Ruffer Investment Share Discussion Threads

[spoole5] 03/6/2023 10:59

.....well the ftse 100 and all share are flat ytd, RICA down 10% plus.

[lowtrawler] 02/6/2023 16:30

spoole5, RICA, CGT and PNL all achieve what they set out to achieve. The recent RICA falls do not prove them to be wrong and taking pleasure in those falls is both childish and ignorant.

You clearly believe you can create your own asset allocation which is better suited to your needs. If so, I am very happy for you. The vast majority of investors do not have those skills and where investors wish to guard against a falling market, the wealth protection funds are one tool at their disposal. Suggesting that NAV reductions in a rising market is proof the wealth protection funds don't work and have no role is just silly.

[jonwig] 02/6/2023 16:25

I would add that RICA are proactive rather than reactive. They attempt to protect against likely future adverse scenarios. It's not impossible that they bought deep out-of-money puts against US debt default (as did some hedge funds). Imagine the profits that would have scored. I hold RICA for the same reason I have some gold. It's "just in case".

[spoole5] 02/6/2023 15:32

And the price keeps falling. Wonder how the alternative strategies are performing!

[essentialinvestor] 02/6/2023 15:08

That's fair comment and RICA arguably more useful if the sh1t really
hits the fan than say PNL. This is not a fund to guard against heavy showers but
against waterfall selling equity downdrafts.

A cynic might say they were a little fortunate with the COVID plunge but
that's really besides the point, they significantly outperformed.

From the chart Jon posted earlier it appears around a 4% NAV discount might be
a decent buy point, but no guarantees that will be available.


Whether funds such as PNL are too conservatively positioned atm is a different discussion.

[lowtrawler] 02/6/2023 14:38

LOL, and you're qualified to criticise asset strategy how?

RICA follow a more complex asset strategy than either CGT or PNL and most investors wouldn't know where to start in creating a comprehensive defence against most eventualities. This is why their charges are higher. Until you see the market crash, it is impossible to know whether they have got the correct asset allocation.

[spoole5] 02/6/2023 14:03

Their asset allocation is highly questionable.

[essentialinvestor] 02/6/2023 13:10

Premium arguably a result of performing beautifully during the pandemic plunge
and more volatile condition and paying a premium can be unwise.
There was a time RIT traded at a 6-7% NAV premium!!, not now.

If you don't much care for RICA then don't hold, it's that simple.
The fund is not going to be run at the behest of a small private investor.

[lowtrawler] 02/6/2023 12:41

spoole5, over time, the trusts do preserve value but their key role is in being less volatile than other assets. Historically, they rarely lose more than 10% of NAV even when under stress.

A valid argument against RICA would be that PNL / CGT do the same job but cheaper. However, RICA do adopt a different approach to PNL / CGT as was shown on the 2020 Covid drop. Also RICA are performing better than CGT over the last year. If wealth preservation strategies are a useful part of your portfolio, mixing RICA with CGT / PNL makes sense.

Not everyone needs wealth preservation within their portfolio. For those who do, RICA provides an interesting option to CGT / PNL. As I have said before, if markets do crash, I expect RICA will outperform both CGT and PNL. Only time will tell.

[spoole5] 02/6/2023 11:46

Yes they don't preserve value and these charge double that of pnl cgt for the privilege

[thamestrader] 02/6/2023 11:38

The NAV has declined at the same time as the smallish premium has swung to a smallish discount, and the compounding effect of this is that the share price has dropped by more than it otherwise would have. But as has been said, this isn't the time to expect stellar performance from this kind of trust.

Based on recent experience, I'd probably sooner buy short-swap ETFs than these so-called value preservation vehicles. The former have served me well recently (albeit more due to luck than my amazing market-timing skills).

[spoole5] 02/6/2023 11:36

It's down more than¹10%ytd, not wealth preservation.

[lowtrawler] 02/6/2023 09:49

spoole5, what point are you trying to make? If you look at the chart jonwig just posted, there are periods when NAV will decline but it has always been fairly limited to what you may get with bonds or equities. The current decline is not even unusual.

[spoole5] 02/6/2023 08:33

Maybe daily nav updates are the way forward given the continuous falls.

[spoole5] 02/6/2023 08:28

Oh I wish I was short!!

[jonwig] 02/6/2023 06:52

Chart of share price (grey) vs nav (pink):



Or, if you prefer, the discount:



Can only go back 10 years, would have liked more. But the second chart shows that the discount isn't all that unusual, and could go wider.

[lowtrawler] 02/6/2023 04:43

melody, my concern is spoole could discourage investors using wealth preservation funds as part of their balanced portfolio. These funds have a valuable role to play but highlighting their recent under performance and suggesting it will be a guide to their future performance could scare some risk averse investors away. The very people who may most benefit from them.

[melody9999] 01/6/2023 23:51

spoole is short RICA and talking his own book.

[spoole5] 01/6/2023 18:18

Another day another fall in the RICA NAV!

[lowtrawler] 31/5/2023 16:43

spoole5, that is why performance is disappointing. However, no trust can ever guarantee meeting targets. They are goals which will sometimes be missed and sometimes exceeded. If you want a guarantee, invest in National Savings.

If RICA had performed noticeably worse than CGT or PNL, you may have a point but when the whole sector is disappointing, the period you are looking at does not suit wealth preservation. You really need to look over an extended period 10 - 20 years to identify if they achieve their stated objective. Of course, over these sorts of period, equities will outperform the wealth preservation sector and this is why they should be used only to provide balance.

[spoole5] 31/5/2023 16:42

I'm sure the discount will widen with the current performance.

[essentialinvestor] 31/5/2023 16:41

IF we are on the cusp of a more significant correction this should significantly outperform wider equity markets.

[slicethepie] 31/5/2023 16:37

He is a sad individual just looking for attention, suspect he doesn't own a single share

[spoole5] 31/5/2023 16:29

They are failing on both their stated objectives.