Datt Absolute Return Fund Performance – June 2026

In June 2026, the Fund returned -8.14%, driven almost entirely by an energy exposure pullback as a Middle East ceasefire triggered a sharp sector rotation.

Energy Exposure Drives a Volatile June

The Datt Absolute Return Fund delivered a net return of -8.14% in June, underperforming a Benchmark return of 0.77%. The Fund has returned 12.15% per annum net to investors since inception. The reduction in portfolio value was driven almost entirely by the Fund's energy exposure, which pulled back sharply as the market shifted away from energy following a ceasefire in the Middle East. The month also coincided with the seasonal low in global energy markets.

At month end, the Fund held 20 positions with 97% of capital deployed. The top five holdings represented 53% of portfolio exposure.

Performance Snapshot

• 1 month: -8.14%
• 3 months: -13.20%
• 1 year: -18.64%
• 3 years p.a.: 7.00%
• 5 years p.a.: 9.27%
• Since inception p.a.: 12.15%
• Since inception total: 147.36%

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

Download the full report - "June 2026 - Absolute Return Fund Newsletter"

Market Overview

The ASX 200 rose 0.64% in June, a modest headline that masked a sharp rotation towards large cap stocks. In contrast to the resource-led leadership earlier in the year, cyclicals reversed: energy and coal names led the market lower as miners and banks dragged the index down into the close, with oil retreating on hopes of Middle East de-escalation. Market breadth was poor and dispersion remained wide.

The May monthly CPI print showed headline inflation easing to 4.0% from 4.2%, helped by lower fuel prices, though trimmed mean inflation rose to 3.6% from 3.4% as electricity, new dwellings and rents kept core pressures sticky. The RBA left the cash rate unchanged at 4.35% on 16 June, its first pause of 2026 after three consecutive 25 basis point increases.

Portfolio Insights

The past six months have been challenging for the Fund, given the flight towards large cap exposures and extreme market dispersion, conditions that have disproportionately affected active managers. The Fund significantly increased its market exposure in June, buying stakes in growing businesses that have derated in valuation terms over the past six months, focused in Financials, Health Care and Information Technology.

Key portfolio characteristics at month end:

• 20 positions held
• 97% of capital deployed
• Top five positions representing 53% of exposure
• Increased exposure to Financials, Health Care and Information Technology

Why It Matters for Investors

June was a reminder that concentrated sector exposure cuts both ways. The same energy positioning that supported returns earlier in the year became the primary drag once the catalyst reversed. For investors, it underlines why position sizing and diversification discipline matter as much during periods of conviction as during periods of caution.

Outlook

Energy markets remain highly constrained, and the Fund anticipates significant upside risk in energy commodity prices over the next three months, a risk that would be amplified by any breakdown in the ceasefire agreement between the US and Iran. The portfolio is positioned for resilience irrespective of broader geopolitical events, with small cap valuations remaining modest heading into the new financial year.

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.

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, contact Daniel Liptak at daniel@datt.com.au or 0419 004 524.