Diversified Portfolios - International Equities Portfolio Report - 31 December 2016

COMMENTARY

PORTFOLIO COMMENTARY

Global equity markets continued their positive momentum from November into December on the back of investor expectations of supportive economic policies from a Trump administration. Europe was the best performing market for the month up 7.4% followed by small caps up 4.5%. The US was up 3.9%, while Japan and Emerging Markets returned 3.0% and 2.9% respectively. The portfolios remain underweight the US and continue to have a minor overweight to Europe and sizeable allocation to Emerging markets (which are absent from the benchmark).

The portfolio returned 5.5% over the month of December versus the benchmark return of 4.5%. Since inception the portfolio lags the benchmark return by around 2.7%, this was predominately due to the portfolio being underweight the US which performed well over that period and the exposure to emerging markets which experienced some volatility over the latter half of 2015. Over the year to December, the portfolio has returned 7.7% (after fees) which slightly lagged the benchmark return of 7.9%.

PORTFOLIO OBJECTIVE

The objective of this model portfolio is to provide investors with a high level ofexposure to the international equities share markets. The portfolio is invested acrossa range of ASX-listed ETFs aimed at achieving a diversified portfolio. The portfolio isexpected to display high levels of volatility and will have a high level of currency risk.

Growth of $10,000

Income Reinvested

Performance Summary to 31 December 2016

Source: Praemium, RBA. Returns are before expenses and fees. Returns are shown as annualisedif the period is over 1 year. * Since Inception (SI) date is 24 October 2014.

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