Datt Small Companies Fund Performance – Deceember 2025

Market Overview

Australian equities ended December on a firmer footing, with the S&P ASX 200 rising 1.3 percent. Market leadership was concentrated in cyclicals, particularly Materials, while Technology and Healthcare lagged. Financials delivered mixed outcomes.

Inflation remained persistent, with CPI surprising to the upside earlier in the quarter. The RBA held the cash rate at 3.60 percent, reinforcing a higher-for-longer rates outlook and contributing to late-month risk aversion. Despite this, liquidity conditions stayed robust, and recent market pullbacks continued to create selective opportunities.

The environment remains supportive for active managers. Valuation dispersion between large and small companies persists, and M&A activity has picked up meaningfully across several parts of the market.

Performance Snapshot

The Datt Capital Small Companies Fund returned 2.72 percent in December, outperforming its benchmark by 1.42 percent. At month end, 83 percent of the Fund’s capital was deployed.

Read the full report here.

Performance Snapshot

1 month: 2.72%
3 months: -0.34%
6 months: 25.99%
1 year: 55.79%
Since inception p.a.: 35.21%
Since inception total: 97.34%

Since inception, the Fund has delivered strong cumulative and annualised returns, reflecting consistent value add versus the Small Ordinaries Accumulation Index. Performance is reported after all fees and expenses.

Portfolio Insights

Healthcare and Materials were the strongest contributors to performance during the month. Technology detracted due to a broader rotation away from the sector, driven by shifting rate expectations and risk positioning.

The portfolio remained conservatively positioned in light of ongoing volatility. Exposure was well diversified across sectors and holdings, balancing downside protection with selective upside. At month end, the Fund held 29 positions, with the top five accounting for 32 percent of the portfolio.

We continued to build positions in higher-conviction opportunities over the medium term, alongside select new holdings. The underlying small-cap universe remains attractive due to limited research coverage and persistent pricing inefficiencies.

Why It Matters for Investors

December reinforced the benefits of disciplined, bottom-up stock selection. While index leadership rotated sharply, company-specific fundamentals continued to drive outcomes within small caps.

Valuation differentials between large and small companies remain wide. Combined with improving corporate activity and rising M&A interest, this creates a favourable backdrop for skilled active managers focused on risk-adjusted returns.

Outlook

We remain constructive on the opportunity set within Australian small companies. Market volatility continues to reward selectivity, and the current environment supports active stock picking across sectors where earnings resilience and operational leverage are improving.

Portfolio construction remains disciplined. We retain flexibility to allocate capital toward businesses with durable fundamentals, clear catalysts, and attractive risk-reward profiles as opportunities emerge.

About the Datt Small Companies Fund

The Datt Small Companies Fund invests in high-quality Australian companies outside the ASX100 with strong fundamentals, scalable business models, and long-term growth potential. The Fund applies a research-led, conviction-based process aimed at identifying undervalued opportunities overlooked by the broader market.

The Fund aims to outperform the S&P ASX Small Ordinaries Accumulation Index over five years through prudent stock selection and disciplined risk control.

For more information about the Fund, visit the fund page or contact Daniel Liptak directly.