Bestinvest says
The managers have met the demanding performance target over more than a decade, steering the fund astutely through the banking crisis when other absolute return funds suffered. They have achieved this through an innovative approach to asset allocation, including the use of index linked securities and gold, and have shown a talent for moving into defensive assets prior to market falls as well as becoming more aggressive when the outlook is positive. The fund’s long only approach means it is typically more volatile than a “pure” absolute return product, though the overall strategy is generally cautious and performance has been substantially less volatile than that of equities.
The fund invests internationally in conventional asset classes, principally listed equities, corporate and government bonds (including index linked). The portfolio has also included commodities, ETFs and put options on equity indices. Currency hedging may be undertaken.
The process is driven by the house macroeconomic view so returns are mainly a product of asset allocation calls. The portfolio is split between “fear” assets designed to preserve capital, and “greed” assets designed to provide growth, with the balance between the two dependant on Ruffer’s view of the economic environment. However, Ruffer describe themselves as “agnostic” on market direction so the portfolio will always include an element of both. Stock selection is split between ideas derived from the top-down view and ideas supplied by analysts.