MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT

This Report is issued by Mercer Investments (Australia) Limited ABN 66 008 612 397 (MIAL), Australian Financial Services Licence #244385 as the Responsible Entity of the Mercer Multi-Manager Funds (MMF). ‘Mercer’, ‘Mercer LifetimePlus’ and ‘Mercer SmartPath’ are Australian registered trademarks of Mercer (Australia) Pty Ltd, ABN 32 005 315 917. MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT THREE MONTHS TO 31 MARCH 2018

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT 1 CONTENTS ECONOMY AND MARKETS 1 - 2 SECTORS 3-28 SHARES Australian Shares 3-4 Australian Shares – Socially Responsible 5-6 Australian Shares – Tax Exempt Investors 7-8 Australian Small Companies 9 International Shares 10-12 Socially Responsible Global Shares 13 Global Small Companies 14 Emerging Markets 15 PROPERTY AND INFRASTRUCTURE Global Listed Property 16 Australian Direct Property 17 Passive Australian Listed Property 18 Global Listed Infrastructure 19 Global Unlisted Infrastructure 20 ALTERNATIVE ASSETS Global Natural Resources 21 Diversified Alternatives 22 FIXED INTEREST Emerging Markets Debt 23 DEFENSIVE FIXED INTEREST AND CASH Global Credit 24 Australian Sovereign Bonds 25 Global Sovereign Bonds 26 Australian Inflation Plus 27 Cash and Term Deposits 28 DIVERSIFED FUNDS 29-33 Mercer Diversified Shares 29 Mercer Growth, Select Growth 30 Mercer High Growth 31 Mercer Income Plus, Moderate Growth 32 Mercer Conservative Growth, Defensive 33 MERCER SMARTPATH FUNDS 34-38 IMPORTANT NOTES 39 ECONOMY AND MARKETS Global equity markets began the quarter in a risk-on atmosphere following President Trump’s tax package in late 2017 and continued economic growth across major economies.

This was not to last, however, as equity market volatility picked up following steeper rate hike fears in the US which was then followed by President Trump’s controversially imposed trade tariffs on China in early March. This sparked fears of a global trade war; impacting market movements further. Consequently the MSCI World ex Australia Index fell 2.3% in hedged A$ terms over the quarter. European markets were similarly affected by activity in the US, but also experienced political uncertainty with Brexit negotiations beginning between British parliament and European leaders, and mixed results coming out of the German and Italian elections.

In local currency terms, the UK (-7.3%), France (-2.0%), Switzerland (-6.0%), Germany (-5.9%) and Spain (-4.0%) MSCI country indices all fell over the quarter.

As anticipated by markets, and following higher than expected rates of inflation in the US, the US Federal Reserve (Fed) decided to raise its benchmark interest rate by 0.25% to a range from 1.5% to 1.75%p.a in its March meeting. The hike puts the US rate ahead of the RBA cash rate for the first time since 2000. The rate increase supports strong realised labour market conditions and a solid return to 2% inflation for the US. Major bond yields increased off this news, also influenced by expressed commitment to a tightening of monetary policies from central banks in Europe, Japan and the US, but were pulled back late in the quarter by the effects of increased market volatility and political (in particular trade) uncertainty.

We saw a distinct flattening of the US Treasury yield curve over the quarter, as investors may be adjusting their growth expectations and/or pricing in greater volatility. Domestic markets also experienced a weak quarter, as the S&P/ASX 300 fell 3.8%. Healthcare and IT were the strongest performing equity sectors over the period. The Australian dollar (AUD) depreciated over the quarter, from US$0.782 in December to $US0.767 in March. Sentiment weakened against the backdrop of the dramatic trade tension, and was also not improved by the first round of hearings from the Royal Banking Commission.

The commission was rife with controversy and disappointment, bringing to light immoral behaviour and illegal practices undertaken by the major Australian banks. Information that has been uncovered so far may indicate that banks and mortgage lenders could be more exposed in an economic downturn than previously anticipated.

QUARTER ENDING MARCH 2018 2 FINANCIAL MARKET RETURNS TO 31 MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Performance shown only for asset classes that are applicable to sector MMFs benchmarked against a single index. # Fully hedged return ^ Unhedged return

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 3 SHARES AUSTRALIAN SHARES Australian equities were negative over Q1 as the S&P/ASX 300 Index returned -3.8% for the period.

There were negative movements across the market cap spectrum, with the best performer being the S&P/ASX Mid Cap 50; returning -2.2% for the quarter while the worst performer was the S&P/ASX 50; returning -4.2%. The best performing sectors were Healthcare and IT while the weakest performing sectors were Telecommunication Services and Utilities. The largest positive contributors to the return of the index were CSL Limited, A2 Milk and Qantas with absolute returns of 10.4%, 55.5% and 16.0% respectively. On the other hand, the most significant detractors from performance were CBA, Westpac and Telstra with absolute returns of -7.6%, -7.3% and -11.8% respectively.

AUSTRALIAN SHARES FUNDS** Benchmark weight by sector (%) S&P/ASX 300 Accumulation Index Benchmark sector returns for the three months to 31 March 2018(%) S&P/ASX 300 Accumulation Index Sector Exposure — Overweight/Underweight positions as at 31 March 2018 (%) Mercer Australian Shares Fund Mercer Australian Shares Plus Fund ** In this Quarterly Report, ‘Australian Shares Funds’ refers to:  Mercer Australian Shares Fund (the ‘Core Fund’)  Mercer Australian Shares Plus Fund (the ‘Plus Fund’) Only the sector exposure differs between the Funds. Benchmark weights etc. apply to both Funds.

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 4 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Ausbil Investment Management +0.4 +3.2 +1.3 +1.9 Fidelity +2.5 +21.6 n/a n/a Yarra Capital Manangement -1.0 +0.8 -0.2 n/a Greencape +0.8 +0.8 n/a n/a JCP Investment Partners -0.9 -1.9 -0.9 -0.4 Plato +1.0 -0.1 n/a n/a BlackRock -0.1 +6.1 n/a n/a Wavestone +2.4 +5.4 n/a n/a Vinva Alpha +0.6 0.0 n/a n/a Colonial First State +2.9 -1.6 n/a n/a Perennial Value Management +4.4 +7.3 +2.6 +1.8 IFM Investors -1.1 +7.7 +2.8 n/a Avoca Investment Management 0.0 -5.7 -2.5 n/a AUSTRALIAN SHARES MERCER AUSTRALIAN SHARES FUNDS** MERCER AUSTRALIAN SHARES PLUS FUND MERCER PASSIVE AUSTRALIAN SHARES FUND Top 10 Australian share holdings Listed (right) are the 10 largest Australian share holdings in aggregate within the Australian shares funds at quarter end compared to their respective benchmarks.

Investment performance Mercer Australian Shares Fund 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -3.4 4.6 4.7 8.5 Benchmark* Return : -3.8 2.9 3.9 7.6 Excess Return — Before fees : +0.4 +1.7 +0.8 +0.9 Mercer Australian Shares Plus Fund 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -3.2 6.6 5.7 8.9 Benchmark* Return : -3.7 3.4 4.2 7.8 Excess Return — Before fees : +0.5 +3.2 +1.5 +1.1 Total Returns – After Fees 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer Australian Shares Fund -3.6 3.9 3.8 7.5 Mercer Australian Shares Plus Fund -3.4 5.6 4.5 7.7 Mercer Passive Australian Shares Fund -4.0 2.4 3.6 7.2 * S&P/ASX 300 Accumulation Index , which is the benchmark used for the fund .

Alternate benchmarks may apply to managers individually Manager performance Fidelity was the strongest contributor to performance over the quarter. Fidelity’s performance was supported by significant overweight allocations to Altium Ltd and Tabcorp Holding. Yarra’s underperformance can be attributed to an overweight position in TPG Telecom and an underweight position in CSL, a global specialty biotechnology company.

* S&P/ASX 300 Accumulation Index, which is the benchmark used for the fund . Alternate benchmarks may apply to managers individually. Proportion of assets managed at quarter end Managers Core Fund Plus Fund Ausbil Investment Management 13.5 22.5 Fidelity 4.3 6.3 Yarra Capital Manangement 9.7 14.1 Greencape 12.9 18.8 JCP Investment Partners 17.2 0.0 Plato 17.8 0.0 BlackRock 3.8 5.5 Wavestone 10.4 15.1 Vinva Alpha 10.4 15.2 Colonial First State 0.0 1.2 Perennial Value Management 0.0 1.3 IFM Investors 0.0 0.0 Avoca Investment Management 0.0 0.0 Mercer Australian Shares Fund % of Fund % of B’mark Mercer Australian Shares Plus Fund % of Fund % of B’mark Commonwealth Bank 7.8 8.0 Commonwealth Bank 7.6 8.0 BHP Billiton 6.3 5.7 BHP Billiton 6.7 5.7 Westpac Banking Corporation 6.3 6.1 Westpac Banking Corporation 6.3 6.1 ANZ Banking Group 5.3 4.9 ANZ Banking Group 5.3 4.9 CSL 4.7 4.4 CSL 4.6 4.4 National Australia Bank 4.2 4.9 National Australia Bank 4.0 4.9 Macquarie Group 2.2 2.0 Macquarie Group 2.2 2.0 Rio Tinto 2.0 1.9 Rio Tinto 2.0 1.9 Woolworths Group Ltd 2.0 2.2 Santos 1.9 0.6 Wesfarmers 1.7 3.0 Aristocrat Leisure 1.7 1.0

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 5 SHARES AUSTRALIAN SHARES – SOCIALLY RESPONSIBLE Australian equities were negative over Q1 as the S&P/ASX 300 Index returned -3.8% for the period. There were negative movements across the market cap spectrum, with the best performer being the S&P/ASX Mid Cap 50; returning -2.2% for the quarter while the worst performer was the S&P/ASX 50; returning -4.2%. The best performing sectors were Healthcare and IT while the weakest performing sectors were Telecommunication Services and Utilities.

MERCER SOCIALLY RESPONSIBLE AUSTRALIAN SHARES FUND Benchmark weights by sector (%) S&P/ASX 300 Accumulation Index Sector Exposure — Overweight/Underweight positions as at 31 March 2018(%) Benchmark sector returns for the three months to 31 March 2018 (%) S&P/ASX 300 Accumulation Index

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 6 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) BT Investment Management +1.7 +5.2 +1.7 +2.4 Acadian +1.6 +2.3 n/a n/a Perpetual Investment Management -1.2 -1.1 +1.7 +2.8 AUSTRALIAN SHARES – SOCIALLY RESPONSIBLE MERCER SOCIALLY RESPONSIBLE AUSTRALIAN SHARES FUNDS Top 10 Australian share holdings Listed (right) are the 10 largest Australian share holdings in aggregate within the Mercer Socially Responsible Australian Shares Fund at quarter end compared to the benchmark.

Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -2.6 5.5 5.7 9.8 Benchmark* Return : -3.8 2.9 3.9 7.6 Excess Return — Before fees : +1.2 +2.6 +1.8 +2.2 *S&P/ASX 300 Accumulation Index Total Returns — After fees : -2.8 4.5 4.5 8.5 Manager performance BT and Acadian contributed to a positive quarter while Perpetual continued to detract from performance. BT benefitted from both stock selection and sector allocation. Overweight allocations to Qantas Airways and Nine Entertainment were positive for the portfolio.

Perpetual’s underperformance was affected by not holding CSL as the stock rallied over the quarter on the back of strong first half financial results.

*S&P/ASX 300 Accumulation Index, which is the benchmark used for the Fund. Alternate benchmarks may apply to managers individually Proportion of assets managed at quarter end Manager % BT Investment Management 34.9 Acadian 45.1 Perpetual Investment Management 20.0 Stock % of Fund % of Benchmark Commonwealth Bank 7.4 8.0 ANZ Banking Group 6.8 4.9 Westpac Banking Corporation 6.4 6.1 BHP Billiton 5.5 5.7 National Australia Bank 4.7 4.9 CSL 3.6 4.4 Telstra Corporation 2.3 2.3 Qantas Airways 2.2 0.6 Macquarie Group 2.0 2.0 Metcash 1.8 0.2

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 7 SHARES AUSTRALIAN SHARES – TAX EXEMPT INVESTORS Australian equities were negative over Q1 as the S&P/ASX 300 Accumulation Index Gross of Franking Credits returned -3.1% for the period. There were negative movements across the market cap spectrum, with the best performer being the S&P/ASX Mid Cap 50; returning -2.2% for the quarter while the worst performer was the S&P/ASX 50; returning -4.2%.

The best performing sectors were Healthcare and IT while the weakest performing sectors were Telecommunication Services and Utilities. The largest positive contributors to the return of the index were CSL Limited, A2 Milk and Qantas with absolute returns of 10.4%, 55.5% and 16.0% respectively. On the other hand, the most significant detractors from performance were CBA, Westpac and Telstra with absolute returns of -7.6%, - 7.3% and -11.8% respectively. MERCER AUSTRALIAN SHARES FUND FOR TAX EXEMPT INVESTORS Benchmark weights by sector (%) S&P/ASX 300 Accumulation Index : Grossed up for franking credits Sector Exposure — Overweight/Underweight positions as at 31 March 2018 (%) Benchmark sector returns for the three months to 31 March 2018 (%) S&P/ASX 300 Accumulation Index: Grossed up for Franking Credits

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 8 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Macquarie Investment Management +0.7 +3.0 +1.7 n/a Plato Investment Management +0.6 -1.8 -0.4 n/a JCP Investment Partners -2.1 -3.9 -0.5 n/a AUSTRALIAN SHARES – TAX EXEMPT INVESTORS MERCER AUSTRALIAN SHARES FUND FOR TAX EXEMPT INVESTORS Top 10 Australian share holdings Listed (right) are the 10 largest Australian share holdings in aggregate within the Mercer Australian Shares Tax Exempt Fund at quarter end compared to the benchmark.

Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -3.0 4.8 6.1 n/a Benchmark* Return : -3.1 4.6 5.5 n/a Excess Return — Before fees : +0.1 +0.2 +0.6 n/a *S&P/ASX 300 Accumulation Index: Grossed up for franking credits. Total Returns — After fees : -3.1 3.9 5.3 n/a Manager performance Macquarie contributed to positive relative returns in the March quarter as an overweight position in Macquarie Atlas Roads Group outperformed following its investor presentation.

Underperformance by Plato was largely driven by overweights in Qantas and Lend Lease and underweights in Origin Energy and Westfield.

*S&P/ASX 300 Accumulation Index: Grossed up for franking credits. Proportion of assets managed at quarter end Manager % Macquarie Investment Management 49.9 Plato Investment Management 30.4 JCP Investment Partners 19.7 Stock % of Fund % of Benchmark Commonwealth Bank 6.6 8.0 National Australia Bank 6.6 4.9 ANZ Banking Group 6.4 4.9 BHP Billiton 6.0 5.7 Westpac Banking Corporation 4.8 6.1 CSL 4.2 4.4 Telstra Corporation 3.0 2.3 Woodside Petroleum 2.8 1.7 Woolworths Group Ltd 2.7 2.2 Macquarie Group 2.6 2.0

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 9 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Avoca Investment Management 0.0 -5.7 -2.5 n/a IFM Investors -1.1 +7.7 +2.8 n/a Perennial Value Management +4.4 +7.3 +2.6 +1.8 Colonial First State +2.9 -1.6 n/a n/a AUSTRALIAN SHARES – SMALL COMPANIES Australian Small Companies performance was negative over the March quarter with the asset class returning -2.8% for the period.

Australian Small Companies outperformed the broad capitalisation index over the quarter.

Australian small vs ‘large’ company performance MERCER AUSTRALIAN SMALL COMPANIES FUND Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -1.3 17.7 10.0 6.8 Benchmark* Return : -2.8 15.0 10.7 6.4 Excess Return — Before fees : +1.5 +2.7 -0.7 +0.4 * S&P/ASX Small Ordinaries Accumulation Index. Total Returns — After fees : -1.5 16.7 8.8 5.9 Manager performance Perennial saw strong performance over the quarter fuelled by overweight positions in Australis Oil & Gas. IFM saw a turn of performance over the quarter, with the leading detractor from performance being an overweight position in in Getswift, which saw a huge drag in performance.

* S&P/ASX Small Ordinaries Accumulation Index, which is the benchmark used for the fund. Proportion of assets managed at quarter end Manager % Avoca Investment Management 19.9 IFM Investors 28.5 Perennial Value Management 26.8 Colonial First State 24.8

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 10 SHARES INTERNATIONAL SHARES The broad MSCI World ex Australia (NR) Index was down 2.3% in hedged terms and up 0.8% in unhedged terms over the quarter, as the AUD depreciated against the major currencies over the period.

The strongest performing sectors were IT and Consumer Discretionary, while Telecommunication Services and Energy were the worst performers.

Over the March quarter, the NASDAQ increased 2.3%, the S&P 500 Composite Index decreased 0.8% and the Dow Jones Industrial Average decreased 2.0%, all in USD terms. European markets experienced negative returns across the board, with the FTSE 100 United Kingdom (UK) decreasing 7.2%, the DAX 30 (Germany) decreasing 6.4% and the CAC 40 (France) also down 2.5% over the period. Majority of equity returns were negative across Asia as the Japanese TOPIX decreased 4.7% and the Indian BSE 500 decreased 5.8%. The Hang Seng Index increased 0.9%, while the SSE Composite (China) decreased 4.2%.

INTERNATIONAL SHARES FUNDS** Benchmark weights by sector (%) MSCI World Index (ex Australia) - in $A with net dividends reinvested Benchmark sector returns for the three months to 31 March 2018 (%) MSCI World Index (ex Australia) - in $A with net dividends reinvested Sector Exposure — Overweight/Underweight positions as at 31 March 2018 (%) Mercer International Shares Fund Mercer Hedged International Shares Fund Mercer International Shares Plus Fund Mercer Hedged International Shares Plus Fund In this Quarterly Report, ‘International Shares Funds’ refers to:  Mercer International Shares Fund  Mercer Hedged International Shares Fund (the ‘Core Funds’)  Mercer International Shares Plus Fund  Mercer Hedged International Shares Plus Fund (the ‘Plus Funds’) Benchmark weights etc.

apply to all four Funds.

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 11 SHARES INTERNATIONAL SHARES INTERNATIONAL SHARES FUNDS** Benchmark weights – Top 10 countries (%) MSCI World Index (ex Australia) - in A$ with net dividends reinvested Top 10 countries’ benchmark returns for the three months to 31 March 2018 (%) MSCI World Index (ex Australia) - in A$ with net dividends reinvested Exposure to top 10 countries - Overweight/Underweight positions as at 31 March 2018 (%) Mercer International Shares Fund Mercer Hedged International Shares Fund Mercer International Shares Plus Fund Mercer Hedged International Shares Plus Fund In this Quarterly Report, ‘International Shares Funds’ refers to:  Mercer International Shares Fund  Mercer Hedged International Shares Fund (the ‘Core Funds’)  Mercer International Shares Plus Fund  Mercer Hedged International Shares Plus Fund (the ‘Plus Funds’) Benchmark weights etc.

apply to all four Funds.

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 12 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Arrowstreet +1.6 +4.4 +1.8 n/a Baillie Gifford +4.2 +13.1 +4.9 +3.9 AB +0.3 -0.2 +2.0 +4.7 Hexavest -1.7 -7.0 -0.9 -1.7 Schroders -0.7 -2.9 +0.1 -0.2 LSV Asset Management +1.3 +2.3 n/a n/a INTERNATIONAL SHARES MERCER INTERNATIONAL SHARES FUND MERCER HEDGED INTERNATIONAL SHARES FUND MERCER PASSIVE INTERNATIONAL SHARES FUND MERCER PASSIVE HEDGED INTERNATIONAL SHARES FUND Top 10 International share holdings Ten largest international share holdings held in aggregate within the Mercer International Shares Fund and Mercer Hedged International Shares Fund as at quarter end, compared to their respective benchmarks: Investment performance Mercer International Shares Fund 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees: 1.4 14.6 9.3 17.8 Benchmark 1 Return — Before fees: 0.8 13.3 8.0 17.0 Excess Return — Before fee: +0.6 +1.3 +1.3 +0.8 Mercer Hedged International Shares Fund 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees: -1.6 12.2 9.7 13.5 Benchmark 2 Return — Before fees: -2.3 11.0 8.5 12.6 Excess Return — Before fees : +0.7 +1.2 +1.2 +0.9 Total Returns – After Fees 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer International Shares Fund 1.1 13.4 8.4 16.8 Mercer Hedged International Shares Fund -2.1 10.9 8.6 12.1 Mercer Passive International Shares Fund 0.8 13.3 8.0 16.7 Mercer Passive Hedged International Shares Fund -2.5 10.6 8.2 12.4 Note that a composite benchmark was used for this fund from its inception to August 2007.

In that month, the benchmark was standardised to the: 1 MSCI World Index (ex Australia) - in A$ with net dividends reinvested. | 2 MSCI World Index (ex Australia) - in Hedged A$ with net dividends reinvested Manager performance During the quarter, Baillie Gifford contributed positively while Hexavest continued to detract from performance. Baillie Gifford mainly benefitted from an overweight exposure to Emerging Markets and Developed Asia. From a sectoral level, an overweight allocation to Information Technology worked well for the portfolio. Hexavest’s underperformance was mainly due to poor sector allocation and stock selection.

The underweight position in the Information Technology sector continues to detract from performance. * MSCI World Index (ex Australia) - in A$ with net dividends reinvested, which is the benchmark used for the unhedged funds. Proportion of assets managed at quarter end Managers % Arrowstreet 19.7 Baillie Gifford 14.9 AB 2.4 Hexavest 12.4 Schroders 35.7 LSV Asset Management 14.9 Stock % of Fund % of Benchmark Amazon 1.2 1.5 Johnson & Johnson 1.1 0.9 Microsoft Corporation 1.1 1.7 Apple 1.0 2.2 Mastercard 0.9 0.4 Facebook Incorporation 0.9 1.0 Visa 0.8 0.6 Intel Corporation 0.8 0.6 Alphabet Inc 0.8 0.8 Pfizer Inc 0.8 0.5

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 13 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer Dublin Sustainable Global Equity +1.0 +0.4 n/a n/a SOCIALLY RESPONSIBLE GLOBAL SHARES MERCER SOCIALLY RESPONSIBLE GLOBAL SHARES FUND – UNHEDGED UNITS MERCER SOCIALLY RESPONSIBLE GLOBAL SHARES FUND – HEDGED UNITS Top 10 International share holdings Ten largest international share holdings held in aggregate within the Mercer Socially Responsible Gloal Shares Fund - Unhedged Units and Mercer Socially Responsible Gloal Shares Fund - Hedged Units as at quarter end, compared to their respective benchmarks: Investment performance Mercer Socially Responsible Global Shares Fund – Unhedged Units 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees: 1.6 13.3 n/a n/a Benchmark 1 Return — Before fees: 0.7 13.0 n/a n/a Excess Return — Before fee: +0.9 +0.3 n/a n/a Mercer Socially Responsible Global Shares Fund – Hedged Units 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees: 0.5 n/a n/a n/a Benchmark 2 Return — Before fees: -2.3 n/a n/a n/a Excess Return — Before fees : +2.8 n/a n/a n/a Total Returns – After Fees 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer Socially Responsible Global Shares Fund – Unhedged Units 1.5 12.6 n/a n/a Mercer Socially Responsible Global Shares Fund – Hedged Units 0.2 n/a n/a n/a 1 MSCI World (NRD) Index - in A$ 2 MSCI World (NRD) Index - in A$ (hedged) Manager performance * MSCI World (NRD) Index - in A$ Proportion of assets managed at quarter end Managers Unhedged % Mercer Dublin Sustainable Global Equity 100.0 Stock % of Fund % of Benchmark Unilever PLC 1.74 0.17 Henkel AG & Co KGAA 1.63 0.03 Apple Inc 1.28 2.17 Waters Corp 1.14 0.04 Microsoft Corp 1.13 1.69 Beiersdorf AG 1.13 0.03 Novo Nordisk A/S 0.93 0.23 JP Morgan Chase & Co 0.87 0.96 Tata Consultancy Services 0.85 0.00 Merck KGAA 0.78 0.03

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 14 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Allianz Global Investors +1.5 +6.4 -1.4 n/a Arrowstreet +0.2 +5.4 +1.3 +3.5 Fidelity +1.4 +0.6 -0.2 -0.5 GLOBAL SHARES – SMALL COMPANIES In AUD terms, the Global Small Cap sector rose 1.4% over the March quarter outperforming the large cap index.

Overseas small vs ‘large’ company performance MERCER GLOBAL SMALL COMPANIES SHARES FUND Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : 2.4 18.6 9.0 18.5 Benchmark* Return : 1.4 15.3 9.3 17.9 Excess Return — Before fees : +1.0 +3.3 -0.3 +0.6 * From July 2014: MSCI World Small Cap Index.

Prior to July 2014, the Overseas Small Companies Fund was benchmarked against the S&P Developed Small Cap Index. Therefore, calculations for longer period benchmark returns are inclusive of this report.

Total Returns — After fees : 2.1 17.6 7.9 17.2 Manager performance Allianz was the strongest contributor to performance in the first quarter of 2018. Stock selection within the Information Technology, Energy and Financials sectors had a positive impact as did overweight positions to Bioverativ, Cancom and Ambu. Fidelity turned performance around and outperformed the benchmark, with sector allocation and stock selection contributing positively over the quarter. * From July 2014: MSCI World Small Cap Index. Prior to July 2014, the Overseas Small Companies Fund was benchmarked against the S&P Developed Small Cap Index.

Therefore, calculations for longer period benchmark returns are inclusive of this report.

Proportion of assets managed at quarter end Manager % Allianz Global Investors 28.9 Arrowstreet 30.7 Fidelity 40.4

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 15 SHARES Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) AQR +0.5 -1.9 n/a n/a BlackRock Investment Management +0.1 +1.4 +2.7 +2.0 Investec -0.4 +2.7 n/a n/a Macquarie Value Weighted +0.7 -4.5 n/a n/a EMERGING MARKETS Emerging markets outperformed developed counterparts over the March quarter rising 3.4% outperforming developed markets.

Emerging Markets vs Developed Markets Top 10 benchmark weights (MSCI Emerging Markets Index MERCER EMERGING MARKETS SHARES FUND MERCER PASSIVE EMERGING MARKETS SHARES FUND Investment performance Mercer Emerging Markets Shares Fund 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees: 3.5 24.0 9.8 12.4 Benchmark 2 Return — Before fees: 3.4 24.2 8.7 11.7 Excess Return — Before fees : +0.1 -0.2 +1.1 +0.7 Total Returns – After Fees 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer Emerging Markets Shares Fund 3.4 23.0 8.9 11.3 Mercer Passive Emerging Markets Shares Fund 3.0 23.6 n/a n/a *MSCI Emerging Markets Index Manager performance Macquarie’s returns were positive over the quarter, benefitting from an underweight position to Naspers.

The biggest driver of Investec’s underperformance came from unfavourable Latin American stock selection. The portfolio was well positioned from a regional perspective, however underweight positions to Brazil’s Petrobras and Banco Bradesco dragged performance.

* MSCI Emerging Markets Index, which is the benchmark used for the fund. Proportion of assets managed at quarter end Manager % AQR 12.6 BlackRock Investment Management 41.2 Investec 23.1 Macquarie Value Weighted 23.1

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 16 PROPERTY AND INFRASTRUCTURE Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Brookfield Investment Management +0.6 +2.3 +1.5 +2.9 Principal Global Investors +2.7 +6.8 +1.9 +2.4 GLOBAL LISTED PROPERTY Australian Real Estate Investment Trusts (REITs) were down 6.4% and Global REITs also decreased by 5.3% on a fully hedged basis.

Australian listed vs global listed property cumulative performance Note The indices used in the graph (above) are: 1. S&P/ASX 200 Property Trusts Accumulation Index for Australian Listed Property 2. FTST EPRA/NAREIT Developed Hedged $A index MERCER GLOBAL LISTED PROPERTY FUND MERCER PASSIVE GLOBAL LISTED PROPERTY FUND Investment performance Mercer Global Listed Property Fund 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -3.4 5.2 3.5 9.0 Benchmark* Return : -5.3 1.2 1.9 6.9 Excess Return — Before fees : +1.9 +4.0 +1.6 +2.1 Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer Global Listed Property Fund -3.8 4.1 2.4 7.8 Mercer Passive Global Listed Property Fund -5.4 0.7 1.5 6.4 *FTSE EPRA/NAREIT Developed Hedged $A Index Manager performance Both managers contributed positive performance over the quarter.

Principal was the strongest contributor, aided by stock selection in the Office & Industrial and Information Technology sectors. An underweight exposure to the Retail sector amid a poor outlook and store closing landscape was also positive for the portfolio. Overweight positions in Deutsche Wohhen and Segro also worked well for the portfolio.

* FTSE EPRA/NAREIT Developed Hedged $A Index Proportion of assets managed at quarter end Manager % Brookfield Investment Management 39.7 Principal Global Investors 60.3

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 17 PROPERTY AND INFRASTRUCTURE Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Charter Hall Industrial +1.5 +4.3 +3.7 n/a Charter Hall Retail -0.2 +5.3 n/a n/a Goodman Funds Management +2.7 +5.2 +8.6 +7.6 Investa Property Group +0.7 +9.1 +6.6 +4.2 Lend Lease Investment Management (APPF Retail) +2.5 +6.5 +2.4 +1.3 Investa SPV +3.3 +8.8 n/a n/a Dexus Wholesale Property Fund +1.7 +8.3 n/a n/a AUSTRALIAN DIRECT PROPERTY The unlisted property sector (NAV) rose 3.3% over the quarter, on a one month lagged basis.

Direct Property – 12 month Rolling Benchmark Return Note: The indices used in the graph (above) are: Before 1/9/2009: Mercer Unlisted Property Funds Index After 1/9/2009: Mercer/IPD Australian Pooled Property Fund Index. Effective January 2016 CPI+4% MERCER AUSTRALIAN DIRECT PROPERTY FUND Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : 2.8 13.1 13.2 12.0 Benchmark* Return : 1.6 6.1 8.0 8.7 Excess Return — Before fees : +1.2 +7.0 +5.2 +3.3 * Before 1/9/2009: Mercer Unlisted Property Funds Index. From 1/9/2009: Mercer/IPD Australian Pooled Property Fund Index.

Effective January 2016 CPI+4%. Total Returns — After fees : 2.5 11.6 11.8 10.6 Manager performance Outperformance continues to be driven by the Fund’s strategic overweight allocation to Sydney and Melbourne Core Offices, with the Dexus Wholesale Property Fund (‘DWPF’) and the Investa SPV both contributing to performance. Retail property enjoyed a stronger quarter despite the headwinds the sector is facing, with a number of high profile transactions driving positive revaluations and consequently, fund performance. In particular, the DWPF Retail portfolio and the Lend Lease Australian Prime Property Fund (Retail) were beneficiaries of this trend.

The Industrial sector continues to buoyed by sector wide structural changes including growth of e-commerce and robust tenant demand; and deep investor appetite. * Mercer/IPD Australian Pooled Property Fund Index (from 1/9/2009) and Mercer Unlisted Property Funds Index (before 1/9/2009) are/were the benchmarks used for the fund. Effective January 2016 CPI+4%.

Proportion of assets managed at quarter end Manager % Charter Hall Industrial 19.9 Charter Hall Retail 15.2 Goodman Funds Management 1.7 Investa Property Group 30.8 Lend Lease Investment Management (APPF Retail) 7.1 Investa SPV 8.3 Dexus Wholesale Property Fund 17.0

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 18 PROPERTY AND INFRASTRUCTURE Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Macquarie True Index y 0.0 -0.1 -0.1 -0.2 Vanguard -0.6 n/a n/a n/a PASSIVE AUSTRALIAN LISTED PROPERTY MERCER PASSIVE AUSTRALIAN LISTED PROPERTY FUND^ Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -6.6 -0.9 5.3 10.4 Benchmark* Return : -6.4 -0.8 5.4 10.6 Excess Return — Before fees : -0.2 -0.1 -0.1 -0.2 *S&P/ASX 200 Property Trusts Accumulation Index Total Returns — After fees : -6.5 -1.0 5.1 10.3 Manager performance *S&P/ASX 200 Property Trusts Accumulation Index ^ As of 1 July 2017 the Mercer Australian Listed Property Fund was restructured, and renamed as the Mercer Passive Australian Listed Property Fund.

Proportion of assets managed at quarter end (Mercer Growth) Manager % Macquarie True Index 91.6 Vanguard 8.4

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 19 PROPERTY AND INFRASTRUCTURE Colonial First State Global Asset Mgmt -0.8 -0.6 +1.9 +1.9 RARE -0.5 -2.9 -2.7 -2.9 GLOBAL LISTED INFRASTRUCTURE Global Core Listed Infrastructure 50/50 index decreased 5.0% for the quarter in hedged terms.

Listed Infrastructure – 12 month Rolling Return Note The index used in the graph (above) is the FTSE Global Core 50/50 Index in $A Hedged. MERCER GLOBAL LISTED INFRASTRUCTURE FUND MERCER PASSIVE GLOBAL LISTED INFRASTRUCTURE FUND Investment performance Mercer Global Listed Infrastructure Fund 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -5.7 0.8 6.0 11.6 Benchmark* Return : -5.0 2.2 5.8 11.3 Excess Return — Before fees : -0.7 -1.4 +0.2 +0.3 Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer Global Listed Infrastructure Fund -5.7 0.0 5.2 10.7 Mercer Passive Global Listed Infrastructure Fund -5.0 1.6 5.6 11.1 *The benchmark used for this fund was the UBS Global 50/50 Infrastructure and Utilities Index - in A$ (Hedged) until 1/4/2015, thereafter FTSE Global Core 50/50 Index in $A Hedged.

Manager performance Both Colonial First State and RARE underperformed. RARE’s continued overweight position to Western Europe satellite companies, SES and Eutelsat Communications hurt performance over the quarter. An overweight position to Pennon Group, a British Water Utility company also hurt performance. * The benchmark used for this fund was the UBS Global 50/50 Infrastructure and Utilities Index - in A$ (Hedged) until 1/4/2015, thereafter FTSE Global Core 50/50 Index in $A Hedged. Alternate benchmarks may apply to managers individually.

Proportion of assets managed at quarter end Manager % Colonial First State Global Asset Mgmt 65.2 RARE 34.8

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 20 PROPERTY AND INFRASTRUCTURE Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Macquarie Specialised Asset Mgmt +10.2 +20.1 +25.1 +18.3 Colonial First State Global Asset Mgmt -3.8 +4.4 +3.4 +4.3 IFM +0.9 +4.7 +10.1 n/a KKR +4.0 +13.6 n/a n/a MAIF Investment Trust +1.1 +0.5 n/a n/a CFS Finerge -0.5 0.0 n/a n/a Stonepeak Infrastructure +4.8 n/a n/a n/a GLOBAL UNLISTED INFRASTRUCTURE The unlisted infrastructure sector rose over the quarter on a lagged basis by 1.3%.

Another quarter of positive growth for global unlisted infrastructure as demand by long- term investors for quality assets remains high, starting to see returns more in-line with our longer-term expectations for the asset class. However, with an influx of infrastructure projects over the quarter this continues to support a positive outlook for the asset class. Unlisted Infrastructure – 12 month Rolling Return (A$) Breakdown by Industry sector MERCER GLOBAL UNLISTED INFRASTRUCTURE FUND Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : 3.9 14.0 16.8 14.8 Benchmark* Return : 1.3 5.0 5.2 6.0 Excess Return — Before fees : +2.6 +9.0 +11.6 +8.8 *CPI + 3% effective January 2016 – previously CPI + 5% (lagged one quarter) Total Returns — After fees : 3.6 11.0 13.6 12.1 Manager performance Macquarie Mercer Infrastructure Trust contributed strongly to this quarter’s return, mostly due to higher valuations of both tollroad asset Elizabeth River Tunnels (United States) and telecommunications asset CRa (Czech Republic).

KKR GIF II also contributed strongly through revaluations of several assets including energy company Veresen Midstream (Canada) and telecommunications company Deutsche Glasfaser (Germany). During the quarter, a call was paid to further fund the co-investment in car parking asset Q-Park (the Netherlands) managed by KKR and a new co-investment in mid-stream energy asset PSXP (United States) managed by Stonepeak was funded. In addition, a Macquarie Asia Infrastructure Fund call was paid to fund an investment in the renewable energy asset Stridor (India).

*CPI + 3% effective January 2016, previously CPI + 5% which is the benchmark used for the fund. Benchmark used in this report is lagged one quarter. Alternate benchmarks may apply to managers individually. Proportion of assets managed at quarter end Manager % Macquarie Specialised Asset Mgmt 17.4 Colonial First State Global Asset Mgmt 16.0 IFM 15.6 KKR 29.5 MAIF Investment Trust 13.7 CFS Finerge 3.1 Stonepeak Infrastructure 4.7

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 21 ALTERNATIVE ASSETS Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Janus Henderson Investors 1 -0.3 +2.3 -0.8 -2.6 New Forests Asset Management +3.2 +16.5 +14.9 +17.7 GLOBAL NATURAL RESOURCES The S&P GSCI Commodity Total Return Index increased 3.7% over the quarter.

Gold prices finished the quarter at US$1,323.43 per ounce for a 1.5% rise over the period. The oil price increased over the March quarter, by 5.2% to $70.09 per barrel. Iron Ore prices decreased over the March quarter, to $65 per metric tonne for a 12.2% decrease. Commodities Index - A$ Hedged Cumulative Returns Note The indices used in the graph (above) include: Before 1/03/2012: 75% Bloomberg Commodity Index (hedged in $A) and 25% S&P Goldman Sachs Agricultural Index. From 1/03/2012: 45% Bloomberg Commodity Index (hedged to A$); 15% S&P Goldman Sachs Agricultural Index; and 40% CPI + 5%.

MERCER GLOBAL NATURAL RESOURCES FUND Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : 1.5 8.0 3.3 0.3 Benchmark* Return : 0.5 3.7 0.6 -2.4 Excess Return — Before fees : +1.0 +4.3 +2.7 +2.7 *60% Bloomberg Commodity Index in $A (Hedged), plus 40% Consumer Price Index + 5%. From March 2012 to December 2017, 45% Bloomberg Commodity Index (Hedged to A$); 15% S&P Goldman Sachs Agricultural Index; 40% CPI + 5%. Prior to March 2012 the composite benchmark was made up of 75% DJ UBS Commodity Index (Hedged in $A) and 25% S&P Goldman Sachs Agricultural Index.

Therefore, the calculations for longer period benchmark returns are inclusive of this data. Total Returns — After fees : 1.3 7.1 2.4 -0.6 Manager performance New Forests had a strong quarter benefitting from strong performance of timber mill asset Timberlink, which was supported by good cost control and strong demand as the operation is further integrated with the timber supply line. *60% Bloomberg Commodity Index in $A (Hedged), plus 40% Consumer Price Index + 5%, which is the benchmark used for the fund. Alternate benchmarks may apply to managers individually.

1 Track record partly reflects manager’s previous inclusion in alternative assets. Proportion of assets managed at quarter end Manager % Janus Henderson Investors 59.3 New Forests Asset Management 40.7

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 22 ALTERNATIVE ASSETS Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Mercer Liquid Alternatives Strategies -0.3 +2.1 +0.4 n/a ALTERNATIVE ASSETS MERCER DIVERSIFIED ALTERNATIVES FUND Investment performance Total Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — After fees and costs 1 : -0.5 3.2 -0.5 2.8 Benchmark* Return : 0.6 3.5 2.2 2.4 *Benchmark prior to November 2016 Bloomberg Bank Bill Index;, from November 2016 HFRI Market Defensive Index in A$ (hedged).

1 The ‘Total return – after fees and costs’ (ie management costs) allows for a deduction of the investment management fee expense allowance and any applicable performance based fee. See the PDS for details of the current fees and costs.

Manager performance GMO and Pharo were the largest contributors to performance over the quarter as volatility finally made its way back into markets over the first quarter of 2018 Cantab underperformed as trend-following managed futures strategies posted negative results following a large sharp drop in equity markets. * Benchmark prior to November 2016 Bloomberg Bank Bill Index;, from November 2016 HFRI Market Defensive Index in A$ (hedged) is the benchmark used for the fund. Alternate benchmarks may apply to managers individually.

Manager Allocation AQR DELTA AQR Style Premia Arrowgrass CQS Everett Taconic Anchorage Man Cantab GSA Cumulus GAM GMO Pharo Anchorage CP DW Partners Makuria QCAM Acadian Bloom Tree Hoplite Marshall Wace Elementum Nephila 2.9% 7.8% 15.8% 15.9% 18.7% 5.6% MULTISTRATEGY 32.3% LONG/ SHORT EQUITY RELATIVE VALUE MAC RO INSURANC E -LINKED TAIL-RISK HED GING MULTISTRATEGY 32.3% SINGLE STRATEGY 56.1% HED GING 10.7% MANAGED FUTURES

MERCER MULTI-MANAGER FUNDS QUARTERLY REPORT NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 23 FIXED INTEREST EMERGING MARKETS DEBT Emerging Market Debt returns were again strong over the March quarter returning 3.4%. This return is a reflection of the strong cyclical upswings and improving fundamentals occurring within emerging market economies. Emerging versus Developed Yields MERCER EMERGING MARKETS DEBT FUND Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : 7.0 13.0 6.1 5.6 Benchmark* Return : 6.5 12.4 5.3 5.6 Excess Return — Before fees : +0.5 +0.6 +0.8 0.0 * JP Morgan GBI-EM Global Diversified Index Total Returns — After fees : 6.7 11.6 5.2 4.7 Manager performance Colchester outperformed while Blackrock marginally underperformed the benchmark over the quarter.

Currency selection was the major contributor to Colchester’s performance as overweight positions to Mexican Peso, Colombian Peso and Malaysia Ringgit benefitted the portfolio.

Proportion of assets managed at quarter end Manager % Blackrock 59.4 Colchester 40.6

QUARTER ENDING MARCH 2018 NOTE: Past performance is not a reliable indicator of future performance. Refer to page 39 – ‘Important notes about this Report’ - for further information on the calculation of returns 24 DEFENSIVE FIXED INTEREST & CASH Manager Returns Relative to Fund Benchmark* (+ or - Before fees Managers 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) AXA -0.1 -0.1 -0.1 n/a Robeco 0.0 n/a n/a n/a Wellington Management +0.3 +0.4 +0.3 +0.4 GLOBAL CREDIT Global Credit returns were negative over the quarter with spreads widening, as such the composite benchmark for the Mercer Credit Fund had a negative return of -1.3% for the March quarter.

US 10-Year Corporate Bond Yield Spread over 10-Year Treasury Bond* MERCER GLOBAL CREDIT FUND Investment performance Total & Excess Returns (%) 3 Months 1 Year 3 Years (p.a.) 5 Years (p.a.) Total Returns — Before fees : -1.2 3.4 3.7 5.3 Benchmark* Return : -1.3 3.1 3.6 4.9 Excess Return — Before fees : +0.1 +0.3 +0.1 +0.4 *60% Barclays Global Aggregate Corporate Index - in A$ (Hedged); 40% Barclays Capital Global Aggregate ex Government ex Treasuries Index - in A$ (Hedged). For the period 1/1/2017 to 31/8/2017 weights were adjusted from 60/40 to 67/33.

Total Returns — After fees: -1.3 2.7 3.2 4.7 Manager performance Wellington marginally outperformed the benchmark whilst AXA marginally underperformed the benchmark over the quarter.

Active duration and yield curve management contributed meaningfully to Wellington’s outperformance over the quarter. AXA suffered from the increase in US government bond yields and wider credit spreads during the quarter. *60% Barclays Global Aggregate Corporate Index - in A$ (Hedged); 40% Barclays Capital Global Aggregate ex Government ex Treasuries Index - in A$ (Hedged) is the benchmark for this fund. For the period 1/1/2017 to 31/8/2017 weights were adjusted from 60/40 to 67/33. Alternate benchmarks may apply to managers individually.

Proportion of assets managed at quarter end Manager % AXA 29.6 Robeco 30.0 Wellington Management 40.4

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