The Orbis Global Equity Fund turns 20

Allan Gray’s global asset management partner Orbis’s flagship Global Equity Fund (US$) proudly celebrates its 20^th birthday in January, having achieved average growth of 13.0% over the last 20 years, compared to its benchmark’s 6.2%. The Fund, which has US$9.5 billion under management, aims to earn higher returns than world stock markets and its benchmark – the FTSE World Index, including income.If you had invested US$10 in the Global Equity Fund when it was launched, your investment would now be worth US$114.62 (as at 31 December 2009).

“It is important to note, however, that this performance does not come in a straight line. For investors who were able to stay the course, their patience has been rewarded,” says Simon Marais, founder of Orbis Australia and Allan Gray’s chairman.

Orbis shares the same founder as Allan Gray Limited. In 1988 Allan Gray and his son William, now President of the Orbis Group, decided to expand their horizons. Using Allan Gray Limited’s investment philosophy, which had been honed in South Africa, they established Orbis with a focus on global clients and investment possibilities. Orbis now has approximately 270 staff located in its offices between Hamilton, Bermuda; London, UK; Sydney, Australia; Seoul, Korea; San Francisco, USA; and Vancouver, Canada.

Marais says that like Allan Gray’s investment philosophy, the Orbis investment philosophy is based on fundamental principles of business analysis. The portfolios follow a contrarian research-intensive approach.

Both firms use their own research to select equities that are priced significantly below their intrinsic value. “We believe that a focused portfolio of such equities will deliver superior long-term returns and, importantly, less risk of loss than the average equity portfolio,” says Marais.

Jonathan Brodie, who was among the first analysts who worked for Allan Gray in the early 1980s and is now with Orbis, shares this long-term perspective. “While there continue to be remarkable developments in the application of our investment process, it is clear that the key strength has been the philosophy underlying both Allan Gray Limited and Orbis which has been consistently deployed over time,” he notes.

For South African investors the best way to access Orbis funds is through Allan Gray. This can be done without using your offshore investment allowance by investing in its two rand-denominated offshore funds, namely the Global Equity Feeder Fund and the Global Equity Fund of Funds. Or you can invest using your offshore allowance by investing in non rand-denominated funds through Allan Gray’s investment platform or LISP.