05
Nov

Quest return well ahead of market

All-BlacksThe Quest Australian Equities Concentrated portfolio has a 1 year return of  8.3%  and is well ahead of the benchmark of  minus  0.5%. The portfolio has benefitted from holding only 5 of the top 20 stocks in favour of mid and small cap stocks. We currently hold 30 shares in companies.

Amongst smaller names over the last 12 months, Surfstitch has surged 161%, Smart Group has risen 154%, Viralytics 85%,Vista Group 74% and Magellan Financial 73%. A number of other stocks gained more than 20% including Henderson Group, Amaysim Australia, Regis Healthcare, APA Group and CSL.

We do not see any change to our strategy in seeking stocks that are new to the market that deliver new innovation and thinking into the economy. We are currently reviewing a number of smaller stocks, a few subject to IPO and anticipate that we will take a couple of  new positions prior to Christmas.

The performance of the top 20 has however been so poor that some value may be emerging. Origin Energy has fallen 52% over 12 months while Woolworths is down 29%, BHP 20% and Woodside 19%. At this stage however, none of the Top 20 look compelling to us.

Our efforts continue to be in the mid cap and small cap space.