Concentrated portfolios crucial for Aussie equity funds



Holding a concentrated portfolio is crucial, according to Datt Capital, if investors want to maintain risk control in Australian equities.
The Datt Capital Absolute Return fund, which invested in Australian small and mid-cap equities, had a single stock limit of 15% which the firm described as being a “reasonably concentrated” portfolio.
A concentrated portfolio was important in Australian equities to maintain risk control amid a large universe of stocks and industries.
Chief investment officer, Emanuel Datt, said: “The Datt Capital philosophy can be described as active contrarian investing with an inclination towards growth. We utilise a long-term investment approach that focuses on capital preservation and absolute wealth accumulation, however not at expense of growth.
“We are both highly opportunistic and highly disciplined investors, with a strong emphasis on risk control. The fund is industry and market cap agnostic, investing solely in the best opportunities that provide the best risk-adjusted returns. Whilst risk control is core focus its not achieved by having a widely diversified portfolio.”
He said he expected positive returns for Australian equities would continue as Government stimulus was currently “extravagant” which was helping alternative assets. However, the threat of rising inflation was a problem for investors who needed to maintain purchasing power and protect wealth.
Recommended for you
Two ETF fund managers have opted to switch away from Cboe and onto the ASX in search of better broker connectivity.
The former CEO and co-founder of Zenith Investment Partners has switched sides and moved in-house to take up an executive role at a listed fund manager.
The “experiment” away from vertical integration has been a mistake, according to Clime’s Michael Baragwanath, and Clime is positioning to benefit via advice and fund manager acquisitions.
JP Morgan Asset Management has identified Australia as an “emerging growth market” as it seeks to double its assets under management in the Asia-Pacific region in the next five years.