Monthly

Performance Update

Emerging Leaders Investment Limited

January 2014 '...snippets of good news, such as the move by the World Bank to raise its global growth forecast for the first time in 3 years...'

Market Review

Portfolio performance for the month of January 2014 was -3.61% versus the benchmark return of -2.92%.
The Australian mid/small cap equity market, as measured by the Emerging Leaders composite benchmark1, closed the month 2.9% lower. Concerns over Chinese macroeconomic data and the Asian GDP growth outlook weighed on investor sentiment. The US Fed began the tapering of its Asset Repurchase Program whilst the World Bank took a more optimistic view of things by tak- ing the opportunity to lift its global GDP growth forecast for CY14. Australia's CPI print for December 2014 was higher than expected and the Aussie Dollar fell below 90 cents against the US dollar.

Fund Review

At a sectoral level, the Portfolio benefited from the overweight position in the Telecommunication and Financials (ex REITs) sectors. The nil holdings in Consumer Staples also added value. Major detractors to the Portfolio included the overweight tilt in the Consumer Discretionary and Industrials sectors and the nil holdings in Utilities and REITs sectors.
At a stock level, the overweight positions in REA Group, TPG Telecom, Oz- Forex Group and Fairfax were the largest positive contributors to perform- ance. The nil holdings in Treasury Wine Estates and ALS also added value. Detractors to the Portfolio included the overweight positions in Super Retail Group, JB Hi-Fi, and McAleese. The nil holdings in Alumina also detracted from relative performance.

Outlook

Sharp currency devaluations in several emerging market economies, as well as the Federal Reserve's announcement regarding further taper- ing measures in February prompted the re-emergence of a cautious tone amongst investors during the month. Indeed the wary mood was enough to overcome further snippets of good news, such as the move by the World Bank to raise its global growth forecast for the first time in
3 years, and also ignored the potential US data point distortions arising from the 1st "Polar Vortex" event. With China essentially closed for busi- ness from the end of January until the end of the 1st week in February, the seasonally weak activity period is also unlikely to provide any clear short-term counterweight to the current US "dip". In terms of domestic economic measures, Australia's December CPI print exceeded expecta- tions and scotched any short term belief in further rate cuts, whilst build- ings approvals data rose sharply (+22.2% yoy), driven primarily by a large
pick-up in multi-family dwellings.

Portfolio Characteristics

Returns as at 31st January 2014

Portfolio%^

Index* Value Add%

One Month -3.61

Three Months -2.03

One Year p.a 21.06

Three Year p.a 6.74

Five Years p.a 15.68

Since Inception p.a

Date: March 2005 9.38

-2.92 -0.69

-2.81 0.79

2.42 18.65

0.13 6.61

9.90 5.78

3.83 5.55

Top 10 Stocks

Bank of Queensland TPG Telecom Resmed
Seek
Seven West Media Bluescope Steel REA Group
James Hardie Industries OzForex Group Henderson Group

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

^ Gross of Fees

Ausbil Investment Management 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 Investment Management 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 funds are made via the relevant current Product Disclosure Statement, which can be obtained by contacting our office.

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