Orbis' Cutler: No need to fear 'scary UK cyclical mid caps'

Steer clear of high-growth mega-caps, investors urged

James Baxter-Derrington
clock • 5 min read

Equity investors should not fear "scary UK cyclical mid-cap" stocks, which present a "wonderful opportunity" at current valuations, according to manager of the Orbis Global Balanced fund Alec Cutler, who warned overexposure to high-growth mega caps is "the definition of risky".

Cutler, who believes the dominance of the FAANGs has led investors to "redefine what risk is", has reduced the multi-asset fund's exposure to a slim holding in just two of the tech giants, which he describes as the "last bastion" of reasonable valuations in the group of mega-cap stocks. Balfour Beatty is one such "scary UK cyclical mid cap" representing a "wonderful opportunity" for investors, Cutler said of the UK-based construction firm, to which he has allocated 1.4% of the portfolio. "Because it is cyclical, because it is value and because it is not very big, momentum-driven quant...

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