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Ruffer Investment says it "miscalibrated" as asset value falls in year

17th Jul 2023 08:45

(Alliance News) - Ruffer Investment Co Ltd on Monday said its net asset value decreased over the past year, blaming both economic headwinds and its own mistakes, but it said it is more optimistic about activities in the coming period.

The London-based investment firm released the NAV figures and outlook ahead of its annual results, which will be published later in the year.

Ruffer said NAV at June 30 was 285.61 pence per share, down 3.2% from 294.98p on the same date in 2022. Over the financial year that ended June 30, NAV total return per share was negative 1.7%, worsened from positive 6.0% the previous year.

Shares in Ruffer were down 0.6% at 276.90p on Monday in London.

Ruffer paid 2.60p per share in total dividends during financial 2023, down 15% from 3.05p per share the year before.

Ruffer called the figures "disappointing" after several more-profitable years, but said its performance still was ahead of global equities and bonds.

Reflecting on its own performance, Ruffer said it was less "bearish" than it could have been, pursuing its customary protection and growth assets balance due to concerns surrounding liquidity withdrawal and recession risks.

"Unfortunately our protection and growth scales have been miscalibrated for much of the latter part of the reporting period," Ruffer explained.

Furthermore, Ruffer said its portfolio was harmed by a "surge in dispersion" which "increased the drag on performance". It also faced a "double whammy" of a weak yen and "surprising sterling strength".

"We share in the pain of our shareholders in having lost money over the past year and acknowledge this represents a failure of our objectives," Ruffer commented. However, it added: "We hope that this report will allow you to share in our optimism for the coming period."

In particular, Ruffer said current high dispersion levels "should offer rich pickings for active managers going forward". It also said it believes a recession is likely, but "we have a variant perception from the market and if that is right there is significant money to be made".

Ruffer continued: "We believe the asymmetry is in our favour: commodities seem to be pricing in a recession; equities are not."

By Emma Curzon, Alliance News reporter

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