Ruffer Investment Company Limited Monthly Investment Report - November 2023 (5590W)
13 Dicembre 2023 - 8:00AM
UK Regulatory
TIDMRICA
RNS Number : 5590W
Ruffer Investment Company Limited
13 December 2023
RUFFER INVESTMENT COMPANY LIMITED
(a closed-ended investment company incorporated in Guernsey with
registration number 41996)
LEI 21380068AHZKY7MKNO47
Attached is a link to the Monthly Investment Report for November
2023.
http://www.rns-pdf.londonstockexchange.com/rns/5590W_1-2023-12-12.pdf
November proved to be a positive month for asset owners, as both
bonds and equities rallied sharply. The catalyst was a growing hope
that falling inflation will not be accompanied by slowing economic
growth. This is an ideal outcome since it would allow policymakers
to gently ease interest rates, helping to sustain high equity
valuations without dampening earnings. Policymakers have also
changed their tone, leaving investors less concerned about further
monetary policy tightening.
The market moves were significant, with global bonds
experiencing their best monthly return since 2008 and US equities
recording their best monthly return this year. We added to the
Company's bond duration in recent months to take advantage of
compelling valuations (eg US ten year real yields reaching 2.5%),
and with the belief that yields were reaching levels beyond which
they would begin to cause acute pain to the financial system. The
increased exposure enabled the Company to further benefit from
November's rally in fixed income, which was the largest contributor
to returns over the month. Likewise in equities, we had tactically
added to the Company's exposure as risk assets struggled with
rising yields in prior months. These increases to both bonds and
equities enabled the portfolio to deliver a positive return and
outweighed the headwinds from our protective assets. From a stock
picking perspective, holdings in Ryanair, Coty and Jackson
Financial were large positive contributors, alongside exposure to
US banks Citi and EastWest.
On the negative side of the ledger, protective positions to
guard against pain in the corporate bond market naturally suffered
in the buoyant environment as credit spreads narrowed sharply.
Elsewhere, exposure to energy was a headwind, partly as the
perceived risk of wider military conflict across the Middle East
has faded. Within our growth seeking assets, the exposure to
Chinese equities continued to stutter. Whilst we deem the visit of
Xi Jinping to San Francisco as a positive step in easing the
tensions between the World's two largest powers, investor sentiment
remains weak. We acknowledge there are good reasons for the high
risk premium applied to Chinese equities, but it does stand out for
both depressed valuations and, in our view, the increasing
likelihood of further policy stimulus to come.
Given the speed of the rally across bonds and equities, we felt
it was prudent to reduce the Company's exposures towards the end of
the month. Bond markets are now pricing in over 1% of interest rate
cuts in 2024 from the Federal Reserve. High equity valuations,
tight credit spreads and low volatility suggest complacency may
have returned to financial markets. There is a path for
policymakers to pull off the magic trick of raising interest rates
aggressively without derailing the economy, but we see an obvious
vulnerability should events deviate from this narrow route. Policy
changes feed through with a lag and the initial signs of a possible
soft landing are eerily similar to those pre-empting something more
severe. The Company's portfolio is designed to deliver positive
returns in both benign conditions such as we saw this month, but
also in those which are likely to be more challenging ahead.
Enquiries:
Sanne Fund Services (Guernsey) Limited
Jamie Dodd
Email: RIC@apexfs.group
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END
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