Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Ruffer duo warn on sterling’s strength

Ruffer duo warn on sterling’s strength

The managers of the £317 million Ruffer Investment Company have argued that the pound’s strength may prove short-lived.

‘Sterling has been an outright beneficiary of the UK’s co-ordination of fiscal and monetary policy as tools to kickstart the economy,’ said Hamish Baille and Citywire + rated Steve Russell.

‘If this recovery proves unsustainable then sterling is vulnerable and particularly so when one also factors in the looming political uncertainty surrounding the Scottish referendum, a general election and the question of EU membership.’

Through their portfolio, Baille and Russell (pictured) are now 25% exposed to the US dollar, principally through holdings in unhedged US index-linked bonds and US equities.

‘This is as much a reflection of the dollar’s protective credentials as it is of sterling’s frailties,’ they explained.

The pair acknowledged that this dollar positioning had ‘come at a price’ during the pound’s recent appreciation, but contended that it would pay off in any downturn.

Baille and Russell cited the experience of 2010 and 2011 as evidence of the dollar’s value in protecting their fund.

‘In a world of zero interest rate policy – where asset prices are distorted and affordable offsets are hard to come by – currencies, the deepest market in the world, are useful,’ they concluded.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Potential US rate rise, cheap oil & the Europe opportunity

Potential US rate rise, cheap oil & the Europe opportunity

This week we analyse the implications of a possible rise in US interest rates, the impact of cheap oil and the European equity opportunity.  

Play Carmignac's Crowl: what QE could mean for Europe

Carmignac's Crowl: what QE could mean for Europe

The ECB is widely expected to finally fire its QE gun this week. Carmignac's Sandra Crowl discusses the implications for the eurozone.

Play Grexit worries, currency wars and a grizzly outlook for 2015?

Grexit worries, currency wars and a grizzly outlook for 2015?

The first Investment Pulse of the year looks at the potential impact of Greece leaving the euro, volatility in currency markets and the UK’s economic prospects.

Your Business: Cover Star Club

Profile: DIY investing is biggest threat to industry, says Whitechurch

Profile: DIY investing is biggest threat to industry, says Whitechurch

The industry is at risk of pushing potential investors down the DIY route unless it does more to make its services accessible says the Whitechurch Securities boss

Wealth Manager on Twitter