Datt Small Companies Fund Performance – June 2026

The Datt Small Companies Fund returned -4.86% in June, driven almost entirely by an energy exposure pullback as a Middle East ceasefire triggered a sector rotation.

Market Overview

The Small Ordinaries fell approximately 1.9% in June, underperforming large caps as the index gave back ground into month end. In contrast to the resource-led leadership of earlier in the year, June saw cyclicals reverse: 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 de-escalation in the Middle East. Gold offered a relative haven and pockets of copper and technology outperformed intraday, but breadth was poor and dispersion across the small-cap universe remained wide.

The May monthly CPI print, released late in the month, showed headline inflation easing to 4.0% from 4.2%, helped by lower automotive fuel prices. The underlying picture was less reassuring: trimmed mean inflation rose to 3.6% from 3.4%, with electricity up 21.1% as government rebates rolled off. Against this backdrop 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.

Performance Snapshot

• 1 month: -4.86%
• 3 months: -8.72%
• 6 months: -25.67%
• 1 year: -6.87%
• Since inception p.a.: 14.72%
• Since inception total: 45.86%

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

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

Portfolio Insights

June was a volatile month given the market shift away from energy exposures, driven by the ceasefire in the Middle East. The reduction in portfolio value was driven almost entirely by the Fund's energy exposure, which pulled back significantly, notably coinciding with the seasonal low in global energy markets. 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 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, Consumer Discretionary and Information Technology. The portfolio held 30 positions at month end, with 96% of capital deployed and the top five positions representing 37% of exposure.

Why It Matters for Investors

As with the Absolute Return Fund, June was a reminder that concentrated sector exposure cuts both ways. The energy positioning that supported earlier returns became the primary drag once the catalyst reversed, reinforcing the case for disciplined position sizing even around high-conviction themes.

Outlook

The portfolio is positioned for resilience irrespective of broader geopolitical events heading into July. Small cap valuations remain modest, and the Fund is enthusiastic about the opportunities within the portfolio as the new financial year begins.

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.