Investing hasn’t been easy these past few years amid a pandemic, soaring inflation and monetary tightening. The ASX200 did 1.4% in 2020, 17% in 2021 and then -1% last year. Hugely volatile.

But it's in times like this when the cream rises to the top. As most fund managers struggle to match the benchmark, Datt Capital’s Absolute Return fund has returned an enormous 25% per annum over the last three years. It's a staggering performance that most fund managers would give their left arm to get.

In this week's episode of The Rules of Investing, Livewire's David Thornton speaks to Emanuel Datt, founder of Datt Capital. Datt’s modest demeanour belies the rockstar performance he’s generated.

Not one to rest on his laurels, though, he’s about to launch a new small-cap fund that seeks to outperform the Small Ordinaries Index by 5% per annum. While the fund may be new, Datt's experience with small cap stocks certainly isn't - he bought market darling Afterpay at $6, long before it became Australia's largest ever takeover at a cool $39 billion.

Datt discusses:

the processes and investments that netted the absolute fund such stellar numbers;
how he found Afterpay;
why he believes now is the time to get into small caps; and
the investment opportunity he sees in rare earths.

Note: this episode was recorded on Tuesday May 16, 2023

Timestamps

1:50 - The man behind Datt Capital 3:20 - Opening up shop 4:30 - Achieving 25% p.a. 7:30 - Rare earths 12:00 - The opportunity in small caps 19:00 - The sectors leading small caps 21:00 - Spotting Afterpay 24:00 - Red flags 27:00 - Finding sustainable companies 30:10 - Inflation can't be understated 31:20 - Winning big with Adriatic Metals (ASX: ADT)

This fundie found Afterpay at $6. Now he’s found his next opportunity

The Rules of Investing

This fundie found Afterpay at $6. Now he’s found his next opportunity