The manager of Ruffer Investment Company says its aim is not to lose clients’ money over any rolling 12-month period.
Steve Russell did emphasise, however, that this was an aim and not a guarantee.
Based on performance, it would appear he takes this aim very seriously. The net asset value of the trust is up by 14.2% over the past year.
Commenting on the different approach adopted by the trust, Mr Russell said: “We don’t pay heed to benchmarks or indices.
“We invest globally in equities, bonds and commodities as well as making use of currency.”
He added there were no structured products or complex derivatives.
Ruffer’s view before the global credit crisis also aided its performance.
Mr Russell said: “The trust has never owned any western banks or housebuilders and in 2006 we took a defensive position to lower our equity weighting. Market timing is not one of our specialities and, as it turns out we were a bit early, but I’d rather be too early than too late.”
One of Mr Russell’s aims for this year is “to avoid giving back some of the gains made in the latter part of 2008”.
He has taken steps to reduce the currency exposure in the trust.
Mr Russell did, however, concede that currency markets would be a major part of the investment landscape over the next year at least.
He added: “We had exposure to the Swiss franc and, although this has traditionally been seen as a safe haven, this was due to the perceived strength of the banking sector, which we felt was fragile. We covered our exposure by hedging this into yen over a couple of weeks in September and October.”
The trust has significant exposure to Japan, with about 15% in equities and a similar amount in Japanese index-linked bonds.
Mr Russell said: “Japan has been one of the hardest-hit markets in recent years, but the problems are not systemic. Take Nomura as an example, its share-price performance has been appalling, but it has none of the problems that UK and US banks have. We just think you get more ‘bang for your buck’ there right now.”
Barry O’Neill is a chartered financial planner with financial adviser Thomson Shepherd. He can be contacted on 01224 619215