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 Navigating geopolitical risk with ETFs

Navigating geopolitical risk with ETFs

ETFGI’s Deborah Fuhr on how investors can use exchange-traded funds to position their portfolio.

Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Your Business: Cover Star Club

Profile: Barclays' former advisory boss on his move into property

Profile: Barclays' former advisory boss on his move into property

On paper, Rick Denton might have been expected to finish his career in banking

Wealth Manager on Twitter