Announcement PDF Monthly Investment Update July 2024 7 Aug 2024 The Manager ASX Market Announcements ASX Limited Exchange Centre Level 4, 20 Bridge Street Sydney NSW 2000 Dear Shareholders, Please find attached Hearts and Minds Investments Limited’s July Investment Update. If you would like to receive these monthly investment updates via email please subscribe here. For and on behalf of the board, Eryl Baron Company Secretary Hearts and Minds Investments Limited ACN 628 753 220 A: 12.04A Chifley Tower, 2 Chifley Square, Sydney NSW 2000 | W: HM1.com.au | E: ir@hm1.com.au | P: 1300 737 760 or +61 2 92909600 Monthly Investment Update July 2024 Investment Objective Provide a concentrated portfolio of long-only positions in 25-35 global securities based on the highest conviction ideas from respected fund managers. The Company forgoes any investment fees and instead donates to leading Australian medical research institutes. Pre-Tax NTA $3.23 Portfolio Commentary Post-Tax NTA $3.15 Share Price $2.73 Global stock markets were mostly positive in July, although for the first time in a while, it was not the Nasdaq leading the way. Market concerns around overinvestment in AI led many of the magnificent 7 stocks down for the month. Whilst the Fed indicated that rate cuts were now definitely on the agenda for their September meeting, the market is now concerned that the predicted soft landing may be harder to engineer than previously thought. Softer economic news is now clearly bad news for markets rather than a positive sign of future rate cuts. The HM1 portfolio was up 4.6% for the month ahead of the MSCI World Index, helped by some good individual stock moves as well as the weakening Australian Dollar. The HM1 portfolio is up 13.7% over the past year, with an annualised pre-tax investment return of 10% pa since inception in November 2018, and has paid fully franked dividends totalling 53 cents per share. It has been an eventful two months for Telix Pharmaceuticals (TLX.AX), the stock pitched at the 2023 Sohn Hearts & Minds Conference by Rikki Bannan of IFM Investors. The most notable news is the proposed changes by the US Centres for Medicare & Medicaid Services for the reimbursement of diagnostic radiopharmaceuticals. Under current pricing rules, there could be a material price drop in the Medicare segment of the market once transitional pass-through status expires (which for TLX is mid-CY25). Whilst TLX is well progressed in mitigating this potential price drop with its “illucix 2.0” diagnostic currently in front of the FDA, it is nonetheless a big positive development for TLX and the broader industry. If confirmed these changes not only increase the value of TLX’s existing PSMA-PET imaging agent illucix, but also yet-to-beapproved drugs including its second generation illucix product, Zircaix (renal cancer diagnostic) and Pixclara (glioblastoma diagnostic). (ASX: HM1) Investment Performance p.a. (Since inception 14 Nov 2018) Latest Dividend (Interim dividend paid 18 April 2024) Fully Franked Dividend Yield1 10.0% 7cps 5.1% Cash Weighting 6% Profits Reserve 49cps (At 31 December 2023) Available Franking Credits 2 (At 31 December 2023) Cumulative Medical Research Funding 56cps $48.9m From a financial perspective, TLX released its Q2 business update, reporting revenue ahead of consensus expectations and upgrading its full year revenue guidance by ~10%. It also successfully launched a $650m convertible bond offering, allowing the company to accelerate its organic and inorganic growth strategy (including development of its clinical pipeline) after aborting its proposed US IPO in June. On the clinical front news was more mixed. While the FDA accepted TLX’s New Drug Application for illucix 2.0, later in the month, the company announced the Biologic License Application for its renal cancer diagnostic, Zircaix, had not been accepted for review. Whilst disappointing, TLX confirmed it expects the issue identified by the FDA can be remediated within 90 days and that it continues to see a clear path to product approval and commercialisation in 2025. 1Fully franked dividend of 14.0cps divided by share price on 31 July 2024. 2Represents the level of future dividends (expressed as cents per share) that can be fully franked. All figures as at 31 July 2024 unless otherwise stated. Fund inception 14 Nov 2018. This communication has been prepared by Hearts and Minds Investments Limited (ABN 61 628 753 220). In preparing this document the investment objectives, financial situation or particular needs of an individual have not been considered. You should not rely on the opinions, advice, recommendations and other information contained in this publication alone. This publication has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Past performance is not a reliable indicator of future performance. Monthly Investment Update July 2024 HM1 Investment Performance Investment Performance 13.7% 3 years per annum -3.5% Since Inception per annum 10.0% 20.0% 9.4% 12.4% 1 month 6 months 1 year HM1 Investment Performance 4.6% 10.0% MSCI World Index (AUD) 3.9% 12.5% HM1 Investment Performance is calculated after expenses and before taxes. The comparator is the MSCI World price index in AUD . Source: Citco Fund Services and www.msci.com. Inception 14 Nov 2018. Dividend History Dividend History FY21 FY22 FY23 FY24 Dividends – fully franked 12cps 13.5cps 13.5cps 14.0cps Top 10 Core Portfolio Holdings Represents 47% of total portfolio holdings (in alphabetical order) Conference Portfolio Holdings Represents 26% of total portfolio holdings (in alphabetical order) All figures as at 31 July 2024 unless otherwise stated. Fund inception 14 Nov 2018. This communication has been prepared by Hearts and Minds Investments Limited (ABN 61 628 753 220). In preparing this document the investment objectives, financial situation or particular needs of an individual have not been considered. You should not rely on the opinions, advice, recommendations and other information contained in this publication alone. This publication has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Past performance is not a reliable indicator of future performance. Monthly Investment Update July 2024 News from the HM1 Network In a recent episode of “Magellan in the Know,” Acting Head of Magellan’s Consumer Franchises and Healthcare team, Emma Henderson, is joined by Investment Analysts, Tracey Wahlberg and Lucina Martin to provide valuable insights for investors navigating a volatile market, discussing retail giants like Costco and Amazon and the challenges for iconic brands like Nike and Estée Lauder. They share the key factors influencing market caution, the impact of inflation on consumer behaviour, and the investment opportunities emerging amidst these challenges. You can listen to the episode here. Economists and market experts say the outcome of the US presidential election has been largely priced in by investors, as softening inflation helps to buoy share markets both globally and locally. According to Jun Bei Liu of Tribeca Investment Partners (Core & Conference Fund Manager), recent US inflation figures have caused a shift in the market's perception of potential interest rate changes. “The market is now thinking there’s a nearly 100 per cent probability of a rate cut in the US in September,” she said. You can read the article here, including insights from AMP Chief Economist, Shane Oliver. Senior Research Engineer, Owen Burns and his team at the Bionics Institute in collaboration with Lead Researcher Dr Mehrnaz Shoushtarian, are developing a new prototype to test tinnitus. Tinnitus affects 15% of the population and can severely impact quality of life. Currently, there are no reliable treatments for tinnitus and no objective tests to determine if treatments are effective. This innovative approach uses brain imaging technology to monitor oxygen levels in the brain. We are proud to support this project, nominated by Cooper Investors. You can learn more here. HM1 invests 35% of its portfolio in the highest conviction investment recommendations presented by local and global fund managers at the annual Sohn Hearts & Minds Conference. Don’t miss our most anticipated event, this time in Adelaide on Friday 15 November. There is an exciting lineup of international and local speakers planned - stay tuned for our official launch. Subscribe here to be the first to know more. Sohn Hearts & Minds is Australia’s leading finance and philanthropic event dedicated to advancing Australian medical research, which alongside HM1, has donated over $65 million since inception. Disclaimer: This communication has been prepared by Hearts and Minds Investments Limited (ABN 61 628 753 220) and may contain general information relating to HM1 securities. The general information should not be considered financial advice. HM1 is not licensed to provide financial product advice. The information does not consider the investment objectives, financial situation, or particular needs of any individual. The information is current as at the date of preparation and is subject to change. HM1 does not guarantee repayment of capital or any rate of return on HM1 securities. An investment may achieve a lower-than-expected return and investors risk losing some, or all, of their principal investment. Past performance is not a reliable indicator of future performance. This document may not be reproduced or copies circulated without prior authority from Hearts and Minds Investments Limited. Monthly Investment Update July 2024 Core Fund Managers Conference Fund Managers Designated Beneficiaries Pro-Bono Service Providers Disclaimer: This communication has been prepared by Hearts and Minds Investments Limited (ABN 61 628 753 220) and may contain general information relating to HM1 securities. The general information should not be considered financial advice. HM1 is not licensed to provide financial product advice. The information does not consider the investment objectives, financial situation, or particular needs of any individual. The information is current as at the date of preparation and is subject to change. HM1 does not guarantee repayment of capital or any rate of return on HM1 securities. An investment may achieve a lower-than-expected return and investors risk losing some, or all, of their principal investment. Past performance is not a reliable indicator of future performance. This document may not be reproduced or copies circulated without prior authority from Hearts and Minds Investments Limited.