Benefits of investing in the Pendal Smaller Companies Fund

Investing in the Fund offers investors a range of benefits:

• access to a professionally managed portfolio of Australian shares and the potential for long term capital growth and tax effective income;

• access to Pendal's investment expertise and core investment style;

• exposure to smaller companies shares within the Australian sharemarket;

• regular investment statements and an annual tax statement to keep you up-to-date on your investment;

• ability to keep track of your investments in the secure client area by visiting the login section at www.pendalgroup.com

Risk level

High

Investor suitability

This Fund is designed for investors who want the potential for long term capital growth and tax effective income, diversification across a broad range of smaller companies and industries and are prepared to accept higher variability of returns.

About the Fund

The Pendal Smaller Companies Fund is an actively managed portfolio investing in companies outside the top 100 listed on the Australian Stock Exchange and their equivalent on the New Zealand Stock Exchange that we believe are trading below their assessed valuation, and which we expect to grow their profits quickly.

Investment Philosophy

Pendal is an active manager of smaller companies, employing a bottom up', valuation driven process. At the cornerstone of our investment philosophy is the view that markets are not always rational and that the inefficient market pricing of securities creates investment opportunities. This is particularly the case in smaller companies where the sector is under-researched and sentiment will often drive periods of under and over valuation.

Pendal's core investment style is an output of our Australian equities investment process. Core means we are style indifferent, we invest in both value' and growth' companies, without a predetermined value' or growth' bias.

Investment Approach

Our valuation driven process is underpinned by extensive research encompassing company visits, contact with competitors and suppliers, financial analysis and peer group comparison (both locally and internationally). Portfolios are constructed within a tight risk framework to ensure that a prudent balance is maintained between risk and reward, with the aim of maintaining consistency of investment returns.

How we invest your money

Investment Process

Pendal's investment process for Australian shares is based on our core investment style and aims to add value through active stock selection and fundamental company research. Pendal's core investment style is to select stocks based on our assessment of their long term worth and ability to outperform the market, without being restricted by a growth or value bias. Our fundamental company research focuses on valuation, franchise, management quality and risk factors (both financial and non-financial risk).

The Fund may have assets denominated in foreign currencies. This means that changes in the value of the Australian dollar relative to foreign currencies may affect the value of the assets of the Fund. The Fund's foreign currency exposure may be hedged from time to time, in whole or part.

Derivatives may be used to reduce risk and can act as a hedge against adverse movements in a particular market and/or in the underlying assets. Derivatives can also be used to gain exposure to assets and markets.

Asset Classes and Asset Allocation Ranges

• Australian shares: 80%-100%

• New Zealand shares: 0%-10%

• Cash: 0%-20%