Where We’re Finding Value in Australian Small Caps

The Datt Capital Small Companies Fund delivered a net return of 2.79% for May 2025, bringing its one-year return to 25.86% since inception in October 2023, substantially outperforming its benchmark over all time horizons despite near-term underperformance for the month.

The Full Performance

To summarise:

• 1-month return: 2.79% (vs. benchmark 5.76%);

• 1-year return: 25.86% (vs. benchmark 9.76%);

• Since inception return: 59.03% (vs. benchmark 24.12%);

• Top contributors: Strong performance from gold producers driven by a buoyant gold market;

• Portfolio positioning: 72% capital deployed, with a concentrated portfolio of 16 holdings, the top 5 representing 42% of the Fund.

While the Fund underperformed in May due to lower market exposure as the tax-loss season approached, its performance over longer periods still reflects disciplined stock selection and defensive positioning.‍

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Disclaimer:

• The Fund’s benchmark is the S&P/ASX Small Ordinaries Accumulation Index (XSOA).

• The Fund commenced in October 2023. Performance is reported net of all fees and expenses and reflects actual returns since inception.

• Past performance is not a reliable indicator of future results. Investment is limited to wholesale and sophisticated investors under Australian law.

Implications for Capital Allocation

The Australian small companies segment continues to present overlooked investment opportunities, particularly in sectors benefiting from market dislocations. Our approach, rooted in independent, primary research and deep due diligence, enables the Fund to navigate volatility with resilience and discipline.

The portfolio’s flexibility, including the ability to hold up to 30% in cash, positions it to capitalise on opportunities as they emerge, particularly given persistent economic uncertainty and cautious consumer sentiment.

Navigating the Uncertainty

While near-term volatility and shifting macroeconomic conditions, including two rate cuts by the RBA this year, may affect market sentiment, skilled active management remains critical in extracting value from this less efficiently covered segment of the Australian market.

About the Datt Capital Small Companies Fund

The Fund targets undervalued companies outside the ASX100, applying a long-only, concentrated strategy designed for wholesale investors. Key features include:

• Target portfolio: 15–25 high-quality holdings across diverse sectors

• Focus: Australian small-cap equities (ex-ASX100)

• Alignment: Datt Capital principals invest alongside clients, ensuring shared outcomes

• Research-led: Original insights, rigorous primary research, and strict valuation discipline

• Platform availability: HUB24 IDPS, Mason Stevens IDPS, and Netwealth IDPS

To learn more or to invest in the Datt Capital Small Companies Fund, visit our Fund page or contact our Head of Distribution, Daniel Liptak, via call at 0419 004 524 or email at daniel@datt.com.au.