Datt Absolute Return Fund Performance – February 2026

February Market Volatility Creates Opportunity for Selective Positioning

The Datt Absolute Return Fund delivered a net return of -3.40% in February, while the benchmark returned 0.68%. Despite the short-term drawdown, the Fund continues to deliver strong long-term performance, returning 16.92% net per annum since inception.

Performance during the month reflected increased market volatility following reporting season. While the S&P/ASX 200 briefly traded near record levels, intramonth sentiment shifted rapidly as many companies were sold off despite solid underlying business performance.

At month end, the Fund held 21 positions with 98% of capital deployed, with the top five holdings representing 48% of portfolio exposure, reflecting our high-conviction approach.

To read the full report, click here: "Absolute Return Fund Newsletter - February 2026"

Performance Snapshot:

• 1 month: -3.40%
• 3 months: -7.94%
• 1 year: 18.09%
• 3 years p.a.: 18.23%
• 5 years p.a.: 15.96%
• Since inception p.a.: 16.92%

Performance is reported net of all fees and expenses. Past performance is not an indicator of future performance.

Market Overview

Australian equities traded near record levels during February, with the S&P/ASX 200 briefly exceeding 9,000 supported by strong earnings and resilient commodity prices. However, markets remained volatile as investors reassessed valuations following reporting season.

Many companies were sold down despite delivering fundamentally solid results, reflecting a broader reassessment of risk across the market.

At the macro level, inflation remained a key focus for investors. The RBA raised the cash rate by 25 basis points, reinforcing expectations of a higher interest rate environment in the near term. At the same time, geopolitical tensions in the Middle East added further uncertainty, contributing to cautious investor positioning.

Portfolio Insights

Technology was the strongest performing segment of the portfolio, while Healthcare detracted from performance during the month.

A notable feature of the month was the sharp sell-off across parts of the technology sector, sometimes described as a “SaaS-pocalypse”. The sell-off was largely driven by concerns that advances in artificial intelligence could disrupt traditional software business models.

From our perspective, these concerns created a significant opportunity.

The portfolio took advantage of the sell-off to build positions in a number of technology leaders trading at the lowest earnings multiples seen in five years, despite what we believe are improving long-term business fundamentals driven by AI adoption.

Technology has now become the largest sector exposure in the portfolio, reflecting our conviction in the long-term outlook for selected companies in the sector.

To read the full report, click here: "Absolute Return Fund Newsletter - February 2026"

Key portfolio characteristics at month end:

• 21 positions held
• 98% of capital deployed
• Top five positions representing 48% of exposure
• Technology now the largest sector exposure

We continue to observe strong valuation dispersion across the market, particularly between large and small-cap companies. At the same time, M&A activity remains elevated within the small-cap universe, reinforcing the opportunity set for active stock selection.

Why It Matters for Investors

February demonstrated how quickly market sentiment can shift even when underlying company fundamentals remain intact.

Periods of volatility can create attractive entry points for investors willing to take a longer-term perspective. In particular, sharp sector rotations and sentiment-driven sell-offs often allow disciplined investors to accumulate high-quality businesses at significantly lower valuations.

For investors seeking less volatility and consistent outcomes across market cycles, environments like this often favour active, research-driven strategies with the flexibility to reposition portfolios as opportunities emerge.

Outlook

While inflation and geopolitical tensions remain key macro considerations, the current environment continues to present compelling opportunities for selective investors.

We remain constructive on the opportunity set within Australian equities, particularly where strong underlying businesses are trading at discounted valuations following recent market rotations.

The environment remains favourable for skilled active managers, especially as valuation dispersion widens and corporate activity continues to increase within the small-cap segment.

About the Datt Absolute Return Fund

The Datt Absolute Return Fund is a research-led investment strategy focused on capital preservation and consistent risk-adjusted returns across market cycles.

The Fund invests in a concentrated portfolio of carefully selected opportunities across Australian-listed assets, guided by independent research and a high-conviction investment process.

Key details:

• Minimum investment: $100,000
• Management fee: 1.03%
• 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 about the Fund offerings, please contact our Head of Distribution, Daniel Liptak, at daniel@datt.com.au or 0419 004 524.