Ruffer Investment Company Limited (LON:RICA) Fund Manager Jasmine Yeo caught up with DirectorsTalk to discuss the firm’s defensive investment strategy, its recent strong performance, and how the trust is positioned for ongoing market volatility.
Q1: You’ve been running the company for the last three years, but can you tell us what the objective of the Ruffer Investment Company is?
A1: We’re a little bit different, I’m sure a lot of people say that, but we are unlike a lot of investment strategies.
So, typically investment managers will seek to maximise opportunity at any given moment in a market cycle. At Ruffer Investment Company, we seek to minimise risk, first and foremost so our primary aim is to defend our shareholders’ capital against any permanent losses so very much a focus on avoiding major market drawdowns.
Now, that’s key because obviously if a portfolio loses, let’s say, half its value, which it can and has happened historically in equity market corrections, you’re going to need to double back the following year, 100% return just to get back to where you started, which is obviously quite difficult. Our focus very much is on avoiding those major market drawdowns.
More formally, the objective is to deliver at least twice the Bank of England base rate after our fees and Ruffer Investment Company is the listed version of the Ruffer strategy, which has got a 30-year track record. Over that period, in performance terms, we’ve delivered about an 8% annualised return net of our fees. Perhaps most importantly, that return profile has come with about half the volatility of the equity market so equity-like returns, bond-like volatility, and crucially that protection through the major market crises. That includes periods over those 30 years like the dot-com boom and busts, financial crisis, COVID, and the interest rate hikes that we had through ‘21 and ‘22.
Q2: How does the trust invest to achieve those goals?
A2: When we construct the portfolio at Ruffer Investment Company, we were really thinking about our investments in one of two buckets, growth investments is one of those.
That’s where assets in the portfolio that we would expect to perform when markets are rising, skies are blue, and that’s really the part of the portfolio we’d expect to be performing. Secondly are our protection assets so when skies are grey, markets are a little bit more difficult. They’re the assets that we’d look to in the portfolio that will help us defend our shareholder capital.
Now, we’ll always hold both types of assets alongside each other in the portfolio at any one moment and that’s in an effort to deliver an all-weather investment return, so positive returns regardless of how markets are performing. What we’ll do is actively manage the balance between those two types of assets, the protection, and the growth and, of course, they’ll change through time. That’s very much a reflection of how we’re feeling about the world, what the risks and opportunities are.
A couple of other important characteristics, I think, of the Ruffer Investment Company:
One is that we’re unconstrained so we’re free to invest wherever we like, that’s both in terms of geographies, but also in terms of asset classes. We’re also un-benchmarked so that’s very important for us because we think it means we can actually avoid particular parts of the market, which may be the ones that are most susceptible to potentially a large fall.
In terms of examples of what kind of things they are, the growth assets typically will be equities. There, we’ll often look for a margin of safety so valuation for us is important there. It can include things outside of equities so commodities would be a good example of that.
The protection assets, we have and do own the more traditional protective assets so it could be bonds at moments in time, currencies is another one. This is maybe the thing that is a little bit different again, is that in recent years, we’ve also owned financial instruments known as derivatives, which work a little bit like an insurance contract. They’re really a key part of the portfolio more recently that’s helped us to deliver those positive returns through market corrections.
Finally, precious metals is also quite a common feature of our asset allocation so that could be bullion, so gold for example, silver or platinum bullion, but also at times gold equities, so mining companies.
Q3: How has the trust performed over the short and longer term?
A3: In terms of NAV performance for last year, for 2025, that was double digits, just below 11% after our fees. In terms of what drove that return, it was really our growth assets, so it was a combination of the equities, but also some precious metals exposure that we had.
I think what was perhaps interesting about last year was how consistent that return profile was. Almost all months, the trust had a positive return and that included through April, when it was pretty tricky and volatile period for markets relating to Trump’s tariff policy. That’s really when our protection assets kicked in and that, I think, really highlights the importance of having both flavour of assets in the portfolio.
I think of 2025 as a bit of a case study year for the Ruffer strategy as a whole. When protection is needed, it’s there and what that allows us to do is both preserve that shareholder capital through the trickier moments, but it also allows us to then reinvest our shareholder capital into the opportunities, which are often most exciting and most interesting through those periods of market corrections.
2022 was another good example of that and particularly important to have an unconstrained and very flexible toolkit, because that was a year when most conventional protections failed, bonds and equities fell together. It was those derivative protections that really helped us deliver a positive return.
More recently, this year, 2026, it’s also started well, share price is up a couple of percent in the first few weeks and over the long run, as I say, we’ve delivered that roughly 8% annualised return after our fees over those 30 years.
Q4: What are your current market views on today? How are you positioned?
A4: This might sound a little grand, but we think we’re living through a period of regime change in financial markets and that’s characterised, I think, by a rise in volatility, both in the real world, but also in markets and in asset prices. I think that’s a result of the things that we read and hear about really on a day-to-day basis now, whether it’s elevated geopolitical tension, perhaps the unsustainable rise in government borrowing, which has come from a return of big government and arguably fiscal dominance.
I think the result of all of those things is probably an investment environment defined by more volatile inflation and more periods of high and rising inflation, but also periods of disinflation. Again, a simple characterisation of that would be that we think at Ruffer Investment Company that 2% is probably now the floor for inflation rather than the ceiling in the way that it maybe has been in previous more recent decades.
I think that regime change can often sound quite abstract or quite slow moving, but I really don’t think that’s the case or certainly not how it feels this year. There’s plenty of examples just in the early stages of 2026 of those geopolitical tensions, a kind of a fragmenting world order in a shift to more and more expansionary fiscal policy, not just in the US, but also Europe and Japan more recently.
The reason I think all of that matters and how it feeds back into how we’re positioned is that higher inflation uproots that relationship between bonds and equities, which has had a very helpful negative correlation for investors. So, bonds have typically offset equity losses in recent decades but if that starts to change and they start to move together more frequently, it could mean that bonds no longer act as that reliable protection and that reliable portfolio diversifier when equity markets turn.
I mentioned 2022 as a recent example of that, and I think that was possibly a turning point for this regime change and what you saw is bonds falling as interest rates rose and equities fell. That really, I think, exposed some fragility in portfolios that rely on that relationship. Arguably, what makes it a little bit more concerning is what we saw last year in April when the other conventional portfolio protection and safe haven that investors will often look to is the dollar. That also fell through the period in April and if the current administration and the unpredictability of Trump persists, maybe that, too, is a less reliable protection.
So, we think we’re operating in a new environment, a new regime and for that, investors need to look at different ways of finding diversification and portfolio protection, and that’s presenting a number of new risks and of course, with risks also come opportunity. That’s why we look to those unconventional protective assets but also on the growth side of the portfolio, we’re focused in areas perhaps outside of the US, more towards places like China and the UK.
Q5: So, who is the typical investor in the trust?
A5: Because we aim to deliver a positive return, regardless of market conditions, especially as I’ve highlighted when perhaps conventional investment strategies are struggling, it often means that our portfolio is a helpful tool within a wider portfolio to provide that protection and across a range of different investors and portfolios. So, often it’s investors seeking to preserve capital in those periods of market stress. It’s also worth mentioning that some of our best years have been in periods of rising markets and as I say, last year is a good example of that.
So, our clients include a whole spectrum of different people from retail investors, but also to some larger institutions. Really our view is that we think everybody can benefit from having a slice of Ruffer and the trust is certainly one way of doing that.
