The value of your investments may go down as well as up, so you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results.
Despite a 27-year track record, Orbis is a relative newcomer to UK retail investors and the advisers who direct a large portion of their investments. Director Dan Brocklebank explains that by only charging a performance fee, the firm is offering investors a radically different fee structure to the vast majority of funds available.
After a contentious dispute over Arconic’s leadership resulted in the resignation of its CEO Klaus Kleinfeld, all eyes were on shareholder meeting in which open board seats would be filled. Activist investment firm Elliott has pushed for a radical shake-up of the company and secured board seats for three of its nominees, which received Orbis’ support.
Amid a spate of high-profile mergers in the financial services sector, Orbis director Dan Brocklebank believes that smaller fund management firms, particularly those with a commitment to delivering strong investment returns, will benefit from industry consolidation.
Orbis investment analyst Jeremie Teboul observes that nine years into a bull stockmarket attractive opportunities are challenging to find and carefully avoiding capital loss may be the main focus for long-term investors.
Orbis’ Ashley Lynn argues that the traditional ‘60/40’ allocation between equities and bonds no longer works in the current environment. Central banks’ quantitative easing efforts, which were intended to boost economic growth, have caused stocks and bond prices to run to record highs in unison, thereby breaking the historically negative correlation between them.
Pressure has mounted on investment managers who often charge high fixed fees for lacklustre performance. Orbis director Dan Brocklebank says that he expects performance fees to become increasingly prevalent as clients demand value-for-money from managers.
Michael Giess used to opt for cash ISAs, but felt that with interest rates so low it was time to turn his focus to investing. One of his priorities was to start saving for his two teenage children, and upon a recommendation from a relative, he set up an Orbis Junior ISA for each child.
Upon news of Aronic CEO Klaus Kleinfeld’s departure, Orbis, a large shareholder, commented that the company’s board had demonstrated “a pattern of poor judgment and intolerable behavior that can’t be redeemed by their reluctant decision to finally remove Klaus Kleinfeld.”
Orbis argued that the actions of Arconic’s board in support of former CEO Klaus Kleinfeld were “an insult to good corporate governance and bring even greater urgency to the need for new leadership at Arconic.”
After a contentious battle with shareholders who wanted a leadership change at Arconic, the company announced Klaus Kleinfeld’s departure as CEO. Orbis believed that Arconic could not realise its true value under Kleinfeld’s direction and was therefore supportive of his removal.
David Parkinson has invested for his twins’ future by opening Junior ISAs for both of them. Choosing a fund is no easy task, but he opted for the Orbis Global Equity Fund. He was attracted to its fee structure, which means that investors only a pay a performance fee if the Fund outperforms its benchmark.
Orbis director Dan Brocklebank argues that investor sentiment on emerging market (EM) stocks may be overly pessimistic. He considers two reasons commonly cited for avoiding EMs—that they fare worse when the US raises interest rates and during developed world bear markets—and finds that neither is well-substantiated.
Orbis’ ISA and Junior ISA promotion, whereby investments made into a stocks and shares ISA or JISA prior to 30 April are matched by a contribution up to £100, is featured as Moneywise’s ‘deal of the week.’
Orbis portfolio manager Alec Cutler has taken a long position on the UK pound, while shorting the US dollar. He believes that the pound’s meaningful decline in value relative to the US dollar since Britain’s EU referendum has been excessive and presents an opportunity for long-term investors.
Orbis investment counsellor Chris Horwood discusses the tendency for many investors to chain economic growth. History suggests that investment returns actually don’t have much to do with economic growth, and investors are better-served focussing on company valuations.
Orbis portfolio manager Alec Cutler contends that having some exposure to gold can put investors in a better position for a range of outcomes. By contrast, he believes attractively-priced bonds, and particularly government bonds, are very hard to come by.
Orbis director Dan Brocklebank argues that the conversation around hidden charges in the active management industry must extend to fee structures. Symmetrical fee structures are the only way to truly align the interests of managers and investors.
The Financial Conduct Authority’s (FCA) November 2016 Interim report shone a bright light on fees charged by active managers, concluding that, on average, they don’t provide investors with value for money. Orbis director Dan Brocklebank applauds the FCA’s efforts to expose—with the aim of improving—the industry’s “inconvenient truths.”
FE Trustnet looks at which global equity funds have been volatile over the last decade while protecting investors’ capital on the downside.
Many investors pay their managers higher fees for products which are really index funds in disguise. Orbis’ performance-linked fee means that if the fund fails to beat its benchmark, investors pay no fee at all.
The FE Alpha Manager status is designated to the top 10% performing managers in the industry, which, this year, included Orbis’ Alec Cutler.
Arconic, the US-based metals and components company and a holding in the Orbis Funds, has resisted efforts by shareholders to oust its embattled CEO Klaus Kleinfeld. Orbis partner Adam Karr remarks that under Mr. Kleinfeld’s tenure, Arconic’s decision making has been poor and detrimental to shareholder value.
There is no ‘one size fits all’ in investing, and different investment strategies can be applied successfully. Orbis’ primary focus on identifying individual under-priced shares, has generated superior returns over the long-term.
While funds focussed on specific sectors have earned the most success in the last decade, some global funds, including Orbis Global Equity Fund, have also earned their keep.
Investment management fee structures have come under fire for failing to promote value for clients, and performance fees seek to address that problem. Orbis’ performance fee means that fees are paid when the fund outperforms the benchmark and refunds are paid when it underperforms.
One way to earn attractive long-term returns is to find well-priced stocks in one attractive area of the market. Orbis director Dan Brocklebank points out that banks may be one such undervalued area, as they have remained out of favour with investors in the years since the financial crisis.
The UK Financial Conduct Authority (FCA) published an interim report in November on the asset management industry, casting a dark light on the high fees managers charge clients—even when they deliver no value. Orbis director Dan Brocklebank observes that a well-designed performance fee structure can ensure that managers are incentivised to deliver long-term value to their clients and are paid on that basis alone.
Value investing has been out of style as of late, despite it being the outperforming strategy when compared to growth investing over the long term. Orbis is featured in this article as specialists in value investing.
Most multi-asset funds struggled in 2016 to beat the FTSE All World index. However, the Orbis Global Balanced Fund was one of just two funds in the relevant Investment Association sectors that comfortably outperformed the FTSE All World index as well as its benchmark.
Orbis Investments has been disclosing annual portfolio net asset value turnover statistics for its OEIC funds. Director Dan Brocklebank feels the figure is “useful”, but needs to be put in context as it can vary from year to year.
Adam Karr, Managing Director at Orbis, sits down with Wallace Forbes in an interview to talk about Orbis’ investment philosophy and contrarian thinking.
When it comes to investing, taking a long-term view is difficult especially when investors are exposed to news and images of Wall Street despair. Orbis Director Dan Brocklebank points out that it’s especially difficult to filter out from all of this noise what really matters over the long term. He suggests best approaches for investors.
Since the UK voted to leave the EU, a dark cloud has been cast over the resilience of consumer spending in Britain. But, Orbis’ Ben Preston believes the Brexit vote hasn’t harmed consumers’ willingness to shop, rather it had an impact on the value of currency.
Dan Brocklebank, director at Orbis Access, sees the new FCA report on fund fees as a wake-up call for the industry and a positive step in fund charge reforms. Orbis believes in a fee structure that shares losses as well as gains and says that investors should demand value for money from the fees they pay their managers.
The People’s Trust, the new fund to be launched by Daniel Godfrey, former chief executive of the Investment Association, has reached its minimum funding target and will be launched in the first half of next year. Orbis Investments is one of the fund’s first three investment managers.
Our own Dan Brocklebank sits down with Jake Moeller, Head of Lipper UK & Ireland Research, and outlines his views on the key aspects of the active vs passive debate. Plus, he discusses the approach Orbis adopts in order to align investor interests with those of the fund manager. Have a listen!
The Orbis Global Equity Fund is highlighted - alongside two other IA Global funds – following research by FE Trustnet indicating that they have “consistently sat in their sector’s upper deciles over recent years.”
Orbis’ Ben Preston talks about opportunities that slumping commodity prices can create for investors who are brave enough to take all the risks attached with investing in emerging market equities.
Dan Brocklebank, director at Orbis Access, explains why investors should be excited about value stocks and under-the-radar opportunities at the moment rather than worrying about the strong performance of most major indices.
Jeff Prestridge argues that the government should start encouraging people to save instead of allowing companies to push or encourage customers to increase spending and debt. He then goes into detail about The People’s Trust, an initiative started by Daniel Godfrey, former IA Chief Executive, and the merits of investment trusts. Orbis Investments is mentioned as one of the first three asset managers who are backing Godfrey’s initiative.
Daniel Godfrey, former chief executive of the Investment Association, plans to launch a low cost, long-term mutual fund called the People’s Trust. It will target a compound annual return of 7% and Godfrey is looking to crowdfund the set-up costs. Orbis Investments is one of three ‘supporting investment managers’ initially announced.
Dan Brocklebank, director at Orbis Access, in an interview brings attention to lack of transparency in asset management, how the Orbis Access fee model works and his hopes for the future where more active managers move towards these sorts of fee models.
Coverage of the Benchmark Rally event in Canary Wharf where we installed a giant race track to raise more awareness of Orbis Access and our fee model.
Dr Elizabeth Kilbey, consultant clinical psychologist, who worked with us on the Kids’ Money Matters report, is on Money Box as a guest speaker discussing the topic of children’s attitudes to money and what influence it will have on their adult financial lives.
An interview with Daniel Godfrey, former chief executive of the Investment Association, on his campaign for greater transparency in asset management. He also talks about performance fees and mentions our performance fee model – fast forward to 5min 40 sec into the interview to have a listen.
Dan Brocklebank, director at Orbis Access, challenges the behaviour of investors who seek out fund managers offering lower fees, presuming that it is going to be better for them in the long run. He points out that if investors consider other fee structures, it may be more rewarding in the long run.
An interview with Dr Elizabeth Kilbey, consultant clinical psychologist and expert who analysed findings in the Orbis Access Kids’ Money Matters report, on the importance of teaching children about money. The interview covers area of how parents can start talking to kids about money, how to go about it in an age appropriate way and provides practical teaching lessons.
Dr Elizabeth Kilbey, consultant clinical psychologist, provides tips on how parents can broach the subject of money with their children. She calls for more financial education in the UK, and says that financial education should really start at home. Dr Kilbey analysed findings in the Orbis Access Kids’ Money Matters, which found that kids have a keen awareness of money.
Ben Preston provides his thoughts on technology firms and their future returns. He expresses concern over the valuations of stocks such as Facebook, Amazon, Netflix and Google. He says they are already priced to deliver continued rapid growth, so it may be hard for them to beat expectations.
Announcement that Marcel Bradshaw will be joining Orbis Access in order to head our UK retail business as we are broadening the distribution of our funds to include third parties.
The Orbis Access Kids’ Money Matters report is covered, along with its finding that there is a greater need to educate young children about finance. Practical tips for parents are also included. These are provided by Dr Elizabeth Kilbey, a consultant clinical psychologist, who features in the report.
Are performance fees suitable for retail investors? Dan Brocklebank, Director at Orbis Access argues that performance fees can align fund managers interests with investors better than a flat fee structure.
Questions raised around performance fees and if they truly motivate fund managers to outperform. Dan Brocklebank, director at Orbis Access, is quoted saying that they can help ensure interests are aligned between clients and the manager, so long as they are structured well.
A private investor tells Morningstar why she switched her child’s Child Trust Fund into an Orbis Access Junior ISA, in part because the Junior ISA comes with a fee offer on one year’s investment at zero cost.
In light of coverage about fund manager pay, question is raised: do bonuses improve investor outcomes? Plus, the Orbis Access fee model is used as an example of one way of linking fund manager remuneration and the fees investors pay.
Dan Brocklebank, director at Orbis, shares his views on why Rolls-Royce stock is worth holding over the long term due to high demand and barriers to entry for its jet engine business.
Orbis Access’ performance-based fee model is featured as an example of a fund fee that only charges if the fund outperforms. If it does, it goes halves, taking 50 percent of that outperformance. And when it underperforms, it refunds half the underperformance to its investors.
Orbis’ Matthew Spencer argues that poorly designed fee structures create a mismatch between manager and client interests. Instead, managers should design incentive structures that reward outperformance, penalise them for poor performance and overall be proportionate to the value that the manager has added to the client’s investment horizon.
In the lead up to the British vote on EU membership, fund managers weigh in on whether they have made any contingency plans in case of a British exit. Dan Brocklebank, director at Orbis Access, says that any fund portfolio changes must come after the referendum, and not before.
The average IA Global fund has performed poorly over the last eight years dodging the worst of the market's falls, according to FE Trustnet. Gary Jackson looks into which Global Funds have bucked the trend and have made good risk-adjusted returns. The Orbis Global Equity Fund finds itself on that list.
Entry fees that fund managers have been charging investors are under scrutiny by the FCA. Dan Brocklebank director at Orbis Access is quoted saying that entry fees are something that we are not comfortable charging our investors with.
When we do go active we need to support firms that really get the way the market is changing. I’ve written before about a few funds that are testing out performance fee-only models. But the one that has taken it to its most extreme is Orbis Access. They charge you nothing on their funds (they have two — Global Equity and Global Balanced) if they aren’t outperforming. No custody fees, management fees, admin, entrance or exit fees. Nothing. Instead they charge you 50 per cent of any performance over their benchmark when they beat it and pay you that money back when they don’t.
The debate over hidden costs in the fund management industry continues, with the Orbis Access performance fee highlighted as a counterpoint.
Looking at Orbis Access research which highlights concerns grandparents have about how their grandchildren will get on the property ladder or fund their retirement.
As investors try to figure out what’s next for China, Craig Bodenstab, investment counsellor at Orbis, provides his opinion.
Jake Moeller argues that the benefits of the active funds industry need to be articulated more strongly. Orbis' paper - Active Management: A Practitioner's Perspective is mentioned as a supporter of active funds.
The volatile market conditions since the start of 2016 have helped prop up the gold price as investors look for a ‘safe bet’. Orbis Access director Dan Brocklebank provides his opinion.
Looking at the debate as to whether fund managers can justify their fees when the majority of funds over the last five years have failed to beat their benchmarks. The Orbis Access offering is highlighted and supported with a statement from the Cass Business School talking about our fee model.
Orbis Access' research into the generosity of UK grandparents, including the general belief amongst them that financial struggles and debt are the biggest threat to their grandchildren's future happiness.
A private investor tells Morningstar about the challenges of managing his own investments and pensions, while also putting something away for his grandchildren.
Looking at the merits and logic behind geographical vs. sector-specific fund mandates. Orbis director Dan Brocklebank talks about the dangers of following investment fads, citing the dotcom crash.
An article based on Orbis Access research looking into “super generous” grandparents. It focuses on the underlying theme of gifting money to grandchildren for instant gratification, versus long-term investing for their future. Orbis Access director Dan Brocklebank is quoted, talking about using this generosity to sow the seeds of a savings habit.
A look at the cost of running a successful asset management business and the fees charged. It also highlights Orbis’ alternative fee structure.
The poor performance of Chinese markets opens this piece about fees charged by funds during periods when investors are losing money. A study by the Cass Business School, commissioned by Orbis Access, is quoted. The study notes that only three funds available in the UK feature fees where the fund manager “bears some pain” during bad spells: Neil Woodford’s Patient Capital Trust and two from Orbis Access.
Looking at some of the important money questions that families come across. Orbis director Dan Brocklebank is quoted talking about Junior ISAs and how much can be paid into them annually.
Case study of private investor Bella Briant-Evans, who explains why she’s considering switching her two Child Trust Funds into Junior ISAs. She wants to build up a decent nest-egg for each of her three children. The youngest has a Stocks & Shares Junior ISA with Orbis Access. Bella is now considering switching the older two Child Trust Funds into Junior ISAs too.
The Super Bowl Stock Predictor has correctly called the future direction of US stock markets 82% of the time over the pasts 49 years. That’s a pretty impressive hit rate, so how does it work? In fact, it’s just a bit of fun created to make the point that just because some things appear to be connected that does not always mean they actually are.
Money may not be able to buy happiness, but research by Orbis Access shows that parents place a huge importance on their children’s future financial well-being. They clearly feel that being over-burdened with debt could overshadow all other aspects of their life. Indeed, debt is regarded as a bigger threat to their children’s future than making the wrong career choice or having an unhappy marriage.
According to the Investors Chronicle, “…there tends to be a much wider range of investment choices with stocks-and-shares JISAs than their CTF equivalents. Costs on JISAs also tend to be lower than on CTFs”.
Orbis’ Ben Preston says, “…emerging markets are currently providing fertile ground for long-term investors: not just ‘despite’ being deeply out of favour, but perhaps even ‘because’ of it.”
Have we reached a turning point for emerging markets and mining investment trusts? Shares in these battered funds bounced back this week.
Orbis’ Dan Brocklebank says “…we find it much more interesting to look back and see who was repurchasing shares back in 2008-09 when stockmarkets were considerably lower than they are today.”
Although the sell-off has been especially tough on sector-focused funds, Orbis Investment Management is a more contrarian investor.
Ben Preston, director of Orbis Investment and analyst on Orbis Global Equity Fund is backing the recently re-listed PayPal to deliver high growth over the long term.
What has happened over the past five days or so further solidifies the argument that investors shouldn’t panic sell within their portfolios on the back of short-term market movements.
News that Japan’s economy shrunk 0.4 per cent in the second quarter of the year has thrust the controversial topic of ‘Abenomics’ back in the spotlight.
In our view, the most reliable indicator of the “market view” is the company’s market value, or share price.
Data from FE Analytics shows UK trusts that charge a performance fee have delivered much better returns on average.
How should we pay fund managers? At present, we pay them too much, to do the wrong things.
Looking at the implications for investing, Orbis’ Dan Brocklebank says: “Situations like these are never pleasant for investors to stomach in the short term but they rarely have a long-term effect.’’
Orbis’ Dan Brocklebank believes that times of panic like these can create opportunities for investors with a long-term perspective.
Orbis’ Dan Brocklebank suggests taking a "bottom-up" view rather than investing based on the latest GDP reports.
As tempting as it may be to predict the future, history shows that many investors have an abysmal track record in doing so.