Monthly

Performance Update

Emerging Leaders Investment Limited

May 2013

'...the sharp fall in the currency should at least begin to help domestic corporates and

SME's leveraged to Tourism, Education and Retailing.'

Market Review

Portfolio performance for the month of May 2013 was -4.13% versus the benchmark return of -3.39%.
The Australian equity market, as measured by the Emerging Leaders com- posite benchmark*, posted small losses in May and closed the month 3.4% lower. Despite a positive first half of the month, equity markets retreated post US Fed comments' that it can potentially taper the asset purchase program. Chinese Government favoured slower growth in order to help prevent envi- ronmental degradation, whilst the RBA's decision to cut the official cash rate by 25 bps saw the Aussie dollar slide below parity against the US dollar.

Portfolio Characteristics

Returns as at 31st May 2013

Fund Review

At a sectoral level, the Fund benefited from the nil holdings in Information
Technology. Companies leveraged to earnings from the US performed well

Top 10 Stocks

Portfolio% Index* Tilt%
following the Aussie dollar depreciation against the US Dollar performed well. Major detractors to the Portfolio included the overweight positions in Industrials and Consumer Discretionary.
At a stock level, the overweight positions in Seven West Media, Sandfire Resources, Aristocrat, Henderson Group and Flexigroup were the largest positive contributors to performance. The nil holdings in United Group also added value. Detractors to the Portfolio included the overweight positions in Transfield Services, Seven Group, Super Retail Group and Downer EDI.

Outlook

Whilst the domestic story, the more relevant story for the Emerging Lead- ers market component, remains clouded, the sharp fall in the currency should at least begin to help domestic corporates and SME's leveraged to Tourism, Education and Retailing. Trade exposed manufacturers should also begin to benefit from better revenue translation and a relatively more competitive cost base for domestic production activities, as should miner- als and metal exporters. Certainty surrounding the country's leadership should help provide positive impetus to business investment and con- sumer spending but these will be needed to help offset the fall in mining capex from FY14. Sustained weakness in the Australian Dollar will also make domestic listed plays more interesting to offshore raiders, whilst si- multaneously presenting a challenge to local companies looking to grow via offshore acquisition. The domestic economy is clearly in a transition phase - one if managed properly, could actually deliver a more balanced and sustainable growth platform, moving away from the concentrated, volatile and distorting mining-centric model of the last few years.
Bank of Queensland 5.78 1.61 4.17
Seven West Media 4.15 0.46 3.69
Seek 4.12 2.04 2.08
Resmed 4.00 2.25 1.75
Sandfire Resources 3.62 0.20 3.42
JB Hi-Fi 3.60 0.49 3.11
REA Group 3.57 0.47 3.11
Bluescope Steel 3.57 1.61 1.96
TPG Telecom 3.50 0.33 3.17
Boral 3.40 2.07 1.33

Portfolio Sector Tilts

Portfolio% Index* Tilt% Energy 5.34 6.74 -1.39
Materials 18.55 19.09 -0.53
Industrials 15.80 12.62 3.19
Consumer Discretionary 32.71 17.74 14.97
Consumer Staples 1.58 6.55 -4.97
Healthcare 8.68 11.01 -2.32
Financials (x LPT) 10.43 8.23 2.20
LPTs 0.00 7.31 -7.31
IT 0.00 1.92 -1.92
Telecommunication 3.50 1.36 2.14
Utilities 0.00 7.44 -7.44
Cash 3.39 0.00 3.39
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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