Top 10 Holdings Sector # % Transurban Group Toll Roads 6.8 American Tower Corporation Communications 4.9 Crown Castle International Communications 4.9 Vinci SA Toll Roads 4.6 Sempra Energy Integrated Power 4.6 Eversource Energy Transmission and Distribution 4.5 Red Electrica Corporacion Transmission and Distribution 4.3 Enbridge Inc Energy Infrastructure 4.2 Dominion Energy Inc Integrated Power 4.0 Norfolk Southern Corporation Rail 3.9 TOTAL: 46.7 Sector Exposure # Geographical Exposure # Performance Chart growth of AUD $10,000 ^ Airports , 7% Communications , 10% Toll Roads , 15% Rail , 9% Energy Infrastructure , 5% Gas Utilities , 5% Transmission and Distribution , 15% Integrated Power , 22% Water Utilities , 7% Cash , 5% Asia Pacific, 13% USA , 50% Canada , 4% Europe , 19% United Kingdom , 9% Cash , 5% $8,000 $10,000 $12,000 $14,000 $16,000 ^ Calculations are based on NAV prices with distributions reinvested, after ongoing fees and expenses but excluding individual tax, member fees and entry fees (if applicable). Fund Inception 19 July 2016. * 3 - year returns are calculated and rolled monthly i n AUD, with the outperformance consistency indicating the percentage of positive excess returns since inception. + The index is the S&P Global Infrastructure Net Total Return Index (A$ Hedged). # Sectors are internally defined. Geographical exposures are b y domicile of listing. Cash exposure includes profit/loss on currency hedging. Exposures may not sum to 100% due to rounding. Fund Update: 31 December 2021 Magellan Infrastructure Fund (Currency Hedged) (Managed Fund) ARSN: 612 467 580 Ticker: MICH $14,613 7.2% p.a. Fund Facts Portfolio Manager Gerald Stack Structure ASX - quoted Global Infrastructure Fund, A$ Hedged Inception Date 19 July 2016 Management Fee 1 1.05% Fund Size AUD $917.9 million Distribution Frequency Semi - annually Performance Fee 1 10% of the excess return of the units of the Fund above the higher of the Index Relative Hurdle (S&P Global Infrastructure Net Total Return Index (A$ Hedged)) and the Absolute Return Hurdle (the yield of 10 - year Australian Government Bonds). Additionally, the Performance Fees are subject to a high water mark. iNAV tickers Bloomberg MICH AU Equity MICHIV Index Thomson Reuters MICH.AX MICHAUiv.P IRESS MICH.AXW MICH - AUINAV.NGIF 1 All fees are inclusive of the net effect of GST Fund Features • ASX quoted version of Magellan Infrastructure Fund • Fund is actively managed • Minimum administration for investors; no paperwork needed to trade • Units can be bought or sold on the ASX like any other listed security • Efficient and live pricing • Provision of liquidity by the Fund • Settlement via CHESS • Magellan has significant investment alongside unit holders 3 Year Rolling Returns (measured monthly) ^* Against S&P Global Infrastructure Net Total Return Index (A$ Hedged) 1 Year Since Inception No of observations 12 30 Average excess return (% p.a.) 1.2 3.2 Outperformance consistency 92% 97% Fund Performance ^ Fund (%) Index (%) + Excess (%) 1 Month 7.3 5.7 1.6 3 Months 8.3 4.5 3.8 1 Year 15.2 13.7 1.5 3 Years (p.a.) 8.7 7.8 0.9 5 Years (p.a.) 8.5 6.0 2.5 Since Inception (p.a.) 7.2 5.4 1.8 Fund Commentary The portfolio recorded a positive return in the December quarter. Stocks that contributed the most included the investments in Crown Castle International, Norfolk Southern and CSX Corp of the US. Crown Castle gained after the tower operator announced it had increased its dividend by an annualised 11% a share when it delivered health y third - quarter earnings. Norfolk Southern climbed after the Atlanta - based railway operator's third - quarter report showed railway operating revenues increased 14% to US$2.85 billion. CSX rose after the Florida - based railroad and transport company's third - q uarter report showed revenue rose 24%, driven by growth across all business lines. The stocks that detracted the most were the investments in Aena of Spain, Transurban of Australia and Royal Vopak of the Netherlands. Aena, the world's largest operator of a irports, declined as the new covid - 19 variant disrupted travel. Transurban fell as investors worried about the potential impact of the surge in covid - 19 infections in New South Wales, priced in interest rate rises sooner than had been flagged previously by the Reserve Bank of Australia after a report showed inflation reached 3% in the 12 months to September, the ceiling of the central bank's target, and the company reached a settlement with the Victorian government and its contractors regarding the allocati on of cost overruns on its West Gate Tunnel project that was larger than investors expected. Royal Vopak slid as the backwardation in oil markets continued, even as the storage terminal operator reported a solid third - quarter result that topped expectation s. Stock contributors/detractors are based in local currency terms unless stated otherwise. Stock S tory: Dominion Energy Dominion Energy, a US regulated electricity and gas company, first invested in solar power in 2013. Now the utility that services nearly seven million customers in 16 US states has, at 2,300 megawatts, the third - biggest solar generation capability in the country. In home state Virginia, Dominion is building a further 3,700 megawatts of solar capacity as part of a drive to cr eate another 16,000 megawatts of this renewable source of power by 2035. Commencing in 2023, the company is spending US$10 billion to build wind turbines more than 40 kilometres out to sea off the Virginia coastline. By generating 2,640 megawatts of power, the offshore wind farm is expected to power 650,000 homes and businesses. Such steps and others are part of Dominion Energy’s commitment to achieve net - zero emissions by 2050. The company, which earned US$14.2 billion in revenue in fiscal 2020, has alrea dy reduced its carbon footprint by 42% over the past decade or so. The other relevant timeline that helps explain why Dominion Energy has come on to Magellan’s investment radar is a shorter one, tha t shows how a company owning regulated and unregulated power assets largely turned itself into a highly regulated utility company. This was done through two mergers with utilities and by selling most of the unregulated assets. The metamorphosis started in 2016 when Dominion Energy came together with Utah - based natural - gas utility Questar. Three years later, Dominion Energy fused with South Carolina - grounded electricity and natural - gas utility SCANA. The sale of the company’s merchant generation and gas transmission and storage assets has taken place over the past five years. The result is that 88% of Dominion Energy’s operating earnings now come from state and federally regulated utility subsidiaries compared with 40% in 2006. The remaining 12% of earnings flow from zero - carbon, long - term contracted power - generation assets; na mely, from Dominion ’s nuclear power plant in Connecticut, its interest in a liquified natural - gas facility on the Virginia side of Chesapeake Bay , and a portfolio of solar - generation assets . To see why Dominion Energy’s shift to being a regulated utility with a focus on sustainable energy is of interest to investors, it helps to understand how utilities are regulated. The key feature of utilities is they are monopolies in their vicinities. To stop utilities using this power to overcharge their customers, g overnments and utilities have developed a ‘regulatory compact’. Under this deal, monopoly utilities must invest the money required to provide the essential service in a safe and reliable manner. In return, utilities are allowed to recover their costs and e arn a ‘fair’ return. The amount invested on which a utility can earn a fair return is driven by the capital invested and is known as its ‘rate base’. As approved capital spending drives their long - term earnings, utilities seek to maximise the amount of reg ulator - approved investment as defined by the rate base, while also managing customer bill impacts. Under this regulatory framework, Dominion Energy is a promising investment for two reasons. First, given the legacy of unregulated assets, the company’s sto ck trades at a discount to other highly regulated peers. We expect this discount to close over time as investors come to appreciate the predictable income stream from its regulated assets that in rate - base terms are valued at about US$42 billion. (About 77 % of rate base is attributable to the electricity utility and the rest to gas, while Virginia and South Carolina subsidiaries account for a significant majority of regulated operations – representing about 52% and 20% respectively.) The other reason Domin ion Energy is a promising investment is the long - term relatively low - risk earnings growth we expect from the company’s assets. This is being supported by Important Information: Units in the fund referred to herein are issued by Magellan Asset Management Limited ABN 31 120 593 94 6, AFS Licence No. 304 301 ('Magellan'). This material is issued by Magellan and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation. This material does not take into acco unt your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell o r subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclos ure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or to continue t o hold, the relevant financial pr oduct. A copy of the relevant PDS and TMD relating to the relevant Magellan financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au. Past performance is not necessarily indicative of future results and no perso n guarantees the future performance of the fund, the amount or timing of any return from it, that asset allocations will be m et, that it will be able to implement its investment strategy or that its investment objectives will be achieved. Statements contai ned in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. This material may contain 'forward - looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materia lly from those reflected or contemplated in such forward - looking stat ements. This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is a ccurate, complete or timely and does not provide any warranties regarding results obtained from its use. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in thi s material. Magellan will not be responsible or liable for any losses arising from your use or reliance upon any part of the inform ation contained in this material. Further information regarding any benchmark referred to herein can be found at www.magellangroup.com.au. Any third - party trademarks contained herein are used for information purposes only and are the property of their res pective owners. Magellan claims no ownership in, nor any affiliation with, such trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan. MICH44561 regulators and legislators who are pushing utilities to invest in renewable forms of power generation because they help governments meet their decarbonisation goals and lower bills for users. The total cost of electricity of the solar farms being installed by Dominion Energy, for example, is lower than the variable costs of the coal power plants they are r eplacing. The company thus has the regulatory ok to boost its rate base by spending a lot of money on green energy, which provides the company with strong capital growth prospects. O ver the next five years, Dominion Energy intends to spend US$26 billion in emissions - reducing capital. By 2035, the utility could spend as much as US$72 billion to achieve regulatory - approved environmental goals. The company’s capital investment plan is expected to drive long - term earnings growth of 6.5% per annum. The combinati on of such capital and earnings growth on top of the predictability of the company’s income stream are why we hold Dominion Energy in the infrastructure fund. Now to the risks. The biggest one for utilities is that regulators regularly reassess their allow ed rates of returns. But Dominion Energy has largely settled its allowed return for its Virginia and South Carolina electricity subsidiaries for the medium term. Execution is another risk, especially given the magnitude of Dominion Energy’s investment plan . Some plans might never happen. Dominion Energy, for example, was recently forced to abandon its joint - venture Atlantic Coast Pipeline project due to delays from never - ending legal challenges that nearly doubled the cost of the project in the six years si nce it was announced. But that venture was peripheral to the company’s regulated utility business. The risks thus appear contained. To the benefit of investors, Dominion Energy has changed much since it first invested in solar power in 2013. The utility p romises to transform itself much more in coming years, most likely for the benefit of investors as well as society. Source: Company filings and website.

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