Diversified Portfolio - Intelligent Investor Equity Income - 31 July 2016

COMMENTARY

PORTFOLIO COMMENTARY

The InvestSMART International Equity Portfolio had a strong month, up 3.7%, as markets enjoyed a post-Brexit rally during July with the broader international equity markets up 2.0%. Emerging market equities returned 2.9% for the month outperforming their developed market counterparts over the month. US equities returned 1.7% for the month which underperformed relative to Europe, Japan and emerging markets. Given the portfolio is underweight the US this was the main reason for outperformance over the month.

The underweight to the US is based on the view that US valuations look expensive relative to other parts of the world and relative to their own history.

The portfolio continues to be positioned with an underweight to US equities and holds an exposure to emerging markets (which is absent from the benchmark). Therefore, the portfolio is expected to perform well in an environment where non-US equites perform better than US equities.

GROWTH OF $10,000

Income Reinvested

PEFORMANCE SUMMARY TO 31 JULY 2016

Source: Praemium, RBA. Returns are before expenses and fees. Returns are shown as annualised if the period is over 1 year. * Since Inception (SI) date is 1 July 2015.

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