Fund Research

Ruffer Investment Company

Last update 16 January 2019

Ruffer Investment Company is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

The Company’s objective is to achieve a positive total annual return, after all expenses, of at least twice the Bank of England Bank Rate.

As at:

15/01/2019

Group/Investment

Ruffer Investment Company

Ticker

RICA

Management Company

Ruffer AIFM Limited

Manager Name

Steve Russell;Hamish Baillie;Duncan MacInnes;

Association of Investment Companies (AIC) Sector

Flexible Investment

12 Mo Yield

0.8%

Dividend Distribution Frequency

Semi-Annually



Latest Market Capitalisation

£386,887,210

Latest Net Gearing (Cum Fair)

-5%

Latest Ongoing Charge Ex Perf Fee %

1.17

Turnover Ratio %

35.4

Shares Outstanding

 180,788,416

(Discount)/ Premium % (Cum Fair)

-3.5

Daily Closing Price

214p

Ruffer Investment Company is designed to deliver steady all-weather returns across the cycle, aiming to protect capital in falling markets and deliver double the Bank of England base rate on a 12-month rolling basis. Primarily a long-only vehicle, the trust also uses currencies, derivatives and illiquid strategies as part of its highly differentiated investment process and is managed on a day-to-day basis by Steve Russell, Hamish Baillie and Duncan MacInnes.

The managers have believed for a long time that efforts to reflate the economy will result in too much inflation, which central banks will find hard to control, and the portfolio is designed to perform well in an inflationary environment, with significant exposure to UK and US index-linked treasuries. In the meantime, however, the managers are keen to ensure that investors are paid to wait; using equities – a mix of special situations, macro opportunities and value plays – to enhance performance.

2018 was a tough year for Ruffer, which lost 5.6% - more than it has lost in any calendar year since inception, and the trust’s performance as a result of recent declines now looks weak over one, three and five years. The trust has traded at a consistent premium since the referendum and its discount at the time of writing reflects this unusually poor showing – at nearly 5% this too stands at a level which hasn’t been seen since 2007.

The trust’s equity exposure – largely made up of cyclical and value stocks, a sharp fall in the oil price, and significant sterling exposure held in the view that more or less any positive news out of the Brexit fiasco would be better than the market’s expectations, all weighed on returns.

A difficult time recently, then, for shareholders in the trust. Yet closer examination of the trust’s NAV over the last twelve months shows that, as the sell-off has intensified, the portion of this trust’s assets which really differentiate it from its peers – and offer the greatest defensive qualities – came into their own. The trust’s protective assets, particularly its illiquid strategies, performed well; the Ruffer Illiquid Strategies Fund 2015, for example, appreciated by 30% over the last quarter of 2018.

It is worth noting that these defensive assets were put it in place to protect its shareholders against real, consequential, falls in the market - not to shield them from every bump in the road. Ruffer has seen difficult periods before, notably in 2006 when the trust struggled to keep its head above water as the initial cracks appeared before the financial crisis. With that in mind, while concerns about the health of the global economy continue to escalate, the managers believe there is comfort to be taken from the clear impact that these protective assets had on performance in Q4 when markets really began to tumble.

Important information

Ruffer Investment Company is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Kepler Trust Intelligence is a website owned and managed by Kepler Partners LLP. Material produced by Kepler Trust Intelligence should be considered a marketing communication, and is not independent research.

This report has been issued by Kepler Partners LLP for communication only to eligible counterparties and professional clients as defined by the Financial Conduct Authority.  Its contents are not directed at, are not to be communicated to, may not be suitable for and must not be relied on by retail clients

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country.  Persons who access this information are required to inform themselves and to comply with any such restrictions. 

The information contained herein has not been prepared in accordance with legal requirements designed to promote the independence of investment research. The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. 

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Fund History: Ruffer Investment Company

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