About Global Masters

Objective of the Fund

Global Masters was created for investors seeking to participate in high, long term capital growth by investing in quality global assets such as Berkshire Hathaway A stock. The specific objective is to increase the value of each share over a medium to long term time horizon and to pay a dividend each year. Apart from its investment in Berkshire Hathaway Inc., Global Masters also invests in a combination of wholesale bond and cash funds.

Value Creation and Dividends

The primary source of value creation for Global Masters shareholders is the capital appreciation of their shares. That said, the Directors also recognise the importance of dividends as income streams for shareholders and so at least 50% of any net after tax profits are paid out as dividends and the balance, other than retaining working capital needs, is reinvested.

Global Masters has a Dividend Reinvestment Plan (DRP) which allows investors to have their dividend entitlements applied to subscribe for new shares at a discount of 5% on the prevailing share price.

Key Holdings

Global Masters' primary investment is in the New York Stock Exchange listed investment company, Berkshire Hathaway Inc. While the portfolio is actively managed and therefore its holdings continually adjusted to seek maximum return for shareholders, Berkshire Hathaway has to date represented around 80% of the portfolio with the remainder in cash and bond funds.

Global Masters believes Berkshire Hathaway has the potential to continue to enjoy outstanding investment returns into the future, hence the significant investment in Berkshire Hathaway. That said and since Berkshire Hathaway does not pay dividends, Global Masters' bond holdings are chosen to provide exposure to global yields and diversification and to provide a dividend return to investors.

The Board takes the view that Global Masters' investment in Berkshire Hathaway provides currency diversification to investors and therefore the Australia dollar/ US dollar currency exposure is not hedged. The bond and cash investments are fully hedged back to the Australian dollar.

Overview of Berkshire Hathaway

Berkshire Hathaway Inc. is a holding company based in Omaha, Nebraska ( USA), with wholly owned and other subsidiaries engaged in a wide variety of diverse business activities.

Berkshire Hathaway's investment approach has traditionally followed the strict discipline of investing only in businesses with superior economic characteristics that are controlled by successful and skilled managers. Their investment style is strongly "value" biased and covers a diverse range of activities including the following:

Insurance, mainly through GEICO (motor), General Re and Berkshire Hathaway Insurance (property, casualty, life, health and medical) on a direct and re-insurance basis.

General Re is one of the world's largest re-insurance companies.

• Sale of financial annuities
• Manufacturing and retailing architectural and industrial coatings
• Manufacturing insulation and building products
• Manufacturing brick and concrete masonry products
• Production of steel connector products and engineering software for the building components industry
• Manufacturing, licensing and distribution of apparel and footwear under a variety of branch names
• Wholesaling of groceries and non food items to convenience stores, clubs etc.
• Retailing home furnishings
• Commercial and consumer lending
• Publishing daily and Sunday newspapers
• Electricity distribution
• Brewing

Berkshire Hathaway also has substantial equity holdings in other large international companies such as:

• Coca Cola
• Gillette
• The American Express Company
• Moodys Corporation
• The Washington Post Company
• Wells Fargo and Company
• PetroChina (the listed arm of China National Petroleum Corporation, China's biggest oil producer)

Global Masters invests in Berkshire Hathaway A stock rather than the less expensive B Class stock as they are generally more liquid and the voting power is diluted in the B stock.

As an illustration of Berkshire Hathaway's past results, US$10,000 invested in 1965 was worth US$50 million in 2005. By comparison, the same US$10,000 invested in the S&P 500 Index would have grown to only US$0.5 million.

Berkshire Hathaway is rated AAA (stable) by Standard & Poors.

Investors should note that while these returns are impressive, there is no guarantee that they will continue into the future at these levels.

For the more information and the latest news from Berkshire Hathaway Inc, visit their website at www.berkshirehathaway.com.

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