Absolute Return Fund Performance: August 2026

Coal holdings generated most of the Datt Capital Absolute Return Fund’s 11.74% return in August, as Chinese supply disruptions tightened the seaborne coal market. The Fund ended the month 96% invested, with its portfolio more concentrated in energy and resources than at any point this year.

Energy Holdings Drove the Return as Coal Prices Rose

In August 2026, the Datt Absolute Return Fund recorded a net return of 11.74%, against 0.42% for its benchmark, the RBA cash rate plus 5%. The Fund has returned 13.09% per annum net to investors since inception in August 2018. Most of the month’s return came from energy holdings, with coal names posting double-digit gains as thermal and coking coal prices rose.

Materials was the second-largest contributor. Gold junior positions benefited from a stronger bullion price, and the Fund rotated into lithium late in the month, before the sector rerated. WiseTech Global (WTC) was the main contributor outside resources, rising more than 11% after its FY26 result.

The month follows a difficult year. The Fund’s 1-year return is -20.64%, against 8.93% for the benchmark, and its 3-month return is 0.22%. One strong month does not offset a drawdown of that size, and the Fund’s record is better judged across a full cycle.

Performance Snapshot

Performance reported after all fees and expenses. Inception August 2018. Past performance is not an indicator of future performance.

Download the full report: “Absolute Return Fund - August 26 - Newsletter”

To summarise:

• Monthly return: +11.74%
• Benchmark return (August): +0.42%
• 3-month return: +0.22%
• 1-year return: -20.64%
• 3-year return: +9.92% per annum
• 5-year return: +11.95% per annum
• Annualised return since inception: +13.09%
• Net return since inception: +169.87%
• Unit price: $1.1319
• Fund status: Open to wholesale investors

Disclaimer:

• The Fund’s benchmark is the RBA cash rate plus 5%.
• Past performance is not a reliable indicator of future results and does not guarantee future returns. Investment in the Fund is limited to wholesale and sophisticated investors as defined under Australian law.
• The Datt Capital Absolute Return Fund was launched in August 2018. Returns are calculated net of all fees and expenses and reflect actual performance since inception. Performance may vary for individual investors depending on the timing of their investment.

Chinese Supply Disruptions Tightened the Seaborne Coal Market

China produces most of the coal it consumes, and the seaborne market supplies only the shortfall. Seaborne prices therefore respond sharply to small changes in Chinese output. A modest domestic disruption can lift import demand enough to tighten the traded market for both thermal and coking coal. That pattern drove prices in August.

Producers capture most of that price move. Higher realised prices flow directly into revenue, while mining costs are largely set in advance. In June, the team argued that seasonal weakness in energy markets had created a mispricing and that energy commodity prices carried upside risk into the second half of the year. August’s move is consistent with that view. [Link to the June piece, if published.]

Small Caps Led a Market With Wide Sector Dispersion

The ASX 200 rose 1.54% in August, its fifth consecutive monthly gain, while the Small Ordinaries returned 5.18%. The modest headline gain for large caps sat above wide differences between sectors. Reporting season also lifted single-stock volatility through the month.

The RBA held the cash rate at 4.35% on 11 August in a unanimous decision. That extended the pause that began in June, after three rate rises earlier in the year. The Board said inflation remained too high and was not expected to return to the middle of the 2 to 3% target range until early 2028. It indicated it would act further only if upside inflation risks materialised.

Portfolio Positioning – August Snapshot

96% of the Fund’s capital was deployed at month end. During the month, the Fund rotated meaningfully away from higher-beta names, while its concentration and cyclical bias increased. At month end, the Fund held 17 positions, with the top five accounting for approximately 61% of the portfolio. The three largest holdings, in alphabetical order, were:

• New Hope Corporation (NHC): Energy
• Whitehaven Coal (WHC): Energy
• WiseTech Global (WTC): Technology

Energy was the Fund’s largest sector exposure at 41.2%, followed by Materials at 37.1%, Software & Services at 17.2% and cash at 4.5%. At month end, the team remained positive on energy and resources into the end of the year, with a continued focus on risk and portfolio quality.

What the Positioning Means for Investors

With 78.3% of the portfolio in Energy and Materials across 17 positions, the Fund’s near-term returns are closely tied to commodity prices. Concentration amplifies outcomes in both directions. For investors, the relevant question is whether the research behind each position justifies its weight, because a portfolio of 17 holdings leaves limited room for any single thesis to be wrong. The Fund’s approach continues to demonstrate:

• Concentrated positioning across Australian-listed assets
• Independent research into competitive advantage, capital allocation, industry structure and valuation
• Full manager alignment with investors
• Flexibility to hold cash and move across sectors as conditions change

About Datt Capital

Datt Capital is an investment fund manager in Australia focused on capital preservation and risk-adjusted returns. Our philosophy is centred on long-term wealth creation, combining disciplined research, opportunistic thinking and a strong focus on capital preservation.

To learn more about the Absolute Return Fund, visit the Fund page or contact our Head of Distribution, Daniel Liptak, on 0419 004 524 or via email at daniel@datt.com.au.