25
Jan

Quest ahead of market in a tough year

?????????????????????????????????????The Quest Sophisticated Investor portfolio returned negative 7.1% after fees in a market that fell 10.9% over the calendar year. That result is 3.8% ahead of the market, just shy of our 4% out performance target. The best stocks for us were Transurban Group, Macarthur Coal and GPT Group.

Transurban benefitted from the defensive nature of the stock; it lacks exposure to economic volatility and provides a growing dividend stream in a market that has sought the safety of yield. Transurban continues to trade below our valuation despite the 16% rise over the year. Macarthur Coal popped 29% over the year and was taken over by Peabody Coal Inc in December; we  also sold Equinox into the Barrick Mines take over in July with a gain of 31%. GPT proved that you can get good returns from REITS if bought at the right time. GPT is back after the disastrous shenanigans of the pre GFC period and is now managed by a sensible team. We continue to own the stock.

Gindalbie Metals was our worst performer. Gindalbie is now well into the development of the Karara Mine and within 12 months of first magnetite ore production. We got the timing wrong here but hold our view that the stock is too cheap. Our relative performance also suffered by not owning Telstra (up 31%) and National Bank (up 6% ) during the year.