Benefits of investing in the Kapstream Absolute Return Income Fund

Significant features and benefits

• Unconstrained approach: Investing wherever the best risk adjusted opportunities can be found irrespective of the benchmark index.

• Conservative risk focus: Priority is given to actively managing the Fund's investment risks within cautious limits.

• Flexibility: Able to meaningfully shift exposure to different geographies, sectors and fixed income categories to meet its return and risk objectives.

• Capital stability: Conservatively managed, the Fund is well suited to investors looking for potentially higher levels of returns compared to cash with low to moderate volatility.

• Income stream: Investing predominantly in high quality bonds provides the potential for a stable quarterly income stream.

• Diversification: A flexible, unconstrained approach results in a diversified portfolio that can be complementary to other asset classes.

Risk Level - Low to Medium

The Fund has the potential to offer a greater level of capital stability over the long term in return for potentially lower returns when compared to other investments.

Investor Suitability

The Fund is intended for investors who are seeking potentially higher levels of returns compared to cash and cash-like securities with low to moderate volatility in the unit price.

Description of the Fund

The Fund is managed by Kapstream who applies an innovative, flexible, and risk averse approach to fixed income portfolio management. The Fund targets an absolute return over time, by investing in a global, diversified portfolio of predominantly investment grade fixed income securities, according to Kapstream's global macroeconomic and market views.

The Fund is intended to be suitable for investors who are seeking potentially higher levels of returns compared to cash and cash-like securities with low to moderate volatility in the unit price. To help you understand the following information relating to the Fund's investments, definitions of the important investment terms are provided in the Additional Information booklet.

Investment approach

Kapstream draws on information from many sources such as economic round tables, investment banks, brokers, rating agencies and central banks.

Kapstream employs a rigorous evaluation process for individual trades, first confirming that a prospective security meets Kapstream's global macroeconomic view, then incorporating various decision variables such as duration, yield curve, country, sector and volatility which is supported by the investment team's research and analysis.

Investment universe and portfolio construction

The investment universe may include, but is not limited to, Government and non-Government bonds, notes, corporate securities, mortgage-backed and asset-backed securities, emerging market debt, convertible securities, derivatives, including swaps, futures, foreign exchange contracts and options, cash and enhanced cash instruments.

Kapstream will explore opportunities in both Australian and global markets, potentially investing in securities across the range of global markets and, to a limited extent, emerging market countries. Derivatives may be used to increase (or decrease) the duration of the Fund by gaining economic exposure to bonds.

Kapstream does not intend to gear the Fund through the use of derivatives, short selling or borrowing.

Currency strategy

Kapstream actively manages the currency exposure of the Fund's investments. Kapstream may hold non- Australian dollar denominated securities which may be fully, partially or not hedged back to the Australian dollar. Kapstream may also invest directly into currencies. Kapstream may hold up to a maximum of 15% of the portfolio in non-Australian dollar currency positions which is comprised of direct investments into currencies and the portion of non-Australian dollar denominated securities which are not hedged back to the Australian dollar.

Investment Objective

Managed to Kapstream's flagship investment strategy, the Fund aims to deliver an absolute return superior to cash benchmarks, generating stable and consistent income while preserving capital and minimising downside loss.

The Fund aims to provide a steady stream of income and capital stability over the medium term while aiming to outperform its benchmark through market cycles.

Kapstream draws on information from many sources including economic roundtables, investment banks, brokers, ratings agencies and central banks. Kapstream employs a rigorous evaluation process for individual trades, first confirming that a prospective trade meets Kapstream's global macroeconomic view, then incorporates various risk variables such as duration, yield curve, country and currency positions.

How we invest your money

Investment Universe

The fund may invest in, but is not limited to:

• Government & government-related bonds

• Corporate bonds

• Mortgage-backed & asset-backed securities

• Emerging market debt

• Convertible securities

• Cash & cash-related instruments

• Derivatives, including swaps, options, & futures

Investment Parameters

• Volatility Limit  <1.5% annualised

• Duration Limits -2 to +2 years

• Investment Grade Range 85-100%

• High Yield & Emerging Market Range 0-15%

• Cash Range 0-100%

Strategic asset allocation ranges

Asset class (Min% / Max%)

• Global fixed income securities (including derivatives)* 0 / 100

• Cash** 0 / 100

*These are indicative asset allocation ranges for the Fund. If market movements, investments into or withdrawals from the Fund, or changes in the nature of an investment, cause the Fund to move outside these indicative ranges, or a limit set out in this PDS, this will be addressed by us or Kapstream as soon as reasonably practicable.

**The global fixed income securities asset allocation includes derivatives and is broken down as follows:

• Investment grade securities 85-100%

• Non-investment grade securities 0-15%