Datt Small Companies Fund Performance – May 2026

The Datt Small Companies Fund returned -1.30% in May, underperforming its benchmark by 3.33% as New Hope Corporation offset a heavy Viva Energy sell-off.

Market Overview

The Small Ordinaries rose 2.03% for the month, outperforming parts of the large-cap market but still reflecting a selective rather than broad-based risk-on environment. Sector leadership within small caps remained tilted toward cyclicals and higher-beta resource exposures, with lithium, gold and base metals names leading, while healthcare and rate-sensitive industrials remained under pressure. The April monthly CPI print of 4.2% was firmer than the RBA's February forecasts but less severe than feared given Middle East-driven fuel pass-through.

The RBA raised cash rates by a further 25 basis points to 4.35% in May on an eight-to-one vote, fully unwinding last year's easing cycle. The Fund anticipates a rising inflation outlook driven by the present energy shock, with second-round effects likely to keep the path back to target extended well into 2027.

Performance Snapshot

• 1 month: -1.30%
• 3 months: -11.75%
• 6 months: -19.74%
• 1 year: -3.59%
• Since inception p.a.: 17.38%
• Since inception total: 53.32%

Download the full report — "May 2026 - Small Companies Fund Newsletter" — [PLACEHOLDER: Google Drive link]. Performance is reported after all fees and expenses. Past performance is not an indicator of future performance.

Portfolio Insights

May was another month of consolidation, with some rotation in the portfolio in preparation for the months ahead. The Federal Budget released in May caused market uncertainty and elevated volatility. The Fund entered positions with anticipated upside and positive tailwinds to both local and global conditions.

New Hope Corporation was the largest contributor for the month, benefiting from higher thermal coal prices and anticipated demand strength tied to ongoing LNG supply disruption out of Qatar. Viva Energy was the largest detractor, sold off heavily after an explosion at its Geelong Refinery, described as an act of god. No injuries were reported, and the company guided to a two-month timeline for full production to resume. The Fund remained conservatively positioned, holding elevated levels of cash and energy exposure. The portfolio held 27 positions at month end, with 70% of capital deployed and the top five positions representing 29% of exposure.

Why It Matters for Investors

May illustrated how a single-name event, in this case an operational incident at Viva Energy, can move a concentrated portfolio meaningfully even when the broader thesis behind a sector holds. Diversification within a conviction position matters as much as conviction in the position itself.

Outlook

The environment remains beneficial for active, skilled stock pickers, with opportunities continuing to emerge across sectors heading into tax-loss season.

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.