Orbis' Cutler bets on producers and warns of 'greenflation'

Consumer names stunt dividend growth

Investors buying into low-earnings, high-duration growth stocks on the back of the Federal Reserve's hawkish stance on rates is “unwarranted”.

According to Alec Cutler, manager of the Orbis Global Balanced fund, these same investors have shunned producer-type names boasting up to 25-30% free cash flow yields. "There is just insane pricing and valuations on these companies," he said. "We are quite comfortable holding them and taking the near-term hit." The multi-asset fund has returned 10.3% and 26.2% over one and three years respectively, outstripping its IA Mixed Investments 40-85% Shares sector, which has returned -5.4% and 9.6% over the same period. Orbis Global Balanced remains underweight popular US growth stocks and...