Small Companies Fund Performance: September 2026

The Datt Capital Small Companies Fund rose 0.75% in September while its benchmark fell 2.34%. Three events shaped the month: a pre-IPO holding listed, Regis Healthcare fell 27% in a single session, and the Fund raised its cash weighting to 18.5%.

Outperforming a Falling Benchmark

In September 2026, the Datt Small Companies Fund (Class A) recorded a net return of 0.75%, outperforming its benchmark by 3.09 percentage points. The Fund has returned 14.91% per annum net to investors since inception. The listing of Normandy Minerals (NMD), in which the Fund held pre-IPO scrip, was the largest contributor. A higher cash weighting also limited the Fund’s exposure to a falling market. [Optional: name one exit made before an adverse event, or cut this sentence.] Regis Healthcare (REG) was the main offset.

The Fund has now outperformed its benchmark over three months, returning 4.02% against -0.53%. Over six months and one year it still trails, at -5.05% against 2.77% and -22.80% against -6.74%.

Performance Snapshot

Performance reported after all fees and expenses and relates to Class A units. Inception October 2023. Past performance is not an indicator of future performance.

Download the full report: “Class A - September 26 - Small Companies Fund Newsletter”

To summarise:

• Monthly return: +0.75%
• Benchmark return (September): -2.34%
• 3-month return: +4.02%
• 6-month return: -5.05%
• 1-year return: -22.80%
• Annualised return since inception: +14.91%
• Net return since inception: +51.73%
• Unit price: $1.3249
• Fund status: Open to wholesale investors

Disclaimer

• The Fund’s benchmark is the S&P/ASX Small Ordinaries Accumulation Index (XSOA).
• Past performance is not a reliable indicator of future results and does not guarantee future returns. Investment in the Fund is limited to wholesale and sophisticated investors as defined under Australian law.
• The Datt Small Companies Fund was launched in October 2023. Returns shown relate to Class A units, are calculated net of all fees and expenses, and reflect actual performance since inception. Performance may vary for individual investors depending on the timing of their investment.

September Reversed Most of August’s Small-Cap Gain

The Small Ordinaries fell 2.34% in September, reversing most of its 5.18% gain in August. September has historically been the weakest month for Australian equities, and 2026 followed that pattern. The August report noted that a single month could not confirm a durable change in market leadership. September’s reversal supports that caution.

On 29 September, the RBA raised the cash rate by 25 basis points to 4.60%, its fourth increase of 2026 and the highest level since November 2011. The [August] monthly CPI showed headline inflation at 4.0%, with trimmed mean inflation at 3.6%, both above the RBA’s 2 to 3% target band. The Governor noted that the upside inflation risks flagged in August had begun to materialise. Higher rates weigh most on businesses that depend on domestic consumer demand or on borrowing, which tightens conditions for many smaller companies.

A Listing Turned an Unlisted Holding Into a Market Price

Before listing, an unlisted holding has no market price. An IPO sets one. Normandy Minerals completed its IPO capital raise at an issue price of 20 cents per share. The listing crystallised value in the Fund’s pre-IPO position and made the single largest contribution from the Materials sector in September.

Pre-IPO positions carry risks in both directions. They cannot be sold until listing, and a listing can be delayed, repriced or withdrawn. This is why the Fund’s mandate allows pre-IPO investment only in a limited manner.

Regis Fell on a Funding Decision, and the Fund Added

Residential aged care providers receive much of their revenue through the government’s AN-ACC funding model. In September, the Government announced that AN-ACC funding would rise 2.55% from 1 October, below the sector’s cost inflation. When revenue indexation trails cost growth, operating margins narrow. The market repriced Regis Healthcare down approximately 27% in a single session.

In the team’s assessment, the fall exceeded the change in the sector’s longer-term fundamentals, and the Fund increased its position. The risk runs the other way if funding increases continue to trail costs in future years, since margin pressure would then persist beyond a single indexation decision.

Portfolio Positioning – September Snapshot

81.5% of the Fund’s capital was deployed at month end. Cash rose from approximately 12% at the end of August to 18.5%, reflecting the team’s defensive view through a historically weak month. At month end, the Fund held 25 positions, with the top five accounting for approximately 41% of the portfolio. The three largest holdings, in alphabetical order, were:

• New Hope Corporation (NHC): Energy
• Regis Healthcare (REG): [Sector to confirm]
• Yancoal Australia (YAL): Energy

Materials was the Fund’s largest sector exposure at 36.0%, followed by Energy at 22.9% and cash at 18.5%. The remaining exposure sat in Real Estate Management & Development (7.9%), Financial Services (6.8%), Software & Services (5.2%) and Pharmaceuticals & Biotechnology (1.6%).

What the Positioning Means for Investors

The Datt Small Companies Fund targets small and micro-cap Australian businesses outside the ASX100, an area of the market the team considers under-researched and prone to mispricing. In September, the higher cash weighting did two jobs. It reduced the portfolio’s exposure in a falling month, and it gave the Fund capacity to add to Regis after the sell-off. The trade-off is that cash lags equities when markets rise. Materials and Energy now account for 58.9% of the portfolio, down from 73.4% in August, so the Fund’s returns are less tied to commodity prices than a month earlier. The Fund’s approach continues to demonstrate:

• High conviction positioning across 15 to 25 holdings
• Independent research into competitive advantage, capital allocation, industry structure and valuation
• Full manager alignment with investors
• Capital deployed where dispersion creates mispricing, independent of index weights

To learn more about the Small Companies Fund, visit the Fund page or contact our Head of Distribution, Daniel Liptak, on 0419 004 524 or via email at daniel@datt.com.au.

About Datt Capital

Datt Capital is an investment fund manager in Australia focused on capital preservation and risk-adjusted returns. Our philosophy is centred on long-term wealth creation, combining disciplined research, opportunistic thinking and a strong focus on capital preservation.