Monthly

Performance Update

Emerging Leaders Investment Limited

November 2013

"The bottom line is that Federal Reserve action is unlikely to jeopardise the US economic recovery..."

Market Review

Portfolio performance for the month of November 2013 was -1.07% versus the benchmark return of -2.52%.

Portfolio Characteristics

Returns as at 30th November 2013

The Australian mid/small cap equity market, as measured by the Emerging Leaders composite benchmark1, closed the month -2.5% lower. Domestic AGM commentary suggested that Australian economic conditions remain subdued and provided further justification for accommodative rate settings for the foreseeable future. The US reported firmer economic growth whilst minutes from the FOMC meeting indicate the tapering program is likely to begin within the next few months. Economic data out of China was better than expected whilst the government disclosed modest economic and social policy reforms in their much awaited 3rd Plenum.

Fund Review

Top 10 Stocks

Portfolio% Index* Tilt%
At a sectoral level, the Portfolio benefited from the overweight position in the Financials (ex REITs) and Consumer Discretionary sectors. The nil hold- ings in Consumer Staples also added value. Major detractors to the Portfolio included the overweight tilt in the Telecommunications sector and the nil holdings in REITs.
At a stock level, the overweight positions in OzForex Group, Bionomics, Bank of Queensland, BlueScope Steel and Henderson Group were the larg- est positive contributors to performance. The nil holdings in Graincorp and ALS also added value. Detractors to the Portfolio included the overweight positions in TPG Telecom, Seven West Media, Sandfire Resources and Seven Group Holdings. The nil holdings in Arrium also detracted from relative per- formance.

Outlook

US tapering expectations continued to influence investor sentiment, this time via the publication of October's FOMC meeting minutes - a docu- ment that essentially highlighted the optionality around future tapering measures. The bottom line is that Federal Reserve action is unlikely to jeopardise the US economic recovery and that it will most likely err on the side of caution in terms of the implementation phase of the "wind back". Adding to the generally positive US backdrop, the securing of a provisional agreement between the US and Iran signalled a potential step forward in diplomatic relations between the 2 countries, however this geopolitical improvement was seemingly replaced by a sudden escalation in tensions in North Asia over disputed islands between China, Japan and Korea. The detail around China's 3rd plenum failed to trigger any major new concerns regarding that country's growth trajectory and it seems that the reformist agenda will continue to be implemented in a measured way, whilst do- mestically the RBA chose not to alter monetary policy settings in light of fairly anaemic economic growth. In addition to continued accommodative rate settings, the central bank resumed its attempts to talk down the local currency by referencing direct foreign exchange intervention as a future potential tool.
Bank of Queensland. 7.31 2.20 5.11
Resmed 4.65 2.22 2.43
SEEK 4.39 2.55 1.84
TPG Telecom 3.89 0.36 3.53
Seven West Media 3.80 0.42 3.38
Bluescope Steel 3.71 1.67 2.04
REA Group 3.55 0.59 2.96
James Hardie Industries. 3.43 3.07 0.36
Aristocrat 3.36 1.33 2.03

OzForex Group 3.30 0.00 3.30

Portfolio Sector Tilts

Portfolio%

Index*

Tilt%

Energy

5.08

5.52

-0.44

Materials

15.92

17.75

-1.83

Industrials

15.28

14.52

0.76

Consumer Discretionary

30.23

19.87

10.36

Consumer Staples

0.00

5.17

-5.17

Healthcare

7.42

11.25

-3.83

Financials (x LPT)

16.05

11.35

4.70

LPTs

0.00

7.09

-7.09

IT

0.00

1.93

-1.93

Telecommunication

3.89

1.55

2.34

Utilities

0.00

4.01

-4.01

Cash

6.14

0.00

6.14

Total

100.00

100.00

0.00

*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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