Datt Absolute Return Fund Performance – December 2025

Disciplined Positioning Amid December Market Rotation

The Datt Absolute Return Fund delivered a net return of 1.83% in December, outperforming the S&P/ASX 200 Index, which rose 1.3%. Performance was driven by strength in Materials, while Technology detracted as investors rotated away from growth-oriented sectors. The Fund remained conservatively positioned, with portfolio construction focused on resilience and selective opportunity capture.

At month end, the Fund held 23 positions with 91% of capital deployed. The top five holdings represented 46% of portfolio exposure, consistent with our high-conviction approach.

Performance Snapshot

• 1 month: 1.83%
• 3 months: -2.70%
• 1 year: 41.10%
• 3 years p.a.: 20.17%
• 5 years p.a.: 19.15%
• Since inception p.a.: 18.93%
• Since inception total: 260.95%

Performance is reported net of all fees and expenses. Past performance is not an indicator of future performance. Download the full report here.

Market Overview

December saw a continuation of sector rotation across Australian equities. Market leadership was concentrated in cyclicals, particularly Materials, while Technology and Healthcare underperformed. Financials delivered mixed results as investors weighed earnings momentum against persistent macro uncertainty.

Inflation remained elevated, with CPI surprising to the upside earlier in the quarter. The RBA maintained the cash rate at 3.60%, reinforcing a higher-for-longer interest rate environment. This contributed to late-month risk aversion, although overall market liquidity remained supportive and continued to create selective opportunities.

Portfolio Insights

Materials was the strongest contributor during the month, reflecting both sector tailwinds and stock-specific outcomes. Technology detracted as higher beta exposures were reduced across the market amid ongoing valuation pressure.

Key portfolio characteristics at month end:

• 23 positions held
• 91% of capital deployed
• Top five positions representing 46% of exposure
• Well diversified across sectors and holdings

We continue to observe a persistent valuation differential between large and small caps. M&A activity has also increased in the small cap segment, reinforcing the opportunity set for active, bottom-up stock selection.

Why It Matters for Investors

December highlighted the importance of disciplined positioning during periods of rotation and macro uncertainty. While markets advanced modestly overall, dispersion across sectors remained wide. The Fund’s structure prioritised capital preservation while maintaining flexibility to build exposure to higher-conviction opportunities as risk-reward dynamics improved.

For investors seeking less volatility and more consistent outcomes, environments like this reward independent research, patience, and conviction-led portfolio construction.

Outlook

We remain conservatively positioned given ongoing macro uncertainty and elevated interest rates. At the same time, we continue to build positions in select higher-conviction opportunities over the medium term, supported by valuation support, improving fundamentals, and identifiable catalysts.

The current environment remains favourable for skilled active managers, particularly as valuation dispersion and corporate activity continue to expand across the Australian small cap universe.

About the Datt Absolute Return Fund

The Datt Absolute Return Fund is an independent, research-led strategy focused on capital preservation and delivering consistent, risk-adjusted returns across market cycles. The Fund aims to achieve double-digit absolute returns over rolling two-year periods, regardless of market conditions.

Key details:

• Minimum investment: $100,000
• Management fee: 1.025%
• Performance fee: 20.5% above benchmark
• Benchmark: RBA Cash Rate + 5%
• Custodian: HSBC
• Auditor: Ernst & Young
• Trustee: Fundhost

To learn more or request a discussion, contact Daniel Liptak at daniel@datt.com.au or 0419 004 524.