We focus on the absolute risk of losing money, not the relative risk of underperforming the stock market.
Consider a year when the market falls by 25%. A fund manager focused on relative returns could lose 20% of their investors’ money and still claim to have done well by ‘outperforming’ the index.
At Ruffer, we take on the responsibility for managing risk, and for the returns we deliver. If we ever lost 20% of our investors’ money, we would have failed.
While our track record is strong, it should definitely not be seen as evidence the fund is immune to shocks or unexpected events. During the next market panic, our protective investments may not protect us.
Our investment approach is tried and tested but sometimes can seem a bit dull. We don’t apologise for that.
For example, we never own shares just because they are currently popular. What’s more, when markets are rising strongly, investing with Ruffer can be like riding a tractor on the motorway, plodding in the slow lane. It’s only when the motorway sinks into boggy marshland that a tractor proves to be a wise way to travel.