IOOF · Osvaldo Acosta Portfolio Manager, Fixed Interest Ray King Portfolio Manager, Alternatives...

June 2018 IOOF MultiSeries IOOF MultiMix IOOF Cash Management IOOF Balanced Investor

IOOFINVESTMENTS SNAPSHOT

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IOOF InvestmentsInvestment management team

Our impressive investment capabilities are driven by our investment team and structure. Each asset class has a dedicated portfolio manager who enjoys strong support from a host of support staff including analysts, investment and marketing specialists.

Dan FarmerChief Investment Officer

Stanley YeoDeputy Chief Investment Officer and Portfolio Manager Strategy and International Equities

Paul CrisciPortfolio Manager Australian Equities

Juanita EscobarPortfolio Manager Internal Management Credit and Cash

Osvaldo AcostaPortfolio Manager Fixed Interest

Ray KingPortfolio Manager Alternatives

Simon GrossPortfolio Manager Property

Angus KnapmanSenior Property Manager

Rhodri PaynePortfolio Manager Internal Equity, Currency and Implementation

Tim CooperPerformance Analyst

Charles KnealeInvestments Specialist (VIC, SA, WA and TAS)

Tim CaseyInvestments Specialist (NSW, ACT and QLD)

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IOOF Investments Snapshot | 30 June 2018

Contents

Market insights

Trade wars and the desynchronisation of global economic growth 4

Strategic tilting update

Cash and fixed interest 6

International shares 6

Currency 6

IOOF MultiSeries

Summary 7

Underlying investment managers 8

IOOF MultiSeries diversified trusts

IOOF MultiSeries 30 9




IOOF MultiMix

Summary 11

Underlying investment managers 12

IOOF MultiMix single sector trusts

IOOF MultiMix Australian Shares 13

IOOF MultiMix International Shares 13

IOOF MultiMix Diversified Fixed Interest 14

IOOF MultiMix Cash Enhanced 14

IOOF Trust

IOOF Cash Management 15

MultiMix wholesale single sector trusts

Property 16

Alternatives and Defensive Equities 17

IOOF MultiMix diversified trusts

IOOF MultiMix Capital Stable 18

IOOF MultiMix Conservative 18

IOOF MultiMix Moderate 19

IOOF MultiMix Balanced Growth 19

IOOF MultiMix Growth 20

MySuper fund

IOOF Balanced Investor 20

4

Trade wars and the desynchronisation of global economic growth Inflation and economic growth continue to be the two main drivers of policymaking for the worlds major central banks. The level of inflation and central bank interest rate decisions will determine the global economys performance during the years to come.

Its evident that the global economy is in better condition than during previous years, however the synchronised global growth that investors were previously expecting could disappoint. This is due to emerging trade barriers and more protectionist policies in the form of higher taxes on imports that may drag on global growth. This has caused the worlds major central banks to take different economic outlooks, in turn causing monetary policy divergence.

Some central banks are reducing ultra-accommodative policies and are stepping back from global bond markets by reducing asset purchases, reducing the size of their balance sheets and normalising interest rates. Other central banks are more cautious and are willing to continue with easy monetary policies, prolonged ultra-low interest rates and Quantitative Easing programmes.

The US Federal Reserve (Fed) has raised interest rates twice this year and it expects two more rate increases, for a total of four rate hikes during 2018. The Fed is expected to continue its gradual interest rate tightening for the next 18 months. This has been influenced by the strong US economy that continues to outperform global growth, accompanied by a persistently falling unemployment rate and fiscal stimulus. Simultaneously, the Fed is continuously reducing the size of its balance sheet. The Fed has recently adjusted its inflation expectations upwards to 2% from the previous forecast of 1.9% for 2018 as there are potential inflationary risks.

Likewise, the Bank of England has a more optimistic outlook for economic growth in the future. BoE hiked its reference rate to 0.75% and indicated more interest hikes to come. The inflation target of 2% is expected to be met later than previously anticipated, by 2020.

In contrast, the European Central Bank (ECB) doesnt expect to raise its reference interest rate until mid-2019, however, it will reduce its asset purchases by the end of 2018, subject to economic developments. Additionally, the ECBs economic growth forecast has been revised down. This is mainly due to the introduction by the US of steel and aluminium tariffs against Europe. The ECB has increased its inflation forecast to 1.7% from 1.4% for both 2018 and 2019, which was mainly driven by strong energy prices.

Similarly, the Bank of Japan (BoJ) has not made any changes to monetary policy. Despite a solid economic recovery, inflation remains weak in Japan and below its 2% target. The BoJ maintained its target yield around the 10 year government bond rate of 0%. However, it increased flexibility and explained that the yields may move depending on developments in economic activity and prices. It also maintained asset purchases.

Domestically, the Reserve Bank of Australia (RBA) doesnt anticipate an interest rate increase anytime soon. Subdued wages growth is keeping inflation low for a prolonged period. The RBA's central scenario is for the Australian economy to grow more strongly this and next year with the unemployment rate trending lower. Future monetary policy decisions will be determined by the speed of increases in the employment rate, income growth and having inflation around the midpoint of the target range of 2% to 3% on a sustained basis. The RBA expects inflation to increase further to be close to 2.25% in 2020. In terms of the financial risks facing the economy, the RBA will continue to keep a close eye on the housing market, housing finance and the impact of changes in dwelling prices on consumption.

While the RBA may have rates on hold, local banks and Authorised Deposit-taking Institutions have been facing increased funding costs internationally since the first quarter of 2018. As a result, banks have been sourcing more of their funding requirements at a premium in Australia, leading to higher bank bill rates for local cash holders.

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Outlook for investorsIn summary, despite rising energy prices and a trade war that could eventually produce higher inflation, we believe income growth in most economies will continue to be subdued and therefore inflation will continue to be controlled. Conversely, for economies such as the US, where the economy is growing above trend and inflation is already trending higher driven by wage growth, we expect central banks to continue their gradual interest rate hikes. If inflation starts moving faster over central banks targets it may eventually trigger faster interest rate hikes. However, inflation is still currently running slightly below the Fed's target, measured by the price index for personal consumption expenditures.

With a trade war threatening the performance of the global economy, the reduction in the size of central bank balance sheets, and cash rate normalisation in some of the main economies, defensiveness, flexibility and diversification provide the best positioning.

In an increasing interest rate environment, there are different ways to protect fixed income portfolios from mark-to-market capital losses caused by interest rate increases. One strategy is to invest in short duration assets, another is to invest in fixed income Floating Rate Notes (FRN). These allow investors to adjust their income stream to receive higher interest, as the coupon payments are variable and indexed to the interest rate market and its movements. FRNs have a very low sensitivity to interest rate changes and have very low duration. Another option is to increase cash holdings. Cash contributes to portfolio construction as it offers flexibility for times when superior risk/reward investment opportunities arise.

IOOF trustsThe IOOF MultiMix Cash Enhanced Trust and the IOOF Cash Management Trust are fully diversified and defensively positioned with high-quality holdings designed to preserve capital. These trusts continue to have exposure to money market holdings and have participated in recent yield enhancements and higher margins paid by banks for short-term funding.

These trusts have outperformed the Bloomberg AusBond Bank Bill Index benchmark and the RBA cash rate over all periods. During the 12 months to 30 June 2018, the IOOF MultiMix Cash Enhanced Trust returned 2.54% and the IOOF Cash Management Trust returned 2.19% before fees, this compares favourably to the benchmark return of 1.78%, with the Trusts outperforming by 76 basis points and 41 basis points respectively.

Juanita EscobarPortfolio Manager Internal Management Credit and Cash

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Strategic tilting update

Cash and fixed interest

Position

For both MultiMix and MultiSeries, there is an overweight to cash/short duration strategies, underweight to fixed interest.

Rationale

Our view is that Australian and US Government bond yields are very expensive. The US 10 year Government bond yield as at end of June was 2.85%, up from 2.74% at the end of March. We believe this may be the end of the bull market in fixed interest.

Current status

Since inception, the tilt to cash has underperformed as global bonds continue to produce positive returns. The underperformance, however, is somewhat mitigated by strong performance from the underlying cash managers, and strong returns from the IOOF Income Trust.

For MultiMix over the June quarter, the IOOF Income Trust returned 1.10% versus the diversified fixed interest strategic benchmark return of 0.48%.

For MultiSeries over the June quarter, the Metrics Credit Partners Diversified Australian Senior Loan Fund returned 1.32% and the Janus Henderson Income Fund returned 0.87% versus the MultiSeries Fixed Income strategic benchmark return of 0.48%.

International shares

Position

For MultiMix, tilt towards unhedged international shares from Australian shares. Tilt only in place for IOOF MultiMix Growth Trust, and has been reduced for IOOF MultiMix Balanced Growth Trust.

Rationale

While both Australian and international shares looked cheap on various valuation metrics, we believed international shares showed better value, particularly in the US. In addition, the high Australian dollar made investing offshore more attractive. Unhedged international equities also provides for a natural hedge. If equity markets fall, the Australian dollar tends to fall with it (as it is considered a risk asset), thus providing a hedge to investors.

Current status

Since inception, the tilt to unhedged international shares has outperformed due to both the international equities market outperforming the Australian equities market, and a sharp decline in the Australian dollar.

For the June quarter, the unhedged international shares benchmark underperformed the Australian shares benchmark by -4.09% (4.27% versus 8.36%).

Currency

Position

For MultiMix, the hedged benchmark remains at 10% of the developed equities portfolio versus the strategic benchmark of 50%. For MultiSeries, the hedged benchmark is at 35% versus the strategic benchmark of 50%.

Rationale

The key reasons for this continued position are:

Australian cash rate no longer supportive v USD.

Australian economy lagging moderating housing market weighing on consumers, household gearing high, tightening consumer credit availability, wages flat.

Impact on trade tensions between China and US problematic for Australia.

Current status

For the June quarter, the unhedged developed international shares benchmark outperformed the hedged developed international shares benchmark by 1.91% (5.53% versus 3.62%).

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IOOF MultiSeries Summary

Full details of the investment strategy, objectives and underlying managers for each Trust are provided in the trust profile which can be downloaded from www.ioof.com.au/investment-central

Trust APIR code Risk/return profile Estimated management costs % pa*1

Growth / Defensive

MultiSeries diversified

IOOF MultiSeries 30 IOF0253AU Low to medium 0.40

Growth 30%Defensive 70%

IOOF MultiSeries 50 IOF0254AU Medium 0.45


IOOF MultiSeries 70 IOF0090AU Medium to high 0.50

Defensive 30%Growth 70%

IOOF MultiSeries 90 IOF0255AU High 0.54


* The estimated management cost includes the investment management fee and indirect costs. See the latest IOOF MultiSeries PDS for full details on fees and costs. The management costs are based on the management costs incurred for each Trust as at 30 June 2018 and subject to change from time to time.

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Underlying investment managersOver the last quarter the following changes were made to our underlying investment manager line-up.

New inclusion in the trusts: No changes

Removal from the trusts: No changes

Manager Style

IOO

F M

ultiS

erie

s 30

, 50,

70

and

90

IOOF Investment Management Limited Short-term money market securities

Cash

and

sho

rt-

term

sec

urit

ies

Janus Henderson Investors (Australia) Funds Management Limited

Active Australian fixed interest

Div

ersi

fied

fixed

in

tere

stMetrics Credit Partners Pty Limited Australian corporate loans

Western Asset Management Company Australian bonds

Brandywine Global Investment Management, LLC Top-down, value-driven

Invesco Australia Limited International core fixed income

IOOF Investment Management Limited Core

Prop

erty

Macquarie Investment Management Limited True index (Australian and global property securities)

Acadian Asset Management (Australia) Limited Small companies

Aus

tral

ian

shar

es


Mid cap passive enhanced, growth

Invesco Australia Limited Quantitative 130/30

IOOF QuantPlus Enhanced passive

Platypus Asset Management Pty Limited Quantitative/quality momentum

State Street Global Advisors, Australia, Limited Enhanced passive

UBS Global Asset Management (Australia) Ltd Fundamental high conviction

Goldman Sachs International Multi-factor global equities index

Inte

rnat

iona

l sha

res

Challenger Limited MSCI World ex Australia Net in AUD plus 0.4% per annum

Neuberger Berman Australia Pty Limited Emerging markets

State Street Global Advisors, Australia, Limited Defensive

TT International Emerging and developed markets

Invesco Australia Limited Global targeted return

Alt

erna

tive

s

Macquarie Investment Management Limited True index (global infrastructure)

Metrics Credit Partners Pty Limited Secured Australian private debt

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IOOF MultiSeries diversified trustsIOOF MultiSeries 30

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 2.51 2.51 3.58 na na na na

Growth -0.42 -0.48 1.52 na na na na

Total 2.09 2.03 5.10 na na na na

Comments

There were no changes over the quarter.

Contributors and Detractors

Contributors to performance

The bulk of the outperformance was a result of the direct property portfolio significantly outperforming. This resulted from a combination of firming market demand from both purchasers and tenants for well located, modern, high quality properties and favourable uplifts in valuations over the quarter.

Detractors from performance

The international equities and diversified fixed interest portfolios slightly underperformed their benchmarks.

IOOF MultiSeries 50

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa



Total 3.15 2.69 7.47 na na na na

Comments






The international equities and diversified fixed interest portfolios slightly underperformed their benchmarks.

Actual allocation Target allocation

AustralianShares

Internationalshares

Property Alternatives Diversiedxed

interest

Cash andshort-termsecurities

0

10

20

30

40

50


0

5

10

15

20

25

30

35

40

AustralianShares

Internationalshares


interest


Actual versus target allocation Actual versus target allocation

10

IOOF MultiSeries 70

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 4.58 4.54 6.20 6.79 9.82 8.52 7.11

Growth -0.40 -1.28 3.41 2.38 -2.80 0.66 1.43

Total 4.17 3.26 9.61 9.17 7.02 9.17 8.55

Comments






An underweight allocation to Australian equities detracted value as Australian equities was a strong performer for the quarter.

The international equities portfolio underperformed its benchmark, detracting from performance.

IOOF MultiSeries 90

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa



Total 5.26 3.87 11.53 na na na na

Comments





The Australian dollar depreciated over the quarter, so being less hedged versus benchmark contributed positively.


The international equities portfolio underperformed its benchmark, detracting from performance.


0

5

10

15

20

25

30

AustralianShares

Internationalshares


interest



0

5

10

15

20

25

30

35

40

AustralianShares

Internationalshares


interest



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IOOF MultiMix Summary

Full details of the investment strategy, objectives and underlying managers for each Trust is provided in the trust profile which can be download from www.ioof.com.au/investment-central

Trust APIR code Risk/return profile

Estimated management fees

%pa

Estimated performance-related fees

%pa^

Total estimated management costs (including performance-related fees) % pa*1

IOOF MultiMix single sector

IOOF MultiMix Cash Enhanced

IOF0091AU Low 0.36 Nil 0.36

IOOF MultiMix Diversified Fixed Interest

IOF0096AU Low/Medium 0.50 0.04 0.54

IOOF MultiMix Australian Shares

IOF0092AU High 0.82 0.28 1.10

IOOF MultiMix International Shares

IOF0098AU High 0.90 0.03 0.93

IOOF MultiMix diversified

IOOF MultiMix Capital Stable

IOF0094AU Low 0.52 0.01 0.53

IOOF MultiMix Conservative

IOF0095AU Low/Medium 0.73 0.08 0.81

IOOF MultiMix Moderate

UFM0051AU Medium 0.79 0.13 0.92

IOOF MultiMix Balanced Growth

IOF0093AU Medium/High 0.92 0.22 1.14

IOOF MultiMix Growth

IOF0097AU High 0.96 0.20 1.16

IOOF Cash Management and Balanced Investor

IOOF Cash Management (Class A)

PIM0002AU Low 0.30 N/A 0.30

IOOF Balanced Investor

IOF0232AU Medium/High 0.50 N/A 0.50

* Total estimated management costs include the management fee and any applicable performance-related fees. Refer to the applicable PDS for full details on fees and

costs. The total management costs are based on the management costs incurred for each Trust as at 30 June 2018 and are subject to change from time to time.

^ Performance-related fees may be charged by underlying investment managers of the IOOF MultiMix Trusts from time to time and may vary.

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Underlying investment managersOver the last quarter the following changes were made to our underlying investment manager line-up.

New inclusion in the trusts: Metrics Credit Partners Real Estate Debt Fund and Metrics Credit Partners Secured Private Debt Fund II (both in Alternative Defensive).

Removal from the trusts: No changes

Manager Style

IOO

F M

ulti

Mix

Gro

wth

Tru

st

IOO

F M

ulti

Mix

Bal

ance

d G

row

th T

rust

IOO

F M

ulti

Mix

Mod

erat

e Tr

ust

IOO

F M

ulti

Mix

Con

serv

ativ

e Tr

ust

IOO

F M

ulti

Mix

Cap

ital

Sta

ble

Trus

t

IOO

F M

ultiM

ix D

iver

sifie

d Fi

xed

Inte

rest

Tru

st

IOO

F

Mul

tiMix

Cas

h En

hanc

ed T

rust


Active

Cash

and

shor

t-ter

m

secu

ritie

s

IOOF Investment Management Limited Short-term money market securities


Active Australian fixed interest

Div

ersi

fied

fixed

inte

rest

IOOF Investment Management Limited Income focusMetrics Credit Partners Pty Limited Australian corporate loansBrandywine Global Investment Management, LLC

Top-down, value-driven

Macquarie Investment Management Limited Active short-duration creditPIMCO Australia Pty Ltd Global bondsT. Rowe Price International Ltd International core fixed incomeLegg Mason Western Asset Management Company

Global total return

Western Asset Management Company US bank loans, Australian bonds and Global Total Returns

Fidante Partners Limited Broad cap core

Prop

erty

IOOF Investment Management Limited CoreLegg Mason Martin Currie Australia Limited Small capPendal Institutional Limited Active, value-driven, risk-controlledCohen & Steers Capital Management, Inc. Active, core, bottom-upResolution Capital Limited High conviction,

benchmark-unaware

IOO

F M

ultiM

ix A

ustr

alia

n Sh

ares

Tr

ust

AllianceBernstein Investment Management Australia Limited

Managed volatility

Aus

tral

ian

Shar

es

Acorn Capital Limited Micro-caps, active long onlyVinva Investment Management Limited QuantitativeJanus Henderson Investors (Australia) Funds Management Limited

Active, bottom-up, growth

Legg Mason Martin Currie Australia Limited Dynamic valueOC Funds Management Limited Small cap and micro-cap

DNR Capital Growth/qualityBoutique Manager Portfolio Diversified Australian sharesDefensive Equities Trust Defensive equities

IOO

F M

ultiM

ix In

tern

atio

nal

Sha

res T

rust

EAM Global Investors LLC Emerging markets small caps

Inte

rnat

iona

l Sha

resState Street Global Advisors, Australia,

LimitedDefensive

Wellington International Management Company Pte Ltd

Growth

Antipodes Partners Pragmatic value, absolute returnLSV Asset Management Quantitative valueTT International Growth at reasonable price and

concentrated quality

We have a large number of underlying managers for our exposure to alternative assets. These managers are not listed separately due to the size of the list and the fact that the allocation to each manager is small.

Alte

rnat

ives

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IOOF MultiMix single sector trustsIOOF MultiMix Australian Shares

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 11.24 11.12 13.57 10.15 7.78 6.13 5.30

Growth -4.52 -5.51 2.74 4.06 2.76 4.80 3.73

Total 6.72 5.61 16.31 14.21 10.54 10.93 9.03

Benchmark 8.36 4.27 13.24 13.53 9.14 9.99 8.97

Comments

An enhancement to the mandate with Selector was implemented over the quarter, which involved broadening the opportunity set in order to augment the excess return potential.



Janus Henderson outperformed due to positive stock selection in consumer staples, financials and healthcare sectors.

Selector Funds Management (part of the Boutique Manager Portfolio) outperformed due to positive stock selection in the industrials and consumer staples sectors.


Overweight to niche segments hurt the portfolio as they underperformed the broader market.

OC Funds Management, underperformed due to challenging stock selection in financials and an underweight to the energy sector.

IOOF MultiMix International Shares

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 22.80 23.23 26.02 26.42 23.81 16.01 11.71

Growth -20.49 -18.99 -12.08 -11.13 -13.12 -1.34 1.81

Total 2.31 4.24 13.94 15.29 10.69 14.67 13.52

Benchmark 4.27 5.42 15.00 15.16 9.64 14.32 14.13

Comments




Despite emerging markets underperforming developed markets, emerging markets small caps manager EAM Investors significantly outperformed its benchmark.

Wellington, TT International and Antipodes Asian Equities strategy outperformed their respective benchmarks.


An overweight to emerging markets detracted the bulk of performance as emerging markets underperformed developed markets by 10.0% over the quarter.

Antipodes Global, TT International emerging markets, SSgA defensive equities and LSV underperformed their respective benchmarks.

DNR Capital 11.79%

Legg Mason Martin Currie Australia Limited 13.93%

OC Funds Management

Limited 16.02%

Boutique Manager Portfolio 17.51%

IOOF Investment Management Limited 0.11%

AllianceBernstein Investment Management Australia Limited 4.23%

Acorn Capital Limited 6.93%

Vinva Investment Management Limited 17.91%

Janus Henderson Investors (Australia) Funds Management Limited 11.56%


State Street Global Advisors, Australia, Limited 15.39%

Wellington International Management Company Pte Ltd 16.68%

Antipodes Partners 19.91%

LSV Asset Management 15.14%

TT International 25.91%

EAM Global Investors LLC 6.21%

Investment manager allocation3 Investment manager allocation3

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IOOF MultiMix Diversified Fixed Interest

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.57 1.15 2.98 3.60 5.58 5.43 5.71

Growth -0.36 -0.79 -0.86 -0.56 -1.81 -0.98 -0.33

Total 0.22 0.36 2.12 3.05 3.77 4.45 5.38

Benchmark 0.48 0.87 2.47 1.41 3.62 4.67 5.54

Comments

US investment grade credit had negative returns and US high yield and Australian credit both had positive returns. 10yr treasury yields increased from 2.74% to 2.86%, but Australian 10yr government bond yields marginally increased from 2.60% to 2.63% with curve flattening mainly at front end between 2-8 yrs.



Our short duration and spread sectors were positive contributors.


Currencies allocation via the global managers were the main detractors to performance.

Western Asset GTR and Brandywine underperformed as US$ strengthened and EM currencies weakened.

IOOF MultiMix Cash Enhanced

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 1.28 1.76 2.31 2.24 2.52 2.77 3.41

Growth -0.74 -0.78 -0.13 0.09 -0.17 -0.06 0.00

Total 0.55 0.99 2.18 2.34 2.35 2.71 3.41

Benchmark 0.49 0.92 1.78 1.80 1.94 2.22 2.72

Comments

Outperformance was driven by the funds overweight allocation to high quality corporate floating rate notes and issuer selection in money market securities, providing a yield above bank bills.



Overweight allocation to high quality corporate floating rate notes.

Issuer selection in money market securities added value. Allocation to Term Deposits, NCDs and cash notice

accounts has contributed positively to the performance over the quarter.


There were no significant detractors from performance.

Janus HendersonInvestors (Australia)

Funds ManagementLimited 34.24%

T.Rowe PriceInternational Ltd 8.95%

PIMCO Australia Pty Ltd 11.34%


Western Asset Management Company 12.33%

Brandywine Global Investment Management, LCC 17.40%

Legg Mason Western Asset Management Company 5.36%

Janus Henderson Investors (Australia) Funds Management

Limited 78.59%


Investment manager allocation3 Investment manager allocation3

15


IOOF TrustIOOF Cash Management

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Total 0.50 0.95 1.89 1.95 2.08 2.38 2.88

Benchmark 0.49 0.92 1.78 1.80 1.94 2.22 2.72

Comments

IOOF Cash Management Trust continues having exposure to money market holdings. The trust has participated in the recent yield enhancements and higher margins paid by banks for short-term funding.



Allocation to Term Deposits, NCDs and cash notice accounts has contributed to the performance over the quarter.

Recent yield enhancements and higher margins paid by banks for short-term funding has added value for the trust.


There were no significant detractors from performance.

Allocation by Standards & Poors ratings3

TOTAL "A-1+" 50.1%

TOTAL "A-1" 26.5%

TOTAL "A-2" 23.5%

16

MultiMix wholesale single sector trustsProperty

Property Australian

CommentsThe portfolio and sector generated very strong returns after having been heavily discounted in late 2017 and early 2018, broadly due to volatility in the bond markets.

Contributors to performance Overweight allocations to Lendlease. Underweight allocation to Dexus. Position with the WestfieldUnibail merger.

Detractors from performance Underweight position in Goodman industrial detracted. Overweight allocation to Stockland and its residential

exposure. Underweight allocation to Scentre which benefited from

the Westfield merger.

Investment manager allocation3

Fidante Partners Limited 63.2%


Legg Mason Martin Currie Australia Limited 36.4%

^ Exposure via the IOOF MIM Property Plus Fund

Property International

CommentsThe portfolio generated strong returns having been discounted last calendar year due to concerns of inflation and accelerated US interest rate hikes.

Contributors to performance Allocations to the Simon Retail property group in USA

added value. Industrial stocks outperformed due to strong demand. Hong Kong retail and healthcare allocations outperformed.

Detractors from performance Lack of allocations to strongly performing self-storage. European allocations detracted due to poor returns

compared to USA.


BT Investment Management (RE) Limited 20.2%

Cohen & Steers Capital Management, Inc. 26.9%


Resolution Capital Limited 52.4%

Property Direct^

CommentsThe Australian direct property portfolio performed very well during the quarter due to increasing rental returns and rising market valuations.

Contributors to performance Four external valuations were undertaken in June,

generating an increase in market value of $29.1m.

Detractors from performance Minor vacancies and capital expenditure detracted value.

Allocation by property type3

VIC Industrial 18.8%

VIC Commercial 39.0%

NSW Commercial 33.6%

NSW Industrial 8.6%

17


MultiMix wholesale single sector trustsAlternatives and Defensive Equities

Alternative Growth

CommentsPerformance has been strong in the June quarter 2018 and for the financial year 2017-18, albeit strong returns from listed global equities makes relative performance seem mediocre.

Contributors to performance Reduced allocation to hedge funds. Strong private equity manager performance.

Detractors from performance Remaining hedge funds performed poorly. Cash in the portfolio had low return.


Private equity 56.6%

Cash and short-term securities 14.4%

Discretionary hedge 27.8%

Special situations 1.2%

Alternative Defensive

CommentsPerformance was solid for the financial year and in the June quarter 2018.

Contributors to performance Good relative performance from energy and infrastructure

managers.

Detractors from performance Private debt manager outperformed the benchmark

but was slightly behind target outperformance. Cash in the portfolio had a low return.


Infrastructure 12.3%

Subordinated debt 29.1%


Private debt 37.4%

Discretionary hedge 3.0%

Credit opportunities (hedge fund) 5.3%

Defensive Equities

CommentsThere were no changes to the portfolio over the quarter.

Contributors to performance Low volatility manager, AB, outperformed both the blended

equity and bond benchmark and broader equity market due to an overweight to healthcare, an underweight to financials and positive stock selection in telcos.

Detractors from performance Low volatility manager, SSgA, underperformed the equity

index but outperformed the blended bond index.


AllianceBernstein Investment Management

Australia Limited 41.25%


State Street Global Advisors, Australia, Limited 28.74%

Plato Investment Management Limited 28.35%

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IOOF MultiMix diversified trustsIOOF MultiMix Capital Stable

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 1.98 1.98 3.48 3.74 4.78 5.02 5.19

Growth -0.07 -0.21 0.64 0.82 -0.11 0.08 0.35

Total 1.91 1.77 4.11 4.56 4.67 5.11 5.54

Benchmark 1.49 1.39 3.69 3.13 4.00 4.73 5.25

Comments





An overweight to Australian equities (via the Defensive Equities portfolio) contributed to performance.


There were no significant detractors.

IOOF MultiMix Conservative

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 3.85 3.85 5.53 5.80 6.92 6.88 6.30

Growth -1.45 -1.46 -0.08 -0.01 -1.65 -0.74 0.15

Total 2.40 2.39 5.44 5.79 5.27 6.14 6.45

Benchmark 2.07 1.79 5.26 4.84 5.20 6.22 6.63

Comments

During the quarter, two new investments were made in the Alternative Defensive portfolio: Metrics Credit Partners Real Estate Debt Fund, and Metrics Credit Partners Secured Private Debt Fund II.


Contributors to performance Outperformance was mostly due to the direct property

portfolio significantly outperforming.

Alternative Defensive outperformed with EIG Energy Fund performing particularly well.

An underweight to diversified fixed interest contributed to performance as the asset class underperformed other asset classes.

Detractors from performance The international equities portfolio underperformed. An overweight to the Income Trust detracted, partly offset

by good performance from the underlying managers in the Income Trust.



Alternative - defensive

Internationalshares

Australian shares

Property Cash andshort-termsecurities

Diversied xed

interest

0

10

20

30

40

50

60

Defensive Actual allocation Target allocation



Australian shares

Property Diversiedxed

interest


0

10

20

30

40

50

Defensive

19



IOOF MultiMix diversified trustsIOOF MultiMix Moderate

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 5.36 5.37 7.28 7.52 8.48 6.55 5.91

Growth -1.88 -1.86 0.96 0.62 -1.75 1.36 1.67

Total 3.49 3.51 8.24 8.14 6.73 7.91 7.58

Benchmark 3.39 2.61 8.18 8.06 7.01 8.58 8.61

Comments




Direct property portfolio significantly outperformed. Alternative Defensive outperformed. An underweight to diversified fixed interest contributed

as the asset class underperformed other asset classes.

The AUD depreciated over the quarter, so being less hedged versus benchmark added value.


The international equities portfolio underperformed. An overweight to the Income Trust detracted, partly offset

by good performance from the underlying managers in the Income Trust.

IOOF MultiMix Balanced Growth

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 10.49 10.53 12.62 12.59 14.32 10.25 8.26

Growth -6.83 -6.41 -1.65 -2.20 -6.17 -0.44 0.98

Total 3.66 4.13 10.97 10.39 8.15 9.81 9.24

Benchmark 4.30 3.14 10.10 10.32 8.04 9.88 9.74

Comments




Direct property portfolio significantly outperformed. An underweight to diversified fixed interest contributed

as the asset class underperformed other asset classes.


Alternative Defensive outperformed.


The international equities portfolio underperformed. Australian equities portfolio underperformed due to an

overweight to small cap stocks.

An overweight to the Income Trust detracted from performance.


Alternative - growth


Australian shares


interest


0

5

10

15

20

25

30

35

40


Defensive Actual allocation Target allocation



Australian shares


interest


0

5

10

15

20

25

30


20





Australian shares


interest


0

5

10

15

20

25

30

35

40



Cash and short-term securities

Diversied xed

interest

Property Australian shares

AlternativesInternational shares

0

5

10

15

20

25

30

IOOF MultiMix Growth

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 12.65 12.69 14.86 14.93 15.40 11.45 8.95

Growth -8.38 -8.08 -1.86 -2.64 -5.97 0.01 1.32

Total 4.26 4.60 13.00 12.29 9.42 11.46 10.27

Benchmark 5.30 3.70 12.15 12.74 9.11 11.24 10.81

Comments

During the quarter, two new investments were made in the Alternative Defensive portfolio: Metrics Credit Partners Real Estate Debt Fund, and Metrics Credit Partners Secured Private Debt Fund


Contributors to performance Direct property portfolio significantly outperformed. The AUD depreciated over the quarter, so being less

hedged versus benchmark added value.

An underweight to diversified fixed interest contributed to performance as the asset class underperformed other asset classes.


The international equities portfolio underperformed due to its overweight to emerging markets.

The Australian equities portfolio underperformed due to an overweight to small cap stocks.

Overweight to cash detracted from performance.

MySuper fundIOOF Balanced Investor

Performance2

3 mths

%

6 mths

%

1 year

%

2 year

% pa

3 year

% pa

5 year

% pa

7 year

% pa

Distribution 0.00 0.00 0.00 2.98 2.90 na na

Growth 4.13 3.49 9.90 6.40 4.91 na na

Total 4.13 3.49 9.90 9.38 7.81 na na

Benchmark 4.18 3.01 9.34 9.41 7.68 na na

Comments

During the quarter, two new investments were made in the Alternatives portfolio: Metrics Credit Partners Real Estate Debt Fund, and Metrics Credit Partners Secured Private Debt Fund II.



The bulk of the outperformance was a result of the direct property portfolio significantly outperforming.



The international equities portfolio underperformed. An underweight allocation to Australian equities detracted

value as Australian equities was a strong performer for the quarter.

Notes to the Snapshot

1. The actual management costs (and total management costs) are subject to change from time to time and may vary from the estimated management costs detailed in the applicable PDS depending on changes to the Trusts underlying assets, changes to underlying investment managers and their fees, if any performance-related fees are incurred (where applicable) and where any unusual or non-recurrent expenses are incurred or changes to other related expenses.

2. Performance is net of management costs and expenses. Performance is based on exit price to exit price for the period and assumes that all distributions are reinvested. Management costs and other expenses are accounted for in the exit price. Past performance is not a reliable indicator of future performance. Full details of the benchmarks used are provided in the relevant Trusts PDS.

3 Allocations may not sum to 100% due to rounding.

Important Note

Issued by IOOF Investment Management Limited (IIML) ABN 53 006 695 021, AFS Licence No. 230524, as Responsible Entity for IOOF MultiMix, IOOF Balanced Investor Trust, IOOF MultiSeries and the IOOF Cash Management Trust. IIML is a company within the IOOF group of companies which consists of IOOF Holdings Ltd ABN 49 100 103 722 and its related bodies corporate. IIMLs contact details can be found on www.ioof.com.au. This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser. You should obtain and consider a copy of the Product Disclosure Statement available from us or your financial adviser, before you acquire a financial product. Past performance is not a reliable indicator of future performance. Information has been prepared in good faith and with reasonable care, with information believed to be accurate and reliable at the time of publication. However, IIML and their respective officers, employees, agents and associated entities disclaim and exclude all liability for any loss or damage suffered by any person acting on any information provided in, or omitted from this document. This document has been based on information believed to be accurate and reliable at the time of publication. W

MA-

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