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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
|---|---|---|---|---|---|---|---|
Buyside Digest is not affiliated with, and does not endorse, Orbis International Equity. This analysis is provided for institutional research purposes only and is not investment advice.
"Orbis navigated an exceptionally narrow AI-driven market by trimming exuberant AI exposure while adding mispriced opportunities with narrower outcome distributions. Credit spreads signal extreme risk appetite comparable to historical bubbles."
Orbis International Equity returned 12.1% net in Q2 2026 versus the benchmark's 14.5%, navigating an exceptionally challenging quarter for stockpickers where the winner ratio hit its lowest reading since 1988. The market was led by a narrow cohort of AI winners, and while the Strategy benefited from holdings like Nebius—an AI cloud infrastructure business with multibillion-dollar deals with Microsoft and Meta—the manager is growing cautious about AI ecosystem economics and valuation exuberance. Credit spread analysis reveals investor risk appetite at historical extremes comparable to the TMT and 2007 credit bubbles. In response, the portfolio is being reoriented toward assets with narrower outcome distributions trading at clear discounts, including BBB Foods, a Mexican discount retailer with a compelling growth runway to 15,000 stores at 40%+ returns on invested capital. The manager acknowledges the Strategy will lag if AI concentration continues, but remains committed to valuation discipline and absolute risk management, patiently hunting for mispricings in healthcare and consumer staples while the broader market crowds into a single theme.
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