At Ruffer, we have a distinctive approach to investing which we believe is well suited to the needs and goals of charities and their trustees. We focus on delivering ‘all weather’ investment returns and protecting and growing the value of our client’s assets throughout the market cycle. Instead of following benchmarks, we aim not to lose money in any single year and to deliver a return significantly greater than the risk-free alternative of cash on deposit. By aiming to avoid the cyclical gyrations of the market, we aspire to provide a less volatile experience for our charity clients. We manage £20.9bn of assets, including c.£2bn for over 300 charities as at 31 December 2018. A dedicated portfolio manager works with each charity to build a portfolio, taking into consideration the charity’s responsible investment concern, where appropriate. We are a signatory to the UNPRI and regularly host conferences and seminars designed to bring charitable organisations together, to discuss the key investment challenges they face. We also manage a fund specifically for charities, the Charity Assets Trust. The fund incorporates a responsible investment policy, which restricts investments in alcohol, armaments, gambling, pornography, tobacco, oil sands and thermal coal. It also follows a proactive voting and engagement approach with companies held within the fund. The fund is monitored against UN Global Compact principles, MSCI’s ESG Metrics and the managers also monitor the fund’s carbon metrics. Ruffer LLP is authorised and regulated by the Financial Conduct Authority
Ruffer is an absolute return fund manager. This means we seek to manage the absolute risk of losing money, not the relative risk of underperforming the stock market.
By contrast, a fund manager focused on relative returns is much more closely tied to the direction of markets. Consider a year when the stock market falls by 25%. A relative return manager could lose 20% of a client’s money and still claim a good relative performance and to have ‘outperformed’. We take on the responsibility for managing a portfolio’s risk, rather than pass the risk on to a stock market or benchmark. If we ever lost 20% of our clients’ money, we would have failed.
Our starting point when investing is always to consider the prevailing risks and opportunities that we see in financial markets. Our approach is therefore forward-looking and active; we operate without pre-determined benchmarks and are not influenced by market indices. One of our main aims is to ensure that we are not dependent on the direction of markets. To that end, we seek to create a balance of offsetting investments within every portfolio, with ‘growth’ and ‘protective’ assets held alongside each other. The protective assets should perform well in a downturn and defend the capital value; those in growth should deliver good returns in favourable market conditions.
We see cash as the true comparator for our performance: with cash there is minimal risk of capital loss and there are no fees to be paid.
It is important to stress however, that a Ruffer portfolio is very different from cash on deposit. By investing, we take risks, and some components of the portfolio are very risky. At times, we will not meet our objectives and we will lose money, particularly over short periods. We may also misjudge investments or over-estimate the resilience of an investment portfolio.
Because of these risks, Ruffer is not suitable for everyone; we seek to be open and transparent about this.