The managers of the £332 million Ruffer investment trust have thanked their defensive positions, which weighed on performance last year, for protecting them from January’s sell-off.
Last month the FTSE All Share index lost 3.1%, but Ruffer slipped by only 1.5% on a net asset value basis and actually rose by 2.4% in share price terms.
Ruffer achieved this through positive returns from US dollar exposure, index-linked bonds and gold.
‘The protective assets have largely done their job and those investments which were holding us back last year earned their keep,’ said managers Hamish Baillie and Steve Russell (pictured) in an update to investors.
In 2013 Ruffer's share price gained 7.3% while its net asset value rose 9.5% compared with the 20.8% surge in the FTSE All Share.
Baillie and Russell also revealed they had acted during January to make their portfolio more defensive. In particular, they reduced Japanese equity exposure - which stood at 22% in the middle of 2013 - by an additional 2% 15% and added to their holdings of long-dated US index-linked bonds.
The Ruffer duo has also ‘tentatively dipped a foot back into gold miners’ on the view the gold price is being supported by the weakness of emerging market currencies.