Outside the NASDAQ: Where to next for technology stocks? by netwealth

Trend Hunter Series

Outside the NASDAQ: Where to next for technology stocks? Technology is reshaping everything, addressing large-scale challenges and significantly altering the way consumers, industries and business operate. In this presentation, we look outside the Nasdaq with special guests Hyperion, Elston and Betashares, to explore the implications of a disrupted world and highlight some large companies leveraging technology to increase their market share.

31 August 2021 This document is for general use. Modification of content is prohibited unless you have Netwealth’s express prior written consent.

Before we get started

The views expressed in this presentation are those of the author and presenter and do not necessarily reflect those of Netwealth Investments Limited’s. It is a general summary only. It is not advice nor an endorsement of any product or service. Netwealth Investments Limited (Netwealth) (ABN 85 090 569 109, AFS Licence No. 230975) is a provider of investment products and services and information contained in this presentation is of a general nature which does not take into account yours or your client’s individual objectives, financial situation or needs. Any person considering a financial product or service from Netwealth (or its related parties) should obtain the relevant disclosure document at www.netwealth.com.au and consider consulting a financial adviser before making a decision and before deciding whether to acquire, dispose of, or to continue to hold, an investment in any Netwealth (including its related parties) product. Whilst reasonable care has been taken in the preparation of this presentation using sources believed to be reliable and accurate, to the maximum extent permitted by law, Netwealth and its related parties, employees and directors are not responsible for, and will not accept liability in connection with any loss or damage suffered by any person arising from reliance on this information. This presentation is for general use. Modification of content is prohibited unless you have Netwealth’s express prior written consent.

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Showcasing managed accounts

70 retail managed accounts

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300+ private label models

45 investment managers

Almost $10billion FUM

Why managed accounts? More than four in 10 (42.5%) advice firms use managed accounts today. Source: AdviceTech 2021

Professionally managed

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Investment customisation

Investment Transparency

Tax optimisation

Improved business efficiency

Meet today’s Trend Hunters

Andrew Mckie

Executive Director & Portfolio Manager

Elston

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Mark Arnold

Lead Portfolio Manager, CIO & Managing Director

Hyperion

Cameron Gleeson

Senior Investment Specialist

Betashares

Elston Andrew Mckie

Executive Director & Portfolio Manager

Elston

Netwealth – Trend Hunters Where to next for Technology Stocks?

August 2021

Elston Asset Management

Disruptive & Sustaining Innovation:

Product, Service, Marketing, Supply Chains & Production

Incumbents v Disruptors: Strategic Advantages of incumbency

Customer Acquisition Costs

Physical Assets to Leverage

Financial Strength & Brand Equity

Scale & Strategic Moats

Endeavour Group (EDV)

Innovating to meet customer needs Digital

Discovery

Convenience

Experience

Quality

Digital

Loyalty & Personalisation

Online, eCommerce & Fulfillment

Macquarie Group (MQG)

Macquarie Group (MQG) $Ab

$400m

Technology Investment

67.0

52.1

35%

12-month Growth

38.5 32.7

6x Home Loans

System Growth

Amcor (AMC)

Recycled

Recyclable

Designed to be recycled

Amcor (AMC) First recyclable thermoform blister packaging for highly regulated pharmaceuticals

Partnered with Israeli tech company Tipa, films & laminates replace plastic decompose 180 days v 1,000 years

Our view on disruptive innovation Cash ROIC with growth & operating leverage

Beneficiaries of disruptive technologies’ value proposition

Embed, sustain & extend competitive advantage

Risk adjusted cash returns

Thank you

Hyperion Mark Arnold

Lead Portfolio Manager, CIO & Managing Director

Hyperion

HYPERION GROWTH EQUITIES Technology and Innovation, the economic implications of a Disrupted World.

Portfolio Construction Trend Hunters Presentation August 2021

Webinar 2021_08

GENERAL DISCLAIMER

Title

This presentation has been prepared by Hyperion Asset Management Limited (‘Hyperion’) ABN 80 080 135 897 AFSL 238380. The information is not intended for general distribution or publication and must be retained in a confidential manner. Information contained herein consists of confidential proprietary information constituting the sole property of Hyperion and its investment activities; its use is restricted accordingly. All such information should be maintained in a strictly confidential manner. This is for general informational purposes only and is only intended to provide a summary of the subject matter covered. It does not purport to be comprehensive or to give advice. The views expressed are the views of the writer at the time of preparation and presenting and may change over time. This is not an offer document and does not constitute an offer or invitation of investment recommendation to distribute or purchase securities, shares, units or other interests to enter into an investment agreement. No person should rely on the content and/or act on the basis of any material contained in this document.

Hyperion Asset Management

Mark Arnold

Chief Investment Officer & Managing Director Hyperion Asset Management

Hyperion’s Mission, Values & Beliefs Hyperion’s mission is to protect and grow our clients’ capital sustainably over the long term. Our values are: 1. Research driven, not marketing driven 2. Evidence based and merit based 3. Alpha focused 4. Think long term 5. Business owners, not share traders 6. Collective first Hyperion’s total FUM is predominantly from investment performance, not client inflows. The table below shows that alpha generation related FUM is currently approximately $4.3 billion (38% of total FUM), this compares to approximately $2.0 billion (18% of total FUM) that is from net client contributions. FUM Generation

$B (AUD)

Net Flows from Clients

18%

2.0

Market Return

44%

5.1

Alpha

38%

4.3

Total FUM*

100%

11.4

*Total FUM as of 31st July 2021. Due to rounding the summation of FUM and Percentage components presented above may not exactly equal total FUM presented and/or 100%.

New economic framework – low growth, disrupted world Hyperion has identified a new economic framework since 2008… 1.

Low growth, low inflation, low interest rate world.

Competitive, disrupted, internet-enabled business environment.

Technology has moved from edges to core of society and business.

The only sustainable source of revenue growth is from market share gains.

Innovation and strong value propositions drive long run market share gains.

Stock markets will suffer from exposures to old world businesses.

Mean reversion has been replaced with dispersion as it’s become a winner takes all environment in a globalised, digital world.

The Value Anomaly – Updated for COVID-19 Fama French HML Index - Value Underperforms in Low Growth, Low Inflation, Low Confidence Environments 100

GFC Tech Bubble European Debt Crisis 1991 Recession

1980 Recession

1960 Recession 1938 Recession 1 1924

1929

1933

1937

1949 Recession

1942

1946

1950

COVID-19

1954 and 1958 Recessions 1955

1959

1964

1968

1972

1977

1981

1985

1990

1994

1999

2003

2007

2012

2016

2021

WW2 Great Depression -17% 0

13%

12%

10%

2% 2%

Nominal GDP Growth

Value underperforms in low growth, low inflation, low confidence environments Source: Kenneth R. French U.S. Research Returns Data (2021) Portfolios Formed on Book-to-Market http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html#Benchmarks

t 10 Year U.S.Tiion Treasury Bonds le

18%

16%

10-Year Treasury Constant Maturity Rate (%)

14%

12%

10%

0% 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Source: Federal Reserve Bank of St Louis (2021) 10-Year Treasury Constant Maturity Rate in Percent (Not Seasonally Adjusted)

Businesses that Sailed the Tailwinds will Struggle in a World of Headwinds

Ageing population

Natural resource constraints

High debt levels

Rising wealth inequality

Declining monetary tailwinds

Plus technology – greater automation, AI & sharing

Title Software moving from edge to core of society

1985 Microsoft’s Windows operating system was introduced

1998 Google Search function enabled by Alphabet

1990 The World Wide Web is created

Historical logos as at time of product and/or service launch used.

2009 Bitcoin was first mined by Satoshi Nakamoto

2006 Xero started it’s account revolution

2005 The YouTube video sharing platform was created

2007 Apple launched the iPhone

Title Software moving from edge to core of society

2014 Uber launched its food delivery platform, Uber Eats

2011 Uber launched following its 2010 beta launch

2012 Tesla Inc. released the Model S

Historical logos as at time of product and/or service launch used.

2015 Apple launched the Apple Watch

2014 Amazon launched The Echo and Alexa

2020 COVID-19 accelerated the modernization of the world

Title That Are Delivering Alpha To Clients Focus Remains On Long-term Thematics

Shift from traditional media to online/digital

Shift from cash to electronic payments

Shift from traditional retail to E-commerce

Software moving from edge to core (of society and business)

Shift from linear consumption to on-demand content

Structural growth in demand for ultra luxury goods

Ageing population

Technology advancement and innovation

Past performance is not indicative of future performance.

Digital transformation of the workplace (productivity)

Serving the value conscious consumer

Transition to sustainable energy and transport

Transition to the gig economy

The importance of structural growth in a low growth world

Growth in the overall economy

Growth in market share

Total growth

• In a high growth world there are two sources of growth • In a low growth/no growth world there is only one way to grow – gaining market share • In a low growth/no growth world most businesses cannot grow • Only businesses with strong value propositions can take market share and grow revenue

Key broad-based Indices are dominated by “old world” businesses 90%

80%

70%

60%

50%

40%

30%

20%

10%

MSCI World Index

S&P 500 Index - U.S.

S&P/ASX 300

Source: FactSet, Hyperion. Hyperion has assigned companies with no or low expected EPS growth and/or with risk of permanent business model disruption as “old world”.

Software Market in Developed Global Equities 25.0%

20.0%

Information Technology

Communication Services

Australia¹

4.4%

4.2%

Globally²

22.1%

9.1%

15.0%

10.0%

5.0%

0.0%

Communication Services MSCI World Index

Information Technology S&P ASX 300 Index

Source: FactSet. Data as at 30 June 2021. ¹Australian benchmark weights from the S&P/ASX 300 Index. ²Global benchmark weights from the MSCI World Index.

Disruptive companies ofTitle the future – Hyperion stocks •

Future returns will be concentrated in a small number of stocks with the potential to outperform & with the following attributes: •

Structural tailwinds

•

Large addressable markets

•

Sustainable competitive advantages

•

Capital light, proven business models

•

Low debt levels

•

Management with long-term focus Global Growth

Australian Growth

Amazon

Afterpay

Tesla

Dominos

Square

Fisher & Paykel

ServiceNow

WiseTech

PayPal

Xero

Title all the value add historically Narrow set of winners produced • •

Equity markets have always been driven higher by a narrow of large winners. Normal distributions do not explain stock returns. Power Law Distribution versus Normal Distribution 45%

Distribution of Individual Stock Returns

40% 35% 30% 25% 20% 15% 10% 5% 0%

Individual Stock Returns Power Law Distribution

Normal Distribution

Source: Bessembinder, H. 2018. Do stocks outperform Treasury bills?. Journal of Financial Economics, 129(3): 440-457.

Title all the value-add historically Narrow set of winners produced •

The best-performing 4% of U.S. listed companies explain the entire net gain for the U.S. stock market since 1926.

•

Bessembinder (2019) replicated this study across 42 countries over the 1990 to 2018 period and found the returns globally were even narrower than in the U.S. (1% of global companies created that wealth)

Cumulative percent of net wealth creation (Global)

Cumulative percent of wealth creation (U.S.) 100%

100%

75%

50%

25%

200

400

600 Number of firms

800

1000

100

200

300

400 500 Number of firms

600

700

800

Sources: Bessembinder, H. 2018. Do stocks outperform Treasury bills?. Journal of Financial Economics, 129(3): 440-457 and Bessembinder, H., Chen, T., Choi, G., & Wei, K. 2019. Do Global Stocks Outperform US Treasury Bills?. SSRN Electronic Journal.

What investment styles Title will work while many will fail?

Hyperion believes most incumbent investment styles will fail in a new economic framework… 1. Traditional value needs another “economic growth bubble”. 2. Common benchmark aware, active strategies are less effective when large, old-world businesses dominate an index. 3. Tailwinds behind passive investing have ended with interest rates near zero and many benchmark stocks being disrupted. 4. We are facing a long period of low economic growth with high levels of innovation and disruption. Only innovative businesses will still be able to grow their revenues and profits in this environment.

Title Hyperion Net Fund Performance – 31 July 2021 Inception* Total Return

Inception* p.a.

7 Year p.a.

5 Year p.a.

3 Year p.a.

1 Year

Hyperion Global Growth Companies Fund (Managed Fund)^

361.4

23.8

24.7

26.0

27.7

40.4

MSCI World Index1

168.4

14.8

15.1

15.7

15.5

32.4

Excess Performance

193.0

9.0

9.6

10.3

12.1

8.1

$AUD Net Performance (%)

Inception^ Total Return

Inception^ p.a.

15 Year p.a.

10 Year p.a.

7 Year p.a.

5 Year p.a.

3 Year p.a.

1 Year

Hyperion Australian Growth Companies Fund

882.6

12.9

11.3

14.8

13.8

13.6

19.6

32.6

S&P/ASX 300 Accumulation Index2

449.4

9.5

7.1

9.8

8.4

10.1

9.7

29.1

Excess Performance

433.2

3.4

4.2

5.0

5.4

3.4

9.9

3.5

Past performance is not a reliable indicator of future performance. Data as at 31st July 2021. Investors who apply for units directly with the Responsible Entity may pay a different price per unit to an investor who purchases those units on the ASX at the same time, and such differences may have a material impact on the performance of that investment. The above performance reflects the performance of the Fund where units are purchased and redeemed directly with the Responsible Entity only. *Hyperion Global Growth Companies Fund (Managed Fund) inception date: 1st June 2014 the date the composite strategy was first implemented. 1 Benchmark: MSCI World Index DTR (Gross) AUD. ^Hyperion Australian Growth Companies Fund Inception Date: 30th September 2002 . 2 Benchmark: S&P/ASX 300 Accumulation Index. Due to rounding excess performance figures may not equate perfectly to the difference between Hyperion fund and respective index . ^The name of the fund was changed from Hyperion Global Growth Companies Fund Class B to Hyperion Global Growth Companies Fund (Managed Fund) on 5 February 2021 to facilitate quotation of the fund on the ASX.

APPENDIX

Lead Portfolio Manager Biography

MARK ARNOLD – LEAD PORTFOLIO MANAGER, CHIEF INVESTMENT OFFICER & MANAGING DIRECTOR CFA, B.Com, LLB, CA, SF Fin Mark has been a substantial contributor to the investment returns Hyperion has achieved since its inception in 1996. He is an original member of the Hyperion investment team and a founding shareholder. He was the key architect of Hyperion’s proprietary investment process including its portfolio management system that has underpinned the investment returns Hyperion has achieved since its establishment in the 1990s. He was instrumental in establishing the organisational culture, values and beliefs that have underpinned Hyperion’s long-term success. Mark is the Chief Investment Officer and Managing Director of Hyperion. He is the most senior and experienced Portfolio Manager in the investment team and has the most influence over Hyperion’s investment decision making. Mark is Lead Portfolio Manager across all of Hyperion’s equity strategies. He is also the Chair of Hyperion’s Investment Committee. Mark has been professionally analysing listed companies since 1991. He originally worked as a research analyst at Stockbroker Lance Jones Limited and then at Wilsons. Wilsons helped facilitate the establishment of Hyperion. Mark is a qualified chartered accountant. Prior to establishing himself in the investment industry, Mark worked for KPMG. He holds undergraduate qualifications in Commerce and Law. Mark is a CFA Charterholder and is the largest executive shareholder in Hyperion.

More information about Hyperion Asset Management and the funds currently open

www.hyperion.com.au Morningstar Awards 2020 Winner: Australian Domestic Equities – Large Caps Finalist: Australian Domestic Equities – Small Caps Finalist: Fund Manager of the Year

2018

Hyperion Global VSG Composite GIPS Report (AUD) COMPOSITE: HYPERION GLOBAL VSG COMPOSITE (AUD) Year

2014* 2015 2016 2017 2018 2019 2020

Composite Gross Return (%) 12.9 30.7 2.0 28.5 20.4 30.5 54.8

Benchmark Return¹ (%) 14.4 11.5 8.0 13.3 1.4 27.9 5.6

Composite 3yr Standard Deviation2 (%)

14.0 13.1 12.6 16.2

BENCHMARK: MSCI WORLD INDEX NET TR (AUD) Benchmark3yr Standard Deviation2 (%)

10.8 9.7 9.7 12.0

Numberof Portfolios <6 <6 <6 <6 <6 <6 6

Internal Dispersion3 (%)

Composite Assets ($M AUD) 1.6 4.1 13.0 32.1 87.1 271.4 1,628.6

Firm Asset ($M AUD) 5,098.9 5,844.4 5,581.1 5,970.8 5,529.3 7,367.4 9,657.4

* Composite and benchmark performance are for the period 1 June 2014 through to the 31 December 2014. 1– The MSCI World Index Net TR (AUD) is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. The benchmark is constructed and maintained by MSCI. Returns are shown in Australian dollar terms and currency impacts are unhedged. Source: MSCI 2 – The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. The three-year annualized ex-post standard deviation of the composite are calculated using grossof fees returns. This metric has not been provided for 2014 to 2016 due to there being less than 36 months of data available. 3– Internal dispersion is calculated using the asset-weighted standard deviation of the annual gross returns of those portfolios that were included in the composite for the entire year. If the composite contains five or fewer portfolios for the full year, a measure of internal dispersion is not required. Dispersion data is therefore not available.

Global Investment Performance Standards (GIPS®) Disclosure The Hyperion Global VSG Composite includes all discretionary portfolios that invest in securities listed in Global Equity Markets. The investment strategy is to invest in growth-oriented companies which pass Hyperion’s rigorous investment process. Companies that meet the investment criteria have high quality business franchises, with above average growth potential and have low levels of gearing with predictable medium to long-term earnings streams. The number of securities in the strategy is expected to be between 15 and 30. The Hyperion Global VSG Composite was created on 20 July 2016 and the inception date is 1 June 2014. Hyperion Asset Management Limited ("Hyperion") claims compliance with the Global investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Hyperion has been independently verified for the periods 1 January 2010 to 31 December 2020. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firmwide basis. The Hyperion Global VSG Composite has had a performance examination for the periods 1 June 2014 to 31 December 2020. The verification and performance examination reports are available upon request. Hyperion Asset Management Limited AFSL 238380, is an investment advisor registered with the Australian Securities and Investments Commission and is also registered with the United States Securities and Exchange Commission (SEC). The firm definition excludes high net worth individual mandates and does not claim compliance with the GIPS® standards. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. The firm’s list of composite descriptions is available upon request. The firm’s list of broad distribution pooled funds is available upon request. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. The Australian dollars (AUD) is the currency used to express performance. Returns are presented gross of management fees and include the reinvestment of all income. Both composite and benchmark returns are net of withholding taxes. Actual returns will be reduced by management fees, operating expenses in the case of pooled investments and if applicable performance fees. The standard investment management fee is 0.70% p.a. The investment management fee is negotiable and will vary from client to client. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Past performance is not indicative of future results.

MORE INFORMATION

Client Services 1 300 497 374 clientservices@hyperion.com.au www.hyperion.com.au

Important Disclaimers

This communication is not a securities recommendation. Any person considering action on the basis of this communication must seek individual advice relevant to their particular circumstances and investment objectives. Past performance is no guide to future performance. This communication was prepared for financial advisors and wholesale investor only. Retail investors should not rely on any information in this document without first seeking advice from their financial adviser. This presentation has been prepared by Hyperion Asset Management Limited (‘Hyperion’), ABN 80 080 135 897, AFSL 238380. This presentation is for general information purposes only. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice before doing so. The information is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. Interests in the Hyperion Australian Growth Companies Fund (ARSN 089 548 443), Hyperion Global Growth Companies Fund (Managed Fund) (ARSN 611 084 229) and Hyperion Small Growth Companies fund (ARSN 089 548 943) (‘Funds’) are issued by Pinnacle Fund Services Limited (Pinnacle) AFSL 238371 ABN 29 082 494 362 as Responsible Entity of the Funds. Pinnacle is not licensed to provide financial product advice. Please consult your financial adviser before making a decision. Please read the recent Product Disclosure Statement available at https://www.hyperion.com.au/#our-funds for each Fund in its entirety before making an investment decision. Hyperion and Pinnacle believes the information contained in this presentation is reliable, however no warranty is given as to its accuracy and persons relying on this information do so at their own risk. Any opinions or forecasts reflect the judgment and assumptions of Hyperion and its representatives on the basis of information at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future. Returns from investments may fluctuate and that past performance is not a reliable indicator of future performance. To the extent permitted by law, Hyperion and Pinnacle disclaim all liability to any person relying on the information in respect of any loss or damage (including consequential loss or damage) however caused, which may be suffered or arise directly or indirectly in respect of such information contained in this presentation The information contained in this presentation is not to be disclosed in whole or part or used by any other party without the prior written consent of Hyperion. Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this presentation is prohibited without obtaining prior written permission from Hyperion. © 2021 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Refer to Morningstar Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement (Australian products) or Investment Statement (New Zealand products) before making any decision to invest. Morningstar publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance is for illustrative purposes only and is not indicative of future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO") This may contain the trade names or trademarks of various third parties, and if so, any such use is solely for illustrative purposes only. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with, endorsement by, or association of any kind between them and Hyperion. The Product Disclosure Statement (‘PDS’) of the Fund(s) will be made available at https://www.hyperion.com.au/. Any potential investor should consider the relevant PDS before deciding whether to acquire, or continue to hold units in, a fund. The information in this communication has been prepared without taking account of any person’s objectives, financial situation or needs and is not intended as a recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. A financial adviser should be consulted before making any investment decision. This communication may contain the trade names or trademarks of various third parties, and if so, any such use is solely for illustrative purposes only. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with, endorsement by, or association of any kind between them and Hyperion. Pinnacle Fund Services Limited and Hyperion believe the information contained in this communication is reliable, no warranty is given as to its accuracy, reliability or completeness and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Hyperion and Pinnacle Fund Services Limited disclaims all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information. This disclaimer extends to any entity that may distribute this communication. Unless otherwise specified, all amounts are in AUD. Due to rounding, numbers presented throughout this report may not sum precisely to the total indicated and performance percentages may not precisely reflect the absolute returns. All data is as at 30th April 2021 unless otherwise stated. Morningstar Awards 2016 (c). Morningstar, Inc. All Rights Reserved. Awarded to Hyperion Asset Management for Fund Manager of the Year, Domestic Equities – Large Caps Category Winner and Domestic Equities – Small Caps Category Winner, Australia. Morningstar Awards 2020©. Morningstar, Inc. All Rights Reserved. Awarded to Hyperion Australian Growth Companies Fund for Winner, Domestic Equities Large Cap, Australia. Morningstar Awards 2020©. Morningstar, Inc. All Rights Reserved. Hyperion Small Growth Companies Fund nominated for Finalist, Domestic Equities Small Cap, Australia. Morningstar Awards 2020©. Morningstar, Inc. All Rights Reserved. Hyperion Asset Management nominated for Finalist, Fund Manager of the Year, Australia. Due to rounding, numbers presented throughout this report may not sum precisely to the total indicated and performance percentages may not precisely reflect the absolute returns.

Betashares Cameron Gleeson

Senior Investment Specialist

Betashares

This document is for general use. Modification of content is prohibited unless you have Netwealth’s express prior written consent.

Using ETFs to invest in Global Tech Leaders Cameron Gleeson

Senior Investment Specialist August 2021

Important information This presentation is for financial advisers only and must not be distributed or made available to retail clients. This presentation has been prepared by BetaShares Capital Limited ABN 78 139 566 868, AFSL 341181 (BetaShares). The information is general in nature only and does not take into account any person’s financial objectives, situation or needs. Investors should consider its appropriateness taking into account such factors and seek financial advice. It is not a recommendation to make any investment decision or adopt any investment strategy. Investments in BetaShares Funds are subject to investment risk and investors may not get back the full amount originally invested. Future outcomes are inherently uncertain. Actual outcomes may differ materially from those contemplated in any opinions, estimates or other forward-looking statements given in this presentation. Past performance is not indicative of future performance. Any BetaShares Fund that seeks to track the performance of a particular financial index is not sponsored, endorsed, issued, sold or promoted by the index provider. No index provider makes any representations in relation to the BetaShares Funds or bears any liability in relation to the BetaShares Funds. Any person wishing to invest in a BetaShares Fund should obtain a copy of the relevant Product Disclosure Statement from www.betashares.com.au and consider whether the product is appropriate. Confidential – may not be distributed without the consent of BetaShares Capital

Nasdaq as a core holding for Australian investors

NASDAQ 100 – Second most popular ETF exposure on the ASX today

Number of HINs (000’s)

Top 6 ASX traded ETFs – Number of Individual HINs

BetaShares NASDAQ 100 ETF (ASX: NDQ):

Source: ASX, CHESS data, as at May 2021

Confidential – may not be distributed without the consent of BetaShares Capital

Awareness has certainly helped drive investor demand People tend to lean toward investing in companies and brands they know and trust. It is human nature to be biased toward what you know.

*No assurance is given that these companies will remain in NDQ’s portfolio or will be profitable investments. Confidential – may not be distributed without the consent of BetaShares Capital.

….but so has economic relevance Nasdaq representation in S&P500 Index top ten stocks NDQ’s launch - May 2015

2/10 Source: Bloomberg, BetaShares, 23 August 2021. Confidential – may not be distributed without the consent of BetaShares Capital.

Today - August 2021

8/10

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Diversification benefits for Australian Investors S&P/ASX 200 Index

Sector Allocations (as at 31 July 2021)

Nasdaq 100 Index

Sector Allocations (as at 31 July 2021)

Information Technology (3.8%) Communication Services (4.1%)

Consumer Discretionary (8.1%)

Consumer Discretionary (16.7%)

Financials (29.3%)

Materials (21.5%)

Correlation to S&P/ASX 200 Index

Information Technology (49.3%)

Communication Services (19.7%)

Nasdaq 100 Index

MSCI All Countries World Index

0.38

0.60

Source: S&P Dow Jones Indices, Bloomberg, BetaShares, July 2021. Correlation to S&P/ASX 200 Index is based on monthly returns for AUD versions of the Nasdaq 100 Index and MSCI ACWI Index for the period July 2011 – July 2021. You cannot invest directly in an index. Past performance is not an indicator of future performance of an Index or ETF. Confidential – may not be distributed without the consent of BetaShares Capital

Thematic ETFs for Satellite exposures to Tech and Megatrends

Using Thematic ETFs to target disruptive tech trends Diversification and Transparency 

Target thematic rather than introducing stock specific risk



Avoid the need to pick single stock winners in an uncertain, evolving competitive landscape



Thematic investing can enhance client engagement and promote a longer-term investment perspective

Conviction: Observable, enduring structural change

Investable:

Index Construction:

Availability of a broad universe of highly liquid stocks providing targeted exposure to the theme

Consideration of stock universe specifics, industry structure and trends

Confidential – may not be distributed without the consent of BetaShares Capital

Satellite Approach

BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Rise of the Cobots! Current utilisation of Industrial Robots:

Global average 113 robots per 10,000 manufacturing workers, one third in auto manufacturing 1.

External Drivers:

Greater focus on: - quality, - safety, and - product customisation.

Enabling Tech:

Vision, sensors, A.I., mobility, connectivity and user interface.

COLLABORATIVE ROBOTS (COBOTS) Examples*

Advantages:

Increased scope of work Efficiency of combined workforce Lower implementation cost Factory floor space design

*No assurance is given that these companies will remain in RBTZ’s portfolio or will be profitable investments. 1. International Federation of Robotics, data as of September 2020. Confidential – may not be distributed without the consent of BetaShares Capital

BetaShares Global Cybersecurity ETF (ASX: HACK)

Cybersecurity: It’s an arms race

Global cybersecurity expenditure projected to grow by 12-15% per annum from 2020 to 2025 - CyberSecurity Ventures

Citi Research Global Technology CIO Survey – June 2021 Top 5 CIO Priorities

1 2 3 4 5

IT Security Digital transformation projects Adoption of cloud solution Data analytics/Business Intelligence Cloud communications

At the government level – the Greatest YTD increase in spending FY 2020 U.S. government

1 2 3 4 5

IT Security Budget is $17.4bn. A 24% Digitalincrease initiatives on 2016. Cloud Software Hardware

Source: Citi Research, June 2021 CIO Survey. Top 5 ranked categories shown only. Confidential – may not be distributed without the consent of BetaShares Capital

BetaShares Climate Change Innovation ETF (ASX: ERTH)

Technological disruption and decarbonisation iClima Earth Decarbonisation Themes 

Green energy

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Green transportation

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Enabling solutions

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Water and waste improvements

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Sustainable products

Refined battery materials

Advanced Recycling Technology

Extraction of raw materials

Strategic Supply Chain Partnerships Blockchain Traceability

Spent EV Batteries

No assurance that Umicore will remain in ERTH’s portfolio or will be profitable investments. LG Chem, BMW, Glencore are not currently part of ERTH’s portfolio Confidential – may not be distributed without the consent of BetaShares Capital

CYBERSECURITY

HACK

GLOBAL TECH

NDQ/HNDQ GLOBAL ROBOTICS & A.I.

RBTZ

ASIAN TECH TIGERS

ASIA

AUSTRALIAN TECH

ATEC

CLOUD COMPUTING

CLDD

Things to consider  Investment risk: The value of an investor’s portfolio can go down as well as up. Risks may include: • Market risk • Index methodology risk • Country risk • Currency risk  No guarantees: Future outcomes are uncertain – desired return outcome may not be achieved.  General information only: Today’s discussion does not take into account any person’s individual circumstances and is not personal financial advice. It is not a recommendation to invest or adopt any investment strategy.  Professional advice: Investors should seek professional financial advice before investing.  Research: See relevant PDS for more information about risks and other features of each fund.

Confidential – may not be distributed without the consent of BetaShares Capital

Questions and answers

Thank you Trend Hunters Series – Coming up • Wed 1st Sep at 1pm - International investing: Your guide to emerging markets and the new world economy • Thu 2nd Sep at 1pm - How to build sustainable investment portfolios • Fri 3rd Aug at 1pm - How green innovation is changing the world for the better, and some investment options

Portfolio Construction Podcast In this podcast series, our investment research team pick the brains of key wealth management professionals to uncover unique insights on the investment areas they are most passionate about.