Ruffer launches daily liquidity version of total return fund

Ruffer will launch its first fund in a decade in response to the ‘uncertain future’ faced by financial markets.

The Ruffer Diversified Return fund is a daily liquidity version of its flagship £4billion total return fund, which restricts investors to weekly redemptions.

The fund manager, which also runs the popular Ruffer investment trust, said it will adopt the same investment approach as its existing four core funds, aiming to generate absolute returns with an ‘uncorrelated risk/return profile to the broader markets’.

Duncan MacInnes, the co-manager of the Ruffer Investment Company, and Ian Rees will manage the fund.

Ruffer is launching its first fund in a decade in response to uncertainty in the markets

‘Global financial markets face an uncertain future which creates major challenges for investors. Traditional asset allocation models will come under renewed stress as inflation volatility rises,’ said MacInnes. 

‘By providing a more liquid expression of our investment strategy we can help support UK financial planners, wealth managers and the broader wholesale market with our ‘all weather’ uncorrelated investment approach.’

The managers hit the headlines in late 2020 and earlier this year when Ruffer took a big bitcoin position but then managed to sell out near the cryptocurrencies’ peak. 

Mixing equities and bonds in a portfolio to reduce risk has been a key feature of financial planning. 

Historically when equities have fallen the price of bonds has gone up so a portfolio of 60 per cent equities and 40 per cent bonds has been an accepted benchmark.

However, the current backdrop means it is unlikely the split will be able to repeat its past success.

Last week Tony Lawrence, senior investment manager at 7IM, said the allocation model can no longer be relied on.

Writing for FT Adviser he said: ‘In a period of consistently low bond yields, the safety and comfort that investing in bonds once provided can no longer be relied on.’

‘So, it’s vital that investors re-examine and re-imagine how that typical 40% fixed income allocation is formed. For those who are willing to break from tradition and look beyond the typical make-up of government and investment-grade corporate bonds, we believe there are pockets of opportunity to be found.’  

The new Ruffer fund will be available through the main investment platforms with the first net asset value scheduled for 15 September. 

‘We believe we are entering a world in which bond and equity prices look poised to fall in tandem. In this environment true diversification and a lack of correlation to other asset classes or strategies will be absolutely vital to portfolio construction,’ MacInnes added. 

This post first appeared on Dailymail.co.uk