12 December 2024
RUFFER INVESTMENT COMPANY
LIMITED
(a closed-ended investment
company incorporated in Guernsey with registration number
41966)
(the
"Company")
Attached is a link to the Monthly
Investment Report for November 2024:
http://www.rns-pdf.londonstockexchange.com/rns/7015P_1-2024-12-11.pdf
On 5 November 1605 Guy Fawkes and
his fellow conspirators famously attempted, and failed, to blow-up
Parliament - an event now celebrated in the UK with bonfires and
fireworks. Just 419 years later, on the same day this year, is it
possible that Donald Trump succeeded in achieving drastic regime
change (in America) where Guy Fawkes failed and, if so, how might
Americans commemorate this event in the years to come?
Frivolity aside, whatever the
longer-term outcomes, Trump's election sweep dominated the month.
The US stock market celebrated immediately, with the S&P 500 up
almost 6%, more than wiping out October's losses and ending the
month at an all-time high. Investments directly linked to the new
administration soared - since the election, both Tesla and Bitcoin
have risen over 40%. The US dollar also strengthened as talk of US
'exceptionalism' hit a crescendo, and bond yields, which rose
sharply before the election, eased back after Scott Bessent was
proposed as Treasury Secretary, instead of some of the more
unconventional suggestions.
The bond market reaction is probably
the most interesting. Will we see the return of bond vigilantes,
unheard of for almost 40 years, as the Trump administration looks
to both cut taxes and fund a record fiscal deficit? US bond
issuance looks set to exceed 10% of GDP for every year of the Trump
presidency, a peacetime record unless Elon Musk's 'Department of
Government Efficiency' can deliver some impressive savings.
However, the electoral coalition that just returned Donald Trump to
power is a significant beneficiary of the 60% of Federal outlays
the government transfers each year to pensioners and lower income
households, making such cuts politically unlikely.
The Ruffer portfolio was broadly
flat in November. It stumbled initially as the US stock market
jumped, credit spreads tightened and gold, somewhat surprisingly,
sold off, but then recovered as gold and the yen rallied into the
month end. Overall, our equity exposure was unsurprisingly the
largest positive contributor to performance, helped by some
tactical additions around the election. This resilience, in the
face of short-term events that were hardly in accord with our
cautious view on markets, reflects the improved balance in our
portfolios.
With cash equities this year
averaging 25%-30% of the portfolio, we currently remain biased more
towards 'protection'. This is similar to our positioning in 2007
during the run up to the global financial crisis. Like then, we
believe now is not the time to dial down protection. The US stock
market looks to us both dangerously expensive and highly
concentrated - neither a good sign for future returns. Whilst the
return of Donald Trump to the White House - this time with the
means to implement his radical ideas - suggests to us market risks
are rising, not falling. Today, with both the US stock market and
retail investor optimism at all-time highs, backed by record
inflows to US equities, we believe the sensible option is a
balanced portfolio, but one focused more on fear than
greed.
Enquiries:
Sanne Fund Services (Guernsey) Limited
Company Secretary
Nicole Liebenberg
DDI: +44(0)20 3530 3653
Email: ric@apexgroup.com
LEI: 21380068AHZKY7MKNO47