We believe that share prices follow business fundamentals over the long term, but investors tend to overreact to short-term events. To capitalize on valuation anomalies or mispriced risk premiums in a disciplined manner, a long-term investment horizon should be maintained. We believe that fundamental, bottom up analysis is an effective way to identify and evaluate the most attractive investment opportunities and asymmetries. A coherent risk framework is an integral part of any investment process and superior risk-adjusted returns are generated by dynamically incorporating both top down and company-specific factors. Experience suggests that transparency, accountability and alignment with clients’ interests are the cornerstones of team structure and a performance-driven culture.
DuPont Capital conducts in-depth fundamental research within a long-term investment context to identify attractively valued securities within the U.S., international and emerging markets. Comprehensive fundamental analysis of sectors and stocks results in proprietary estimates of earnings cash flow generation and the sustainable earnings growth rate. The portfolio construction process seeks to avoid uncompensated investment risk through multifaceted assessments of concentrations across and correlation between active positions.