Ruffer endures 'worst year in history' as 'protective toolkit' fails to deliver
Portfolio managers Duncan MacInnes and Jasmine Yeo.
In the calendar year to 31 December, the trust's net asset value total return fell 6.2%, while its share price total return was down 10.6%. In the last six months of the year, its NAV was down 0.6%, while its share price total return fell 0.3%.
According to the investment manager's period-end review, Ruffer ended 2023 with a 3.6% discount to NAV, having started the year at a 1% premium. At the time of writing, the discount has widened to 5.6%.
«There is no hiding from 2023 being a disappointing year, the worst in the history of Ruffer Investment Company — narrowly topping 2018's -6.0% NAV TR,» the managers said. «However, zooming out a little does provide some perspective, and shows a more balanced outcome.»
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The managers noted that taking 2022 and 2023 together, effectively the beginning of the Fed tightening cycle, the NAV TR of the portfolio is 1.3%.
«Global equities are also slightly positive over two years but with a very different journey which points to the usefulness of Ruffer as an uncorrelated diversifier and volatility dampener to multi-asset portfolios,» they said.
MacInnes and Yeo said 2022 «gave a taste of what the new regime might look like», with the «illusion of diversification» between equities and bonds hurting portfolios with stocks and bonds positively correlated while falling, while many alternatives «were just duration in disguise».
The managers argued it is «no longer conjecture» that conventional portfolios are insufficiently protected and diversified, and that 2023 «made this lesson too easily forgotten».
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