Benefits of investing in the IFP Global Franchise Fund

• Potential for long-term compound returns with a focus on capital preservation.

• Potential for lower volatility of returns compared to the Benchmark.

• Access to the knowledge and investment expertise of IFP in franchise investing.

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The Fund may be suitable for investors who are looking for an investment with the objective of the Fund listed above and are prepared to accept the risks of the Fund set out in Section 4. A Target Market Determination (TMD) for the Fund which includes a description of the class of consumers for whom the Fund is likely to be consistent with their objectives, financial situation and needs is available at macquarieim.com/TMD.

Fund description

The Fund provides exposure to a concentrated portfolio of global equities by investing in securities that are, in IFP's opinion, issued by high quality companies. These high quality companies possess a primary competitive advantage supported by a dominant intangible asset, such as a brand, patent or licence. The companies in which IFP invests are typically found in sectors such as branded consumer goods (including tobacco), pharmaceuticals, media and publishing, broadcasting and information services. IFP typically does not invest in capital intensive industries such as telecommunications and utilities.

IFP believes that investing in shares of high quality companies that trade at attractive valuations can lead to superior returns with less volatility over the long term compared to the Benchmark.

Significant features

• Actively managed Fund that invests in the shares of companies that are, in IFP's opinion, of exceptionally high quality and that are trading at attractive valuations.

• Risk is evaluated in absolute terms, not relative to the Benchmark. IFP deliberately ignores benchmarks in its portfolio construction process.

• Provides exposure to a concentrated portfolio of 20 to 40 stocks, undiversified by sector.

• IFP employs a buy and hold approach, with annual turnover typically in the range of 15% to 25%.

How we invest your money

Investment process

IFP's investment approach is bottom-up and driven by in-depth company research. The franchise investment approach is founded on the belief that a concentrated portfolio of exceptionally high quality companies, whose primary competitive advantage is supported by a dominant intangible asset selected at attractive valuations, will earn attractive long- term returns with less than average absolute volatility. Franchise companies tend to exhibit the following characteristics:

• resilient intangible assets (for example brands, licenses, patents)

• domestic/international growth potential

• low capital intensity

• high free cash flow generation

• financial strength: comfortable coverage of fixed charges, and

• capable management.

IFP supplements detailed proprietary fundamental analysis with one-on-one meetings with company management to evaluate and monitor these companies over time. Management is always interviewed before an investment is made. The Fund is constructed one stock at a time and does not use the Benchmark as a portfolio construction tool.

The companies in which IFP invests are typically found in sectors such as branded consumer goods (including tobacco), pharmaceuticals, media and publishing, broadcasting and information services. IFP typically does not invest in capital intensive industries such as telecommunications and utilities. IFP also typically invests in companies listed in developed countries with a strong culture and history of public participation in ownership of companies listed on stock exchanges.

IFP evaluates risk in absolute terms, not relative to the Benchmark, and deliberately avoids the Benchmark in its portfolio construction process. Since its goal is to earn attractive returns over the long term with less than average volatility, IFP focuses on the risk factors that are most likely to influence that outcome. These absolute risk factors include management quality, financial leverage, franchise durability, and free cash flow valuation.

While IFP seeks a diversified portfolio, it does not sacrifice either quality or value to achieve diversification or Benchmark characteristics. IFP's absolute approach to risk has resulted in historical portfolio returns that are substantially less volatile than the Benchmark.

Asset allocation

• International shares: 90% - 100%

• Cash: 0% - 10%

The Fund may be exposed to derivatives through the use of foreign exchange spot and forward contracts. IFP may use these foreign exchange contracts to:

• bring the Fund's exposure to currencies, which arises from stock selection, closer to that of the Benchmark, and

• facilitate the settlement of share purchases and sales.

The Fund's exposure to international assets is not hedged back to Australian dollars.