Fund ReviewLincoln Australian Income Fund

The Lincoln Australia Income Fund experienced another month of positive returns, returning 4.47% for the month and only marginally underperforming its benchmark. Considering the incredibly strong market, we are pleased our defensive portfolio has delivered total returns of 20.13% over the past 12 months.

Australian shares had a strong start to the year despite global stocks experiencing a period of weakness following the coronavirus outbreak in China, with the MSCI index returning -0.7%. In particular, trade-exposed industries such as mining, oil and gas, and transport were amongst the worst performing sectors.

While a coordinated global effort to contain the spread of the virus continues, we expect the markets to see ongoing sensitivity in the short-term. The Lincoln Australian Income Fund does not have a significant exposure to Chinese demand, but in the few instances where there are short-term disruptions to operations, we view any share price weaknesses as an opportunity to invest in fundamentally great quality companies.

In stock specific news, we were pleased to see yet another positive

financial result from Credit Corp (returning 15% for the month). The core Australian and New Zealand segment reported record collections and net profit after tax – further complemented by the recent acquisition of Baycorp assets, with integration ahead of schedule. The US segment also reported robust growth and remained on track for full-year profit growth of 45% to 65%.

We are now firmly focused on the February reporting period, and intend to actively position the portfolio to maximise the yield generation for the quarter. Following a period of sustained commodity price strength, particularly in iron-ore, the strong free cash flow generation from stocks such as BHP, Rio Tinto and Fortescue Metals Group should translate into above average dividend payments.

Kind regards,

Tim Lincoln Co-Founder, Executive Chairman and Chief Investment Officer

Performance highlights Macquarie Group Limited (MQG) was the best performing stock in the portfolio (+18.12%) in January. This is a high beta stock and was boosted by the strong equity performance. The large new inflows to MQG have also led to this result.

Charter Hall Group (CHC) was a strong performing stock in the portfolio (+16.06%) in January. The continued low interest rate environment strengthened their property funds, with CHC benefitting from large inflows into their funds as a result.

Insurance Australia Group Limited (IAG) underperformed (-7.57%) due to the impact of the recent bushfires. The larger than expected claims and the bushfires’ uncertain duration and damage contributed to this fall in January.

January 2020

Data referred to in the performance commentary above relates to the Lincoln Australian Wholesale Income Fund unless otherwise stated.

Past performance is not an indicator of future performance.

Performance to 31 January 2020Lincoln Australian Income Fund

Suitable for Investors seeking a reliable income and reduced exposure to equity market risk

Investment objective Higher yield than the S&P/ASX 200 Accumulation Index inclusive of franking credits and some capital growth over the long-term

Distribution frequency QuarterlyIncome Total Return Total Return (Inc. Franking Credits)

Fund income(a)

Benchmark income(b)

Total Wholesale

Fund Return(d)

Total Retail Fund

Return(d)

Total Return Benchmark(f)

Total Fund Return

(Wholesale)(e)

Total Fund Return

(Retail)(e)

Total Return Benchmark

(b)

1 month 0.00% 0.00% 4.48% 4.41% 4.98% 4.47% 4.41% 4.98%

3 months 0.96% 0.93% 4.45% 4.24% 6.08% 4.60% 4.40% 6.27%

1-year 5.95% 5.58% 18.39% 17.45% 24.72% 20.13% 19.19% 26.41%

3 years p.a. 8.17% 5.68% 10.36% 9.49% 12.36% 12.73% 11.85% 13.93%

5 years p.a. 8.59% 5.79% 5.77% 4.92% 9.33% 8.24% 7.37% 10.88%

Financial year to date 2.73% 2.69% 3.85% 3.37% 8.20% 4.48% 3.99% 8.91%

Since Inception p.a. (c) 8.35% 5.73% 9.33% 8.49% 11.07% 11.97% 11.11% 12.63%

Month in review

(a) Gross income accrued, inclusive of franking credits(b) S&P/ASX 200 Accumulation Index inclusive of franking credits. Source: Macquarie Equities(c) Inception 2 April 2012(d) Net of all fees, excluding franking credits(e) Net of all fees, inclusive franking credits(f) S&P/ASX 200 Accumulation Index excluding franking credits.Past performance is not an indicator of future performance.

Tim LincolnCo-Founder, Executive Chairman and Chief Investment Officer

Fund ReviewLincoln Australian Income Fund

Lincoln Australian Income Fund holdings as at 31 January 2020Code Company Portfolio %

Large Diversified Industrials 14.47%

WES Wesfarmers Limited 3.82%

APA APA Group 3.63%

TLS Telstra Corporation Limited 3.05%

AST AusNet Services 2.11%

SKI Spark Infrastructure Group 1.86%

Large Financials 30.91%

MQG Macquarie Group Limited 5.22%

MFG Magellan Financial Group Limited 5.08%

CBA Commonwealth Bank of Australia 3.51%

ASX ASX Limited 3.28%

ANZ Australia & New Zealand Banking Group Ltd 2.92%

SUN Suncorp Group Limited 2.92%

IAG Insurance Australia Group Limited 2.77%

NAB National Australia Bank Limited 2.61%

WBC Westpac Banking Corporation 2.60%

Large Resources 3.61%

BHP BHP Group Limited 3.61%

Small Industrials 8.36%

SPK Spark New Zealand Limited 3.74%

PMV Premier Investments Limited 3.08%

AX1 Accent Group Limited 1.54%

Small Financials 4.15%

CCP Credit Corp Group Limited 4.15%

Property Stocks 18.17%

CHC Charter Hall Group 4.08%

CLW Charter Hall Long Wale REIT 3.69%

RFF Rural Funds Group 3.16%

VVR Viva Energy REIT 2.92%

BWP BWP Trust 2.82%

GOZ Growthpoint Properties Australia 1.50%

Small Resources 3.16%

RRL Regis Resources Limited 3.16%

Hybrids / Corporate Bonds 1.03%

ANZPE ANZ Capital Notes 2 0.73%

BENPF Bendigo and Adelaide Bank Convertible Preference Share 3 0.16%

BENPE Bendigo and Adelaide Bank Convertible Preference Share 2 0.14%

Cash 16.14%

January 2020

Strategy update As we approach the February reporting period, the Lincoln Managed Funds team intends to tactically deploy some excess cash into strong dividend-paying opportunities in the coming weeks.

Fund ReviewLincoln Australian Income Fund

Key data Lincoln Wholesale Australian Income Fund Lincoln Retail Australian Income Fund

APIR code ETL0324AU ETL0323AU

Fund inception 2 April 2012 2 April 2012

Minimum initial investment $250,000 $20,000

Management costs 0.95% p.a. 1.75% p.a.

Entry/exit fees Nil Nil

Distribution frequency Quarterly Quarterly

Estimated average yield1 8 - 9% 8 - 9%

Entry/exit unit price2 $1.1424/$1.1344 $1.0897/$1.0859

Fund size2 $436.30m

Responsible entity Equity Trustees Ltd

Investment manager Lincoln Indicators Pty Ltd

1 This estimated dividend yield is as at 31 January 2020 and is inclusive of franking credits.2 As at 31 January 2020.

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Important information.

This information is issued by the Investment Manager, Lincoln Indicators Pty Ltd (Lincoln) ABN 23 006 715 573, as Corporate Authorised Representative of Lincoln Financial Group Pty Ltd ABN 70 609 751 966, AFSL 483167. The Responsible Entity of the Fund is Equity Trustees Limited ABN 46 004 031 298, AFSL 240975, a subsidiary of EQT Holdings Limited ABN 22 607 797 615, a publicly listed company on the Australian Securities Exchange (ASX:EQT). All figures, information and illustrations are as at 31 January 2020 unless stated otherwise. Portfolio holdings are subject to change without notice. This communication contains general information only. It has been prepared without taking into account the objectives, financial situation or needs of any individual investor. As a result, you should consider its appropriateness in regard to your particular objectives, financial situation and needs. This publication may contain forward-looking statements regarding our intent, belief or current expectations with respect to market conditions. Readers are cautioned not to place undue reliance on these forward-looking statements. You should also consider obtaining your own independent advice before making any financial decisions. You should read the Product Disclosure Statement (PDS) and the Reference Guide where references are made for additional information in the PDS for the Lincoln Australian Growth Fund or Lincoln Australian Income Fund before making any decision about whether to acquire or continue to hold in either product. Applications to acquire units can only be made on an Application Form attached to a current PDS. You should also read and consider our Financial Services Guide (FSG), which sets out key information about the services we provide. A copy of each PDS, including the Reference Guide and our FSG are available by contacting Lincoln on 1300 676 333 or via our website www.lincolnindicators.com.au.

Lincoln, Lincoln Financial Group Pty Ltd, its employees and/associates of these entities may hold interests in companies listed in this communication. This position may change at any time without notice. Investments go up and down. Past performance is not a reliable indicator of future performance. Lincoln will be remunerated based on funds invested. Neither Lincoln, Equity Trustees Limited, or their directors, employees or agents provide any guarantee, representation or warranty as to the reliability, accuracy or completeness of the information in this document; and do not accept any responsibility or liability arising in any way (including by reason of negligence) for errors in, or omissions from, this document. This disclaimer does not purport to exclude any warranties implied by law which may not be lawfully excluded. Neither Lincoln, Equity Trustees Limited, or their directors, employees or agents guarantees the performance of, or the repayment of capital or income invested in the Fund.

January 2020