17 January 2025

RUFFER INVESTMENT COMPANY LIMITED

(a closed-ended investment company incorporated in Guernsey with registration number 41966)

(the "Company")

Attached is a link to the Monthly Investment Report for December 2024:

http://www.rns-pdf.londonstockexchange.com/rns/6606T_1-2025-1-16.pdf

December proved to be a disappointing month for those expecting a Santa rally, with bond yields rising and equities giving back some of their early winter gains. The major market event during the month was the decision by the US Federal Reserve (Fed) to trim interest rates by a further 0.25%, as had been widely anticipated. The decision was delivered with a hawkish tone, suggesting the Fed sees an economy in need of only modest further monetary support and less than the market had anticipated.

The move higher in global bond yields hindered the fund's interest rate sensitive assets, namely index-linked gilts and gold mining equities. An additional headwind came from exposure to the yen as the currency depreciated against sterling over the month. We made a small addition to the fund's long-dated index-linked gilts in December, in reflection of the rising value they now offer. Yields on these long-dated issues are now near where they were during the short-lived, but tumultuous, Truss government in 2022. Despite seeing decent value should one hold to maturity - eg the real yield on the 2068 index-linked gilt is now +1.7% - we have resisted the temptation to add materially to the   duration, which remains around two years. It's also worth noting that over the year the board have continued their buybacks. In the year to 31 December 2024 the board have purchased 50.2 million shares for a total of around £136.2m which equates to 14% of the shares outstanding. These purchases have added 0.8% to the company NAV.

In a world where the correlation between bonds and equities can no longer be blithely assumed to be negative, our duration management will remain more tactical than it had been in the previous decade. Thus far equities, notably those in the US, have shrugged off this challenge from higher long-term yields as economic conditions remain reasonably robust, but we are rapidly approaching levels at which rising yields have previously proved to be damaging for equity valuations.

Today our focus sits firmly on our primary aim of capital preservation. Looking back at markets at the end of the year, we see a landscape of great complacency and over-optimistic assumptions. This is most clearly illustrated by the extreme valuation levels and concentration in US equity markets, which matter for most investors given their dominance of global equity indices, as well as tightly compressed credit spreads and of course the euphoria in crypto assets.

An area of frequent inquiry is 'Will it all be worth it?' How much will Ruffer have to make when the market breaks to justify the pain? The answer: if events play out as we expect, we should experience very healthy returns (at a time when conventional portfolios are suffering). The oft overlooked second part is the pivot of the portfolio to buying distressed assets in the crisis. We did this effectively in 2003, 2009 and 2020. The power of the Ruffer model - what makes it worth it - is to be on the front foot as a buyer when everyone else is a seller, setting the portfolio up for decent gains in the recovery years post crisis.

Enquiries:

Sanne Fund Services (Guernsey) Limited

Company Secretary

Nicole Liebenberg

DDI: +44(0)20 3530 3653

Email: [email protected]

LEI: 21380068AHZKY7MKNO47