he CF Ruffer European Fund aims to achieve absolute return by investing in a diversified selection of equity and fixed interest investments, predominantly in the UK and Europe. The fund's core holdings tend to be those which can prosper in good times and bad: they are not dependent on underlying economic conditions but rather can grow their businesses through their own efforts.

Europe provides a wealth of opportunities for investors with their wits about them. The region is rich in companies with strong franchises and valuable intellectual property, although they are often hidden from the general public gaze in industrial or commercial niches. The rapid development of economies in Eastern Europe, Russia, China and India affords such companies broad and durable long-term growth potential, which should only be strengthened by access to lower-cost manufacturing capabilities and development of local marketing capacity.

No less important an investment consideration is the lack of an equity culture in some European countries, which means that there is a proliferation of under-researched, well-managed businesses. Not surprisingly, pricing anomalies abound, providing the investment opportunities we look for.

The fund was launched in May 2002. For recent performance data and portfolio structure, please see the monthly report.