Update No. 156 – 29/03/14

We are 3 years old as at this update. Well, we deployed first capital on April 1 2011, so the birthday is a couple of days away yet…

The 3^rd quarter of FY2014 was unspectacular for both EGP, which finished the quarter up 0.88% and for the ASX200, which finished the quarter up 1.56%. Given the very impressive gains that started in mid-2012, it shouldn’t surprise too much when the gains level out for a few months.

Conditions look relatively benign for the market, no major threats on the horizon and earnings growth returning to a number of industries that have lacked such growth for a while. I have mentioned before that it is at these benign times a shock can cause the greatest market reaction. We would like a good jolt to the markets to create opportunities, but remain of the opinion 2014 will be an average year. In fact, if the next 9 months were repeats of the first 3, the 2014 benchmark performance would land quite in the middle of the band of likely outcomes I posited back then.

As I discuss within the 3^rd quarter update (.pdf), we have managed to ferret out a number of opportunities that I am fairly excited about, there is no guarantee it will have any great effect over the short term, but after finally deploying some capital of late, I certainly feel more confident about the likely results in the medium term. We are, however, back to nearly 23% cash after dividends and inflows have replenished our recent capital allocation efforts, but we do have some good ideas, they may take a little patience is all.

For those of you joining us (or adding to your holdings) in the March quarter intake, your shares will be issued at the closing price below of $1.61640 and you’ll get an e-mail in the next day or two setting out your adjusted holdings – Tony Hansen 29/03/2014

EGP Fund No. 1 Pty Ltd. Up by 0.88%, trailing the benchmark by 0.68% since January 1^st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 65.74%, leading the benchmark by 38.52% all-time (April 1^st 2011).

^{*1 after 31May 2013 dividend of 2.333 cents per share plus 1 cent per share Franking Credit}

^{*2 calculated based on dividends reinvested}