30 th September 2019 www.globalvaluefund.com.au Agenda 1. - PowerPoint PPT Presentation

30 th September 2019 www.globalvaluefund.com.au

Agenda 1. Introduction – The Global Value Fund 2. What are markets pricing in? What are the second page stories? 3. The ‘Challenge’ 4. Case studies 5. Appendices 6. Disclaimer 2

1. Introduction - The Global Value Fund (ASX: GVF) 3

The Global Value Fund A focus on listed securities which are undervalued relative to a Our core discount defined and observable asset value capture strategy We operate on a • A discount to “break - up” value global stage; targets returns investing around comparable with global Closed-end funds (CEFs) will form the world and the core of our investment universe equity markets while across asset classes • Internationally, CEFs are a aiming for a mainstream asset class, with an investable universe of >US$500Bn significantly lower risk profile A variety of passive and active techniques are used to unlock value for our investors 4

December quarter market sell-off Draw-down of GVF and selected market indices to Dec market low 6 S&P Growth (US$) 4 ‘FANG’ (US$) 5 GVF (A$) 1 ASX (A$) 2 MSCI AC (A$) 3 0% -2% -4% -6% 1 GVF investment portfolio. -8% 2 S&P/ASX 200 Index. 3 MSCI All Country World Index in -10% A$ terms. Total return 4 S&P 500 Growth Index. -12% 5 NYSE ‘FANG’ Index. (FANG is the acronym for four -14% high-performing technology stocks in the market – Facebook, -16% Amazon, Netflix and Google (now Alphabet, Inc.)) -18% 6 All returns are from 30 th September 2018 through to 24 th of December 2018. -20% Data source: Bloomberg LP and -22% Staude Capital All returns are total returns, including -24% price and dividends. -26% 5 Please note that past performance is not indicative of future returns

The Global Value Fund at a glance ASX code: GVF Objective 10.5% IPO Price: $1.00 To generate equity market Share Price: $1.015 1 like returns when measured over time, but to do so with No. Shares: 148M significantly less risk than a Annualised adjusted NTA Mkt Cap: $150M typical global share market return since IPO 2 portfolio. Listed: July 2014 Directors 35.2 8.2% Jonathan Trollip (Chair) Chris Cuffe Total cents per share of Geoff Wilson Indicated FY2020 grossed grossed up dividends up yield 3 Miles Staude declared since IPO It is the Board’s intention to pay regular dividends so long as the Company is in a position to do so Please note that past performance is not indicative of future returns Unless otherwise stated, data sourced from Bloomberg LP and Company reports. 1 Share price of GVF shares as at 30 th September 2019. 2 From IPO to 30 th September 2019. NTA adjusted for tax paid, dividends, dilution from options exercised and other minor balance sheet items. Data source: Staude Capital 6 3 Based on September 2019 month end price of $1.015/share and Company guidance for FY2020 dividends of 5.8 cents per share, 100% franked.

GVF dividend & option price history Declared grossed up dividends and option VWAP 1 since IPO 2 4.29 4.29 4.14 4.10 4.10 3.88 4.0 Current Board 3.83 3.83 3.83 guidance 3 is for 3.5 FY2020 fully franked 3.0 dividends of 5.8 2.86 cents per share Cents per Share 2.5 1 Data source: The ASX The Volume Weighted Average 2.0 Price of the GVF Options (GVFO) traded from IPO to Expiry on the 10 March 2016. 1.5 2 Data source: Annual company reports. 1.0 3 FY2020 dividend guidance is not a formal declaration of dividends. The size and payment of any dividends 0.5 for FY2020 will be subject to the Company having sufficient profit reserves and the dividend payment 0.0 being within prudent business Nov 15 Mar 16 May 16 Nov 16 May 17 Nov 17 May 18 Nov 18 May 19 Nov 19 practices. Ordinary Dividend Franking Credit Option VWAP at Expiry 7 Please note that past performance is not indicative of future returns

2. What are markets pricing in? What are the second page stories? 8

Markets pricing in a growth slow-down Global PMIs 1 . Global GDP Growth 2 Purchasing Managers' Indices (PMI) 60 58 Economic outlook 56 has deteriorated in most developed 54 countries 52 1 Data source: Bloomberg LP and Staude Capital as of 30 th 50 September 2019. Europe Germany UK US 48 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 3.8% Global GDP Growth Global GDP growth has decelerated 3.6% markedly over past 3.4% 12 months 2 Data source: The International 3.2% Monetary Fund (IMF) 3.0% 2012 2013 2014 2015 2016 2017 2018 2019f 9 Please note that past performance is not indicative of future returns

Markets have rallied on bad economic news Bad economic news as ‘good’ market news only lasts so long 2300 150 Markets have 2200 145 rallied in the face 2100 140 of deteriorating 2000 growth, and falling 135 1900 earnings estimates 130 MSCI AC World Index (LHS) 1800 Data source: MSCI All Country World FY19 Earnings estimates (RHS) Index in US$ terms. 1700 125 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 3.0% 10yr - 2yr US Government Bond yield 2.5% Falling interest rates 2.0% push asset prices 1.5% higher, but paint a 1.0% bleak long-term picture 0.5% 0.0% Data source: Bloomberg LP and Staude Capital as of 30 th September Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 2019. -0.5% 10 Please note that past performance is not indicative of future returns

Monetary policy has a saturation point Central bank reversal rates 1 . Aggregate negative yielding debt 2 2.0% Current level Median reversal rate estimate 1.5% Central banks have 1.0% Base rate limited scope to cut 0.5% rates if faced with a 0.0% recession… -0.5% 1 An economy’s reversal rate is the -1.0% level at which future interest rate Fed BOJ ECB BOE cuts become contractionary, instead of providing additional stimulus. Data source: Bloomberg 18 Global Aggregate Negative Yielding Debt Market Value USD LP and Staude Capital as of 30 th Market Value USD trillions 16 September 2019. 14 …while their current 12 10 policy settings are 8 creating substantial 6 market distortions 4 2 2 Bloomberg LP and Staude Capital as of 30 th September 2019. 0 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Sep 15 Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 11 Please note that past performance is not indicative of future returns

3. The ‘Challenge’ (and a possible solution…) 12

Australia… welcome to the club Australian interest rates have moved towards the zero bound 7% 6% ‘We are prepared to do unconventional 5% things if circumstances 4% warranted it. I hope we can avoid that’ 3% RBA Governor Philip Lowe. 2% Data source: Bloomberg LP 30 th September 2019. 1% 0% Sep 99 Sep 00 Sep 01 Sep 02 Sep 03 Sep 04 Sep 05 Sep 06 Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 RBA base rate Average of US Fed, BoE, BOJ and ECB base rates 13 Please note that past performance is not indicative of future returns

How did we get here? The RBA is losing the fight against inflation Labour force underutilisation (seasonally adjusted) 18% 16% 14% 12% 10% 8% While 6% unemployment 4% remains low, 2% Unemployed % Underemployed % Underutilised % 0% underemployment Sep 78 Sep 83 Sep 88 Sep 93 Sep 98 Sep 03 Sep 08 Sep 13 Sep 18 is a growing 3.4% problem Data source: Australian Bureau of 2.9% RBA Inflation Target Lower band Statistics. RBA Inflation Target Upper band 2.4% Australian CPI - one year rolling average 1.9% 1.4% 0.9% Sep 10 Sep 11 Sep 12 Sep 13 Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Please note that past performance is not indicative of future returns 14

The Challenge Expected returns have fallen, investment risks have risen Returns Risk 15

A possible solution? GVF - global share markets upside vs. downside participation 1 Since IPO, GVF GVF upside participation GVF downside participation 70% has participated 60% in 63% 1 of the 50% upside in global 40% share markets, 30% but only 40% 1 of 20% 10% market declines 0% -10% 1 Global share markets refers to the MSCI All Country World Index in -20% A$ terms. Data source: -30% Bloomberg LP and Staude Capital as of 30 th September 2019. -40% 2 Data source: Staude Capital. -50% Annualised return from IPO to 30 th September 2019. -60% 3 Data source: Staude Capital. Yield -70% based on 5.8c dividend and 2.4c of franking and a share price of 1.015 as of 30 th September 2019. Long term returns 2 : 10.5% Sharpe ratio 4 : 1.4 4 Data source: Bloomberg LP and Staude Capital. Long term returns less Long term US LIBOR returns divided by Realised volatility. Indicated forecast yield 3 : 8.2% Realised volatility 5 : 6.4% 5 Data source: Staude Capital. Annualised volatility of monthly returns from IPO to 30 th September 2019. 16 Please note that past performance is not indicative of future returns