05
Oct

Quest ahead of benchmark in tough market

?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????Quest 1 year performance numbers released by JB Were Managed Funds for the year ended 30th September 2011 show Quest has returned -3.28% pre fees compared to the ASX 300 return of -8.71%. This represents relative out performance of 5.4% in a tough year.

Over the last year we have been concerned about increasing debt pressures in both Europe and China and have taken a more defensive portfolio approach as a result. While the trajectory of the market has been down, we have reduced our resource investments after some good performances in favour of higher yielding stocks such as Transurban, GPT Group and Stockland. We have avoided exposure to stressed sectors such as retail and insurance.

We believe the European woes can only be addressed by an acceptance that many banks have invested poorly in bonds of neighbouring countries and must accept the losses that result. This will lead to a recapitalisation of the banking sector. Partial or total nationalisation is possible in some cases.

We do not envisage rotating our portfolio into a more aggressive stance until this recapitalisation process commences.