Investment update for financial advisers October 2018 This material is not for circulation to retail investors

Important information This information is provided by MLC Investments Limited (ABN 30 002 641 661 AFSL 230705) as Responsible Entity and NULIS Nominees (Australia) Limited (ABN 80 008 515 633, AFSL 236465) as trustee of the MLC MasterKey and Fundamentals Super and Pension and MLC MasterKey Business Super products which are a part of the MLC Super Fund (ABN 70 732 426 024 (together “MLC” or “we”), all members of the National Australia Bank Limited (ABN 12 004 044 4397, AFSL 230 686) (NAB) group of companies, 105– 153 Miller Street, North Sydney 2060. An investment in any product offered by a member company of the National Australia Bank group of companies does not represent a deposit with or a liability of the National Australia Bank Limited (ABN 12 004 044 937) or its subsidiaries. NAB does not guarantee or otherwise accept any liability in respect of any financial product referred to in this presentation. This presentation has been prepared for licensed financial advisers only. This document must not be distributed to “retail clients” (as defined in the Corporations Act 2001 (Cth)) or any other persons. This information is directed to and prepared for Australian residents only. This information may constitute general advice. It has been prepared without taking account of an investor’s objectives, financial situation or needs and because of that an investor should, before acting on the advice, consider the appropriateness of the advice having regard to their personal objectives, financial situation and needs. Investors should obtain a Product Disclosure Statement or other disclosure document relating to any financial product which is issued by MLC, and consider it before making any decision about whether to acquire or continue to hold the product. A copy of the Product Disclosure Statement or other disclosure document is available upon request by phoning the MLC call centre on 132 652 or on our website at mlc.com.au. Past performance is not a reliable indicator of future performance. The value of an investment may rise or fall with the changes in the market. The performance returns in this communication are reported before deducting management fees and taxes unless otherwise stated. Actual returns may vary from any target return described in this presentation and there is a risk that the investment may achieve lower than expected returns. Any opinions expressed in this presentation constitute our judgement at the time of issue and are subject to change. We believe that the information contained in this presentation is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made at the time of compilation. However, no warranty is made as to their accuracy or reliability (which may change without notice) or other information contained in this presentation. MLC may use the services of NAB Group companies where it makes good business sense to do so and will benefit customers. Amounts paid for these services are always negotiated on an arm’s length basis. Any projection or forward looking statement (‘Projection’) in this communication is provided for information purposes only. No representation is made as to the accuracy or reasonableness of any such Projection or that it will be met. Actual events may vary materially. MLC relies on third parties to provide certain information and are not responsible for its accuracy. MLC is not liable for any loss arising from any person relying on information provided by third parties. While MLC has taken all reasonable care in producing this presentation, subsequent changes in circumstances may occur and impact on its accuracy. The investment managers are current as at the date this presentation was prepared. Investment managers are regularly reviewed and may be appointed or removed at any time without prior notice to you. Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”) do not approve or endorse any information included in this material and disclaim all liability for any loss or damage of any kind arising out of the use of all or any part of this material. The funds referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such fund.

Market update

The Fed is still talking up interest rates   The US Federal Reserve (Fed) raised US interest rates by 0.25% to a new 2%-2.25% range in September. This is the eighth US interest rate rise since December 2015. The Fed has provided guidance that US interest rates should continue to rise with another 0.75% increase projected in 2019 and a further 0.25% in 2020 (dotted blue line). However the Fed’s guidance is not a guarantee that future US interest rate rises will be gradual. US inflation risks are building as seen in higher US wages growth and rising oil prices. The US annual inflation rate (red line) was running at 2% in July. % % Source: Factset earnings insights, July 2018, IBES

US Shares are expensive on Forward P/E ratios, even with corporate tax cuts and strong earnings Expectations for US corporate profits for this year are very ambitious. Even if these expectations are met, US shares are expensive. According to the FACTSET Earnings Insights: “For Q3 2018, the blended earnings growth rate for the S&P 500 is 19.1%. If 19.1% is the actual growth rate for the quarter, it will mark the third highest earnings growth since Q1 2011 (19.5%).” On valuation, the forward 12 month Price to Earnings (P/E) ratio is 16.0x. This is above the 10 year average of 14.5x. Prior to February’s 2018 correction, US shares were very expensive with a Forward P/E at 18.5x. P/E ratio Source: Factset Earnings Insights , October 12 2018, and IBES

The IMF has highlighted the downside risk to the global economy from “trade tensions” The International Monetary Fund’s (IMF’s) model indicates an escalation of trade tensions* could reduce next year’s economic output significantly: For China, Real GDP declines by -1.6% US GDP declines by - 0.9 % Global GDP declines by - 0.8 % The IMF warns that:“ An intensification of trade tensions and the associated further rise in policy uncertainty could dent business and financial market sentiment, trigger financial market volatility, and slow investment and trade. An increase in trade barriers would disrupt global supply chains, which have become an integral part of production processes in the past decades, and slow the spread of new technologies, ultimately lowering global productivity and welfare.” Global Change in real GDP US CHINA * IMF assumes that a 25% tariff on all China imports from 2019 as well as all imported cars with trading partners responding with “similar tariffs”. Source: IMF WEO page 20 and the Scenario Box 1 Page 33 to page 35

Scenario insights and portfolio positioning Our portfolios include sophisticated strategies unique to MLC which can make a real difference to your investment outcome.

Things we think about Despite strong macro fundamentals, markets are fragile due to persistent underlying vulnerabilities from too much debt and imbalances between sectors and economies Bond yields aren’t rising sharply because of complacency about inflation and issuance US economy close to full capacity, employment costs are rising, inflationary pressures are building and the Fed is flagging multiple rate hikes China’s policy reorientation away from investment to consumption and services continues – this moderates demand for Australia’s exports. Banking sector consolidation is accelerating, though remaining risks may be under-appreciated Geopolitics – US trade policy remains a threat to economic growth – how far this will escalate is uncertain Risks of a disorderly or a ‘no-deal’ Brexit have risen – the outcome remains highly uncertain Eurozone growth remains above trend but the risks (Italy, Brexit, trade) are skewed to the downside Japan’s recovery is cyclical and structural – profits have surged and capex is rising, margins are rising with the tight labour market driving innovation, inflation pressures are slowly building but expectations remain grounded in the past Recent volatility reflects the vulnerabilities for asset prices, that we’ve been talking about, as monetary policies normalise – we are still early in this process

Modest returns with lots of risk We're looking for assets that have an attractive trade-off between risk and return. The most attractive assets are in the top left hand corner, the least attractive in the bottom right. Source: NAB Asset Management Services Limited

MLC Wholesale Inflation Plus Moderate Portfolio Target Asset Allocation At 30 september 2018 Defensive Australian shares 4.0% Global Defensive shares 22.0% Equities futures 1.5% Equity call options 2.0% Australian non-government bonds (short maturities) 23.0% Australian inflation-linked bonds (short maturities) 5.0% Global bank loans Enhanced cash 17.0% Multi-asset real return strategy 13.5% Low correlation strategy Insurance-related investments Cash backing for other derivatives (eg FX) 1 0.5% Positioning the portfolio for capital preservation through: High exposure to cash provides a robust defensive allocation within an environment where most asset classes are expensive relative to their risks Foreign currency exposure for diversification as global shares and the AUD tend to move in the same direction. We maintain significant currency exposure which is partially protected (using options) from a significant rise in the AUD. FX exposure is set independently of asset class exposures High exposure to non-benchmark aware strategies (eg real return strategies) to assist in achieving the portfolio’s real return objective by limiting the risk of negative returns. Defensive orientation of shares exposures skews the pattern of returns from shares - participation in rising markets is reduced in favour of lower risk of negative returns Interest rate risk limited through no direct allocation to long duration traditional bonds Tailored short maturities Australian inflation-linked bonds exposure to protect against rising inflation and interest rate risk Source: NAB Asset Management Services Limited

MLC Wholesale Horizon 4 Balanced Portfolio Defensive positioning relative to benchmark while maintaining adequate participation in share market upside: Exposure to real return strategies (ie Inflation Plus) is in part a response to low return potential and high risk of mainstream asset classes. Defensiveness of Inflation Plus has enabled Horizon to maintain shares at benchmark weight Underweight interest rate risk. The potential for further falls in bonds yields is less than the potential for yields to rise. We have had a reduced exposure to rising interest rates by reducing the duration (exposure to changes in interest rates) of the fixed income strategy, tilting the portfolio away from longer maturity bonds and towards cash An overweight to foreign currencies for diversification as global share markets and the AUD tend to move in the same direction. Not hedging some overseas assets can help insulate the portfolio from losses if share markets fall Tailored short maturities Australian inflation-linked bonds exposure to protect against rising inflation and interest rate risk Derivative strategies – FX options protection and emerging markets futures Asset allocation at 30 September 2018 Current Benchmark Active Australian shares 28.0% - Global shares (unhedged) 21.0% 15.0% +6.0% Global shares (hedged) 7.0% 13.0% -6.0% Global property securities 4.0% Fixed income (all maturities) 16.0% -9.0% Australian inflation-linked bonds (short maturities) 5.0% 8.0% Australian inflation-linked bonds (all maturities) 3.0% High yield bonds and loans 2.0% Enhanced cash 9.0% 1.0% +8.0% Real return strategies (Inflation Plus) 11.0% 10.0% +1.0% Low correlation strategy Source: NAB Asset Management Services Limited

MLC Wholesale Index Plus Balanced Portfolio Asset allocation at 30 September 2018 Current Benchmark Active Australian shares 28.0% - Global shares (unhedged) 19.0% 16.0% +3.0% Global shares (hedged) 13.0% 16.5% -3.5% Global property securities 4.0% Fixed income (short maturities) 2.5% 2.0% +0.5% Fixed income (all maturities) 7.0% 17.0% -10.0% Australian inflation-linked bonds (short maturities) 5.0% Australian inflation-linked bonds (all maturities) -3.0% Enhanced cash 13.5% 3.5% +10.0% Real return strategy (simple real return strategy) 6.0% We’ve focussed on defensively positioning the portfolio relative to its benchmark by: Exposure to a real return strategy (ie simple real return strategy) is in part a response to low return potential and high risk of mainstream asset classes. Defensiveness of the real return strategy has enabled Index Plus to maintain shares close to benchmark weight Underweight interest rate risk. The potential for further falls in bonds yields is less than the potential for yields to rise. We have had a reduced exposure to rising interest rates by reducing the duration (exposure to changes in interest rates) of the fixed income strategy, tilting the portfolio away from longer maturity bonds and towards cash. Overweighting foreign currencies for diversification as global share markets and the AUD tend to move in the same direction. Not hedging some overseas assets can help insulate the portfolio from losses if share markets fall Tailored short maturities Australian inflation-linked bonds exposure to protect against rising inflation and interest rate risk Source: NAB Asset Management Services Limited

Goal is to shift as rightward as possible MLC Inflation Plus portfolios deliver different outcomes to traditional diversified portfolios The objective is to maximise the return for risk taken by investing in assets which, in combination, provide an attractive potential pay-off Inflation Plus Traditional diversified portfolio Goal is to shift as rightward as possible Risk Reduction Worst Outcome Best Outcome Source: NAB Asset Management Services Limited

Inflation plus performance lags when returns are strong and persistent; leads when returns are significantly negative Inflation Plus leads: Market risks revealed Inflation Plus lags: Returns strong but risk high Source: NAB Asset Management Services Limited

Returns in recent share market falls 1 October 2018 to 12 October 2018 Past performance is not a reliable indicator of future performance. The value of an investment may rise or fall with the changes in the market. Source: NAB Asset Management Services Limited Returns are calculated before deducting fees. Global Shares Hedged: MLC Hedged Global Share Fund.

Recent portfolio changes

Recent portfolio decisions When Reason inflation plus China A-shares with downside limit of -20% Q2 2018 We maintain our exposure to the on-shore China-A share market using the combination of a Total Return Swap (TRS) and a 20% out-of-the-money put. Due to the high growth potential and volatility of Chinese shares, this type of exposure allows us to be opportunistic and proactive by participating in a strong share market while maintaining our defensive positioning by avoiding downside exposure.  FX overweight with AUD/USD upside protection On going FX weaker but still valuable source of diversification, but recognise possibility of strong AUD in a risk scenario. We maintain significant currency exposure which is partially protected (using options) from a significant rise in the AUD. Increased Australian non-government bonds (short maturities) These short-duration bonds offer some return enhancement while limiting additional risk. MLC Horizon and Index Plus portfolios also benefit from these decisions via their investments in inflation plus or the simple real return strategy

Fixed income strategy changes within MLC Horizon and Index Plus In September we: replaced Goldman Sachs, one of our global government bonds managers since 2010, with existing manager Insight. Insight has been one of our global absolute return bonds managers since 2015. We’ve now extended our relationship to include the management of global government bonds. removed Franklin Templeton, one of our global multi-sector bonds managers since 2010. We’ve reallocated the assets to Amundi, an existing global multi- sector bonds manager. We expect to deliver improved and more stable returns with a modest reduction in risk relative to the benchmark. We have greater conviction in the new mix of managers to deliver to the portfolios’ objectives. There is no increase in fees.

Performance

MLC Wholesale - Absolute returns (net of fees) as at 30 September 2018 (net of fees) 3 mths (%) 1 year 3 years (% pa) 5 years (% pa) 7 years (% pa) 10 years (% pa) MLC Horizon 1 ‐ Bond Portfolio 0.6% 1.9% 2.3% 2.5% 3.0% 3.5% MLC Horizon 2 – Income Portfolio 0.9% 3.7% 3.9% 4.6% 6.1% 5.2% MLC Horizon 3 – Conservative Growth Portfolio 1.5% 7.2% 6.4% 6.3% 7.9% MLC Horizon 4 – Balanced Portfolio 9.5% 8.4% 7.8% 9.9% 7.4% MLC Horizon 5 – Growth Portfolio 2.4% 11.0% 9.7% 8.7% 11.2% MLC Horizon 6 – Share Portfolio 13.4% 11.8% 10.2% 13.0% 8.8% MLC Horizon 7 – Accelerated Growth Portfolio 16.9% 15.2% 12.4% 15.8% MLC Inflation Plus Conservative Portfolio  MLC Inflation Plus Moderate Portfolio 1.3% 5.0% 3.8% MLC Inflation Plus Assertive Portfolio 8.3% 5.4% MLC Index Plus Conservative Growth Portfolio 2.0% MLC Index Plus Balanced Portfolio 2.6% 10.1% MLC Index Growth Portfolio 3.1% 12.1% The returns shown are calculated after deducting MLC Wholesale fund’s ‘headline fee’ which is not reduced by the rebate commonly paid to platforms and investors. Source: MLC Investments Limited. Past performance is not indicative of future performance.

MasterKey Super Fundamentals - Absolute returns (net of fees and tax) MasterKey Super Fundamentals as at 30 June 2018 (net of fees and tax) 3 mths (%) 1 year 3 years (% pa) 5 years (% pa) 7 years (% pa) 10 years (% pa) MLC Horizon 1 ‐ Bond Portfolio 0.4% 1.2% 1.6% 1.8% 2.3% 2.7% MLC Horizon 2 – Capital Stable Portfolio 1.1% 4.8% 4.1% 4.4% 5.4% 4.5% MLC Horizon 3 – Conservative Growth Portfolio 1.5% 6.9% 5.9% 6.1% 7.3% 5.7% MLC Horizon 4 – Balanced Portfolio 1.9% 9.3% 7.9% 7.8% 6.7% MLC Horizon 5 – Growth Portfolio 10.7% 9.1% 8.7% 10.5% 7.2% MLC Horizon 6 – Share Portfolio 2.9% 13.0% 11.0% 10.2% 12.2% 8.0% MLC Horizon 7 – Accelerated Growth Portfolio 3.7% 16.6% 14.6% 12.6% 15.5% 9.2% MLC Index Plus Conservative Growth Portfolio 6.0%  MLC Index Plus Balanced Portfolio 8.1% 7.6% MLC Index Growth Portfolio 2.8% 10.9% 9.4% 8.6% MLC Inflation Plus Conservative Portfolio 0.8% 3.2% 2.4% MLC Inflation Plus Moderate Portfolio 3.3% MLC Inflation Plus Assertive Portfolio 7.4% 4.7% 6.6% The returns shown are calculated after deducting the ‘headline fee’ which is not reduced by any rebates. Source: MLC. Past performance is not indicative of future performance.

Contributors to returns Another quarter of strong market performance

Impact on quarter’s return Impact on 1 year’s return Contributors and detractors from absolute returns Asset allocation decisions Decision Impact on quarter’s return Impact on 1 year’s return Unhedged global assets’ exposure + Private assets exposure Exposure to global and Australian shares Exposure to high yield bonds and loans High allocation to enhanced cash - Real return and low correlation strategies Exposure to risky assets paid off over the quarter and year, and defensive positions generally didn’t. We’re maintaining defensive positions as they help reduce some of the risks of investing in shares.

Strategy example – FX exposure . % of portfolio AUD:USD Source: NAB Asset Management Services Limited

Relative to peers – quartile performance rankings for MLC Super Fundamentals Returns for portfolios are above median over almost all periods Portfolio Returns to 30 September 2018 1 year 3 years 5 years 10 years MLC Horizon 2 Q1 MLC Horizon 3 Q2 MLC Horizon 4 MLC Horizon 5 Q3 MLC Horizon 6 Peer universe is the Morningstar Superannuation Universe Source: Morningstar Direct with MLC Super Fundamentals’ returns provided by MLC. Past performance is not indicative of future performance.

Relative to peers – quartile performance rankings for MLC Wholesale Most portfolios’ returns are above median over most periods Portfolio Returns to 30 September 2018 1 year 3 years 5 years 10 years MLC Horizon 2 Q3 Q2 MLC Horizon 3 MLC Horizon 4 Q1 MLC Horizon 5 MLC Horizon 6 The peer universe is the Morningstar Wholesale universe. MLC Wholesale is disadvantaged in this peer universe because performance is calculated after deducting MLC Wholesale fund’s ‘headline fee’ which is not reduced by the rebate paid to platforms and investors. Source: Morningstar Direct. Past performance is not indicative of future performance.

Consider the risks – MLC Index Plus has had twice the volatility of MLC Inflation Plus 3 year returns (net of fees and tax) to 30 September 2018 Source: MLC, based on MLC MasterKey Super Fundamentals, returns are calculated after deducting fees and taxes. Past performance is not a reliable indicator of future performance.

Where to find client tools Our portfolios include sophisticated strategies unique to MLC which can make a real difference to your investment outcome.

Ongoing support Performance overview for MLC funds Presentation of fund performance, updated quarterly. Fund performance commentaries Client report on fund performance for the quarter and year, updated monthly available on Fund Profile Tool. Portfolio positioning and scenario insights for advisers Quarterly update on our investment positions, detailed report for financial advisers. Monthly reports Summary of the fund’s performance, positioning, asset allocation and fees for clients. Client updates and investment insights Insights and commentary for clients on economic and market developments. Available as articles, videos, infographics and Q&As. Adviser updates and investment insights Detailed analysis and resources on economic and market developments. Manager insights Highlights of MLC’s investment managers’ insights on markets and their positions, updated quarterly. Alternatives and other strategy commentaries Client reports on performance and positioning of underlying investment strategies; updated quarterly