Benefits of investing in AFI

• Diversified portfolio primarily of ASX-listed Australian equities.

• Tax-effective income via fully franked dividends.

• Consistent after tax paid investment returns achieved over the long term.

• Professional management and an experienced Board, investment and management team.

• Low-cost investing.

• Ease of investing, transparent ASX pricing, good liquidity in shares.

• Shareholder meetings on a regular basis.

About the Fund

Australian Foundation Investment Company Limited (AFIC) is Australia's largest listed investment company on the Australian Securities Exchange (ASX). It was established in 1928 and specialises in investing in Australian equities.

We invest in Australian companies that have unique high-quality assets, brands and/or business footprints that can withstand economic cycles. When selecting investments for our portfolio, we look for management and board strength, and sound financial metrics covering returns on investment, profit margins, cash flow and gearing.

We believe that these businesses generate superior returns over the long term.

Our experienced team manage the AFIC portfolio with a long-term lens - aiming to provide shareholders with attractive investment returns through access to a growing stream of fully franked dividends and growth in capital invested.

Investment Objectives

The Company aims to provide shareholders with attractive investment returns through access to a growing stream of fully franked dividends and growth in capital invested.

The Company's primary investment goals are:

• to pay dividends which, over time, grow faster than the rate of inflation; and

• to provide attractive total returns over the medium to long term.

How we invest your money

The investment philosophy is built on taking a medium to long-term view on companies in a diversified portfolio with an emphasis on identifying quality companies that are likely to sustainably grow their earnings and dividends over this time frame.

Quality in this context is an outcome of our assessment of the board and management as well as some key financial metrics such as the level of gearing in the balance sheet, product margins and free cash flow. The structure of the industry and a company's competitive position in this industry is also an important indicator of quality. Linked to this assessment of quality is the ability of companies to grow earnings over time, which ultimately should produce good dividend growth.

Recognising value is also an important aspect of sound long-term investing. Short-term measures such as the price earnings ratio, price to book or price to sales may be of some value, but aren't necessarily strong predictors of future performance. Our assessment of value tries to capture the opportunity a business has to prosper and thrive over the medium to long term.

In building the investment portfolio in this way, we believe we can offer investors a well-diversified portfolio of high-quality companies that is intended to deliver total returns ahead of the Australian equity market and with less volatility over the long term.

The Company also uses options written against a small proportion of its investments and a small trading portfolio to generate additional income.

From time to time, some borrowings may be used where potential investment returns justify the use of debt. This is managed within very conservative limits, as determined by the Board.