RUFFER TOTAL RETURN INTERNATIONAL
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Transcript RUFFER TOTAL RETURN INTERNATIONAL
RUFFER TOTAL RETURN
INTERNATIONAL
Investment objective
Share price as at 31 Dec 2014
The investment objective of Ruffer Total Return International (’the fund’) is to achieve positive returns
with low volatility from an actively managed portfolio. The fund may have exposure to the following
asset classes: cash, debt securities of any type (including government and corporate debt), equities and
equity related securities and commodities (including precious metals). Pervading this objective is a fundamental philosophy of capital preservation.
C class shares
Performance since launch on 14 July 2011 – C class shares
DECEMBER 2014
ISSUE 42 – C class
CHF cap
117.26
EUR cap
118.28
EUR dis
116.96
GBP cap
120.24
GBP dis
118.03
USD cap
118.97
USD dis
117.84
Percentage growth (C cap) GBP
%
31 Dec 2013 – 31 Dec 2014
6.0
31 Dec 2012 – 31 Dec 2013
9.8
31 Dec 2011 – 31 Dec 2012
3.6
31 Dec 2010 – 31 Dec 2011
na
31 Dec 2009 – 31 Dec 2010
na
Source: Ruffer LLP
Structure
Sub fund of Ruffer SICAV,
a Luxembourg domiciled
UCITS SICAV
Management company,
administrative agent,
registrar and transfer
agent, paying and
domiciliary agent
Investment manager
Custodian
Auditors
Minimum
investment
Ongoing Charges
Figure (OCF)*
Source: Ruffer LLP
FundPartner
Solutions
(Europe) S.A.
Ruffer LLP
Pictet & Cie
(Europe) S.A.
Ernst & Young
£10,000,000
(or equivalent in
CHF, EUR or USD)
1.18 to 1.23%
* Specific share classes available on request.
Ruffer performance is shown after
deduction of all fees and management
charges, and on the basis of income being
reinvested. Past performance is not a guide
to future performance. The value of the
shares and the income from them can go
down as well as up and you may not get
back the full amount originally invested.
The value of overseas investments will be
influenced by the rate of exchange.
Monthly review
During December the fund’s C GBP capitalisation shares
rose by 0.1%. This compared with a fall of 1.6% in the
FTSE All-Share Index and a rise of 1.8% in the FTSE AllStocks Index (both figures total returns in sterling).
Currency exposure at the end of the month was around
66% in sterling and 22% in the US dollar.
In many ways, 2014 was a cruel year to most market
forecasters. Instead of ‘normalising’ from their already
low levels as market pundits conjectured, benchmark
interest rates were cut or left unchanged and government bond yields fell further to hit multi-year (and multicentury) lows. Despite this vastly accommodative
monetary environment deflationary pressures have
started to re-emerge, prompting some central banks to
take additional steps in the uncharted area of unconventional monetary policies. We also saw the Federal
Reserve bow out of quantitative easing just as the
European Central Bank is pondering extending its easing
programme to buying government bonds. This was
supportive to the US dollar, of which we held 20-27%
throughout the year. Perhaps the most surprising market
development was the collapse in the oil price. After a few
years of correlated returns, western equity markets have
diverged with double digit growth for the US whilst
many bourses closed the year in negative territory. The
other equity market to single out was the Chinese A
share (Shanghai-listed) market which had a stellar year.
The portfolio structure remained broadly unchanged
during the year and generated mid-single digit returns.
Gold and our protective strategies were a hindrance to
portfolio progression, while our index-linked bonds, the
US dollar and our equities contributed positively.
Weighing on the economy and the momentum of
‘Abenomics’, the consumption tax hike caused Japanese
equities to sell off at the beginning of the year. Trusting
that a credit expansion cycle would eventually start after
two decades of deleveraging supported by the Prime
Minister Abe’s reflationary policies, we added to our
holdings in Japanese financials on market weakness. At
the end of October, the Bank of Japan renewed its
support of the equity market by adding further stimulus
which benefited our holdings. In the US, we have been
progressively rotating out of Lockheed Martin and
General Dynamics as well as some ‘old tech’ stocks after
their strong runs and allocated the proceeds to the
managed care sector (Humana) and, more recently, to
the pulp and paper industry (Rock-Tenn), Boeing and
eBay. Common to all these companies are their underappreciated cash generation and growth, with shareholder
friendly managements. We have recently added
exposure to a number of Chinese financials in order to
benefit from the authorities’ measures aimed at liberalising financial markets and diverting savings towards
financial assets. These benefitted from the sharp rise in
Chinese equities in the fourth quarter. Perhaps counterintuitively, the main contributors to the performance in
December and this year were our long-dated inflationlinked bonds. With little inflation expectation built into
them, they benefitted from the continued fall in global
bonds yields, both real and nominal. The 2068 inflationlinked gilt, the funds’ largest position, was up 45% this year.
With strong US growth now rich in job creations, it is
becoming harder for the Fed to justify the everlasting
accommodative policy stance that markets seem to be
yearning for. Fed officials have consequently started to
urge investors to stop ignoring the guidance they
channel to markets through the ‘dots chart’. The falling
oil price might be just the boon needed to set the wheels
of the global economy back in motion, allowing
households to spend more and companies to produce
with less costs. Yet, this fall might be disruptive to the
high yield bond market, of which the oil and gas sector
represents a sizeable portion. This highlights one of the
number of pressures global markets face as we enter
2015, with asset prices remaining near all-time highs, and
signs of stress re-emerging in parts of the global
economy not to mention an earlier than previously
anticipated Greek general election in January. This
necessitates that we keep our primary aim of preserving
capital at the forefront of our minds.
Please note that Ruffer SICAV is a Luxembourg UCITS and subject to Luxembourg law. Ruffer SICAV is authorised by and subject to the supervisory
authority in Luxembourg, the CSSF, and is a scheme recognised by the UK’s Financial Conduct Authority (FCA). Ruffer Total Return International (RTRI) is
not registered for distribution in any country other than Belgium, Finland, France, Germany, Ireland, Luxembourg, the Netherlands, Spain, Sweden and the
UK. The fund’s prospectus is provided in English; key investor information documents are provided in Dutch, English, French, German, Spanish and Swedish
and are available on request or from www.ruffer.co.uk. Ruffer LLP is not able to market RTRI in other countries, except under certain exemptions.
Portfolio structure of Ruffer Total Return International as at 31 Dec 2014
Five largest equity holdings as at 31 Dec 2014
Stock
% of fund
Dai-ichi Life Insurance
3.0
Mizuho Financial
2.4
CF Ruffer Japanese Fund
2.4
Sumitomo Mitsui Financial
2.2
Mitsubishi UFJ Financial Group
2.0
Source: Ruffer LLP
Five largest bond holdings as at 31 Dec 2014
Stock
% of fund
UK Treasury index-linked 0.125% 2068
7.2
US TIPS 0.625% 2021
6.3
UK Treasury index-linked 0.125% 2019
5.6
UK Treasury index-linked 1.875% 2022
4.3
UK Treasury index-linked 0.375% 2062
4.1
Source: Ruffer LLP
Asset allocation
Source: Ruffer LLP
Fund information
Fund size
£1,022.3m (31 Dec 2014)
No. of holdings
71 equities, 10 bonds (31 Dec 2014)
Record date
Third Monday of November
Ex dividend date
Next NAV following the record date
Within five business days
after ex dividend date
Payment
JACQUES HIRSCH
Investment Director
Prior to joining Ruffer
in 2011, he spent
over ten years
working in fund
management and
macro research at
firms including Goldman Sachs, GLG
Partners and Fulcrum Asset
Management. He graduated from École
Centrale Paris in 1999, and holds an
MSc in Mathematics from Oxford
University. He is co-manager of Ruffer
Total Return International.
ALEX LENNARD
Investment Director
Joined Ruffer in 2006
after graduating from
Exeter University with
an honours degree in
economics and finance;
he is a member of the
Chartered Institute for Securities &
Investment. He manages investment
portfolios, concentrating on family
offices and corporate pension schemes.
He is co-manager of Ruffer Total Return
International.
Charges
Maximum subscription fee 5%
Maximum management fee
(per annum) C class 1.2%
Dealing
Weekly, every Thursday (if not a business day,
on the following business day)
Plus on the first business day of each month
Cut off
4pm Luxembourg time
on the day before valuation day
(so typically Tuesday and the business day
preceding the last business day of the month)
ISIN and
SEDOL
CHF
EUR
EUR
GBP
GBP
USD
USD
C cap
C cap
C dis
C cap
C dis
C cap
C dis
LU0638557743
LU0638557669
LU0779208544
LU0638557586
LU0638558048
LU0638557826
LU0779208890
B45L1M4
B4MRCS8
B8BHY14
B4XQ109
B4X19Y4
B4WPBZ2
B8BHY81
Enquiries
Ruffer LLP
80 Victoria Street
London SW1E 5JL
Tel +44 (0)20 7963 8254
Fax +44 (0)20 7963 8175
[email protected]
www.ruffer.co.uk
Ruffer
The Ruffer Group manages investments on a discretionary
basis for private clients, trusts, charities and pension funds.
As at 31 December 2014, assets managed by the group
exceeded £17.8bn, of which over £8.3bn was managed in
open-ended Ruffer funds.
Issued by Ruffer LLP, 80 Victoria Street, London SW1E 5JL. Ruffer LLP is authorised and regulated by the Financial Conduct Authority. © Ruffer LLP 2015