11 March 2026

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 February 2026:

http://www.rns-pdf.londonstockexchange.com/rns/0923W_1-2026-3-10.pdf

The shortest month of the year gave markets plenty to digest. A sharp equity rotation saw software stocks fall nearly 9% as investors repriced AI-related risks, yet the S&P 500 finished the month down less than 1% and within 2% of recent all-time highs. Other developed market indices outperformed their US counterparts. Policy uncertainty persisted after the US Supreme Court ruled against President Trump's tariffs. Gold continued its advance and oil prices rose as geopolitical tensions intensified, culminating in a US-Israel offensive against Iran on the last day of the month.

In our 2026 outlook, we argued rising real world volatility stood in contrast to expensive equity markets and full investor positioning. That tension remains evident. In particular, US equity markets struggled for momentum despite a respectable earnings season, perhaps reflecting crowded positioning.  

Equities were the primary driver of returns, with the fund benefiting from the market rotation. We trimmed winners as the sell-off in AI-at-risk names began to look panicked - illustrated by the scale of market moves in response to an article by Citrini Research which depicted a hypothetical AI scenario. With the future capabilities and adoption path of AI still highly uncertain, further sharp swings in equity markets can be expected. Actively managing equity exposure will be an important skill if this market dynamic continues.

We increased our Japanese equity allocation to around 5.5%. Corporate reform momentum remains compelling, and we expect greater political stability and supportive fiscal policy after the decisive election victory for the Liberal Democratic Party under Prime Minister Sanae Takaichi. The position contributed around 0.5% to returns. We maintain exposure to the yen as a source of foreign currency protection in a market sell-off. With higher Japanese interest rates increasingly plausible, we see scope for the yen to stabilise and potentially appreciate if market conditions prove more positive.

Government bond yields rallied meaningfully, with the US 10 year Treasury yield falling below 4%. We have maintained low portfolio duration at around one year, reflecting our view that inflation risks are skewed to the upside over the medium term. Despite the modest exposure, UK and Japanese government bonds contributed approximately 0.4% to performance.

Demand for credit protection increased amid concerns arising from gigantic AI investment by hyperscalers and from credit managers' exposure to software assets. Credit spreads widened modestly, helping our derivative protection strategies to appreciate modestly, despite markets remaining benign overall. The main performance detractors were financial equities and Chinese technology companies, the latter being caught up in the broader rotation away from mega-cap US tech stocks.

The seemingly straightforward bull case for markets in 2026 has faced successive challenges from AI-related fears, geopolitical escalation and policy uncertainty. The portfolio remains well-protected against further negative shocks, with exposure to oil, derivative protections and cash key in such scenarios. Meanwhile, the nearly 40% invested in equities and precious metals exposure ensures the portfolio remains balanced, poised to deliver positive returns if the outcome proves more benign for markets.

Enquiries:

Apex Fund and Corporate Services (Guernsey) Limited

Company Secretary

James Taylor

DDI: +44 (0) 20 3530 3600

Email: [email protected]