Emanuel Datt

Despite the Australian economy facing the prospect of a slowdown, the Datt Capital Small Companies fund recorded strong performance in the month of April on the back of its exposure to the materials sector, delivering a return more than 10 per cent above its benchmark for the month.

“The portfolio benefitted from sound stock picking with the portfolio’s largest positions WA1 Resources and Jupiter Mines providing strong returns, despite soft market performance” Emanuel Datt, chief investment officer of Datt Capital said.

The fund returned 8.03 per cent for the month of April (after all fees and expenses), compared to a negative return of 3.06 per cent for the benchmark S&P/ASX Small Ordinaries Accumulation Index. Since inception in October last year the fund has returned 13.93 per cent.

“M&A interest continues within the small cap sector, and we believe this reflects the unique dichotomy between elevated private market valuation, relative to more subdued public market valuations,” Datt said.

Although the small cap market continues to experience soft conditions, with low liquidity, there are plenty of opportunities for active stock pickers that take the time to research lesser-known companies where price inefficiencies can be found.

“We are observing a slight softening of economic activity which may be a portend of times ahead. We remain well positioned to capitalise from any future market dislocations and we remain very disciplined in selecting portfolio exposures,” Datt said.

The Datt Capital Small Companies fund has a minimum investment of $50,000, making it an accessible fund for self-managed superannuation fund (SMSF) trustees looking for a small company exposure.

It invests in 15 to 25 Australian listed companies outside the S&P/ASX100 index and pre-IPO equities. It aims to identify quality companies with the potential for long-term capital growth.

As at the end of April, the fund held 26 positions with the top 5 positions accounting for 42 per cent of the portfolio.

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