| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.78% | 1.89% | 1.89% |
The Davenport Value & Income Fund generated a 1.89% return in Q1 2026, outperforming during a volatile quarter marked by Middle East conflict and AI disruption concerns. Energy holdings including Exxon Mobile, Chevron, and SLB were top performers as oil surged 77% due to the closure of the Strait of Hormuz, though managers trimmed positions acknowledging war premium pricing. Technology holdings like Accenture faced headwinds from AI disruption fears despite strong fundamentals. The fund added infrastructure plays including Union Pacific's Norfolk Southern acquisition and Cisco Systems entering a networking refresh cycle. Fourteen holdings increased dividends during the quarter, with the average increase of 6% exceeding headline inflation. Notable dividend growers included NextEra Energy (30th consecutive year), Enbridge (30 years), and Chevron (39 years). Managers view current market volatility as creating opportunities to capitalize on short-term inefficiencies while maintaining focus on quality companies with strong balance sheets and cash flow generation.
The fund focuses on value-oriented investing with dividend growth, seeking to capitalize on market inefficiencies during sector rotations while maintaining exposure to quality companies with strong balance sheets, free cash flow, and returns on capital.
Managers embrace taking advantage of short-term market inefficiencies while exercising long-term patience, viewing sector rotation as creating opportunities when the market throws out the baby with the bath water.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 13 2026 | 2026 Q1 | ACN, BDX, CMCSA, CSCO, CVX, ELV, ENB, FDX, NEE, NSC, NVO, SLB, TXN, UNH, UNP, VSNT, WAT, WY, XOM | AI, dividends, energy, Geopolitical, income, infrastructure, large cap, value | - | Value & Income Fund delivered 1.89% in Q1 2026 as energy holdings surged on Middle East conflict while AI fears pressured tech names. Managers trimmed energy war premiums and added infrastructure plays. Fourteen holdings raised dividends 6% on average, exceeding inflation. Strategy focuses on capitalizing on market inefficiencies during sector rotation while maintaining quality dividend growers. |
| Jan 18 2026 | 2025 Q4 | ACN, ADBE, ARE, C, CTAS, EOG, FDX, GOOG, HPQ, ISRG, META, MMC, MRVL, MSFT, NOW, NVDA, ORCL, SPOT, UBER, UNP, VRTX | AI, Buybacks, dividends, large cap, technology, value | - | Davenport maintained disciplined value investing in Q4 2025 despite underperforming AI-driven markets. Their focus on quality dividend-growing companies with strong buyback programs positions them for potential outperformance when market leadership rotates. With reduced policy uncertainty expected in 2026 and stretched valuations in momentum stocks, their conservative approach targeting overlooked opportunities could benefit from broader market participation. |
| Oct 20 2025 | 2025 Q3 | AAPL, ACN, AMZN, AVGO, EA, ELV, GOOGL, ISRG, META, MSFT, NOW, NVDA, NVO, ORCL, ROK, SPOT, TEL, UNH, UPS, XOM | AI, dividends, large cap, momentum, technology, Valuations, value | - | Strong Q3 market performance driven by AI enthusiasm and policy support masks elevated valuations and speculative excess. S&P 500 at 23x forward earnings with record-low credit spreads signals compressed risk premiums. Davenport maintains valuation discipline despite relative performance challenges, focusing on asymmetric opportunities outside momentum-driven tech/AI names while awaiting broader market participation. |
| Jul 21 2025 | 2025 Q2 | AAPL, ACN, AMZN, AVGO, EA, ELV, GOOGL, ISRG, META, MSFT, NOW, NVDA, NVO, ORCL, ROK, SPOT, TEL, UNH, UPS, XOM | AI, earnings, Federal Reserve, momentum, small caps, technology, Valuations | - | Davenport acknowledges strong Q3 market performance driven by AI enthusiasm and supportive fiscal/monetary policy but warns of elevated valuations and speculative behavior. While recognizing powerful economic backdrop, they maintain valuation discipline and seek asymmetric opportunities outside momentum-driven tech/AI space, expecting their contrarian approach to be rewarded over time. |
| Mar 31 2025 | 2025 Q1 | AVY, BAM, BMY, BRK.B, BUD, CMCSA, CVX, ELV, FDX, HP, HSY, JNJ, LHX, NEE, NSC, ORCL, PM, SNY, STZ, UPS | Buybacks, Consumer Staples, Defensive, dividends, healthcare, value | - | Davenport Value & Income Fund outperformed in Q1 2025 as defensive sectors led by healthcare and consumer staples outpaced declining technology stocks. The Fund benefits from strong dividend growth across holdings and attractive valuations in individual names despite broader market concerns. Management selectively added positions while maintaining focus on quality companies with compressed valuations and resilient cash flows. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
EnergyEnergy was the only S&P sector that rose in March as oil surged 77% for the quarter due to the Middle East conflict and closure of the Strait of Hormuz. The fund's energy holdings including Exxon Mobile, Chevron, and SLB were top performers, though managers trimmed positions to acknowledge war premium pricing. |
Oil Energy Geopolitical Commodities War Premium |
DividendsFourteen of the fund's investments increased their dividend in the quarter, with notable mentions including NextEra Energy (30th consecutive year), Enbridge (30 years), and Chevron (39 years). The average Value & Income holding increased its dividend 6% year-over-year, exceeding headline inflation. |
Dividend Growth Income Inflation Protection Yield Distribution | |
AIArtificial intelligence concerns weighed on technology holdings like Accenture, with market skepticism about the company's ability to navigate AI-driven changes in white collar employment. However, managers note Accenture has historically benefited from prior generational technology changes including the internet and cloud computing. |
Artificial Intelligence Technology Disruption Software Automation Employment | |
InfrastructureThe fund added Union Pacific seeking to acquire Norfolk Southern, viewing it as a potential growth opportunity among large-cap industrials. They also added positions in companies positioned for infrastructure refresh cycles including Cisco Systems entering a networking refresh cycle augmented by data center growth. |
Rail Transportation Data Centers Networking Industrial | |
| 2025 Q4 |
AIAI and technology stocks led market gains in 2025, with massive capital expenditures driving investor excitement. However, the manager expresses concern about valuations and speculative behavior, noting that many AI investments appear driven by FOMO rather than clear returns on capital. |
Artificial Intelligence Technology Valuations Capital Expenditures Speculation |
ValuationsThe manager highlights extreme valuations across AI and technology stocks, with many trading at historically high multiples. They note that 18 of the top 20 Russell 3000 performers were unprofitable companies, indicating speculative excess reminiscent of the late 1990s. |
Overvaluation Multiples Speculation Bubble Risk | |
ValueThe manager emphasizes focusing on stocks that have been cast aside as investors chase momentum. They believe their conservative, valuation-sensitive approach will eventually be rewarded, similar to the late 1990s market dynamic. |
Undervalued Contrarian Conservative Opportunity Discipline | |
DividendsMultiple funds highlight strong dividend growth across portfolio holdings, with companies continuing multi-decade streaks of dividend increases. The Value & Income Fund saw 36 of 42 holdings increase dividends by an average of 7% year-over-year. |
Dividend Growth Income Yield Consistency Returns | |
RatesFixed income markets benefited from stable economic conditions and Federal Reserve policy. The manager notes the importance of the ten-year Treasury yield above 4.1% as reflecting a durable economy that bodes well for lenders. |
Interest Rates Federal Reserve Treasury Economic Growth Fixed Income | |
| 2025 Q3 |
AIArtificial intelligence is driving enormous spending from tech titans and prompting explosive moves in AI-linked stocks. The technology theme has joined forces with monetary stimulus to embolden risk taking. While AI is incredibly promising, many perceived beneficiaries are prioritizing growth over profit and investors may question ultimate returns on AI spending. |
Technology Growth Spending Valuations Returns |
ValuationsThe S&P 500 currently trades for approximately 23x earnings estimates for the next 12 months, which is high by historical standards. The equal-weighted S&P is more reasonable at 17x earnings estimates but still above recent norms. High-yield spreads stand at record lows, suggesting investors are accepting little compensation for additional risk. |
Multiples Risk Spreads Historical Premium | |
MomentumMarket dynamics reflect powerful momentum with unprofitable tech stocks, AI-linked stocks and meme stocks posting explosive moves. Investors are focused more on stories than intrinsic value, flocking towards richly valued momentum stocks. There's been little reward for having differentiated perspectives as winners keep winning while losers keep losing. |
Speculation Stories Differentiation Winners Losers | |
| 2025 Q2 |
AIArtificial intelligence is described as a powerful technology theme prompting enormous spending from tech titans. The manager notes AI is incredibly promising and expects to participate via ownership of select technology leaders, though warns of a gold rush mindset in certain corners of the market with many perceived beneficiaries prioritizing growth over profit. |
Technology Data Centers Semiconductors Cloud Growth |
ValuationsThe S&P 500 currently trades at approximately 23x earnings estimates for the next 12 months, which is high by historical standards. The manager notes this tells them risk tolerance is up, with the 10-year average at 19.0x and 20-year average at 16.4x. |
Risk Appetite Quality Value | |
MomentumThe manager observes speculative behavior with unprofitable tech stocks, AI-linked stocks and meme stocks posting explosive moves higher since April. They note investors are focused more on stories than actual intrinsic value, flocking towards richly valued momentum stocks. |
Growth Risk Appetite Small Caps | |
| 2025 Q1 |
DividendsSixteen of DVIPX's holdings raised their dividends during the quarter, led by double-digit percentage increases at Walmart, Brookfield Corp, and others. The average DVIPX constituent has raised its dividend 8% year-over-year, which exceeds the S&P 500's 6%. The Fund is both higher yielding and possesses higher dividend growth than the benchmarks. |
Dividend Growth Income Yield Payout |
BuybacksSeveral companies accelerated their share buybacks into market weakness including Fairfax Financial Holdings, Chevron, HP, and Comcast, each reducing their share count by more than 4.5% year-over-year. The average company in the Fund has reduced its diluted share count more than 1% versus year-ago levels. |
Share Repurchases Capital Return Share Count | |
ValueMany individual constituents appear to trade at reasonable multiples despite market-wide valuation levels. Constellation Brands trades at 13x multiple, nearly three standard deviations below its long-term average closer to 21x. Many pharmaceutical and insurance holdings trade at even lower multiples. |
Valuation Multiples Compressed Reasonable |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| XOM | Exxon Mobile Corp (XOM), Chevron Corp (CVX), and SLB NV (SLB) participated nicely in the run-up, and were the Fund's top three performers for the quarter. We chipped SLB and Chevron to acknowledge a 'war premium' increasingly priced into the commodity complex. |
| CVX | Exxon Mobile Corp (XOM), Chevron Corp (CVX), and SLB NV (SLB) participated nicely in the run-up, and were the Fund's top three performers for the quarter. We chipped SLB and Chevron to acknowledge a 'war premium' increasingly priced into the commodity complex. Among those deserving special mention are NextEra Energy, Inc. (NEE, 30th consecutive year of increases), Enbridge, Inc. (ENB, coincidentally, also 30 years in a row), along with Chevron Corp (CVX, 39 years in a row). |
| SLB | Exxon Mobile Corp (XOM), Chevron Corp (CVX), and SLB NV (SLB) participated nicely in the run-up, and were the Fund's top three performers for the quarter. We chipped SLB and Chevron to acknowledge a 'war premium' increasingly priced into the commodity complex. |
| ACN | Worst for the quarter were Accenture PLC (ACN), UnitedHealth Group, Inc. (UNH), and Elevance Health, Inc. (ELV). Accenture continued to post strong results that have been met with skepticism around the company's ability to navigate a landscape being changed by artificial intelligence. We understand the market's concerns about artificial intelligence potentially shrinking white collar employment, while also observing that Accenture has benefited from prior generational technology changes, including the advent of the internet and the shift to cloud computing, among others. |
| UNH | Worst for the quarter were Accenture PLC (ACN), UnitedHealth Group, Inc. (UNH), and Elevance Health, Inc. (ELV). Consternation about preliminary Medicare Advantage price increases for 2026 hurt the health insurers. |
| ELV | Worst for the quarter were Accenture PLC (ACN), UnitedHealth Group, Inc. (UNH), and Elevance Health, Inc. (ELV). Consternation about preliminary Medicare Advantage price increases for 2026 hurt the health insurers. |
| UNP | Early in the quarter, we added west coast rail Union Pacific Corp (UNP), which is seeking to acquire east coast peer Norfolk Southern Corp (NSC). We view this as a potential 'heads we win, tails we win' opportunity; if regulators scotch the deal, UNP shares likely rally (reversing their decline when the deal was announced), whereas if the transaction receives a green light, the combined company is likely to present one of the most visible growth opportunities among large-cap industrials for the next several years. |
| NSC | Early in the quarter, we added west coast rail Union Pacific Corp (UNP), which is seeking to acquire east coast peer Norfolk Southern Corp (NSC). We view this as a potential 'heads we win, tails we win' opportunity; if regulators scotch the deal, UNP shares likely rally (reversing their decline when the deal was announced), whereas if the transaction receives a green light, the combined company is likely to present one of the most visible growth opportunities among large-cap industrials for the next several years. |
| TXN | Texas Instruments, Inc. (TXN) seems timely as a free cash flow inflection appears to be at hand. TXN is likely to return most or all of that free cash flow to shareholders via dividends and share buybacks. And we see a number of TXN's end markets as being in the early stages of recovery, including autos, aerospace, and industrial automation. |
| CSCO | In a similar vein, Cisco Systems, Inc. (CSCO) is entering a networking refresh cycle, one that's being augmented by robust data center growth. A growing portfolio of security solutions adds visibility, and the company's subscription-based products and services should be multiple enhancing. |
| WY | In the last week of the quarter, we purchased forest and wood products leader Weyerhaeuser Co (WY). We view our investment here as an opportunity to get paid (a 3.5% dividend yield) while waiting for improved housing market conditions. Private fixed residential investment sits near its lowest level since the Global Financial Crisis, and the age of existing homes is near a record high, so incremental home building seems more like a question of when, rather than if. Tariffs on Canadian wood may enhance the value of Weyerhaeuser's domestic timber. |
| FDX | We exited FedEx Corp (FDX) into what could be 'good as it gets' conditions - the company is growing both volumes and pricing for the first time in years, all while enthusiasm for the spin-off of its Freight business is rising. |
| NVO | Novo Nordisk A/S (NVO) was a relatively brief holding, and while it wasn't a profitable holding, our exit decision saved us from further pain as the company continues to lose share in the GLP-1 weight-loss market. |
| WAT | Finally, we sold our stub position in Waters Corp (WAT), shares of which we received from ownership of Becton-Dickinson & Co (BDX). The biosciences business that BDX distributed to Waters had been BDX's slowest-growing unit - and the price BDX received for it was well above BDX's consolidated valuation. |
| BDX | Finally, we sold our stub position in Waters Corp (WAT), shares of which we received from ownership of Becton-Dickinson & Co (BDX). The biosciences business that BDX distributed to Waters had been BDX's slowest-growing unit - and the price BDX received for it was well above BDX's consolidated valuation. In addition to the shares of WAT we received, WAT also paid BDX $4 billion, which BDX is using for debt paydown and share buybacks. |
| VSNT | Similarly, we sold Versant Media Group, Inc. (VSNT), the Comcast spinoff that includes various cable TV networks including CNBC and the Golf Channel. With shares rallying after Versant announced good quarterly results, initiated a dividend, and authorized a share repurchase program, we exited this small position that faces an ongoing 'cord cutting' challenge. |
| NEE | Fourteen of our investments increased their dividend in the quarter. Among those deserving special mention are NextEra Energy, Inc. (NEE, 30th consecutive year of increases), Enbridge, Inc. (ENB, coincidentally, also 30 years in a row), along with Chevron Corp (CVX, 39 years in a row). |
| ENB | Fourteen of our investments increased their dividend in the quarter. Among those deserving special mention are NextEra Energy, Inc. (NEE, 30th consecutive year of increases), Enbridge, Inc. (ENB, coincidentally, also 30 years in a row), along with Chevron Corp (CVX, 39 years in a row). |
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