MLC Investment Management Detailed performance Appendix: Wholesale

1. MLC Investment ManagementDetailed performanceAppendix: Wholesale 31 December 2010

2. General advice warning and disclaimer This information has been provided by MLC Limited (ABN 90 000 000 402) a member of the National Group, 105–153 Miller Street, North Sydney 2060. Any opinions expressed in this communication constitute our judgement at the time of issue and are subject to change. We believe that the information contained in this communication is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made as at the time of compilation. However, no warranty is made as to their accuracy or reliability (which may change without notice) or other information contained in this communication. Past performance is not indicative of future performance. The value of an investment may rise or fall with the changes in the market. Please note that all performance reported is before management fees and taxes, unless otherwise stated. The specialist investment managers are current as at the date this communication was prepared. Investment managers are regularly reviewed and may be appointed or removed at any time without prior notice to you. This communication contains general information and may constitute general advice. Any advice in this communication has been prepared without taking account of individual objectives, financial situation or needs. It should not be relied upon as a substitute for financial or other specialist advice. Before making any decisions on the basis of this communication, you should consider the appropriateness of its content having regard to your particular investment objectives, financial situation or individual needs. You should obtain a Product Disclosure Statement or other disclosure document relating to any financial product issued by MLC Investments Limited (ABN 30 002 641 661 [include AFSL for PDSs/FSGs/Annual Reports]) and consider it before making any decision about whether to acquire or continue to hold the product. A copy of the Product Disclosure Statement or other disclosure document is available upon request by phoning the MLC call centre on 132 652 or on our website at mlc.com.au.

3. Agenda • Economic and Market Environment • MLC Horizon Performance • Asset Class Performance Slide 3

4. 1. Market & Economic Environment • Global Prospects • Cautiously optimistic about prospects for global growth, but it remains a highly uncertain environment • Modest rates of developed world growth (de-leveraging process) but no new recession (The macro news is not all bad) • Emerging markets drive global growth (many EMs had a good GFC!) • A more conservative investment environment (transparency, liquidity) • Modest investment returns, heightened volatility

5. G4 growth: worst recession in decades followed by anaemic recovery Source: Datastream Note: Data provided to 31 December 2010

6. Business conditions and consumer confidence American confidence still very subdued Source: Datastream, MLC Investment Management Note: Data provided to 31 December 2010

7. It’s the labour market stupid Note: Data provided to 31 December 2010 Source: Datastream.

8. V-shaped cycle in emerging markets Source: Datastream, MLC Investment Management Note: Data provided to 31 December 2010

9. Chinese and Indian growth remains staggering Source: Datastream, MLC Investment Management Note: Data provided to 31 December 2010

10. Australian Prospects • Massive terms of trade boost, huge pipeline of construction work, BUT.. • Monetary and fiscal policy are being tightened • Strong $A is a two-edged sword • Consumers are confident, but are spending very cautiously • Global environment is still fragile • Two-speed economy returns – WA, Queensland set to outperform? • Queensland floods will detract from near-term growth, but rebuilding will add significantly to growth over the next year and beyond.

11. Consumers confident but cautious? Note: Data provided to 31 December 2010

12. MLC Horizon 4 Balanced Portfolio Source: MLC Investment Management Highlights: • Returns for the December quarter built on the previous quarters solid results, with leading indicators in the US suggesting growth is picking up in the worlds largest economy. • The strong second half of the year (+8.7% before fees and taxes) more than offset the weak first half, with MLC Horizon 4 posting lacklustre, but nonetheless positive 1 year returns. • As at December, MLC Horizon 4 is above median over all time periods. Additionally, over 1 year the fund is firmly positioned in the 1st quartile, highlighting the significant rebound in MLC’s returns post the global financial crisis. • Over the quarter the standout strategies were Global REITS (+7.0%) and Hedged Global Shares (+8.4%), both benefited from currency hedging, with the Australian Dollar rising 5.8% over the period. Both these strategies were also amongst the top performers for the year, recording +23.9% and +14.3% respectively. • Our strategic allocation to Australian inflation linked bonds was the strongest performing debt sector in Australia. With inflation rates rising, performance was strong, recording 8.1% (before fees and taxes) for the year. Slide 12

13. 2. MLC Horizon Performance MLC Horizon 4 Balanced Portfolio– total returns Source: MLC Investment Management

14. MLC Horizon 4 strategy – asset class contribution Source: MLC Investment Management

15. MLC Horizon 4 Balanced Portfolio – peer relative performance Q2 Q2 Q1 Q2 Q2 *Based on Mercer Wholesale – Balanced Growth universe historical data to 31 December 2010.

16. MLC Horizon 5 Growth Portfolio Source: MLC Investment Management Highlights: • Returns for the December quarter built on the previous quarters solid results, with leading indicators in the US suggesting growth is picking up in the worlds largest economy. • The strong second half of the year (+9.7% before fees and taxes) more than offset the weak first half with MLC Horizon 5 posting lacklustre, but nonetheless positive 1 year returns. • As at December, MLC Horizon 5 is above median over 1and 3 years. Over longer time periods the portfolio is slightly below median, caused by the relative overweight to Global Equity (which has underperformed Australian markets over the last decade – a situation MLC does not expected to re-occur¹) • Over the quarter the standout strategies were Global REITS (+7.0%) and Hedged Global Shares (+8.4%), both benefited from currency hedging, with the Australian Dollar rising 5.8% over the period. Both these strategies were also amongst the top performers for the year, recording +23.9% and +14.3% respectively. • Our strategic allocation to Australian inflation linked bonds was the strongest performing debt sector in Australia. With inflation rates rising, performance was strong, recording 8.1% (before fees and taxes) for the year. ¹ Refer to MLC Strategic Overlay for asset class risk and return expectations Slide 16

17. MLC Horizon 5 Growth Portfolio – total returns Source: MLC Investment Management

18. MLC Horizon 5 strategy– asset class contribution Source: MLC Investment Management

19. MLC Horizon 5 Growth Portfolio – peer relative performance Q3 Q2 Q2 Q3 Q2 *Based on Mercer Wholesale – High Growth universe historical data to 31 December 2010.

20. MLC Horizon 6 Share Portfolio Source: MLC Investment Management Highlights: • Returns for the December quarter built on the previous quarters solid results, with leading indicators in the US suggesting growth is picking up in the worlds largest economy. • The strong second half of the year (+11.2% before fees and taxes) more than offset the weak first half with MLC Horizon 6 posting lacklustre, but nonetheless positive 1 year returns. • As at December, MLC Horizon 6 is predominantly above median. Additionally over 1 and 7 years the fund is firmly positioned in the 1st quartile. • Over the quarter the standout strategy was Hedged Global Shares (+8.4%) which benefited from currency hedging, with the Australian Dollar rising 5.8% over the period. This strategy was also amongst the top performers for the year, recording +14.3%. • Other noteworthy performance came from LTAR which finished the year strongly recording +4.2%, returns since inception remain well ahead of the neutral strategy, with the portfolio delivering annualised outperformance of 4.1%. Slide 20

21. MLC Horizon 6 Share Portfolio– total returns Source: MLC Investment Management

22. MLC Horizon 6 strategy– asset class contribution Source: MLC Investment Management

23. MLC Horizon 6 Share Portfolio – peer relative performance Q1 Q2 Q1 Q3 Q2 *Based on Mercer Wholesale – All Growth universe historical data to 31 December 2010.

24. 3. Asset Class Funds Performance MLC Australian Share Fund - performance Source: MLC Investment Management Highlights: • The market’s return was disappointingly low for the year (+1.9%) and relatively poor compared to some major global markets (e.g. US +12.8%, UK +9%, Germany +16.1% in local currency terms). Note this follows a +37% return in 2009. • The market return has remained narrowly based with resources & mining related companies, particularly small-medium sized miners, the best performers (e.g. OZ Minerals +45%, Iluka +155%, Alumina +35%). The performance gap between the ASX300 Resources and Industrials indices was wide (15%) with most industrial sectors losing ground. • For the year, two managers outperformed (Dimensional & JCP Investment Partners) with JCP by far the best (5.3% above index) due in part to their ownership of selected medium sized mining companies. • Market events this year highlight the worth of a multi-manager approach – some managers have captured the return upside of resources while others have focused on the industrial stocks who have been left behind (“buying straw hats in winter”). • Looking ahead, most of MLC’s managers are predicting a better year for the market, depending on whether consensus 2012 earnings growth forecasts (currently +14%) prove to be too optimistic and are revised down. Valuation of industrials look especially attractive.

25. MLC Australian Share Fund – total returns Source: MLC Investment Management

26. Australian shares strategy – excess returns Source: MLC Investment Management

27. Contributors for the year: JCP Investment Partners and Dimensional outperformed. JCP’s strongest performance contributors versus index were overweight InToll (takeover target), Independence Group, Newcrest Mining, CSL and Whitehaven Coal. Dimensional’s returns benefited from the performance superiority of small companies as well as Amcor, Incitec-Pivot and Alumina Detractors for the year: Maple-Brown Abbott, Balanced Equity Management, Concord Capital, Wallara, Northward Capital and Northcape all underperformed. Australian shares strategy – manager contribution Source: MLC Investment Management

28. Highlights: Global share investors had to endure another indifferent period with absolute returns being slightly negative for the year driven by the worries over the global economy and a rising Australian dollar. The strategy again benefited from exposure to Emerging Markets, not only through locally listed companies but also Multi-nationals sourcing revenue from these regions. Emerging Markets outperformed developed markets by over 5%. The strategy remains defensively positioned, in view of manager consensus about global uncertainty. With the risk rally seemingly over, better capitalised companies with monopoly businesses and products should do better moving forward. The portfolio is suitably positioned to take advantage of this. The portfolio’s defensive characteristics were a drag on performance, especially during the last quarter when global share markets, led by the US, rallied substantially. With corporate cash levels near record highs 2011 is likely to see high levels of mergers and acquisitions as companies look to deploy their capital. MLC Global Share Fund - performance Source: MLC Investment Management

29. Highlights: Absolute returns were positive for the quarter and year driven by the rising Australian dollar ($A). The $A had another strong year, it was up +8.8% when measured against a basket of currencies. Global share investors had to endure another indifferent period with absolute returns being slightly negative for the year driven by the worries over the global economy. The strategy again benefited from exposure to Emerging Markets, not only through locally listed companies, but also Multi-nationals sourcing revenue from these regions. Emerging Markets outperformed developed markets by over 5%. The strategy remains defensively positioned, in view of manager consensus about global uncertainty. With the risk rally seemingly over, better capitalised companies with monopoly businesses and products should do better moving forward. The portfolio is suitably positioned to take advantage of this. The portfolio’s defensive characteristics were a drag on performance, especially during the last quarter when global share markets, led by the US, rallied substantially. With corporate cash levels near record highs 2011 is likely to see high levels of mergers and acquisitions as companies look to deploy their capital. MLC Hedged Global Share Fund - performance Source: MLC Investment Management

30. MLC Global Share Fund – total returns Source: MLC Investment Management

31. Global shares strategy – excess returns Source: MLC Investment Management

32. Contributors for the year: Sands Capital’s continued excellent performance was on the back of good company selection and being underweight Western Europe and Developed Asia. The top contributors included Las Vegas Sands, Salesforce.com and Naspers Ltd. Harding Loevner’s annual performance was aided by stock performance in Health Care, Financial and Consumer Discretionary. Tweedy, Browne's returns were driven in large part by strong returns in oil and gas holdings, several of the banks and insurance companies, and machinery stocks. From a regional perspective, the U.S. holdings did well. Detractors for the year: Capital International detracted over the year due to security selection across a range of sectors, with Roche (Health care) and Eletricite De France (Utilities) detracting the most. Mondrian's security selection in the UK and Europe was a drag for the year. BP and UniCredit were amongst the largest detractors within the strategy. Global shares strategy – manager contribution Source: MLC Investment Management

33. Highlights: Sector returns remain subdued even though REITs’ financials are back on solid ground and business as usual activity (property transactions, development activity, mergers & acquistions) is more evident. The AREIT sector return lagged that of most global REIT markets. Three and five year returns remain in negative territory. Quarter and 1 year Fund returns generally in line with index and significantly better for 3 & 5 year periods. Good stock selection by Resolution Capital (overweight Challenger Diversified, underweighting Mirvac, Commonwealth Property Office Fund and nil exposure to Centro Properties and Valad Property Group) was beneficial in addition to the ownership of non-Australian REITs Link REIT (Hong Kong), Hong Kong Land (Singapore listed), Hufvudstaden (Denmark) and Aeon Mall (Japan). MLC Property Securities Fund - performance Source: MLC Investment Management

34. MLC Property Securities Fund – total returns Source: MLC Investment Management

35. Australian property strategy – excess returns Source: MLC Investment Management

36. Highlights: The GREIT sector continues to perform strongly with most markets performing well – Japan +29.5%, US +28.4%, Europe +17.2%, Singapore +12.5%, UK +6.6% Sector fundamentals are attractive: GREIT financials are generally in good shape; debt and equity fund sources have improved; and the property supply/demand equation is favourable. December quarter returns were in line with index in the quarter with Morgan Stanley the standout performer of the three appointed managers. For the year the after fees and tax return lagged the benchmark. Resolution and Morgan Stanley outperformed their respective benchmarks while LaSalle’s portfolio, which tends to be more diversified, underperformed slightly. The Fund’s largest stock holdings versus index continues to be dominated by Asian REITs and Real Estate Operating Companies, including Mitsubishi Estate (Japanese property developer and property manager), Hong Kong Land Holdings (Singapore listed office stock), Sun Hung Kai Properties (Hong Kong developer), Mitsui Fudosan (Japan real estate developer and manager) and Kerry Properties (Hong Kong property developer). MLC Global Property Fund - performance Source: MLC Investment Management

37. Global property strategy – excess returns Source: MLC Investment Management

38. Global property strategy – manager contribution Source: MLC Investment Management

39. Highlights: LTAR returns over the past year have been positive in absolute terms, and are 2.5% ahead of the neutral strategy. Given the defensive positioning of the Fund, excess returns were negative over the September (-1.1%) and December (-0.40%) quarters, on the back of equity market strength. Returns since inception remain ahead of the neutral strategy, with the portfolio delivering annualised outperformance of 2.6%. Hedged global equities, Ruffer’s Multi Asset Strategy and hedged global listed property had the strongest returns over the quarter. Bridgewater Pure Alpha not only performed well during the quarter, but was also up 34% for the year. Unhedged global equities continued to lag due to the strength of the Australian dollar. MLC LTAR Portfolio - performance Source: MLC Investment Management

40. Highlights: Increased liquidity and low expectations of economic growth prospects led to yields in global government and non-government bonds falling over the year. In the last quarter yields rose due to expectations of an improvement in economic growth. Australian bonds did not fare as well as global markets, with yields rising over the quarter and year. With yields at historical lows in the US and Japan, the risk of them rising is much higher than falling. That’s why we continue to maintain our Strategic Overlay position which shortened the duration (interest rate risk) of the Fund’s global government bond exposure early in 2010. In October we reduced exposure to non-investment grade bonds (global high yield, banks loans and mortgages) as there is less upside potential from high yield bonds after the extremely strong returns in 2009 and 2010. MLC Diversified Debt Fund – performance Source: MLC Investment Management

41. Diversified Debt strategy* – excess returns Source: MLC Investment Management * This strategy is for the MLC Diversified Debt Fund only

42. Diversified Debt strategy* – sector contribution Contributors: • Falling yields in overseas government bond markets has been a positive environment for the Fund. In the last quarter, however, as growth expectations improved, yields increased. • Non-government bonds yields also fell over the year which was a positive for the Fund. • The flexible strategy we put in place to manage exposure to debt securities, almost a year ago, has helped the Fund deliver strong returns at a time when growth assets are weak. The overweight position in non-investment grade bonds contributed positively to returns. We’ve now reduced this position as return potential is no longer as high given the strong returns we’ve captured since the credit crisis. • Global multi-sector bonds and global high yield bonds outperformed lower risk bonds over the year due to the market’s increasing appetite for risk and desire for higher yield. Due to changes to the debt strategy (announced 15 February 2010) returns for new debt sectors are only available for the quarter. 1-year returns will be available from March 2011. Due to this, the Global Bond classification represents the longer period return for that sector. Source: MLC Investment Management * This strategy is for the MLC Diversified Debt Fund only

43. Diversified Debt strategy* – manager contribution Contributors: • Although markets weren’t favourable to many of our managers over the quarter, all but three had positive returns. • The Fund has a large exposure to global multi-sector bonds which are flexible mandates allowing managers with broad debt skills to invest in the sectors they believe will outperform. Franklin Templeton and PIMCO, 2 of the managers in this sector, were stand-outs this quarter and year respectively • Despite a relatively weak Australian bond market, our Australian bond managers, UBS and Antares, both outperformed their benchmarks over the quarter and year. • . Detractors: • One of our strongest performing managers over the year, Oaktree, underperformed their benchmark. When markets and returns are strong, it’s common for active managers to lag the market as it’s not always quality investments that are driving returns. Due to changes to the debt strategy (announced 15 February 2010) returns for new managers are only available for the quarter. 1-year returns will be available from March 2011. Source: MLC Investment Management * This strategy is for the MLC Diversified Debt Fund only

44. Highlights: In line with growing evidence of companies raising their dividends (after cutting dividends to preserve capital during the GFC), the dividend income received by the Fund over the last three quarters was higher than the previous year’s corresponding periods. Short term returns after fees and tax were generally less than the market return though are superior for longer periods. The pre-fees and tax returns of both managers were better than index. Stock strategies that contributed the most towards the Fund’s index relative returns in the year were overweight Brambles, Fosters Group, and not owning QBE Insurance Group and Macquarie Group. MLC IncomeBuilderTM Fund - performance Source: MLC Investment Management

45. MLC IncomeBuilderTM Fund – distribution performance Source: MLC Investment Management

46. Contributors: For the Quarter: Overweight Brambles, AXA Asia Pacific, Seven Group Holdings, ASX and underweight Woolworths For the Year: overweight Brambles, Fosters Group, and not owning QBE Insurance Group and Macquarie Group. Detractors: For the Quarter: Overweight Coca-Cola Amatil, Aristocrat Leisure, Fosters Group and not owning CSL and QBE Insurance Group For the Year: Overweight Primary Health Care, Telstra, Blue Scope Steel, Aristocrat Leisure and not owning CSL IncomeBuilder strategy – manager contribution Source: MLC Investment Management