Summary of Fiscal 2017

The Quest Australian Equities Concentrated Portfolio has concluded a strong fiscal 2017 with a pre fees return of 18.6%. This is 4.8% ahead of the ASX 300 Accumulation.

While a number of our stocks performed well, we think our rotation away from high PE stocks mid last year, around the same time as the US 10 year bonds bottomed, as having been the key decision that made this a successful year. The US bond market hit nadir in early July 2016 and over the following months, higher priced growth stocks relinquished market leadership in favour of lower PE stocks. This rotation saw Quest move into Boral, AGL Energy, Aristocrat, Fortescue, Commonwealth Bank, Suncorp and Lend Lease.

The rotation away from growth dealt harshly with stocks not in our portfolio such as Aconex, Blackmores, Domino’s Pizza and TPG Telecom and Sirtex.

The Quest portfolio has out-performed the market benchmark by 4.5% per annum for 12 years. Our average annual return is 11.6% pre fees while the benchmark achieved an average of 7.1% per annum over that period.