Datt Capital Oz small cap fund finds opportunities in soft market

May 8, 2024: Despite the Australian economy facing the prospect of a slowdown, the Datt Capital  Small Companies fund recorded strong performance in the month of April on the back of its  exposure to the materials sector, delivering a return more than 10 per cent above its benchmark for  the month.

“The portfolio benefitted from sound stock picking with the portfolio’s largest positions WA1  Resources and Jupiter Mines providing strong returns, despite soft market performance" Emanuel  Datt, chief investment officer of Datt Capital said.

The fund returned 8.03 per cent for the month of April (after all fees and expenses), compared to a  negative return of 3.06 per cent for the benchmark S&P/ASX Small Ordinaries Accumulation Index.  Since inception in October last year the fund has returned 13.93 per cent.

“M&A interest continues within the small cap sector, and we believe this reflects the unique  dichotomy between elevated private market valuation, relative to more subdued public market  valuations,” Datt said.

Although the small cap market continues to experience soft conditions, with low liquidity, there are  plenty of opportunities for active stock pickers that take the time to research lesser-known  companies where price inefficiencies can be found.

“We are observing a slight softening of economic activity which may be a portend of times ahead.  We remain well positioned to capitalise from any future market dislocations and we remain very  disciplined in selecting portfolio exposures,” Datt said.

The Datt Capital Small Companies fund has a minimum investment of $50,000, making it an  accessible fund for self-managed superannuation fund (SMSF) trustees looking for a small company  exposure.

It invests in 15 to 25 Australian listed companies outside the S&P/ASX100 index and pre-IPO equities.  It aims to identify quality companies with the potential for long-term capital growth.

As at the end of April, the fund held 26 positions with the top 5 positions accounting for 42 per cent  of the portfolio.

About Datt Capital  

Founded in 2016, Datt Capital is a Melbourne-based Australian focused Long-only Fund Manager.  Datt Capital is focused on generating alpha by structuring its portfolio in a unique and uncorrelated  manner, across asset classes. Its investments consist primarily of listed equity, debt and derivatives  solely in Australian markets.

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