“UK firms are dirt cheap, amongst the cheapest in the world, and they are good,” Cutler said at the event. 

He invests in firms like UK-based Drax, a renewable energy company engaged in renewable power generation and the production of biomass. “If Drax was New York listed it would be double or triple the price,” he added. “We are major shareholders in these firms. We are also heavily weighted in defence stocks. Gold is interesting too. We are overweight in the UK, emerging markets and heavily weighted in Japan.” 

“Korea is looking favourable,” he said. “The Japanese market also looks very attractive. It’s cheap and there’s a ton of value out there. Japan is really turning and we are very excited about it.”

Rob Perrone, a Japan investment specialist at Orbis Investments, added: ”We buy firms that trade at a big discount. We are stock pickers and look for opportunities. Valuations of stocks in Japan are compelling. The change in corporate governance has had a positive impact. Returns on investments and profitability have improved as a result.” 

“Capital efficiency has also improved and if that continues, it will be good for the Japanese stock market and the economy. The Japanese stock market is also the least correlated and it plays a wonderful diversification role. It is an unusually attractive time and stocks are cheap. We favour good quality, small and mid-caps. There’s a lot of opportunities out there,” Perrone said.  

Orbis isn't alone in favouring Japan and thinking that, as a result of corporate governance reforms and other measures, the Asian country deserves more investor attention. See here.

Orbis Global Balanced Strategy
Cutler manages the Orbis Global Balanced Strategy which continues to be a top quartile performer across multiple time periods in its sector.

The fund seeks to balance investment returns and the risk of loss using a diversified global portfolio. To do this, it primarily invests in shares of publicly-listed companies and bonds issued by companies and governments located anywhere in the world. It can also indirectly invest in commodities. It targets outperformance of the returns of its benchmark, 60 per cent MSCI World Index with net dividends reinvested and 40 per cent JP Morgan Global Government Bond Index (hedged into sterling).

Top 10 holdings include iShares Physical Gold, South Korea-based Samsung Electronics, Taiwan Semiconductors, Japanese-based Sumitomo Mitsui Financial Group and the UK-based Drax Group.