Monthly

Performance Update

Emerging Leaders Investment Limited

April 2013

'The prospective year assumes stronger earnings growth of 20.1% (Mid) and 28.8%

(Small) to deliver valuations of 14.9 and 13.1 times earnings apiece.'

Market Review

Portfolio performance for the month of April 2013 was 2.55% versus the benchmark return of -0.38%.

Portfolio Characteristics

Returns as at 30th April 2013

The Australian equity market, as measured by the Emerging Leaders com- posite benchmark*, posted small losses in April and closed the month down (-0.4%). Disappointing 1Q13 Chinese GDP results led to a sell-off in mining and mining services stocks which showed signs of investor capitulation. The announcement of a stimulus program in Japan lifted investor sentiment to- wards the second half of the month, however it failed to excite the Midcap and Small Resources segments with investors continuing to favour large cap stocks with high yield. In addition, the lower than expected Australian CPI figure and weaker unemployment data led to speculation of another official interest rate cut by the Reserve Bank of Australia.

Top 10 Stocks

Portfolio% Index* Tilt%

Portfolio Review

At a sectoral level, the Portfolio benefited from the overweight positions in the Consumer Discretionary, Telecommunications and Industrials sec- tors. The underweight positions in the Materials sector also added rela- tive value. Conversely, detractors to performance included the nil holdings in Utilities and AREITs, as well as the underweight position in Consumer Staples.
At a stock level, the overweight positions in TPG Telecom, REA Group, JB Hi Fi, Super Retail Group and Seek were the largest positive contribu- tors to performance. Detractors to the Portfolio included the nil holdings in Australian Pipeline, Federation Centres and Bendigo & Adelaide Bank.

Outlook

Consensus earnings estimates continue to be fine-tuned heading into the June 30 balance date. Whilst the large cap market segment at least sees some areas of positive earnings surprise, such as the Banks, it is clear that some further earnings downside remains in the Emerging Leader market capitalisation band. The Australian Dollar/Commodity price exposed lever- aged Resources, trade-exposed manufacturers and companies geared to- wards the domestic construction sector remain most at risk with few signs of relief despite accommodative rate settings aimed at prompting domestic economic activity and currency moderation. The mid and small cap stocks currently trade on 17.8 and 16.9 times FY13 earnings, on the assumption of earnings growth of 5.0% and 5.2% respectively. The prospective year assumes stronger earnings growth of 20.1% (Mid) and 28.8% (Small) to deliver valuations of 14.9 and 13.1 times earnings apiece.
Bank of Queensland 4.84 1.78 3.07
Seek 4.20 2.16 2.04
JB Hi-Fi 4.11 0.49 3.62
TPG Telecom 3.74 0.33 3.41
Boral 3.58 2.20 1.38
Super Retail Group 3.50 0.55 2.94
James Hardie Industries 3.26 2.52 0.74
REA Group 3.23 0.47 2.76
Resmed 3.20 1.94 1.26
Seven Group Holdings 3.15 0.29 2.87

*70% S&P/ASX Midcap 50 Acc Index and 30% S&P/ASX Small Ord Acc Index

^ Gross of Fees

Ausbil Dexia Limited, Level 23, 207 Kent Street, Sydney NSW 2000 T: 02 9259 0200 F: 02 9259 0222 W:www.ausbil.com.au

Net returns are after fees, before taxes and assume reinvestment of all distributions. You should note that past performance is not necessarily a guide to future performance. Ausbil Dexia Limited (ACN 076 316 473, AFSL 229722) does not give any warranty as to the accuracy, reliability or completeness of the information contained on this page. Offers for investment in Ausbil Dexia funds are made via the relevant current Product Disclosure Statement, which can be obtained by contacting our office.

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