DuPont Capital seeks to identify EAFE companies trading at a significant discount to their expected normalized earnings power by effectively integrating proprietary analytics, in-depth fundamental analysis and top-down country risk assessment. By applying a consistent, process-driven approach, the strategy results in a risk controlled portfolio of 60 to 150 securities designed to achieve excess returns with below average risk.
DuPont Capital combines proprietary valuation models with in-depth fundamental research to opportunistically identify the most attractively valued EAFE securities. The valuation models systematically assess profit trends and potential risks to earnings power for the entire investable universe on a daily basis. In-depth fundamental analysis results in proprietary estimates of normalized earnings power, normalized cash flow generation and the sustainable earnings growth rate. Within EAFE, DuPont Capital also evaluates risk at the country level through top down macroeconomic analysis and allocates capital accordingly. The portfolio construction process seeks to avoid uncompensated investment risk and applies a multi-faceted approach to risk assessment.