Jonathan Ruffer has told investors in his Ruffer Investment Company the fortunes of the fund over the next year will come down to a binary play on Japan.
The £178.1 million trust has become one of the most closely followed in the UK as Ruffer and co-manager Steve Russell have made a series of prescient allocation calls.
The fund finished 2008 15.4% ahead of its nearest competitor as it positioned itself at the head of currency and bond cycles, following through with cyclical equity in 2009.
The trust has consistently traded at a sizeable premium over the past two years. Shares are currently changing hands 6.7% over net asset value.
‘In an investment world which is distinctly boggy, the opportunity in Japan remains a rare land mass which will determine, in my view, whether or not the investment company has a third good year,’ said Ruffer.
‘22% of the portfolio is represented by Japanese equities. More startlingly, perhaps, over 40% of our equity exposure is now held there. The moral is that we had better be right.’
He remains somewhat sceptical of the attention lavished on him by the media, however.
‘We wrote at the end of last month that we had been purchasing high-beta Japanese financial stocks quite hard that month; such was the shortage of news that the magazine The Week featured this fact as from the voice of an expert. I wouldn’t really put it quite like that.’
Ruffer possibly protests too much. Over the last three years the trust has returned 63.3% versus his nearest competitor, Murray International, on 31.8%.