Datt Small Companies Fund Performance – February 2026

The Datt Small Companies Fund returned -9.06% in February, underperforming its benchmark by 6.49% as a discretionary retail holding was sold off heavily.

Market Overview

The S&P/ASX 200 was broadly flat to modestly weaker in February. Market leadership remained narrow, with Materials continuing to provide support while Technology and Healthcare lagged and Financials softened following their prior resilience. Inflation remained persistent and rate expectations adjusted higher at the margin, reinforcing a higher-for-longer policy backdrop. This contributed to increased volatility and periods of risk aversion through the month, particularly in rate-sensitive sectors.

Despite this, market liquidity remained solid, and ongoing dispersion across sectors continued to create selective opportunities where valuations have adjusted but underlying earnings remain intact.

Performance Snapshot

• 1 month: -9.06%
• 3 months: -9.06%
• 6 months: -2.82%
• 1 year: 25.66%
• Since inception p.a.: 25.70%
• Since inception total: 73.73%

Download the full report - "February 2026 - Small Companies Fund Newsletter".

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

Portfolio Insights

Performance was disappointing in February. The main detractor was a turnaround discretionary retail holding that was sold off very heavily. Other detractors were small cap growth exposures with lower liquidity, largely sold off due to prevailing geopolitical events.

The Fund remained conservatively positioned given volatile market conditions, with the portfolio well diversified across sectors and holdings. Cash levels stayed elevated following continuing reductions in materials exposure. The recent volatility has thrown up excellent opportunities, and the portfolio rotated heavily towards small cap energy exposures in March given the present geopolitical environment, with those assets now more critically important in a world short of energy supply. The Fund held 28 positions at month end, with 85% of capital deployed and the top five positions representing 35% of exposure.

Why It Matters for Investors

February demonstrated that concentration risk can materialise from a single holding as much as from a sector. A turnaround position that goes wrong can outweigh diversification elsewhere in the book, underscoring the importance of position sizing discipline alongside stock selection.

Outlook

Historically, the Fund has performed well in environments of this kind, and the team expects selected energy-related exposures to outperform as those assets become increasingly critical amid persistent supply constraints.

About the Datt Small Companies Fund

The Fund invests in high-quality companies outside the ASX100 with strong fundamentals, scalable business models and long-term growth potential. Our research-led, conviction-based process focuses on identifying undervalued opportunities often overlooked by the broader market. The Fund aims to outperform the Small Ordinaries Accumulation Index over five years through prudent stock selection and disciplined risk control.

Key details:

• Minimum investment: $50,000
• Management fee: 1.54%
• Performance fee: 20.5% above benchmark
• Benchmark: S&P/ASX Small Ordinaries Accumulation Index
• Custodian: HSBC
• Auditor: Ernst & Young
• Trustee: Fundhost

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