Ruffer Investment Share Discussion Threads

[smicker] 30/1/2020 12:01

Bought ruffer gold fund in Sept and gold price now higher but fund down over 13%. Anyone any idea whats going on with it?

[essentialinvestor] 10/11/2019 22:01

Unruffled, eh )

[elmfield] 10/11/2019 18:54

I got so fed up with them I sold after last dip! Take a bit of convincing to rebuy!

[essentialinvestor] 10/11/2019 18:52

RICA had a very nice 3 month run. If gold and bonds continue
to sell off it's not supportive to NAV.

[lambeater] 08/9/2019 20:22

Insolvency practitioners is also a good hedge against a downturn. Look at the way Begbies Traynor has performed during the recent nervousness in bonds. I have long believed that interest rates will remain low and that we might even see them go negative as that might prove the only way central banks can save their economies when the s hits the f. I've never been a great fan of gold but it feels good to pickup big miners such as BHP, RTZ when cheap and hold them long term. They may not be as meteoric as gold but the stuff they're digging up will always be in demand.

[apollocreed1] 06/9/2019 16:25

My iShares UK INDEX LINKED Gilt tracker (INXG) dropped by 8% over 2 days when Sajid Javid announced his change to using CPI, although I bought it a year ago so now am breaking even. This is just a reminder that: 1) There is no such thing as a risk-free investment 2) Always diversify 3) A secure-ish income stream from diversified private sector sources is usually safer than payments promised by a government. Governments can and often do rewrite contracts in their favour -e.g. Railtrack, Corbyn's threats against infrastructure funds, Civitas and Triple point social housing funds and Ground Rent legislation. 4) Precious metals are probably a safer inflation hedge than index linked bonds.

[edwardt] 06/9/2019 08:58

rpi review not good for 'd'uffer..

[jonwig] 22/8/2019 14:38

@ lambeater - agreed, it was a resume of the basic factsheet narrative. But it's good to be reminded from time to time, and I thought his reasoning for holding Tesco was an interesting one.

[lambeater] 22/8/2019 14:17

jonwig, A lot of "so's" in that interview and he didn't really give away much in his explanation, nevertheless thanks for posting it.

[jonwig] 22/8/2019 06:47

Video interview:

[edwardt] 21/5/2019 14:03

perhaps we will not get to my 10% discount for long but there maybe a moment when it will touch it. anyone track ruffer aum? i imagine it has shrunk for more reasons than the obvious.

[essentialinvestor] 18/3/2019 12:09

Agree with the rational of looking for a larger % discount to NAV
given recent poor performance and annual costs of holding.

[slicethepie] 15/3/2019 08:06

Another odd transaction, they bought 8% of Bilby in September at 100p now 2 profit warnings later 37p. This is not a typical Ruffer stock and looks like they were seen coming!

[edwardt] 14/3/2019 12:55

if it still owns cyclicals which they do by my definition at least that is not defensive. also linkers where nominals are will not dig them out of hole as they did last time - they went up for different reasons to why they owned them. as such, a 10 discount given their high fee is my entry point. probably september time..

[contrarian joe] 08/3/2019 18:58

Is Ruffer Now a Buying Opportunity for Defensive Investors?
After a year of poor performance, Ruffer Investment Company has slipped to a rare, sustained discount. Is this a good time to buy this defensive play?
David Brenchley
5 March, 2019 | 2:03PM







Last year was tough for investors, with the majority of asset classes seeing steep falls as macro-economic and geo-politics worries came to a head from October onwards.
For some funds, market volatility and down years are par for the course. Investing in risk assets comes with the possibility of losing cash in the short term.
For others, though, it’s less than ideal. Absolute return funds, in particular, set their stall out to produce positive returns for investors year after year whatever the underlying market conditions. This is a high bar and one many have failed to achieve.
While the Morningstar Bronze-rated Ruffer Investment Company (RICA) is not an absolute return fund per se, its objectives are similar. It aims to achieve an annual return after expenses of at least twice the Bank of England base rate. Currently, that means it aims to generate a positive return of at least 1.5%.
By and large, it has achieved that. Ruffer has generated positive returns in nine of its 14 full calendar years of existence. Even at the depths of the financial crisis in 2008, when the FTSE All-Share lost almost a third of its value, Ruffer was up 23%.
As a result, for most of its life it has rarely traded on anything but a premium to net asset value (NAV). Its 10-year average premium is 2.48%. When it has slipped to a discount, it hasn’t been long until that was rectified.
Indeed, only for three periods has Ruffer’s discount been sustained: between October 2008 and January 2009; between June and December 2014; and between January and September 2016. In August 2014, the discount widened to more than 5% – the widest it had traded at prior to 2019.
Disappointing Performance
However, Ruffer’s fortunes dipped in 2018. At almost 6%, the NAV lost more than it ever has in any calendar year for the past 10 years. The share price followed, losing 11% – almost twice that of the NAV. As a result, Ruffer has been trading at a discount ever since December 22.
At one point in early January, that discount reached 7.34%, though it quickly narrowed to around 4%, where it has remained. Today, the discount is 3.86%.
“The high level of correlation between asset classes [in 2018] largely rendered allocation to risk-on and risk-off assets redundant,” says Morningstar analyst David Holder. “In this environment [Ruffer] failed to deliver an absolute return.
“Ruffer make the point that the portfolio is designed to protect against cliff edge falls of 15%+, but I have no doubt that Ruffer will be disappointed with the returns and it looks like some investors voted with their feet.”
Peter Hewitt has held Ruffer for more than five years in his BMO Managed Portfolio Growth (BMPG) as part of his protection to cushion potential downside from his more aggressive holdings like Scottish Mortgage (SMT), Polar Capital Technology (PCT) and Worldwide Healthcare (WWH).
In the protection bucket, which currently accounts for between 12-15% of his portfolio, he also has exposure to RIT Capital (RCP), Personal Assets (PNL), BH Macro (BHMG) and Capital Gearing (CGT).
“It’s not a perfect defence against a bear market – far from it. But, as we saw in the fourth quarter, when the market does go down, say, 10%, your Scottish Mortgage-type trust will go down by 15-20%.
“I wanted to try and cushion the blow of that. That’s the main reason for holding a Ruffer – it’s for defensive reasons.”
Ruffer is at the riskier end of this bucket, Hewitt explains. As a result, it was by far the worst performing of the quintet last year – the second worst, Personal Assets, lost 3%. That said, while it was clearly a disappointing year, and one management were hurt by, “in the grand scheme of things it wasn’t a disaster”.
Is Ruffer a Bargain?
Hewitt thinks last year’s poor performance was a stock selection issue. The equity portfolios of the likes of Personal Assets and Capital Gearing would be made up of conventional defensive stocks like Unilever (ULVR), Diageo (DGE) and British American Tobacco (BATS).
Hewitt says Ruffer thinks these stocks look expensive, so a lot of their UK and US holdings are more cyclical in nature. That decision probably cost them a few points of performance in 2018, as cyclicals didn’t do well amidst fears over global trade.
That trade may play to their advantage over the longer term, though. If we do hit a proper bear market, it could be hoped their stocks would be able to at least hold their value, if not outperform the wider market, as happened in 2008.
“If they get it wrong and the markets don’t fall substantially then hopefully their cyclical stocks should perform in a better environment because a lot of them are genuinely quite cheap,” adds Hewitt.
In addition to performance, Holder notes that the company has issued 3.6 million new shares over the past six months, so “there is clearly non-equilibrium in supply and demand”. Whether this is temporary or not remains to be seen.
Both Holder and Hewitt do feel the current discount offers investors a “reasonable entry point”. Further, continues Holder, as mentioned previously, periods of extended discount tend to be short lived.
Indeed, for investors looking for some defensive holdings, Ruffer has a great long-term record of preserving value and growing the NAV, says Hewitt.
As a comparison, RIT Capital, Personal Assets and Capital Gearing are trading on premiums of 8.38%, 0.94%, 0.47% and 2.73% respectively.
Holder adds: “I would view RICA as a hedge against substantial and extended periods of market weakness and down side volatility.”
As at January 31, Ruffer had around a third of its portfolio invested in equities, which is lower than ever before. Regionally, it has a decent slug in Japanese equities. Elsewhere, 42% of the fund is invested in index-linked bonds both in the UK and elsewhere.
One thing to be aware of, with Brexit uncertainty continuing to weigh on sentiment towards UK assets, is that Ruffer is currently heavily exposed to sterling – around 70-75% according to Hewitt.
As a result, should we get some kind of deal and sterling re-rates, a large chunk of Ruffer’s portfolio should do well. If, on the other hand, there’s a negative outcome to negotiations in the form of a no-deal Brexit then Ruffer would be impacted on the downside.
The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

[essentialinvestor] 08/3/2019 12:05

Would certainly question some of the stock holdings.

Dixons Carphone, makes me wonder.

[slicethepie] 08/3/2019 07:42

Thanks for ideas, will do some research. On the tack of change at Ruffer i was again supervised to see the sale of Herald worldwide fund, this has been held many years (10+) and provided excellent returns. Why sell this now and yet retain other large tech holdings such as Apple, it suggests a new found degree of arrogance ie we can now pick tech winners better than you. Happy to be corrected but recent performance makes me want to scrutinise this.

[jonwig] 08/3/2019 06:35

Citywire comment:



A disappointment, but not (yet) a serial offender.

[essentialinvestor] 07/3/2019 13:10

That FEBRUARY update is again poor. Given that and the performance over
the last 12 months, with the new tax year in sight, these may be available lower down on a widening of the discount.

[aleman] 07/3/2019 12:51

BEG shares might be useful as part of a diversification into countercyclicals or non-cyclicals. They are expanding and producing good results from the slowdown already but could take off in a recession/financial crisis. They pay a healthy dividend, too, but beware that your investment might go down a bit if the economy improves, though.

[essentialinvestor] 07/3/2019 11:41

PNL may be worth considering, however not overly impressed by some of their stock
selections. They sold out of Greggs, it's more than doubled since. Imperial oil (Canada) has been a poor performer. They maintain a heavy exposure to tobacco,
even allowing for a reduction in their BATS holding. As a result holdings such
as Philip Morris have taken a heavy hit of late. Arguably they had too low
an exposure to a stock like DGE over the past 5 years plus.

[0x3f] 07/3/2019 11:39

I'd suggest Capital Gearing (CGT). I also hold Personal Assets (PNL).

[slicethepie] 07/3/2019 09:13

I suspect Ruffer is not the place it was 10 or so years ago, JR was very hands on and surrounded himself with extremely bright, eclectic individuals ( the paper on the financial crisis written by Henry maxey was the most accurate I have ever seen) Cultures inevitably change and i have witnessed this in their behaviour in some smaller stocks where they were historically very loyal and supportive. I am beginning to look for an alternative any suggestions greatly appreciated.

[0x3f] 06/3/2019 15:23

I've a small position, was much larger but sold down most of it. I thought the excuses were poor - Essentially, the wrong type of snow.

The main point for me is that they're failing in their remit to preserve capital, this should be their main focus - it looks like they're instead focusing on trying to figure out how to make a large gain when the next crash comes. They're down much more than the FTSE, 3x more than the real capital preservers.

I don't like the high fees, the use of Ruffer sub funds (hidden fees), 3 managers (Investing by commitee), unrealistic benchmark (trust has daily volatility greater than their target annual return).

I've been in agreement with their general market outlook, though we've been wrong for several years - must be right at some point!

- 0x3F