Benefits of investing in Investors Mutual Future Leaders Fund

Significant features

The Fund invests in an actively managed portfolio of listed Australian & New Zealand shares on the ASX. The Fund focuses on listed Australian shares and on occasion invests in ASX listed New Zealand shares.

Significant benefits

The Fund provides Australian and New Zealand investors access to Australian and New Zealand securities. The Fund aims to provide attractive investment opportunities for investors seeking medium to long term capital growth with income.

Investing in the Fund offers you a range of benefits:

• your money is managed by IML's investment professionals who have access to investment techniques that may not be available to all investors;

• access to investment opportunities and markets that may not be accessible to all investors;

• generally you can apply to withdraw your investment on any Business Day; and

• fund managers can usually transact at a lower cost than individual investors.

Risk level - High

Fund overview

The Fund applies IML's conservative value based investment philosophy with a long term focus and aims to deliver consistent returns to clients. Investment philosophy IML's investment philosophy is based on the premise that over the long-term, a company's share price will reflect its underlying inherent value.

We seek to buy and own companies with a competitive advantage, recurring earnings, run by capable management, that can grow at a reasonable price.

Investment Strategy

The Fund will invest in a diversified portfolio of quality ASX listed Australian and New Zealand shares outside the Top 50 shares listed on the ASX, where these shares are identified by our investment team as being undervalued.

Our Investment philosophy

Our investment philosophy is based on a belief that a company's share price will reflect its underlying value in the long-term. We believe that markets are not fully efficient and there will be times that a company's share price will not reflect what we believe to be that company's true underlying value. Such situations provide our investment team with the opportunity to build long term portfolio positions in quality companies at attractive valuations.

Investment style

IML has an active, "bottom-up approach to identifying, researching and valuing quality companies. The investment style is built upon a systematic and disciplined research process that aims to deliver superior risk-adjusted returns by favouring quality stocks whose share prices are significantly different from their assessed inherent value'.

We believe that the underlying value of a company is best determined by quantifying and valuing the sustainability, quality and growth potential of a company's future earnings stream. The earnings stream from a company is important to us because it enables both the payment of dividends to shareholders and the reinvestment into the business for future growth.

IML conducts detailed in-house research and valuation as part of its overall investment process. Individual investments across all allowable asset classes are selected based upon our opinion of their ability to fulfil all or part of the objectives of the Fund.

As such, we will be seeking investments that we believe offer one or more of the following characteristics:

• provide an absolute real return over the long term to investors

• will pay a regular income stream

• are less volatile (risky) than the market in which they trade and therefore should minimise the impact of a falling market on the value of your investment.

As markets move through different cycles some asset classes will be more attractive in their ability to deliver on the objectives of the Fund. The overall makeup of the investments of the Fund will therefore change from time to time to reflect this relative valuation. This is the approach we will adopt in order to manage the asset allocation of the Fund.

How we invest your money

We are looking to invest in companies with four clear quality characteristics:

• competitive advantage

• recurring earnings

• capable management

• the ability to grow over time

Additionally, from a valuation perspective it is important that such companies be trading at a reasonable price.

As a guideline, the Fund will usually hold a minimum of 20 different securities.

The main investments of the Fund (will include a combination of):

• securities listed on the ASX;

• occasionally New Zealand securities listed on the ASX;

• cash (and cash equivalents such as other investment grade interest-bearing securities); and

• derivatives (bought and sold options), as described below; IML may use options, futures and other derivatives to manage risk, to gain exposure to particular securities and markets or to enhance the returns of the underlying physical investments.

Derivatives are not used speculatively or for the purposes of gearing the Fund.

The Fund will not borrow.

Asset classes and allocation range

• Australian equities (80-100%)

• Cash (0-20%)