Strategic gold exposure powers Datt Capital Small Companies Fund

Despite facing one of the most challenging starts to a year in recent memory, the Datt Capital Small Companies Fund has defied broader market trends, posting strong result through a defensive blend of strategic gold exposure, disciplined stock selection and active management.

The Small Companies Fund has returned 22.51% net to its investors in the financial year to date (as at April 2025), outperforming its Small Ordinaries Accumulation Index Benchmark by over 17%; in a manner uncorrelated to its peer group.

As markets faced renewed volatility following President Trump’s trade sanctions, Datt Capital made a decisive move to increase its exposure to gold. The precious metal rallied 19% over the March quarter, delivering a significant boost to the Fund’s performance.

“We anticipated a resurgence in geopolitical and economic uncertainty that would support safe-haven assets like gold,” said Emanuel Datt, Chief Investment Officer at Datt Capital. “Our proactive positioning in this space was a key contributor to our outperformance.”

The Fund’s portfolio adjustments over the year reflected a high-conviction approach to undervalued and strategically attractive assets and reinforces the value of a high-touch, research-driven investment process.

“Our investment in Metals X (ASX: MLX), trades at just 2.5 times EBITDA with strong cash backing, exemplifies our focus on value and balance sheet strength,” Datt said. “We also increased our holding in Gold Road Resources (ASX: GOR), which consequently drew an improved bid from Gold Fields resulting in an excellent result for shareholders.”

With volatility at elevated levels, Datt Capital implemented a series of measured steps to safeguard investor capital and prepare for market dislocations.

“We reduced exposure to high-beta sectors, elevated our cash holdings and positioned the portfolio to capitalise on tax-loss selling, which often presents unique entry points in June,” said Datt.

This methodical approach proved prudent, with the ASX 200 falling 3.9% and the ASX Small Ordinaries Index down 2% over the same period.

“In times of dislocation, passive strategies often fall short,” Datt stated. “Active management allowed us to avoid overvalued sectors, identify resilient, high-quality businesses early and adapt our positioning dynamically.”

Looking ahead, Datt Capital remains cautiously optimistic. The team continues to focus on quality companies, liquidity and opportunistic deployment of capital.

“We believe the current environment, though volatile, presents rare opportunities for those willing to be patient and disciplined,” said Datt.