Share market concentration has reached new peaks in recent years with a handful of US stocks dominating the investment narrative. But global equities specialist, Antipodes, is finding value beyond the obvious in a world that is turning…
An imaginary line drawn through the exact centre of the earth connects two geographical extremes known as the antipodes.
But the arc of colonial history also delivered the term into common use as a somewhat dismissive label for the two countries most opposite to Europe and, with an adjectival twist, the people who lived there.
From the perspective of ‘antipodeans’ in Australia and NZ, of course, the antipodes lie on the other side of the world.
Wellington, for example, pairs with Alaejos in Spain while Sydney is (almost) diametrically opposed to Almagreira in the Portuguese mid-Atlantic island territory of the Azores.
Sydney is also the headquarters of the Antipodes funds management business founded in 2015 by Jacob Mitchell that – as per the brand name – eyes an investment horizon well beyond its home base.
The boutique firm has built a stellar reputation as a savvy ‘high conviction’ global equities manager with over A$10 billion assets under management, with a unique value-based investment style, with the firm managing over A$20 billion firmwide in total.
Since inception, the flagship long-only Antipodes Global Value Fund has returned an annualised 11.6 per cent net-of-fees (in Australian dollar terms) during a period that hasn’t been particularly favourable to fundamental investors.
Over the last decade the manager has expanded its product suite, too, from developed market equities to other asset classes including emerging markets and, more recently, China-focused strategies with three funds developed exclusively as portfolio investment entities (PIEs) for NZ investors.
As well as the Global Value Fund, Antipodes also offers the long-short Global Fund and the Emerging Markets Fund in PIE formats. Further information about the Antipodes PIE suite is available by clicking here.
Process, price and pragmatism
While Antipodes undoubtedly falls in the ‘value’ investment camp, the firm is not constrained by the style’s historical definition.
As Vihari Ross, Antipodes portfolio manager, told a recent adviser roadshow in NZ: “Traditional value managers just buy the cheapest 20 per cent of stocks.
“We follow a ‘pragmatic value’ process that allows us to participate in structural trends that pure price-driven managers would miss.”
In a phrase coined by Mitchell, ‘pragmatic value’ still relies on share price as a key metric but adds on a deeper assessment of business resilience and portfolio risk management techniques.
“… we focus on the opportunities that are revealed by a close scrutiny of industry and business cycles, as well as the structural changes and the socio/macroeconomic forces that shape the future of the companies in which we may choose to invest,” Antipodes says on its website.
Ross is one of more than 30 specialists in the Antipodes team charged with using the rigorous process to scour a global universe of 4,000 stocks for the handful of companies (typically about 60) most likely to deliver on those investment objectives.
She says the off-index, worldwide ambit can see the manager leaning against consensus at times such as now when investor enthusiasm for US technology stocks – fuelled by artificial intelligence (AI) hype – remains at delusional heights.
Short in the USA
The US share market looks expensive, and highly concentrated, as measured against almost any gauge.
Price-to-earnings (P/E) metrics, for example, show the US index continues to trade at multiples well above global peers.
As at mid-2025, US shares were trading at more than 20-times earnings – even after excluding the so-called ‘magnificent 7’ tech stocks the dial barely dropped lower – as illustrated in the graph below.
Source: Factset, Antipodes. As at 30 June 2025
By contrast, earnings multiples for China equities stood at about 12.6-times while European markets traded at 16.5-times, within which companies with similar structural tailwinds and rates of growth can be found.
Aside from the global comparisons, Ross notes that US stocks are also expensive relative to their own 20-year average valuation in another risk warning for price-conscious investors.
She says the value discrepancy is especially acute among some US ‘quality’ companies, such as budget retailer Costco, which trade at similar forward P/E multiples to ‘mag 7’ stars despite growth forecasts running at less than half their tech counterparts.
Antipodes also has broader concerns about ongoing US ‘exceptionalism’ as the country faces challenges around debt limits (see graph below), the impact of tariffs and other economic factors.
Source: Macrobond
Indeed, the Global Value fund has managed to outperform a US-dominated MSCI All Country World index over the last three years despite a large underweight to the country and a more diverse sector exposure.
There is no overlap, for instance, between the top 10 stock contributors in the Antipodes fund – that features the German-listed Siemens Energy as its largest contributor to performance – and the index, which is a mag-7 lookalike led by Nvidia.
Ross says with Europe and China better-placed to deliver fiscal stimulus, the structural market shift away from the US is also poised to continue.
Meanwhile, the Antipodes Global Fund, a vehicle designed to provide greater downside protection and a smoother ride through volatility, has the majority of its short positions in the US: the portfolio is short more than 22 per cent and long almost 56 per cent on US stocks.
Trend-AI
If the research-heavy ‘pragmatic value’ process has seen the manager tilt away from the US for better opportunities elsewhere in the world, Antipodes remains alert to the technology trend that has underpinned much of the recent ‘mag-7’ multiple expansion.
However, Ross says that rather than piling into the “AI-enablers” like Nvidia, Antipodes is looking for companies that are likely to profit from implementing the technology.
The AI-themed search has identified a few non-US names – including Chinese social media giant, Tencent, and the French bank, Société Générale – set to book productivity gains from the ChatGPT-sparked revolution.
Antipodes is pragmatic, not dogmatic, though, about country exposures. The manager expects US tech behemoths Alphabet, Amazon and Microsoft to emerge as next-gen AI winners as well as a lesser-known New York Stock Exchange-listed name, Keysight.
Ross says Keysight has emerged as cornerstone service supplier to the AI industry as a software/hardware testing and measurement specialist.
“Cloud-based companies with big data deficits – banks and pharmaceuticals, for example – will also benefit through AI and we think that hasn’t been priced into earnings or valuations yet,” she says.
Send in the PIEs
Regardless of its global outlook as a fund manager, Antipodes has long valued its relationship with neighbouring NZ investors and financial advisers.
In fact, the firm was one of the first Australia-based businesses to tailor a tax-effective product for the local market, launching the Global Value and Global Funds as PIEs in 2018 under the aegis of FundRock NZ.
Antipodes added the Emerging Markets Fund to the PIE menu last year to underscore its commitment to offering NZ investors a wide suite of investment options.
The assets under management for NZ investors have grown to about $400 million under management in total amid an uptick in interest over the last couple of years.
Ross says as fellow antipodeans, NZ investors understand that real opportunities can be found on the other side of the world… if you know where to look.
Disclaimer:
The Product Disclosure Statement is available from Antipodes, or the issuer FundRock NZ Limited on www.fundrock.com, and on https://disclose-register.companiesoffice.govt.nz/.