Ruffer made 23% when shares crashed in 2008, so where is it investing now?

You will have heard the line about keeping your head when others are losing theirs, but do you know about the investment trust that made 23 per cent when shares crashed 30 per cent during the financial crisis?

Ruffer investment company is one of the funds that tries to emulate the famous opening line of Rudyard Kipling’s poem If.

It’s aim is ‘consistent positive returns, regardless of how the financial markets perform’, which in practical terms it says means, ‘we try not to lose money in any 12 month period, and to grow the value of our investors’ wealth over the long haul.’

So how does Ruffer do that? What were the investments that meant it outperformed the UK stock market by 50 per cent in 2008? And could it pull that trick off again?

Ruffer’s co-manager Duncan MacInnes joins Simon Lambert and Richard Hunter on the Investing Show to explain where the investment trust is invested now and how it positions itself to protect investors when a stock market storm becomes a hurricane.

This defensive position means that when markets are rising, Ruffer will tend to lag behind but when things turn bad it should be better placed to weather the storm. 

Its aim is not to match stock market performance but to deliver long-term inflation-beating returns in a less volatile manner.

Over the past three years things have been tough, with just an average 3.4 per cent annual return, but taken over the longer-term it has delivered average annual gains of 7.2 per cent over ten years.

Duncan tells us why what is important is not which correction it is that eventually turns into a big drop, but knowing that one eventually will – and being prepared for that.

He also talks us through where Ruffer sees opportunities, and why these like Japan and gold miners usually lie in what people would term value investments.

However, one of the trust’s top holdings is also Ocado – and he explains why the Ruffer managers believe despite its relatively high price it could still be undervalued.

Weathering the storm in 2008 and profiting in 2009 set Ruffer up to outperform the FTSE All Share over the past 15 years, but could it pull that trick off again?

Was the stock market sell-off overdone? 

Investors suffered in October with the FTSE All Share among the global markets driven down, but was the sell-off overdone and are people too pessimistic on the prospects for UK shares? 

In this part of the Investing Show, Simon Lambert, of This is Money, Richard Hunter, of Interactive Investor, and Nick Batsford, of Core London, take a look.