Manager Research

We have recently completed our reviews of the Orbis fund range and have retained our current ratings on the funds, which we show below. In addition, we highlight the core points that underpin our rating views.

Orbis is a long-standing fund manager with strong attributes in place that support long term active fund management according to a contrarian investment approach.

Below, we detail the salient points relating to our current rating views on the Orbis fund range.

Global Equity

We last completed a review of the Global Equity fund in 2022. In general, our rating view has remained relatively constant since then. Under the new portfolio management structure, Ben Preston, Adam Karr and Graeme Forster continue to settle into their roles and we are seeing early signs that the decision to change to a more focused structure has been beneficial. We will continue to monitor how decisions are made in the fund and how they ultimately manifest in the portfolio’s positioning.

Global Balanced

We have maintained our Tier 2 rating on this fund. This fund leverages off the strong equity capability within Orbis and we have been monitoring how the fixed income component of the fund has developed through time. Since our last review, the fund has gone through a period of strong performance. This was driven by both security selection and asset allocation decisions that paid off. Overall, we would like to see how the fund performs in a market environment where balanced fund managers can generate returns from a broader range of assets to help us assess the level of asset allocation skill within the fund. 

Optimal

This fund is also retained at a Tier 2 rating. The Optimal strategy has recently experienced strong performance as global equity markets have sold off and the fund’s stock selection decisions have been positive. During our most recent review, we met with Graeme Forster, the lead portfolio manager and found our interactions with him to be quite insightful. This strategy and its success is highly dependent on him and although there are a number of portfolio managers that manage slices of the Optimal strategy alongside Graeme (with whom we also met), he has developed a very specific skillset that isn’t easy to replicate. Lastly, although we have seen the performance profile of this fund take a turn for the better, we would like to see how it performs in an environment which is more suited to Orbis’ contrarian investment philosophy going forward.

Emerging Markets Equity

On the Emerging Markets Equity fund, we still have some minor concerns around the ability of the fund to deliver consistent long-term alpha on a net of fees basis. In addition, we have over time seen (1) changes to the mandate and (2) changes to the portfolio construction process, and we would like to see how the investment proposition settles down over a longer period of time. Lastly, having met with the lead portfolio manager, Stefan Magnusson, and similar to the Optimal fund, succession risk is something that we continue to monitor.

Japan Equity

We have maintained our Tier 1 rating on this fund. We believe that Orbis has established a very competitive position within this market driven by (1) the investment philosophy and (2) the skill of the investment team. In addition, the line of succession within this fund is quite clear to us. Lastly, we also feel that Orbis’ contrarian investment philosophy is particularly well suited to the Japanese equity market.