Question 02
Why is different good?
Joining the crowd is costly.
Different isn’t always good. You don’t want an unconventional doctor or accountant. Investing is unusual. When too much capital crowds into the same area of the market, the comfortable thing quietly becomes the expensive, risky thing. The best opportunities tend to sit where nobody's looking, because nobody's looking.
Two main reasons that matters. First, price: when prices are high, expectations are high too, and so is the risk of disappointment. Our research across more than 200,000 quarterly observations shows that the cheapest stocks produced positive returns far more often than the most expensive ones. Second, shape: because our funds genuinely differ from the index and our peers, they can bring real diversification—not just another fund name attached to the same bet.
The comfortable thing quietly becomes the expensive thing.
Investing is an unusual profession. If 90% of doctors or accountants agree on something, there's usually a good reason. But if 90% of investors agree a company has a brilliant future, their beliefs have already influenced the price. And when prices are high, expectations are high. When expectations are high, so is risk (or so is the risk of disappointment). Popular investments can therefore be wonderful companies and terrible investments at the same time. By the time an idea feels obvious to everyone, everyone is already on board. So, who is left to get excited? The big rewards belong to those who can invest while it is uncomfortable.
Being different can also reveal opportunity. For the better part of the past 20 years, investors have been madly in love with the US market. Stocks outside the US have gotten far less attention. Worse yet, they were written off as obsolete or uninvestable. As a result, there are materially fewer analysts and investors around the world looking at these areas. Less attention means less research, and less understanding of the fundamentals. It means wider gaps between stock prices and the reality of those businesses. But for those who are prepared to do the work, it’s a rich hunting ground for opportunity. With more than 40 analysts around the globe, we never stop looking. We never stop turning over stones, waiting patiently to put capital behind only our highest-conviction ideas. We research hundreds of companies each year and only buy a handful.
Diversification is more than holding different managers or styles Correlation between the passive index, popular passive and active funds, and Orbis Global Equity Fund
30 Jun 2026 | Source: Source: Workspace Datastream, Morningstar, Orbis. The categories shown are descriptive groupings selected by Orbis for illustrative purposes and do not represent formal or industry-standard classifications. Each category is characterised by a representative manager chosen by Orbis that employs a specific investment style or philosophy. The representative manager was selected on the basis of size (largest assets under management), with size data sourced from Morningstar Direct. The correlation of each fund vs another uses five years of monthly net returns in AUD. All data is current as at 30 June 2026.
And the evidence says that it’s worthwhile being selective. We recently analysed more than 200,000 quarterly data points across 5,000 stocks, stretching back nearly four decades. Buying the cheapest group produced positive returns 60% of the time. Buying the most richly valued group only produced positive returns 28% of the time. Cheap stocks don't tend to stay cheap, and expensive stocks don't tend to stay expensive. The crowd pays a premium for comfort, and over time, the premium is the problem.
Done well and done consistently, a disciplined focus on valuation produces the asymmetry we prize. We don't need to be right on every stock. We need to be right enough of the time, and to make a lot more when we're right than we lose when we're wrong. And that’s exactly what we’ve done. Since inception, the Orbis Global Equity Fund has put roughly 58% of its capital behind winners, and those winners won by meaningfully more than the losers lost.
Blending active managers with different styles may reduce risk and impact returns Example: Efficient frontier (last 5 years)
30 Jun 2026 | Source: Morningstar, Orbis. Left chart shows the historical potential impact on returns and volatility when Orbis Global Equity Fund is blended with MSCI All Country World Growth Index. Future outcomes may be very different from the above as past performance is not a reliable indicator of future outcomes. Net returns and volatility of Orbis Global Equity Fund and MSCI Index returns are annualised using monthly data. Right chart shows the historical potential impact on returns and volatility when Orbis Global Equity Fund is blended with the largest passive fund, active growth fund, passive quality fund and systematic fund (as sourced from Morningstar Direct AUM data). The categories shown are descriptive groupings selected by Orbis for illustrative purposes and do not necessarily represent formal or industry-standard classifications. This is not financial advice or a recommendation to buy the Orbis Fund. All data is current as 30 June 2026
Good for us. But what about your portfolio? The beauty of our approach is that we always bring something different to the table. You don’t need another manager who has the same holdings as the index and other managers. Real diversification is what we offer. Because our portfolios genuinely differ from the benchmark and our peers, they tend to perform differently too, which can help smooth out overall returns. While we tend to disagree with our peers, that also makes our portfolios play nicely with them.
Investing is an unusual profession. If 90% of doctors or accountants agree on something, there's usually a good reason. But if 90% of investors agree a company has a brilliant future, their beliefs have already influenced the price. And when prices are high, expectations are high. When expectations are high, so is risk (or so is the risk of disappointment). Popular investments can therefore be wonderful companies and terrible investments at the same time. By the time an idea feels obvious to everyone, everyone is already on board. So, who is left to get excited? The big rewards belong to those who can invest while it is uncomfortable.
The comfortable thing quietly becomes the expensive thing.
Being different can also reveal opportunity. For the better part of the past 20 years, investors have been madly in love with the US market. Stocks outside the US have gotten far less attention. Worse yet, they were written off as obsolete or uninvestable. As a result, there are materially fewer analysts and investors around the world looking at these areas. Less attention means less research, and less understanding of the fundamentals. It means wider gaps between stock prices and the reality of those businesses. But for those who are prepared to do the work, it’s a rich hunting ground for opportunity. With more than 40 analysts around the globe, we never stop looking. We never stop turning over stones, waiting patiently to put capital behind only our highest-conviction ideas. We research hundreds of companies each year and only buy a handful.
Diversification is more than holding different managers or styles Correlation between the passive index, popular passive and active funds, and Orbis Global Equity Fund
30 Jun 2026 | Source: Morningstar, Orbis. Left chart shows the historical potential impact on returns and volatility when Orbis Global Equity Fund is blended with MSCI All Country World Growth Index. Future outcomes may be very different from the above as past performance is not a reliable indicator of future outcomes. Net returns and volatility of Orbis Global Equity Fund and MSCI Index returns are annualised using monthly data. Right chart shows the historical potential impact on returns and volatility when Orbis Global Equity Fund is blended with the largest passive fund, active growth fund, passive quality fund and systematic fund (as sourced from Morningstar Direct AUM data). The categories shown are descriptive groupings selected by Orbis for illustrative purposes and do not necessarily represent formal or industry-standard classifications. This is not financial advice or a recommendation to buy the Orbis Fund. All data is current as 30 June 2026
And the evidence says that it’s worthwhile being selective. We recently analysed more than 200,000 quarterly data points across 5,000 stocks, stretching back nearly four decades. Buying the cheapest group produced positive returns 60% of the time. Buying the most richly valued group only produced positive returns 28% of the time. Cheap stocks don't tend to stay cheap, and expensive stocks don't tend to stay expensive. The crowd pays a premium for comfort, and over time, the premium is the problem.
Done well and done consistently, a disciplined focus on valuation produces the asymmetry we prize. We don't need to be right on every stock. We need to be right enough of the time, and to make a lot more when we're right than we lose when we're wrong. And that’s exactly what we’ve done. Since inception, the Orbis Global Equity Fund has put roughly 58% of its capital behind winners, and those winners won by meaningfully more than the losers lost.
Blending active managers with different styles may reduce risk and impact returns Example: Efficient frontier (last 5 years)
30 Jun 2026 | Source: Morningstar, Orbis. Left chart shows the historical potential impact on returns and volatility when Orbis Global Equity Fund is blended with MSCI All Country World Growth Index. Future outcomes may be very different from the above as past performance is not a reliable indicator of future outcomes. Net returns and volatility of Orbis Global Equity Fund and MSCI Index returns are annualised using monthly data. Right chart shows the historical potential impact on returns and volatility when Orbis Global Equity Fund is blended with the largest passive fund, active growth fund, passive quality fund and systematic fund (as sourced from Morningstar Direct AUM data). The categories shown are descriptive groupings selected by Orbis for illustrative purposes and do not necessarily represent formal or industry-standard classifications. This is not financial advice or a recommendation to buy the Orbis Fund. All data is current as 30 June 2026
Good for us. But what about your portfolio? The beauty of our approach is that we always bring something different to the table. You don’t need another manager who has the same holdings as the index and other managers. Real diversification is what we offer. Because our portfolios genuinely differ from the benchmark and our peers, they tend to perform differently too, which can help smooth out overall returns. While we tend to disagree with our peers, that also makes our portfolios play nicely with them.
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