Pre-Select Diversified Funds: Asset Allocation & Manager Changes October 2018

This material is not for circulation to retail investors. Pre Select Diversified Funds Asset allocation and manager changes October 2018

Importantinformation This information is provided by Navigator Australia Limited (ABN 45 006 302 987, AFSL 236466) as Responsible Entity of Pre Select diversified funds (listed at the end of this disclaimer) ( MLC or we ), a member of the National Australia Bank Limited (ABN 12 004 044 4397 AFSL 230686) group of companies (NAB Group), 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. 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. Any projection or other forward looking statement ( Projection ) in this document 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 communication, subsequent changes in circumstances may occur and impact on its accuracy. The investment managers are current as at the date this communication was prepared. Investment managers are regularly reviewed and may be appointed or removed at any time without prior notice to you. The following funds are offered through MLC Wrap platforms and are affected by the changes to the Pre Select diversified funds: Pre Select Conservative Fund Pre Select Balanced Fund Pre Select Growth Fund Pre Select High Growth Fund 2 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Recap on changes weve made, since late 2017 In December 2017 we informed clients of changes to the Pre Select Diversified Funds Change Introduced asset allocation ranges Reason Asset classes can now be managed within ranges of 15% above or below the benchmark asset allocation. The risk level of each asset class is constantly changing so we can better manage clients exposure to risk and returns by adjusting the asset allocation. Alternatives generate returns not strongly linked to mainstream assets such as equities. Added an alternatives asset class 3 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Weve had to terminate some small funds March 2018 Pre Select Australian Small Companies Fund and Pre Select International Equity Fund September 2018 Pre Select Australian Equity Fund 4 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Changes were now making to our asset allocations We re frequently adjusting the asset allocation, within defined ranges, because the risk level of each asset class changes constantly. We adjust the asset allocation based on our scenario analysis (the Investment Futures Framework). The risk aware nature of our scenarios approach tends to mean that value is usually added through defensive positioning we aim to reduce our investors exposure to losses by reducing exposure to asset classes when we believe their risks are too high. Key asset allocation changes we ve made since 2017 (shown in the graphs on the following slides): Increased unhedged global shares and decreased hedged global shares global share prices and the AUD tend to move in the same direction, so increasing foreign currency exposure helps reduce the funds risk of negative returns in certain negative scenarios. While foreign currency remains an important source of risk control, its power as a diversifier reduces as the AUD declines. Increased Australian fixed income and decreased global fixed income to reduce vulnerability to increases in interest rates. Increased alternatives we believe exposure to our real return (alternative) strategies provides the funds with greater potential ability to preserve investors capital in volatile markets and provides our investors with potentially better investment returns for the level of risk we take. Removed Australian listed property securities from most funds we re no longer allocating to Australian listed property securities (Real Estate Investment Trusts, REITs) because we believe global REITs provide greater return potential and diversification benefits. An exception is our lowest risk Diversified Fund, the Pre Select Conservative Fund, which has mostly global REITs exposure and a small allocation to Australian REITs. 5 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Changes were now making to our investment managers Within the asset classes we ve: Moved the fixed income from passive to active managers. Expanded the diversity of active managers in our Australian equities, fixed income, and listed property securities (REITs) strategies. We believe these changes enable us to improve returns and manage risk within the asset classes. 6 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Pre Select Conservative Fund Asset allocation changes Asset and manager allocations Cash - Antares Aust FI -UBS Aust FI -Antares Global FI - Goldman Sachs Global FI - FFTW Global FI - Insight Global FI - Loomis Global FI - Wellington Global FI - Amundi Global FI - Pimco Global FI - Frankin Templeton Aust Eq - Antares Aust Eq - Maple-Brown Abbott Global Eq - Arrowstreet Global Eq - C Worldwide Global Eq - Harding Loevner Global Eq - Intermede Global Eq - Kiltearn Global Eq - Sands Capital Global Eq - Tweedy, Browne A-REITs - Antares A-REITs - Resolution Capital G-REITs - Presima G-REITs - Morgan Stanley G-REITs - Resolution Capital Alternatives - Real return strategies 50% Current portfolio positioning x Previous portfolio positioning 40% Asset allocation ranges for each asset class 30% 20% 10% 0% Source: NAB Asset Management Services Limited, as at 31 August 2018. Asset allocation changes are from 31 December 2017 to 31 August 2018. Total 70% defensive and 30% growth assets is unchanged 7 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Pre Select Balanced Fund Asset allocation changes Asset and manager allocations Current portfolio positioning Cash - Antares Aust FI -UBS Aust FI -Antares Global FI - Goldman Sachs Global FI - FFTW Global FI - Insight Global FI - Loomis Global FI - Wellington Global FI - Amundi Global FI - Pimco Global FI - Frankin Templeton Aust Eq - Antares Aust Eq - Vinva Aust Eq - Northcape Aust Eq - Alphinity Aust Eq - Blackrock Aust Eq - Redpoint Global Eq - Arrowstreet Global Eq - C Worldwide Global Eq - Harding Loevner Global Eq - Intermede Global Eq - Kiltearn Global Eq - Sands Capital Global Eq - Tweedy, Browne G-REITs - Presima G-REITs - Morgan Stanley G-REITs - Resolution Capital Alternatives - Real return strategies 40% x Previous portfolio positioning Asset allocation ranges for each asset class 30% 20% 10% 0% Source: NAB Asset Management Services Limited, as at 31 August 2018. Asset allocation changes are from 31 December 2017 to 31 August 2018. Total 53% defensive and 47% growth assets, previously 50% defensive and 50% growth 8 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Pre Select Growth Fund Asset allocation changes Asset and manager allocations 50% Current portfolio positioning Cash - Antares Aust FI -UBS Aust FI -Antares Global FI - Goldman Sachs Global FI - FFTW Global FI - Insight Global FI - Loomis Global FI - Wellington Global FI - Amundi Global FI - Pimco Global FI - Frankin Templeton Aust Eq - Antares Aust Eq - Vinva Aust Eq - Northcape Aust Eq - Alphinity Aust Eq - Blackrock Aust Eq - Redpoint Global Eq - Arrowstreet Global Eq - C Worldwide Global Eq - Harding Loevner Global Eq - Intermede Global Eq - Kiltearn Global Eq - Sands Capital Global Eq - Tweedy, Browne G-REITs - Presima G-REITs - Morgan Stanley G-REITs - Resolution Capital Alternatives - Real return strategies x Previous portfolio positioning 40% Asset allocation ranges for each asset class 30% 20% 10% 0% Source: NAB Asset Management Services Limited, as at 31 August 2018. Asset allocation changes are from 31 December 2017 to 31 August 2018. Total 33.5% defensive and 66.5% growth assets, previously 30% defensive and 70% growth 9 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Pre Select High Growth Fund Asset allocation changes Asset and manager allocations 60% Current portfolio positioning Cash - Antares Aust FI -UBS Aust FI -Antares Global FI - Goldman Sachs Global FI - FFTW Global FI - Insight Global FI - Loomis Global FI - Wellington Global FI - Amundi Global FI - Pimco Global FI - Frankin Templeton Aust Eq - Antares Aust Eq - Vinva Aust Eq - Northcape Aust Eq - Alphinity Aust Eq - Blackrock Aust Eq - Redpoint Global Eq - Arrowstreet Global Eq - C Worldwide Global Eq - Harding Loevner Global Eq - Intermede Global Eq - Kiltearn Global Eq - Sands Capital Global Eq - Tweedy, Browne G-REITs - Presima G-REITs - Morgan Stanley G-REITs - Resolution Capital Alternatives - Real return strategies x Previous portfolio positioning 50% Asset allocation ranges for each asset class 40% 30% 20% 10% 0% Source: NAB Asset Management Services Limited, as at 31 August 2018. Asset allocation changes are from 31 December 2017 to 31 August 2018. Total 21% defensive and 79% growth assets, previously 15% defensive and 85% growth 10 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Whats included in alternatives? The funds alternatives exposure is to the MLC Inflation Plus portfolios, managed by our Capital Markets Research team. The Inflation Plus portfolios focus on providing risk-controlled real returns. The Pre Select Diversified Funds have different allocations to the three Inflation Plus portfolios. The MLC Inflation Plus portfolios can invest in a wide range of assets and strategies and we have the flexibility to make large changes to the strategy s asset allocation to manage risk and capture opportunities for returns as the investment environment evolves. We expect this diversification, flexibility and ability to tailor risk exposures should help us to generate higher performance for the level of risk we take in the Pre Select Diversified Funds and smooth their returns. 11 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

Why invest in alternatives? Risk management changes the path of the Inflation Plus portfolios returns Expected return outcomes across different investment scenarios (before deducting fees and tax) STRONG SHARE MARKETS There may be times when the MLC Inflation Plus returns are lower than traditional funds WEAK SHARE MARKETS There may be times when the MLC Inflation Plus returns exceed traditional funds Real returns (% pa) Source: NAB Asset Management Services Limited Inflation Plus portfolios are expected to provide greater return certainty than a traditionally managed diversified fund. While they may provide lower volatility, returns should be similar over a full market cycle. The returns are expected to be more efficient because they re: o less constrained by asset allocation ranges and invest in a broader ranges of asset classes and strategies, and o not grounded by a benchmark asset allocation. THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS. 12

How may clients benefit from these changes? Through increased active management we've: improved potential returns, and reduced risk. Are fees changing? As a result of these strategy changes there are no increases in the funds management costs. However there ll be a small increase in underlying investment costs during the 2019 financial year. We estimate the increase will be in the range of 0.01% pa to 0.02% pa of a fund s net asset value. Underlying investment costs are incurred when a fund invests in investment funds such as the MLC Inflation Plus portfolios. The costs of these investments are reflected in the unit price of the Pre Select funds and aren t additional fees retained by MLC. We believe investors will benefit from these changes after deducting all fees, including underlying investment costs. 13 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.

How are clients informed? We continue to keep clients informed of asset allocation and manager changes each quarter in the Pre Select fund commentaries available on: The fund commentaries tab on mlc.com.au https://www.mlc.com.au/content/dam/mlc/documents/pdf/investments/pre-select-commentaries.pdf The Fund Profile Tool for MLC Wrap and Navigator https://www.mlc.com.au/fundprofile/flow/fundProfile?entryCode=6o9%2Fakug39f%2FztOmCkKN5p 9vSdMCASihGB%2BG2tPHKMA%3D 14 THIS MATERIAL IS NOT FOR CIRCULATION TO RETAIL INVESTORS.