Good morning. Good morning, and welcome to the Future Generation Australia Half-Year Results Webinar. My name is Caroline Gurney. I'm the CEO of Future Generation, and I want to thank you so much for joining us this morning. Before we begin, I'd like to acknowledge the Gadigal people of the Eora nation, the traditional custodians of this land, and acknowledge the elders, past and present, of the lands on which we are sitting. Joining me today is one of our pro bono fund managers, Sean Fenton, founder and portfolio manager from Sage Capital, who's going to be sharing his market insights and giving his stock tips. Thanks very much, Sean, for being here. We also have Mary Jane Howard from DEBRA, one of our incredible not-for-profits that we support, and obviously, Geoff Wilson, Future Generation's founder, and he's going to be wrapping up and answering any questions you may have. Future Generation, as you all know, gives you the opportunity to become both an investor and an everyday philanthropist, harnessing the generosity and expertise of the finance community to raise millions to help support young Australians. It's a very unique model, one which Geoff can talk to you later, and I want to thank you so much for your support. As you know, Philip Lowe was appointed chair of FGX at the AGM in May, and as one shareholder asked him on his last webinar, I'm very grateful to that shareholder, they asked: Would he buy shares? I'm delighted to say that he has. And he basically said that it's an opportunity to invest in high-quality investment portfolio managed by Australia's leading fund managers, so Future Generation is not only an investment, it also has a social impact, and this year, Future Generation Australia has donated AUD 43 million to Australasian youth, youth at risk, not-for-profit since inception, and the tenth annual social investment this year is AUD 5.4 million, without further ado, let's go to our half-year results for Future Generation Australia. I'd also like you to submit questions as we go along, and then we can actually add those into the Q&A segment at the end of the webinar. We'll also be taking questions earlier for one of our not-for-profits or for Sean, so please do start typing. Use the Q&A segment. I think you can press on that and add them in. This is the first time that we're actually hosting a separate Future Generation Australia results webinar, and we really want your feedback on whether this works for you, and a survey will pop up at the end, and so please do fill in any feedback you have at the conclusion of the webinar. If we go to the next slide, this is our Future Generation half-year 2024 results. As you can see there, there are highlights. 6% investment portfolio performance over the six months, 5.7% annualized fully franked dividend yield, 8.1% grossed up dividend yield, AUD 35.1 per share profits reserve, and we have five years of dividend coverage and AUD 3.5 per share, fully franked interim dividend. I think for the six-month period, the total shareholder return was 9.8% or 11.1% when including the value of franking credits. This was driven by the share price increase, together with the payment of the fully franked final dividend of AUD 3.35 per share, and the narrowing of the share price discount to net tangible assets. At the end of the period, the share price discount to NTA has narrowed to 12.8% from 17.1% at the thirty-first of December, 2023. The Future Generation Australia management team is actively committed to returning the share price to NTA or a premium. And now, if we look at our dividends, the board of directors for Future Generation Australia declared an increased, fully franked interim dividend of AUD 0.035 per share. The full year 2024 fully franked interim dividend provides an annualized, fully franked dividend yield of 5.7% and a grossed up dividend yield of 8.1% when including the value of franking credits. The board's decision to increase the fully franked interim dividend was informed by the annualized grossed up dividend yield of 7.4% on pre-tax NTA, and the objective to provide shareholders with both capital growth, which is the movement in the company's share price and income through franked dividends paid to shareholders on a semi-annual basis. You know, the long-term investment portfolio performance, the listed investment company structure, and the profits reserves available has allowed Future Generation Australia to pay shareholders a stream of fully franked dividends since inception. The company has paid AUD 0.664 per share in fully franked dividends to shareholders, including the value of franking credits since inception. At the thirty-first July two thousand and twenty-four, the company had five years of dividend coverage, based on AUD 0.351 per share in the profits reserve through the payment of fully franked interim dividend of AUD 0.035 per share on the twenty-ninth of October, two thousand and twenty-four. I think, let's go to the performance now, because, you know, this is something that the investment committee has really been very focused on. The Future Generation investment portfolio has outperformed again, increasing 6.6% during the six-month period. This outperformance has been achieved by the company's leading Australian fund managers while taking less risk than the market. Since inception, the investment portfolio has increased 9.1% per annum, outperforming both the S&P/ASX All Ords Index by 1.1% per annum and the Small Ords by 3.2% per annum. Future Generation Australia gives you shareholders access to a diversified investment portfolio, and we have exposure to 18 of Australia's leading fund managers. One of them, we're about to hear from in a few minutes. That has really shown they have a proven ability to outperform the market and their peers over the long term. We do have a large weighting towards small, mid, and micro-cap companies, and an underweight exposure to large caps, all as you well know. The investment committee and our leading pro bono fund managers continue to believe that active management in the small, mid, and micro-cap sectors are going to drive long-term outperformance for shareholders. And now let's talk about our social investment. This year, we deliver our tenth annual social investment of AUD 5.4 million to our social impact partners and other not-for-profit organizations, bringing the total social investment to AUD 43.3 million since inception. And the company's combined, our social investment, Future Generation Australia and Future Generation Global, is now AUD 87.2 million. We can do this because our fund managers, our IC members, investment committee members, I should say, board members, accountants, lawyers, and everybody that does our, our sort of shareholder communication videos, they all waive their usual fees. We estimate the value of the management and performance fees generously forgone to be approximately 8.6 million per annum, or around 1.6% of the net assets of the company. These savings to shareholders far exceed the annual investment to our social impact partners of 1% of the company's average assets per annum. I would really like to acknowledge you, our shareholders, for your commitment to doing good while doing well. In speaking to you over the last six months, we've really come to realize how much you value the social impact, as long as you're getting the financial returns that Future Generation Australia provides. So one of our, you know, pro bono fund managers is Sean Fenton from Sage Capital. Thanks so much for joining us, Sean. Pleasure to be here. Thanks for having me. Thanks so much. So I've got lots of questions to ask you, and hopefully, our shareholders are busy typing in as well. So reporting seasons just ended. You know, what are the key themes that have emerged? And, you know, who are the winners and losers? Yeah, as always, it's a very hectic time of the year, companies going through their annual report. So I think we saw a reasonably positive reporting season. There's always some winners and losers. Results coming through are probably a little bit skewed more towards the downside in terms of downgrades, but that's a pretty common pattern. But we did see a little bit more caution looking out in FY 2025 in terms of outlook statements, which seem to be a little bit more conservative. So probably the best performing sectors were like growth stocks, so some good results there early on. You know, ResMed with stronger margins, Life360 getting some great subscriber growth, and towards the end, you know, WiseTech with sort of a new product launch now coming through and stronger margin outlook. So that's you know often a strong area. We saw that again. Some of the cyclicals actually did pretty well, so Bramble's really stood out in terms of also improving margins, but possibly getting towards the end of that sort of inventory cycle that we've seen in fast-moving consumer goods. Some strength there, and you know reasonable strength in the consumer as well. So we've all been expecting a recession for a couple of years. It just hasn't happened. And margins for retailers, there's less promotional activity there, so they continue to hold up well. So, you know, JB Hi-Fi, pretty in line sort of results, small beat, but performed quite well afterwards. You know, as well, so it was pretty good. But we did see some broad weakness where- I'm not sure if the last couple of things you said came through. Would you just mind repeating in terms of from the retail sector, please? No problem. Yeah, so retailing is held in there in terms of the consumer, largely because there hasn't been as much promotional activity coming through. So JB Hi-Fi is probably the standout there. It's been performing. Yeah, we saw Qantas deliver pretty in line result, but with a stronger outlook, the market's becoming more comfortable there. AGL, electricity retailing, it's cost of living pressures, but that's performed quite strongly, provided a bit of value. But we have seen, you know, some broad weakness across a range of sectors as well, so some slowdown in volume. We're certainly seeing the consumer trade down. Housing cycle's been weak, so Bunnings had pretty flat growth and a poor outlook. So, you know, Wesfarmers that weighed on that a little bit. And across the ditch in New Zealand, looks like it's the economy is turning down a bit more heavily and had some very weak like-for-like comps coming out of Harvey Norman, which weighed on that as well. Generally costs for companies that have less pricing power have been an issue, so you know, Ramsay Health Care had a pretty weak outlook as government funding isn't really being lifted in line with inflation. They've got a lot of cost pressures coming through. Companies like you know, ASX with technology replacement cycles also had a lot of costs. So a lot of winners and losers, but generally, those you know, themes of twenty-five companies, a bit conservative. Margins have been very strong in the last two years, but starting to come under pressure and not really cracks, but just some signs that the consumer might be running out of puff a little bit. Excellent. Thank you. So I really want to ask you for two stock tips, because obviously our shareholders love those, but I'm really hoping you're gonna give one around AI, because I'm really interested also in your outlook for AI. ... Yeah, AI is fascinating, and it's obviously captured the world's imagination. Pretty much everyone's jumped on ChatGPT by now and been blown away by some of the responses that you get from that generative AI. So, it's, you know, an interesting, you know, future ahead. Whether it's an evolution or a revolution, it's always hard to tell, but it will be an incremental driver of productivity, and companies will use that, as they've used, you know, technology consistently to, you know, to improve outcomes for consumers, improve productivity, efficiency, hopefully hang on to some margin. But it's still pretty early days, so where we stand at the moment really is more the hardware rollout side. You know, NVIDIA's very much ground zero there because it's very much all about training those big language models, rolling them out. We haven't seen so much the applications to come. That hardware rollout cycle has obviously driven huge earnings growth for NVIDIA, but you're starting to see that, you know, flow through in terms of data centers, which has been a strong thematic with the shift to cloud computing, but that's being accelerated by AI as well. There's a few companies that benefit from that in Australia. NEXTDC rolls out data centers, but an interesting one, and at one of our stock tips for today is Goodman Group, which traditionally has been more of a property manager in terms of particularly industrial property and developing that there. But it just happens that they've also got that industrial property bank has great access to power, and they've outlined a very strong program to roll out data centers, and in a model that's quite capital light and efficient as well. So bringing in their third party capital partners to give them a bit of a cost of capital advantage, whereas they get to receive the development profits and benefit from the management of those assets longer term. So that's gonna be a very key profit driver for the Goodman Group going on. It's a very sound business model, a very consistent, stable earnings. It's one that, you know, we have very high confidence just gonna deliver, consistent, you know, 10%, 10% plus earnings growth, for the foreseeable future. And, AI is, a real driver of, a little bit of an acceleration in, that going forward. So, you know, that's a stock that we quite like. AI's, you know, other beneficiaries, companies will use it for productivity. It's starting to be a little bit hype around the consumer and AI-enabled laptops and phones, which might help JB Hi-Fi and Harvey Norman, but, that's, a little bit, down the track and will take a little bit of, time to get momentum as well. So one of the things, you know, our shareholders are always saying is, you know, "How can we be exposed to AI in the Australian market?" So you've done that for us. That's fabulous. So you always talk also about the global nature of the Australian market. Perhaps you could expand on that a little bit more and give us a really good sort of company to watch in that area. Yeah, I think one of the truly fascinating, amazing things about the Australian market, despite, you know, being down the bottom of the world here, we do have a range of really high quality companies that have some niches in global markets where they really dominate and have some, you know, real innovation and pricing power. And one of their favorites for the last couple of years, and I mentioned it before in terms of having very strong result is WiseTech, who have a really dominant global position in software for logistics. So think about freight forwarding. When you buy something from overseas, it gets moved around the world. It's got some regulations there. There's a lot of information, data management, and they're expanding from freight forwarding into customs and warehousing and sea freight and land logistics as well, in the U.S. So they've got a very strong dominant software position with CargoWise, their core product, and a continuing volume growth story, and that's accelerating a little bit over the next year or so. They've got a new product called Neo, which does some more granular data and tracking for companies and consumers as packages moving around. They're packaging that up into a bit of a newer release of CargoWise, which will have a bit of a price uplift and help drive margins. So it's a strong company with great organic growth. They've grown a lot through acquisition of smaller companies, but they've really used that to integrate in, grow their customer base, and really get a dominant position in that market. So, a lot of pricing power and a genuine leader in a global industry. Thank you. So let's turn to China, because obviously their growth outlook has softened, especially as the property bubble is unwinding. So what is the knock-on effect for Australia? And, also perhaps how exposed are you currently to China as well? Yeah, so China's, you know, a number one trading partner and has big implications for Australia, so particularly through steel demand and iron ore, which as you mentioned, that property has been a slow sort of contraction, but a very deep contraction. It's been offset a little bit by manufacturing infrastructure spend, but that's starting to run out of puff as well. And we've seen the iron ore price come down in response, and that flows through the Australian economy in a few ways. Number one is probably really tax revenues, so royalties for state governments, but also income corporate tax for the federal government. So it's very important for government budgets, what they can spend and redistribute. It's important for income in terms of trade and national income and how that flows back through the economy, but also its impact on mining investment. That's got a lot of acceleration in terms of how that flows through job creation and consumption, so that iron ore price is very important for Australian growth and coming down, you know, will place some pressure there on Australia and it flows through the broader economy, but within the equity market, it's most clearly felt within the resources segment and the leverage to iron ore prices there, and we're seeing a similar dynamic in lithium, which slower uptake of EVs is also weighing under excess supply, so it's an area we've actually been avoiding in the portfolio. So, within resources, we've got a stronger preference for base metals and even a little bit of energy, which benefit from longer term electrification trends, as well as decarbonizers. But it does look like, you know, China's steel production actually peaked a couple of years ago and is going into decline, which means it's very hard to get that pricing tension back in iron ore. And that's flowing through a broader consumer malaise in China. So we're also avoiding, you know, areas that have, yeah, China consumption themes like, you know, a2 Milk or Treasury Wine. So avoiding, you know, iron ore-related stocks, Rio, Fortescue, Mineral Resources, and BHP to an extent, and some of those consumer stocks, yeah, it looks like there's some sort of secular trends pushing against them for a while. So let's turn to interest rates. You know, as they've risen, we've very much seen that sort of, you know, flight to safety and into large caps. So where are the opportunities and the risks in this? And when are you expecting a rotation back into small to mid-cap companies in Australia? Yeah, it's definitely interesting. Australia's a bit out of sync with the rest of the world. So whilst you know, Jerome Powell at Jackson Hole recently outlined the case for cutting rates in the U.S., you've already seen New Zealand cut rates, you know, U.K., parts of Europe. So we're definitely probably through peak rates into that rate cutting cycle. But the real question is how fast they come down, how far they come down, and when Australia joins the party. So Australia really under tightened deliberately through this inflationary cycle, which means we're gonna be later to cut and probably have less room to cut as well. And that means the market's probably got even a little bit excited about you know the prospects of rate cuts and what it means. But as you point out, so far, it's actually just been feeding into broader market indices, and we've seen it actually probably reflected in larger cap stocks and multiple expansion. To actually get you know real interest down at the smaller end of the market, which tends to have a little bit more domestic exposure, a little bit more cyclical exposure. You know we do need to see the consumer pick up, and that could be quite a delayed process. So you know we don't see rate cuts in Australia till sometime next year, and unless something goes wrong, it'll probably be quite a shallow rate cutting cycle as well. There's probably a little bit of time before we actually see cyclical strength come back to the smaller end of the market. So I've heard you speak before in terms of that massive shift from active to passive management. You know, w hat is driving that? And, you know, what are we seeing as a result of this? And I'm really interested in the risks as well. Yeah, it's well, there's two things, I think that are really driving it. One's a bit of a free rider problem, if you think about economics. It's great to have an efficient market where companies are priced effectively, and information is disseminated quickly and capital is allocated efficiently. That's what markets are there for. If you, you know, avoid paying active management fees, you can just buy an index and get all that for free. That's a free rider problem, and that's a bit of a trend that people go, "Why bother paying for active management? I can get all the benefits without paying for it." But you do get to the point where if passive becomes so large, the market starts to lose its efficiency, capital's not allocated well, and actually everyone loses out. So there's a bit of a failure of the market there and a failure of policy to address that. And the other issue is the way the government approaches superannuation in our country, which has supported consolidation of larger and larger managers, to the point now where we've got these huge super funds, they're actually too big to invest actively. So they themselves are investing passively. So there's both a shift to passive, and then even within active managers, there's more passive allocations occurring, and that's starting to distort the market. We've seen it, you know, very clearly over the last year, where the larger end of the market with bigger index weights in our market, even overseas markets, because liquidity conditions are still pretty easy, the economy has done better than expected, markets have been strong, the passive money has been flowing into the- So Sean, I'm really sorry. I think it's gone off again. Perhaps you can go back to where the passive money is flowing into the market. I think maybe in terms of shareholders, you can ma... I'm not sure whether or not- Can't hear you. At the moment. Yeah. No. Okay, I think we're just swapping Sean, because obviously he was right in the middle of a very- Often confused. Interesting. So Sean, you come in with me here. Slightly more intimate? So, yeah. No, that's all good. That's all good. That's why we have separate computers, but obviously we've got a failover on one Wilson Asset Management or a Future Gen computer. I swear I didn't touch it. It wasn't me. No, it wasn't you. You guys know. I think we're back on track, so I might ask Sean to go to... Basically, you got to the part where the sort of passive money coming into passive was actually- Yeah. I was saying some great stuff. You were. It was so good. I was talking to myself. It was very good. You were. Hey, I thought, geez! I thought, geez, I was quickly writing down. This is bloody good. I'm gonna ask Geoff for a wrap up after this, so. No, no, no. ... So let's go back, Sean, if you wouldn't mind just continuing- No, go. In terms of the passive inflows. Yeah. So we're just talking about passive and the fact that free riders in the market means people can get something for nothing. They can invest passively, and that's fine, but once passive becomes a significant part of the market, you actually start to lose efficiency. So you lose that pricing efficiency, what markets are there for allocating capital, and actually everyone loses out because you know, the economy and growth falls off. The other thing that's probably wrong with the market structure is just the super fund industry is consolidating and getting bigger and bigger. From a back office administration point of view, it makes sense, but from an investing point of view, they've become too big to actually make a difference with active investing. So they're also investing more passively. So you get this situation where the biggest stocks in the market receive more of the flows coming in when things are going well, and their multiples have been stretched out. And, it's a pretty clear example of that in CBA, Commonwealth Bank. It's our largest company now. It's about 10% of the index, and it's trading on 25 times earnings, which is bizarre and unheard of for a bank. Like, it doesn't have any real earnings growth. We've got a very mature mortgage market. You've got some stability now in net interest margins, and there's not a lot of capital risk, but there's not a lot of growth to justify that. It's premium to its own history, even to an extent to other banks. The whole bank sector is very expensive. It doesn't offer a great dividend yield now. Its dividend yield's below the cash rate. The valuation is so stretched, it makes sense even for people that have owned it for maybe twenty years or however long it's been listed, to sell it and take the capital gains tax. You're getting those sort of inefficiencies in the market building up, and that can cause instability, so that if we do have a downturn and you know, suddenly people aren't interested in Australia globally, they might want to allocate back to emerging markets or developed markets globally or into bonds or something else, or we hit a recession, some downside. Suddenly, the valuations in the market look very exposed, and the cost to you of investing passively becomes quite great because you've got 10% of your portfolio in a bank trading on crazy multiples. So I'm actually gonna interrupt you there- Mm. -because we've got a question from Sean for you. Sorry, from Harry. Sorry, Harry. And literally continuing, so if you can read it there: What is your view on the Australian regional banks, e.g. Auswide Bank, MyState Bank? Please. I get down to Bendigo Bank and Bank of Queensland but don't really go down beyond there too much. Basically, because it's a mature industry, if you're talking about mortgage, the mortgage market, it's also a scale industry in terms of processing and capital efficiency and everything else. So, as you get down to the smaller end of the market, there's some structural disadvantages there in terms of having cost base, being able to compete. So, I actually don't know specifically about those banks, but you generally see the market be less interested as you go down the smaller end of the market, and certainly Bendigo Bank and Bank of Queensland trade on lower multiples. They don't have the capital efficiency of the larger banks, and they can be a bit more exposed to economic downturns when they do hit. And I imagine as you get down smaller, it gets a little worse as well. But I don't know those companies specifically, so they might have some particular edges I'm not aware of. So one question we've got here is, the cost of living is obviously a huge focus for government and consumers. So- Mm. This is very topical. The select committee on cost of living is underway. Do you think anything will come out of it that can impact markets? I think it's probably a little bit of pre-election positioning in a political sense. We've had quite a big focus on cost of living politically. It is still obviously a major issue for households, but we've sort of been there a little bit with the airline inquiry. We've had supermarket inquiries, and we've had quite a lot of political beat-up there. Other areas that are driving cost of living are, you know, electricity is regulated, so hard to get too much there. Insurance is going up, but that's because inflation's going up and loss rates are going up as well. I think it's hard for them, other than political grandstanding, to do too much more than they've already done. Thank you. So you actually also mentioned earlier in terms of Powell putting a September rate cut on the table. Mm. What are you expecting from the Fed in the next twelve months, and what does this mean also for Australia? Yeah. So the Fed very likely will start cutting its next meeting in September. Mm. They've signaled that quite clearly. Mm. And they meet every six weeks, and I imagine they'll cut by 25 basis points at maybe every meeting. They might skip one or two, but as with the RBA, they'll be data dependent. So we've had a good run of inflation coming in lower than expectations. But most of that's been driven actually by global goods prices and goods deflation. So China's built a whole heap of excess manufacturing capacity, and it's back to its old trick of exporting disinflation to the world, which is good, helping anchor things. But if that ebbs away, don't forget you've got a political cycle there. Tariffs are coming in all around the world. Tariffs are great, but they're actually inflationary. They push up retail prices. That core services bit, things like housing and rents, even, you know, wages and labor costs, are actually quite sticky and hanging in there. So absent of the recession, we're not expecting big falls in interest rates, and probably not enough to really get some of the cyclical sectors firing, like, you know, house prices have stayed elevated. So even with interest rates coming down and moderating, affordability is still actually quite stretched. There's not that quick relief coming there, or the incentives for people to go out and spec build houses and, be able to onsell them, s o, yeah, we don't see a rate cut in sight from a big cyclical upturn coming. It's more of a removal of some of the restrictions and, yeah, we'll see how we go. So the question that we always get is, you know, we've got November the fifth, we have an election in the U.S. I won't ask you who you think is gonna win, but are you factoring in different scenarios into your portfolio? Yeah. We're largely sitting on the fence like the bookies. It looks very much fifty-fifty at this stage, so I wouldn't even hazard to guess. I think whatever happens, you've got to bear in mind that there's a lot of emotion that goes around political cycles. But as we saw, you know, the last time Trump got in with the presidency, there's a fair bit of volatility to start with, but the world didn't end and things moved along. You know, they've got some obviously different political policies that impact markets in different ways, more the U.S. market than the Australian market. I think the biggest one's probably Trump put in some corporate tax rate cuts, which Biden actually extended out, and Kamala Harris is talking about taking them away. Moving that rate from 21, 22 back up to 28%, that would be a negative for markets. They're both talking about they talk hard on China and trade and tariffs. They've actually both got tariff policies, but Trump's a little bit more aggressive in terms of tariffs against you know EVs and other bits and pieces. Once again, inflationary probably doesn't change the outlook for those things. There's not a lot of Chinese EVs being sold into the U.S., so the actual impact of that's probably a little bit more limited. The responses to geopolitics can be different, but that's another whole mess in itself in terms of what's going on there, that's probably even independent of the U.S. election cycle. Excellent. Thank you, Sean. Thank you so much. Thank you for everything you do for Future Generation as well, in terms of- Pleasure ... waiving your performance fees and your management fees, which has been substantial over the years. So thank you very much. And, and now we're going to turn to Mary Jane. So I'm gonna ask DEBRA's general manager- I think we've just had a little slight technical glitch on Caroline's computer now. I'm not sure. Can everyone hear me? Hi, Geoff. I can hear you, but I couldn't hear Caroline. Oh, I think we lost Caroline. Anyway, I think she gave you the start of the introduction. Obviously, you're, you know, you're one of the senior team members at DEBRA, and what-- that's, you know, one of the Children At Risk charities that FGX supports. Do you just wanna... I think Caroline sort of briefed you about- Yes. There's a little bit of an idea of what your work does and how it, you know, significantly changes young people's lives. Yes, absolutely. So, as some of the shareholders may already know, about DEBRA Australia, but for those who don't, we are the national charity in Australia that support those living with epidermolysis bullosa, which is a group of rare genetic disorders that predominantly affect the skin, but can also affect the internal linings, airways, eyes, or in more severe cases, it can be fatal as well. So, this is our focus is to support people living with this and their families, and look towards our vision, which is to reduce suffering of people living with this affliction. So, we do that through a range of different programs and services across Australia. There is roughly just over a thousand people living in Australia, statistically speaking, with this disease. EB, we call it for short, it's a bit easier to say. And in the last financial year, for example, we had five new babies born with this disease, and life expectancy can be very low for those that have the severe presentation of it. There are four main subtypes, but of EB, but even within those, it presents differently for different people, which makes management a very specialized service. So part of what we do besides actually offering these hands-on services where we're there for them, in the sense that in the medical world, we also are about advocating for awareness and understanding, further understanding of this disease, 'cause even though many within the medical community aren't very familiar with it, and there really is specialized treatment for this. We do support nurses as part of our program. We have in-hospital nurses, and we have in-home nursing program as well. Since having FGX's support, we've also been able to implement a psychology program, because that's another gap we identified within the system. There's fantastic support now available there, and since its inception in two thousand and nineteen, we've been able to respond to our community's needs, and the utilization of this program has increased by 400%. O h, you're back. I am back. I'm so sorry for everyone for that. So, I mean, I think the work that you do is really amazing, but do you wanna talk some of the key changes that you've advocated for to improve the lives of, you know, young people living with EB? So look, as an organization, there's been many areas in which advocacy has grown and been a focus, but in the last 10 years, more specifically with FGX's support, the implementation of the psychology program was huge. And you know, it started off really small, and as I just mentioned, it has increased significantly since inception, and even over the last year, it's doubled. The need for this has doubled. And we, as an organization, really want to pivot our existing services and develop new ones and programs that meet the needs of our community. So it's been great that with the support, we've been able to do that. We, we've been able to advocate for, a focus on mental health as well as the physical side, because everyone understands the physical side. Often in the more severe cases, as you'll see if you visit our website, et cetera, with the imagery we have there, full body bandaging or part body bandaging is required. So it's a very, it can be a very physical disorder, where you can see it. It can create scarring, in cases, blindness. So there's the physical side, and we deal with that and have been, and there's... In the past, there was advocacy towards the government to further support. So they did set up a bandaging scheme. So, bandaging is more freely available now. But there's the mental health side as well, which, until this program, hasn't been addressed as fully. So we're really glad that we've been able to advocate for that support, as well as, obviously continuing looking at research into treatments. And then we also advocate connection within our community and, against that sense of isolation that can often happen with the social side of living with something that's so physically impairing, that really stands out to people. It can be difficult for both the individual living with it and those around them, their family, to see that suffering. So, Without a doubt. But one thing you did mention there, which I was actually really interested in, is of how you've like leveraged the funding, because obviously we provide you with multi-year, untied funding. Untied funding being you spend it on what you really need to do, and obviously, you've leveraged it to get the government in terms of the bandaging program. Are there any other ways that you've actually leveraged it, anything going forward? Well, yes, I think that it's been very helpful, obviously. I mean, it's been vital, really. This unrestricted funding is getting harder and harder, I think, for charities to get that sort of support, where there's that trust and gives that flexibility to be able to use the funding where needed. So it's been greatly appreciated and certainly has helped us when talking to other people, other organizations looking for support, to be able to say that a credible, a fantastic organization like FGX supports us already and has been for 10 years now. So, that's been fantastic, and it's also freed us up to be able to go for those grants and et cetera, which are more tied and focused, and knowing that we have that flexibility with the untied funding to work around that and, yeah, still be able to grow our programs and shift as needed to meet our community. I think it's really important. I mean, I think with Mary Jane, I think it's been really important that you've actually got global funding as well. But actually, I've got a shareholder question, and he, the question is, you know, what is EB and how would a child get it? As in, is it genetic or is it... It is generally considered a genetic disorder, but in some cases, it does start spontaneously. So that is another area that we obviously continue to look at, the whole genetic side of it. You know, often people don't even know that they have it. You know, it can skip a generation, they don't know that it's in their family line. But yes, there's also a move towards any people that do know that they have it or there's a chance of having it with features to manage that. So that is something else that's, it's a growing area, I think, and we look to support that. And there's often limited funding for that from hospital. We actually recently- I think we're having a few technical- Oh, you're cutting off. In terms of going in and out. Yeah. What I might do is say thank you so much. I think the work that you do is incredibly valuable. And now I might actually go to Geoff, but I really want to thank you so much for coming in, and, you know, you know, it's quite heart-rending when I look at your website and when I've met some of your ambassadors as well. Yeah. But thank you very much. Thank you. We're getting some questions. Thank you. We're getting some questions now in for Geoff, but one question, Geoff, are you there? I just wanna make sure you're there when I talk to you. Yeah. I mean, I think my connection's been the highest quality so far, but who knows? You know, things happen in- Don't say anything. Things happen in, things happen in threes, and maybe we've had- Maybe we've had the whole three through. Yeah, we're good. So, I mean, Geoff, in terms of Future Generation Australia as an investment vehicle, I mean, you know, please, please do a wrap in terms of the importance of it as an investment vehicle to our shareholders. Well, that would actually have to be for the shareholders to decide. I can't tell them if it's important to them or not. You know, from my perspective, Future Generation Australia, which gives you exposure, you know, to the best Australian fund managers that we can find, and, you know, anyone who listened earlier, you know, listened to Sean Fenton, you know, a lot of experience, you know, highly intelligent, you know, one of Australia's, you know, top fund managers. You know, we've selected the best, and we've got 18 of them. Like, to me, the interesting thing is, I know in your introduction, you talk about, you know, discount NTA. You look at the performance of these managers and also how the portfolio's been put together by the investment committee, and a high quality investment committee. You actually get. You take less risk than the market, and these guys. You know, normally, when you take less risk than the market, you expect to get you know, a proportional less return, and these managers are giving you a better return than the market. But also, when we've been looking at the best managers in Australia, you tend to find the ones that look for the smaller growth or the medium-sized growth companies. And Sean talked about CommBank, how crazily expensive it is at the moment. And we've selected those managers, and they manage. They're focused on the more medium-sized growing Australian companies, and all the passive money hasn't been going there. You know, so to me, that's an area that really hasn't performed that well, the mid and smalls. You put that to one side, out of the universe we've picked in terms of the 18 managers, put them all together, they've outperformed, so they're giving you-- You're taking less risk, you're getting outperformance. You're taking exposure to a sector that hasn't performed that well, and you're getting outperformance of the All Ordinaries. So to me, you know, go back five months, you know, FGX was trading at about an 18% discount. You know, now at the end of last month, it was at 12%. I just looked it up. You know, assuming the market, you know, the portfolio's performed about in line with the market. As of now, it's about 11 and a bit% discount. You know, FGX, it's on its way back to a premium. I mean, it should be at a premium. You know, to me, you're getting exposure to these managers, and the incredible thing is you're actually not paying for it. You know, some of the money that the managers would get, go to support the charities, but also a reasonable amount of it stays with you, the investors. So... And then, you know, you've got, you know, a fully franked yield, and, and so to me, you know, I'm pretty confident that FGX, you know, is heading back, you know, to trade at an NTA, which, a few years ago it had, it was trading at. And, and to me, there should be an embedded, you know. Like, to me, some of these managers, you actually can't get exposure to, you know, their funds are, are shut. So it, that, that's. Does that sort of answer your question slightly? It was quite an open-ended question. I think one... the other question we've got is in terms of the discount to NTA is narrowing now. Why do you think that is? Because there's also been a lot of work, and with the investment, performance, you know, that, as you said, has come down. But why do you think it's now? Yeah. First of all, a listed investment company has to do four things to trade at NTA, if not a premium. It has to perform, and FGX has performed. Also, the marginal buyer tends to be a self-managed super fund or someone who's looking for yield or fully franked yield. So you have to have a clearly articulated dividend strategy, which FGX has. Also, you need to treat shareholders with respect, and that's, you know, to me, that's every listed company has to do that. And you see some companies that, you know, raise money at discounts and, you know, do the wrong thing by shareholders, and, you know, that's what we do. And the fourth thing is, you really have to have a disciplined shareholder engagement communication, you know, strategy. And because in the end, it is, it's supply, demand, and if all the shareholders understand what they've invested in and are happy, then they're not selling, and you only need a few, you know, first year economics. Actually, I only did first year economics at uni, but, you know, they show you the supply, demand curve, and that's where you need to get it to. And you know, so we're in the process of tidying up the share register. If you're a shareholder and you haven't been contacted by the investment team, send them an email. And And sorry, the Future Gen team, send them an email and give them a little blast. Because, you know, we're trying to engage. You know, if you haven't, you know, there's hundreds of people on this call, you know, please, you know, communicate, because it's your company, and you need to understand what you invested in. The- Mm-hmm. If you understand what you've invested in, then you'll realize what a great opportunity is that it's trading at a discount, and you'll realize why it should trade at NTA, if not a premium. And it will trade there, and I'm very confident. And historically, that's what you need to do. So why isn't it trading at a premium now? Unfortunately, these things take time. A number of years ago, you know, we had quite a reasonable-sized capital raising, and of that, a lot of... There was a lot of flow back in terms of sellers, so we had to work through that. You know, you know, there was a CEO before Caroline. There was a period there where the company, you know, was sort of had a big, you know, break in the CEO side, you know, Kate Thorley. So are you having a technical problem? Something's just- I think I just want to make sure that everybody can hear you. I could hear it clearly, but it was just bouncing back a minute ago when you touched the computer, so I don't know what that's done. That's actually good now. I can't hear it now. Brilliant. Brilliant. To me, yeah, we will be. They will trade back at a premium to NTA. And yeah, it's like it's quite clear that that's, you know, we're on the, we're on that path. Hopefully, Nigel, that's answered your question. I mean, he said, the question was, "Can you please explain why the market seems to price the shares in FGX and WAM Capital all sort of at a rather steep discount to NTA?" And I think you've explained the catalyst to that. Let me just touch on WAM Capital. WAM Capital is trading at about three, 3.5% premium to NTA, so it's not at a discount. And, like, effectively supply and demand, and WAM Capital's a totally different kettle of fish because it's paying out super dividends. You know, it's paying out the equivalent of about 14% pre-tax as fully franked dividends. So it's, you know, when the assets might go up by 10%, it's paying you more, so the capital actually declines. But that's not the situation at FGX. You know, and this is, you know, Caroline talked about the board, you know, gently increasing the dividend. The dividend on assets, you know, is a little over 5%, that's fully franked. Now, what does FGX have to earn? It, it obviously has to earn, you know, the pre-tax amount, you know, which is, you know, probably heading above 7.5% pre-tax, or in the sevens, to then pay the tax and then pay the fully franked dividends. Yeah, obviously, we get some flow through fully franked dividends from our, our fund managers. But, you know, so to me, FGX is poised to give you a combination of a sizable, fully franked dividend, you know, gently growing, and capital growth. And, and it gives you, you know, you, you. you. It gives you an incredible diversity. You know, like, to me, if you had to pay to get exposure to these fund managers, you know, and if you just paid their normal fees, you'd be paying nearly double the money that goes out to charity. So to me, it's a great structure for shareholders. The- Yeah. The next questions that are coming in, in terms of, Future Generation Australia and Future Generation Global, "Is there a maximum sort of amount that FG would like to manage, or are the size of these funds uncapped due to the LIC structure?" Another question from Sam saying, "What is the maximum size we're targeting for funds being managed by FGX?" I mean, maybe you want to explain that obviously, we need to get to a premium. Yeah, well, the good thing is, you know, we have never raised capital at a discount to NTA. So, you know, the goal will be to get both entities to trade at NTA, if not a premium. You know, my view is they should all have an embedded premium in them. And then, you know, the logic of potentially growing these entities, you know, there's an option there. Oh, sorry, I, I don't mean option as in have an option issue, but, you know, that's an alternative. You know, then we can, you know, potentially look at that. You know, the plan is to, you know, it would be to grow them. Now, obviously, the capacity of the global one is probably higher than the Australian entity. But you know, like, we, there's still a number of managers that are very willing to manage money pro bono. The current managers we've got, you know, they see, you know, the impact that, you know, FGX has on children at risk, and, you know, very real impact, and they're sort of emotionally attached to, you know, the journey we're on. So, you know, to me, they're just phenomenal structures, and, you know, we've put, you know, Caroline and her team and, you know, we've been lobbying the government to try to improve these structures for the investor. You know, like, to me, they're incredible structures, but you know, we just think there's a lot of opportunity. Obviously, you know, how we'll do it is that it's in shareholders' interests. Thank you, Geoff. Well, actually, one question we've just had in was whether or not we assist the not-for-profits more with their corporate governance and their process. And yes, we do try to, but realistically, what we want to do is make sure that these vehicles are really good for shareholders, just as, as Geoff said. I'm actually going to wrap up now. We do have a few other questions, but I will come back to you and speak to you. No, don't wrap up yet, Caroline. We've got five minutes. I tweeted and told everyone that we will be on till eleven o'clock. So unfortunately, in my world, now I came from investment management and stockbroking. My word is my bond. I'm more worried about the LIC, but, We're not wrapping up. Okay, we're not wrapping up. That's all good. What other questions have we got? So one other question was, would we ever think about doing a buyback? That's always an option. And as a board, you know, capital management is always on the, you know, every board meeting, capital management is one of the agenda items. You know, obviously, capital management's not only, you know, doing a buyback, it's dividends, it's raising capital, you know, it's profit reserves. You know, so to me, it's multifactorial. But we've always looked at it. You know, to me, it is the interesting thing is buybacks for operating companies tends to work. Buybacks for closed-end companies or listed investment companies tend not to work. One of the reasons that. And if you've got a group, and if you haven't come along, you know, been to one of our presentations, you know, please, we'd encourage you to come along. Now, in Melbourne and Sydney, so we have a thousand people in the room. If I said: Look, put your hand up, who thinks a buyback is good? And this is. Think of the logic. You're buying a dollar of assets, say, for. Well, at the moment, you know, with FGX, you're buying a dollar of assets at 11.6% discount. You know, then you think, "Well, that makes sense." You know, for every dollar of assets, then the asset value for everyone else goes up. So, but if I ask that question in a room of listed investment company investors, probably only about 10%-20% would put their hand up. Now, why is that the case? And so the other 80%-90% wouldn't. They would say they would prefer not to have that a buyback didn't occur. And the reason they'd say that is because, you know, first thing they think of, well, if the group, you know, like the investment manager, thinks that he can only make 12%, you know, then, hey, I'm investing with these guys to make 20% or 30%. So to me, that's a question mark. And then also, like, it actually does reduce the size of the company. And it sort of. To me, there's a lot of negative connotations in the closed-end space, and we've done all the analysis on the listed investment companies that have done buybacks. We have done, for Wilson Asset Management, you know, we bought back 35% of WAM Research, go back, you know, about twenty-odd years ago. And that took us seven years to get it to trade at NTA. It's the longest of all our LICs, and I think one of the reasons why is because we bought back 35% of the company cheaply, and investors don't like that. You know, they want the manager to be growing, to be successful, you know, to finding investment opportunities. For us, you know, as Future Gen, finding new fund managers that are gonna add value, investing with the ones that we've already got. Like, the fund managers, they're not there forever. You know, if they don't perform, you know, then they're removed, and that's another sort of question. I know we've probably got room for one more question. I sort of- We have. So Andy has said, which I quite like, he says, "Don't buy back. We need to get bigger to get in the ASX 200." But he's... But he's also asked for whether or not you have any stock picks for us, Geoff. No. I'm not stock picking today. Okay. Like, to me, I would've had to, you know, do a little bit of work. I know I've given stock picks before, and I think my last one did extremely well, but Of course. But actually, the question here that we have, another one is, you know, why, as obviously you're on the board, why didn't the board lift the dividend higher to help close the discount? Yeah. Well, that's a good question and a really good question, and there was very vigorous debate at board level, as there usually is on dividends. See, if we had, you know, I mentioned the figures before. Let's say hypothetically, you know, the portfolio, what has it done? It's done. Now, since inception, the portfolio's returned 9.1%. Yeah. Outperforming the All Ords by about 1.1%, with the volatility, probably 30% less volatility. So you're actually taking a lot less risk, and you're getting a better return from the market, like, that's what you want. You know, normally, when you take less risk, you, like, put your money in the bank, you get less, you know, less return. So to me, that's really exceptional, you know, performance now. So 9.1%. Let's say we increase the dividend to 10%, fully franked. We've got the profit reserve. You know, we haven't got the franking at the moment, but let's say we did have the franking, and we increased it to 10% fully franked. So then to do that, you've actually got to pay the tax. A little bit of franking will get through, so you've probably got a return about 14%. Yeah, and the one percent that goes to charity, so probably about 14.5%. Probably 13.5% gross up the, after tax, so 14.5%. So but we've only made 9%. So on our. You know, that's been the performance, even though it's outperformed the market. Mm-hmm. So then your assets are gonna fall. And then what happens is, you know, because you can only-- How do you get your returns? It's either it's income, or capital, or it's a combination of the two. So if you push the income too much, then you actually lose capital because, yeah, in that example I was giving you, like, say, you've got to make 14.5%, but you're only making 9%, so the capital drops by 5% pre-tax. And that's what's happened with WAM Capital. You know, we've held the dividends. During the GFC, everyone cut their dividends. We probably should have done that. We kept it high. We had the franking, and then everyone says, "Oh, look, I put it in this price, and now the assets have, you know, come down," but you've actually paid them out to shareholders. So FGX, you know, and the board, you know. Look, good on the board, I think they came to a really good compromise, where you're getting a really, like, an exceptional fully franked yield compared to the market. Like, you can't get that at the market. I haven't looked recently, but the market yield is probably around that 3.5%-4%. It's probably seventy. Last time I looked, it was 77% franked. So you're getting, like, 20%-25% better fully franked yield. You've got the profit reserve, you know, the franking, so you've got a little bit stored there, so we can keep it going. Plus, you'll get a bit of capital growth. You know, so to me, it's that combination, because you want to see your share price going up gently. The beautiful thing is, if you buy now, well, in theory, you're getting that free kick of, you know, say 11.6% discount, then it goes, you know, then you'll make 12 or 13% because it increases to NTA, on top of the market. I think that's good. Thank you. We do have a couple more questions on not-for-profits, but I will take those, but also which time, and I want to apologize as well for any of the sort of technology- Any more investment questions, Caroline, or? None. I think we've answered... I mean, a lot of them are about the discount, buying back. Yep, they're all roughly the same. If we get anything else, I will call them. Remember, like, guys, you know, this is your company. You know, so please, any suggestions, any ideas, any questions, please, contact us or contact the Future Generation team. Thank you. So thank you, Geoff. Thank you, Sean. Thank you, Mary Jane, and please do fill in the survey, because we'd like to know if you'd like to continue with this format. And any feedback, any questions, as Geoff said, please do e mail them in, and we'll call you back. And hopefully, we will see you at our regional shareholder presentations in October, or no doubt in Sydney or Melbourne or Perth. So thank you very much for listening.