Ruffer co-manager steps down after stellar 10-year run

The defensive trust successfully navigated the 2008 financial crisis, 2020 Covid crash and market jitters this year. 

Hamish Baillie, co-manager of the Ruffer Investment Company, is stepping down at the end of July to “pursue other opportunities”.

Duncan MacInnes, who has been managing the £980 million defensive trust since 2016, will take sole responsibility for the investment company.

Since Baillie was appointed lead manager on Ruffer in March 2012, the trust has produced net asset value (NAV) total returns of 69.7% (5.3% a year) compared with 91.5% (6.5% a year) for the FTSE All Share.

While lagging its benchmark, Numis, the investment trust analyst, says this return was “very credible” given the defensive characteristics and lower risk profile of the strategy.

Ruffer Investment Company is designed to thrive when markets nosedive, and it has delivered on this goal. It has achieved this by owning plenty of inflation-linked bonds as well as gold and cheap stocks, and by using derivatives to hedge against market falls.

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In the first three months of 2020, when the spread of Covid-19 spooked markets, its NAV fell just 0.7% compared with a 25.1% drop for the FTSE All Share. This year it has risen 3.4% compared with a 4% drop for the All Share index.

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Numis said: “This builds on Ruffer’s strong reputation that was built during the global financial crisis when it produced NAV total returns of 25.8% vs –29.9% for the FTSE All Share in 2008. Ruffer delivers this return profile through a combination of investments for growth, typically equities, and protective assets, particularly inflation-linked bonds.”

While Baillie's  exit, after a total of 20 years at the investment manager, will be disappointing to shareholders, they should not worry about the direction of the trust, according to Numis.

Numis said: “In some cases the departure of a lead manager may cause a bit of a stir, but the shares were unchanged yesterday and we are not surprised that investors are sanguine about his departure.

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“Ruffer have a clearly defined approach across the firm, with its wider resources working towards the aims of not losing money over a twelve month period and seeking to growth the real value of assets and income over the long-term.”

Baillie commented: "It has been a privilege to be a part of the firm over the last 20 years and to see the trust grow while stewarding our investors through some turbulent times in financial markets.

“I know I leave with the business in great shape, and I will cherish fond memories of the time I have had at Ruffer.”

The trust is popular with interactive investor customers, regularly appearing in our top 10 most-bought trust monthly roundups. In June, the trust was the fifth in the rankings.