1. www.iml.com.au ABN 14 078 030 752 Correction? What Correction? Mr. James Dunn – Investment Journalist and Commentator - August 2005 ABN 14 078 030 752AFS Licence Number 229988 Presentation to clients of Goodman private wealth advisers

2. www.iml.com.au James Dunn Presentation

3. www.iml.com.au The Autumn Correction

4. www.iml.com.au The Autumn Correction  Market down 7.5% March 21-May 5  Floats rescheduled or postponed  Earnings downgrades – approximately 90 since end December 2004 to 1 May 2005  130 downgrades in total  Investor complacency shaken

5. www.iml.com.au Profit downgrades hit share prices  Pacifica down 50%*  PaperlinX down 35%*  PMP down 38%*  Wattyl down 36%*  Repco down 30%* *March peak-May low

6. www.iml.com.au Blink – and you missed it!  Market up 11.7% since May 5 – back at record highs  Profit season expectation of 15–25% earnings growth  Investor complacency back in town  But oil – and profit margins – still a worry

7. www.iml.com.au The last 12 months - what’s not to like?  S&P/ASX 300 Accumulation Index up 29% for 12 months to 31 July 05  Index up 52.5% July 2003 – July 2005  Strong earnings growth  Best back-to-back FY gains in 18 years

8. www.iml.com.au Warning signs that we noted  Many stocks were at record highs  PEs had expanded significantly  Opportunistic floats  Slump in retail spending  Building boom & house price bubble finished

9. www.iml.com.au How sustainable is China’s growth?  Measuring China’s economy is difficult  Infrastructure bottlenecks appearing  China trying to cool its economy  Can China do it with limited tools at its disposal?

10. www.iml.com.au What about the US?  Fed has raised rates 10 times in 14 months  Twin deficits still growing  US Dollar weakness persisting  Iraq better, but geo-political risk remains  Oil supply and price pressures

11. www.iml.com.au Reasons we were cautious…  Second largest current account deficit on record  Investors’ mood was buoyant  Some sectors of economy slowing  Many Industrial P/Es peaked at 20 times earnings  Not gloom but time for reality check

12. www.iml.com.au Australia’s strong economy  Record numbers in workforce  Budget surplus swelling  Exports gaining momentum  Business spending taking over from consumers

13. www.iml.com.au Company earnings drives shares  Earnings growth slowing  Some P/Es contracting  Market looking for more predictable earnings  Downside should be limited on stocks with good yields

14. www.iml.com.au Disclaimer  While the information contained in this presentation has been prepared with all reasonable care, Investors Mutual Limited accepts no responsibility or liability for any errors or omissions or misstatements however caused. This is general securities information only and is not intended to constitute a securities recommendation. This information does not account for your investment objectives, particular needs or financial situation. Statements of opinion are those of IML unless otherwise attributed. Except where specifically attributed to another source, all figures are based on IML research and analysis.  Investors should be aware that past performance is not indicative of future performance. Returns can be volatile, reflecting rises and falls in the value of underlying investments. Potential investors should seek independent advice as to the suitability of the Fund to their investment needs. The fact that shares in a particular company may have been mentioned should not be interpreted as a recommendation to either buy, sell or hold that stock. Investors Mutual Limited is the issuer of the Investors Mutual Australian Share Fund, Investors Mutual Industrial Share Fund, Investors Mutual Future Leaders Fund, Investors Mutual Australian Smaller Companies Fund and Investors Mutual Diversified Value Fund. Applications can only be made on the form in the current Product Disclosure Statement dated 21 st March 2005, or for Investors Mutual Diversified Value Fund, dated 21 st March 2005, or through IDPS products that include these Funds. The Product Disclosure Statement can be obtained by contacting Investors Mutual or on www.iml.com.au. Potential investors should consider the Product Disclosure Statement before deciding whether to invest, or continue to invest in the Funds.www.iml.com.au