(Alliance News) - Ruffer Investment Co Ltd on Friday reported a drop in net asset value over its recently ended financial year, as a result of holdings in unconventional protective assets and option protection weighing on the company's performance.
Ruffer's net asset value per share as at June 30 was 224.98 pence, down 1.7% from 228.97p the same date the year before.
The company's share price as the end of June was 216.00p, reflecting a 4.0% discount to net asset value.
Shares in Ruffer Investment were down 0.8% on the day Friday at 225.25 pence, having improved since the year-end.
Ruffer Investment declared a dividend of 1.8 pence per share, in line with the year before.
The company said its annual objective was to achieve a positive total return, of at least twice the Bank of England base rate. The BoE raised the rate from 0.5% to 0.75% in August 2018, where it has remained ever since.
The blended average rate for the period was 0.73%, giving the company a target of 1.46%. However, the decline in net asset value and dividend paid for the year led to a negative return of 0.9%.
The investment company attributed the poor performance to its unconventional protective assets, in particular costs from the credit protection in the Ruffer Illiquid Multi Strategies Fund 2015, and option protection against a fall in equities.
"We do not bear these costs lightly - our performance would be much better without them - but they are necessary in an environment where conventional protections cannot be relied on," said Investment Manager Ruffer AIFM Ltd.
"Ten years have passed since the last major crisis. There are signs, discussed in the investment manager's report, that we are nearing the end of this bull market which has swept most asset classes along with it, and your directors remain confident that the company is well-positioned to preserve investors' buying power through the next crisis and beyond," said Chair Ashe Windham.
Ruffer (RICA)