Benefits of investing in the Allan Gray Australia Equity Fund

The Fund has two significant benefits, both related to the Fund's aim to be fully invested in Australian equities at all times.

Real returns

The Fund focuses on buying investments that Allan Gray believes will offer long term value. Long-term investing in equities should provide an investor with a return that beats the risk-free interest rate (cash) as well as inflation.

The value that Allan Gray adds

The Fund aims to outperform the Australian sharemarket, and in particular, the Benchmark through the Allan Gray investment philosophy. If this is achieved, an investor could benefit from returns that are above both inflation and the overall sharemarket.

This product is intended for use as a satellite to core component portfolio allocation for a consumer who is seeking capital growth and has a high or very high risk and
return profile for that portion of their investment portfolio. It is likely to be consistent with the financial situation and needs of a consumer with a minimum investment
timeframe of more than 5 years and who is unlikely to need to withdraw their money on less than one week's notice.

Significant features of the Fund

Please consider whether the expected Fund characteristics below suit your investment needs and if you are comfortable with the risks of investing in the Fund. If you are in any doubt, please seek professional advice before investing.

Access to a contrarian investment approach

The Fund's investment approach sees it looking to buy securities that offer long term value that are currently unpopular with the general investment community and financial press, or are not well known to the financial community. These securities are often underpriced by the market because sellers significantly outnumber buyers.

In these circumstances, Allan Gray is often early when buying such securities, which means that the Fund may experience some fluctuations or volatility. Allan Gray believes that these fluctuations are unfortunately necessary to gain the upside when the sharemarket recovers.

Benchmark-unaware and high conviction

Allan Gray will not buy a security simply because it is in the S&P/ASX 300 Accumulation Index (Benchmark) - it has to offer value as an investment. Allan Gray will also buy significant positions in securities that it believes may offer outstanding value even if these securities are not in the Benchmark.

Defined investment restrictions

The Fund has detailed investment restrictions/limits. The Fund is unable to purchase investments that are outside these restrictions.

Focused on the longer term

The Fund's investments are based on research which has a long term focus of five to ten years.

Fully invested

The Fund aims to be fully invested in the sharemarket so that there are no prolonged periods where it will hold more than 10% of its assets in cash.

Investment approach

The Fund's investment approach is to buy securities that offer long-term value, that are currently unpopular with the general investment community or are not well known. Allan Gray will not buy a security simply because it is in the Benchmark. Similarly, Allan Gray will buy significant positions in securities that are not in the Benchmark if they offer outstanding value, based on our bottom-up, fundamental valuation of the opportunity.

In implementing the Fund's strategy, Allan Gray adheres to detailed investment restrictions and limits, as set out in the Fund's Product Disclosure Statement and accompanying Information Booklet (together, the PDS).

The Fund offers you a choice in fee structures. This fact sheet relates to Class A which charges a base fee and a performance fee. You can choose to pay a zero base fee and a higher performance fee with Class B.

How we invest your money

Strategy

The Fund employs the Allan Gray investment philosophy to search for ASX investments based on defined investment restrictions (see Asset allocation).

Asset allocation

Allan Gray will implement the above strategy by adhering to the following investment restrictions. These restrictions are measured at a Fund level, and not at a class level.

• Weights: The Fund's weight for a specific share shall not exceed that share's weight in the Benchmark by more than 10 percentage points.

• Holdings: The Fund will not hold more than 10% of a company's issued voting shares.

• Listed securities: No more than 10% of the Fund's net asset value may be invested in securities which are not traded on or under the rules of a sharemarket, and only where there is an expectation that the securities will be listed or convertible into listed securities within 12 months of acquisition.

• Exposure: Allan Gray may not actively reduce the effective share exposure to below 90% of the Fund's net asset value.

• No leverage: The effective share exposure shall not exceed 100% of the Fund's net asset value.

• Options: No more than 5% of the Fund's net asset value may be invested in call options.

• Derivatives: The Fund may invest no more than 10% of its net asset value in listed futures contracts for the primary purpose of managing liquidity and only if the underlying exposure is fully covered by cash or money market instruments.

• Borrowing: The Fund has never borrowed and cannot borrow unless it is to meet unexpected large redemptions. Borrowing is limited to 10% of the Fund's net asset value and must be repaid within 90 days.

• Investment grade: Any investment by the Fund in interest-bearing non-equity linked securities is restricted to Investment Grade Securities.

Investment restrictions

Allan Gray is permitted to make an investment which is not consistent with the investment restrictions if EQT and Allan Gray agree that the investment is not a material departure from the investment restrictions.