Healthcare sector was one of the few negative sectors. Currency-hedged international equities were up 5.6%, assisted by the aforementioned gains in US equities, and unhedged international equities gained 3.1%, blunted by the Australian dollar which increased (+2.5%) against the US dollar, buying US$0.6664 at the end of the month. The Australian 10-year government bond yield rose by 42bps to 4.02% and the 2-year government bond yield rose by 67bps to 4.22%. The US 10-year government bond yield rose by 19bps to close at 3.84% and the US 2-year government bond yield rose by 49bps to 4.90. Key Developments Post Month-End The RBA met on 4 th July and elected to retain the current cash rate at 4.10% noting that “interest rates have been increased by 4 percentage points since May last year. The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. In light of this and the uncertainty surrounding the economic outlook, the Board decided to hold interest rates steady this month. This will provide some time to assess the impact of the increase in interest rates to date and the economic outlook" . Benchmark Returns