Quest X20 Australian Equities Fund
The Portfolio comprises between 20 and 40 securities and aims to outperform the S&P/ASX 300 index excluding the 20 largest companies.
The Fund’s objective is to outperform the Benchmark (as defined below) after fees, on a rolling three-year basis.
The recommended investment timeframe may not be appropriate for you at all times or suit your particular needs. You should regularly review all aspects of your investments.
This Fund invests in Australian equities with a bias to mid and small capitalised companies. As a result, an investment in this Fund carries a higher-risk level.
The Fund is suited to investors looking for exposure to Australian equities and who recognise the risk and return characteristics of investing in mid and small companies. Investors should also be comfortable with the focus on growth investments and have a timeframe of five years or more.
Investment style and approach
The assessment of business quality is fundamental to the Quest investment process. The aim is to identify companies that can deliver good returns on invested capital and sustain those returns through time. The Fund will have significant exposure to mid and small-capitalised and will typically have a bias to companies with growth characteristics and may have exposure to companies not in the benchmark.
Asset allocation
| Australian equities | 75-100% |
| Cash | 0-25% |
The maximum cash levels that can be held by the Fund is 25%. Practically, cash levels can be expected to be less than 10% in the majority of cases.
Significant features
This is an actively managed portfolio of Australian shares aiming to deliver capital growth and some income over the medium to longer term.
The Fund comprises between 20 and 40 securities with an objective to outperform the S&P/ASX 300 index excluding the 20 largest companies.
The Fund will target companies that are likely to deliver good returns on capital and will have significant exposure to mid and small-capitalised stocks. The Fund may invest in securities expected to be listed on the ASX except those expected to be included in the S&P/ASX 20 Index upon listing.
The Fund will typically have a bias to companies with growth characteristics and may have exposure to companies not in the benchmark. Both these exposures will vary through time as opportunities arise. Portfolio risk is actively managed with a focus on capital preservation.
Significant benefits
Investors will access a share portfolio that aims to deliver above-benchmark returns over the medium to long term and will allow diversification away from the larger financials and resources companies that dominate the S&P/ASX 20 Index.
The Fund will leverage the highly experienced Quest investment team and its process. This team conducts ongoing research to assess the business quality, earnings prospects and relative valuations of investments being considered for inclusion in the portfolio.
The assessment of business quality is fundamental to the Quest investment process. The aim is to identify companies that can deliver good returns on invested capital and sustain those returns through time. The Fund will have significant exposure to mid and small-capitalised which can generate good returns for investors over time. Quest has a long track record of investment performance leveraging this investment process.
In addition, benefits to investors in the Fund may include:
- ability to invest for less cost than ordinary investors can achieve individually;
- ability to add or withdraw investment funds relatively quickly;
- the right to receive any distributions from the Fund, usually annually. Distributions may also carry tax credits;
- a robust compliance and governance structure with a trusted Responsible Entity and legal rights under the Constitution of the Fund;
- receiving regular reporting including monthly unitholder statements, yearly income distribution statements and annual tax statements; and
- have ongoing access to investment information.
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This information is intended as indicative and general information rather than advice. Quest Asset Partners holds an AFS Wholesale Licence. Quest’s products are not directly available to, and may not be appropriate for, retail investors. Retail clients may invest via a retail platform and should seek advice from their financial adviser before doing so. The information has been prepared without taking account of any individual’s objectives, financial situation or needs. The portfolio returns quoted above represent the return achieved if invested in the Quest portfolio on the Mason Stevens platform since inception (June 2016). Individual returns will differ for investors that made an initial investment after this inception date or where additional investments, redemptions or any SPP investments have been made. Past performance provides no guide to future performance. Neither Quest Asset Partners Pty Limited nor any member of Quest guarantees the performance of Quest funds, the repayment of capital or any particular return. Please contact Quest for further information
Quest Asset Partners was formed in 2004 to create an independent boutique Australian equities manager that was motivated by performance and not by size. The firm manages in excess of AUD$2 billion for institutional, wholesale and wealth management clients. Quest is 100% privately owned by the investment team who have built a long standing and sophisticated 3 Stage investment process that dictates stock decisions and shapes portfolio construction. All staff are co-invested in the portfolios alongside clients. Quest has a long-standing track record with a recognised skill in analysing and investing, particularly in small and mid-cap stocks. The business adheres to strict compliance guidelines and embeds an understanding of sustainability into the investment process.
The Quest team believe they have a number of competitive advantages:
- Independently owned;
- A long track record of 18 years;
- Lack of staff turnover in the investment team thereby retaining intellectual property;
- In depth research that pinpoints the key drivers of performance and determines our target price. We believe accurate business assessment requires a combination of skills and that stock research is a mix of both art and science;
- A strong understanding of the business value chain;
- A process that continually reviews the quality ranking and valuation assumptions for each business;
- Access and capacity to interview senior management of investee companies and competitors;
- Willingness to undertake travel to differentiate business knowledge including finding similar business models in other markets;
- A nimble team that undertakes detailed peer review of business valuations; and
- A bespoke valuation template that allows sensitivity analysis.
Troy is a Director and Portfolio Manager at Quest Asset Partners. He has over 25 years’ experience in Australian investment markets, being particularly active in mid and small cap industrials, technology stocks and the healthcare sector. Troy joined Quest in 2007 and was formerly a Director in Equity Capital Markets at UBS and prior to that ABN AMRO Rothschild. He also advised listed companies on transactions and investor relations as Director at Channel Financial Communication. Troy originally qualified and practised as a Veterinary Surgeon and earned an MBA in 1995.
Qualifications: MBA (Dist), Univ. NSW BVSc (Hons), Univ. of Syd.
Swapan is a Portfolio Manager and shareholder having joined Quest in 2014. Previously, Swapan was an Equity Research Analyst at BBY Ltd for 6 years. During this time, he covered a range of sectors including small industrials, mining, banking, diversified financials and equity strategy. Prior to this, Swapan held various roles within Australian equities at CommSec. Swapan is a CFA Charter holder.
Qualifications: CFA BComm. (Accounting and Finance), Univ. of Sydney CFA Charterholder
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Quest Asset Partners Pty Ltd holds a wholesale Australian Financial Services Licence from ASIC (AFSL Licence No. 279207).
As the holder of a wholesale AFSL licence, those who satisfy ASIC’s ‘Sophisticated’ or ‘Professional’ Investor requirements can come directly to Quest. Both the Quest Ex20 Trust and Quest Long Short Trust have an external Responsible Entity and are accessible for ‘Retail’ investors via Equity Trustees.
- QuestLong Short PDS from Equity Trustees: Link to Quest LongShort PDS
- QuestX20 PDS from Equity Trustees: Link to Quest X20 PDS
Quest SMA portfolios are available on investment platforms including Macquarie, JBWere, Mason Stevens, MyNorth, Netwealth, HUB24 and Xplore Wealth. Retail investors can access the SMA portfolios via their financial adviser.
Quest provides four Australian equity portfolios run by various members of the experienced team. All Quest portfolios utilise the long standing Quest investment philosophy of combining business quality and value disciplines. To satisfy ASIC requirements, some portfolios are available directly from Quest whilst others are accessed via financial planners, investment platforms and/or the Responsible Entity of our investment trusts.
The following table provides a table of accessibility.
Institutional Investors sign an Individually Managed Account (IMA) agreement directly with Quest which can be tailored to suit specific needs. Quest uses Link Fund Services (LFS) for back-office functions and Institutions elect the custodian. Please contact Quest for more information.
Quest Portfolios have ratings from various independent manager researchers, such as JANA, Willis Towers Watson, Lonsec and Zenith.
The current Lonsec ratings are (as at November 2022):
- Quest Concentrated - Recommended / 4 Stars
- Quest Ex20 - Recommended / 4 Stars
- Quest Long Short - Recommended / 4 Stars
Financial advisers can email quest@questap.com.au for the Lonsec and Zenith reports.
This depends on the product. The Trusts pay annual distributions. The SMA’s reinvest all income and realised gains. A client can redeem all or part of their investment at any time. Redemptions are usually settled in 2 days.
The Quest Long Short and X20 Funds have a minimum of $50,000. Please see your financial adviser to invest with Quest on Mason Stevens, Macquarie, HUB24, Netwealth, Xplore Wealth and MyNorth. The minimum investments are set by the platforms. For clients on the JBWere Multi-Asset Platform (Sophisticated Investors) the minimum investment is $250,000. Some minimums can be varied by agreement. Please contact Quest.
All portfolios have the objective of adding value after fees over the relevant portfolio benchmark over the medium term.
Portfolios have both Quest Investment Management fees and platform or trust fees depending on the investment structure. Please see the details in the particular PDS or platform documents.
Quest portfolios generally carry management fees and performance fees. Performance fees are paid when portfolios perform well. Most portfolios have performance fees on outperformance above a benchmark such as the S&P/ASX300 Accumulation Index whilst one portfolio has performance fees on returns above an absolute hurdle. All mandates with performance fees have high water marks for the benefit of clients where underperformance must be recouped before performance fees can be earnt.
Quest Directors have considerable experience managing large portfolios. Quest has chosen to remain a smaller boutique to ensure size is not an impediment to client returns. We have chosen a performance fee model to offset the smaller scale.
A central tenet of the Quest Asset Partners investment process is the assessment of business quality. We are attracted to companies that can demonstrate an ability to attain and sustain above average returns on capital employed. In our experience, companies that can maintain high returns on capital are rare and can become valuable. Consideration of Environmental, Social and Governance (“ESG”) factors are important inputs into our qualitative assessment of business quality. It may also impact our valuation of a company, reflecting our evaluation of the risks inherent in each business.
Quest philosophy is to provide ‘best ideas’ portfolios. We limit the stock numbers in each portfolio in order to maximise both the quality of holdings and the weights held in each stock. In this way we seek to maximise potential returns.
Our Concentrated mandate limits holdings to no more than 35 securities will be held in a portfolio and historically clients have held approximately 30 stocks. The Quest Ex20 has a 40 stock limit whilst the Long Short has a higher limit. A Quest portfolio will be more volatile than the relevant Australian equity index with the potential to deliver larger absolute gains or losses.
Prior to the launch of the Quest Long Short Fund in February 2020, Quest did not short sell stocks. The Quest Long Short Fund is classified as a 130/30 active extension strategy. Up to 30% of the portfolio can be shorted and reinvested in alternative long investments. In November 2022 the Long Short is 5% of Quest’s FUM, so shorting is currently a small activity at Quest.
Some Quest portfolios are available as SMA’s on various investment platforms such as Hub24 and Macquarie. Investors invest into a Separately Managed Account (SMA). This structure allows Quest clients to have their own individual portfolio that replicates a model portfolio. As a result, all clients have the same portfolio of shares. The shares are held in the name of the applicable custodian on behalf of our clients.
In contrast to pooled investment vehicles or unit trusts, investors retain individual ownership of the underlying investments managed by Quest and there is no transfer of capital gains between clients. This may allow clients to benefit from the tax advantages from discounted CGT benefits.
Only institutional mandates and the Quest Long Short allow for use of derivatives. In practice, derivatives are seldom used except to manage large client flows.
If you have any questions, please contact Quest on 02 94092333 or email quest@questap.com.au
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The issuer of this product is identified at the top of this page. The PDS and target market determination for the product are available in the Documents section of this listing. Prospective investors should consider the PDS before deciding to acquire the product. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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