Daniel Dupont joined longtime manager Joel Tillinghast on this go anywhere, all cap equity fund in late 2011. They have continued to build on the excellent long term track record, outpacing both the index and peers. More impressive, this was done with lower volatility and stellar downside protection. According to Morningstar, it has experienced about half of the market declines over the past five years.
The managers meet both formally and informally to discuss the relative attractiveness of investment opportunities in various regions around the world. Apart from that, they work largely independent of each other, with each using their unique, bottom up, value focused approaches to security selection.
Daniel Dupont uses a concentrated approach that focuses on 20 to 50 companies with sustainable business models that can deliver high return on capital over the long term. To be considered, it must be trading at a significant discount to its true value. In comparison, Fidelity veteran Tillinghast uses a value focused approach that looks for companies that are growing faster than their peers, have little or no debt, a strong, aligned management team, and the ability to deliver consistent earnings and stable revenue. He also looks for low valuations, high barriers to entry, and robust returns on equity and assets.
The portfolio is well diversified, holding more than 500 names, with a sector mix that is much different from the benchmark. Neither manager is afraid to hold cash when no opportunities are available. At the end of October, 38% of the fund was in cash,
This is not a fund that will shoot the lights out when markets are rallying. But it should hold its own when markets get rocky. The result is that over the long term, you can be expected to earn an above average rate of return, with a below average level of volatility. If you have an above average risk tolerance, you could use this as a core global equity holding, but if not, it can be a good complement to an otherwise well diversified portfolio.