Datt Absolute Return Fund March 2026 | Performance Update

Why the energy shock is reshaping how the Fund is positioned

March 2026 was one of the weakest months for Australian equities in recent years. War-risk in the Middle East and threats to the Strait of Hormuz drove a sharp repricing across global energy markets, pulling the S&P/ASX 200 down 7.8% and the All Ordinaries a further 7.5%. The Datt Absolute Return Fund returned -12.67% for the month, with performance overwhelmingly driven by sector rotation under geopolitical stress. Since inception in August 2018, the Fund has returned 14.67% per annum net to investors.

This piece forms part of Datt Capital's ongoing market insights series.

Market Overview

The S&P/ASX 200 traded from around 9,140 at the February peak to approximately 8,430 late in March. Energy was the clear outperformer for the month, with the ASX Energy Index up approximately 19%, supported by Brent crude rising 48%, Asian LNG up 61%, and coal up 20%. By contrast, technology, consumer and industrial sectors lagged as higher oil prices revived inflation fears and pressured valuation multiples.

The month was defined by sharp sector rotation, rising volatility, and a market increasingly driven by geopolitical headlines and energy-security risk premia. As Datt Capital outlined in its analysis of when safe havens stop working, energy has increasingly become the real flight-to-safety trade as traditional defensive assets lose their reliability.

Inflation remains a concern, with the RBA raising the cash rate by a further 25 basis points. Datt Capital anticipates a mixed inflation outlook ahead, driven by a weaker labour market that may partially offset the present energy shock stemming from the conflict in the Middle East. The environment remains very beneficial for active, skilled stock pickers, and the team continues to see excellent opportunities. M&A continues to drive interest in small caps.

Performance Snapshot

The Datt Absolute Return Fund returned -12.67% in March 2026. At month end, 85% of the Fund's capital was deployed. The Fund held 14 positions, with the top five accounting for 58% of exposure.

• 1 month: -12.67%
• 3 months: -21.05%
• 1 month: -12.67%
• 3 months: -21.05%
• 1 year: 15.03%
• 3-year p.a.: 13.09%
• 5-year p.a.: 14.67%
• Since inception p.a.: 14.67%
• Since inception total: 184.98%

Read the full report: "Datt Absolute Return Fund March 2026 | Performance Update".

Performance is reported after all fees and expenses. Benchmark is the RBA cash rate plus 5%. Inception date of the Fund is August 2018. Past performance is not an indicator of future performance.

Portfolio Insights

Performance this month was disappointing and was overwhelmingly driven by sector rotation under geopolitical stress. In response, a hard reset of the portfolio was undertaken, with a significant rotation into the energy sector.

Preferred energy exposures are in local mid-stream refineries and in LNG-derived commodities such as thermal coal, which stand to benefit from the significant physical disruption in energy commodities globally. The top three portfolio holdings at month end were Ampol (ALD), WA1 Resources (WA1) and WiseTech Global (WTC).

For investors seeking context on how this energy shock is flowing through to corporate earnings and Australian equities more broadly, Datt Capital's recent piece on the energy shock fuelling disruption for ASX stocks outlines the specific mechanisms and sectors most at risk.

Why It Matters for Investors

March tested the resilience of every active strategy in the Australian market. For absolute return investors, months like this underscore the importance of a fund that can reposition decisively rather than remain anchored to prior exposures.

The Fund's benchmark is the RBA cash rate plus 5%, which means the return objective is explicitly independent of equity market direction. The hard reset undertaken during March reflects that mandate in practice: identifying where physical disruption is creating durable value rather than waiting for the broader market to stabilise.

For sophisticated investors managing capital across cycles, the sequence of returns risk framework published earlier this year is relevant here. The timing and magnitude of drawdowns matter as much as long-term averages, and the Fund's positioning reflects a deliberate view on where that risk is concentrated right now.

Outlook

The portfolio remains conservatively positioned given volatile market conditions, with 85% of capital deployed and elevated selectivity across holdings. The energy rotation positions the Fund to benefit from a geopolitical environment that is unlikely to resolve quickly.

The team continues to see excellent opportunities across sectors, particularly where M&A activity is accelerating and valuations have been compressed by sentiment rather than fundamentals. Portfolio construction remains disciplined, with flexibility retained to allocate toward businesses with durable fundamentals, clear catalysts, and attractive risk-reward profiles as opportunities emerge.

As explored in Datt Capital's analysis of identifying overlooked Australian small-cap opportunities, the current environment rewards depth of research and patience over momentum-driven positioning.

Frequently Asked Questions

How did the Datt Absolute Return Fund perform in March 2026?

The Fund returned -12.67% in March 2026. Performance was overwhelmingly driven by sector rotation under geopolitical stress, as war-risk in the Middle East and threats to the Strait of Hormuz caused a sharp repricing in energy markets. Since inception in August 2018, the Fund has returned 14.67% per annum net of all fees.

What drove the portfolio repositioning in March 2026?

The team undertook a hard reset of the portfolio during March, rotating significantly into energy. Preferred exposures include local mid-stream refineries and LNG-derived commodities such as thermal coal, which stand to benefit from the significant physical disruption in energy commodities globally. The top three holdings at month end were Ampol, WA1 Resources and WiseTech Global.

How is the Datt Absolute Return Fund different from a traditional equity fund?

The Fund is benchmarked against the RBA cash rate plus 5%, not an equity index. This means the return objective is explicitly independent of market direction. The Fund invests in a concentrated portfolio of Australian-listed assets, unconstrained by sector or size, applying independent research to identify overlooked investment opportunities across multiple asset classes.

What is the Datt Absolute Return Fund's track record since inception?

Since inception in August 2018, the Fund has returned 14.67% per annum net of all fees, with a total return of 184.98%. The benchmark has returned 7.40% per annum over the same period, representing a net value add of 7.27% per annum since inception.

How does Datt Capital manage risk in the Absolute Return Fund?

Datt Capital applies a disciplined, research-led process focused on preserving capital first. The Fund maintains a concentrated portfolio of 14 to 25 positions, retains flexibility through elevated cash during periods of uncertainty, and rotates decisively when the research identifies a more compelling risk-reward profile. The Fund's Sortino ratio of 1.03 and Sharpe ratio of 0.69 reflect this focus on risk-adjusted outcomes.

About Datt Capital

The Datt Absolute Return Fund is a high-performing, multi-asset strategy designed to protect capital and deliver steady long-term returns with less volatility across market cycles. To learn more or to invest, visit the Datt Absolute Return Fund page or contact us directly.