Monthly Investment Report September 2020

RUFFER INVESTMENT COMPANY LIMITED

(a closed-ended investment company incorporated in Guernsey with registration number 41996)

LEI 21380068AHZKY7MKNO47

Attached is a link to the Monthly Investment Report for September 2020.

http://www.rns-pdf.londonstockexchange.com/rns/4060B_1-2020-10-7.pdf

During September, the net asset value of the Company fell by 0.3% (after allowing for the dividend of 0.95p declared on 10 September and of which went ex-dividend on 24 September). This compares with a fall of 1.7% in the FTSE All-Share Index.

As is often the case, September heralded a distinct change of tone in markets. Global equities registered only their second negative month since March, but our offsets worked as we hoped. Index-linked bonds and foreign currency exposure more than countered the fall in equities. The reversal in markets was triggered by a number of risks that have been bubbling under the surface yet were ignored during the frothy days of August. The US Congress remains at an impasse in negotiations on further stimulus and partisan issues moved up the agenda with the presidential election now in plain sight. In Europe covid cases are increasing again, while Brexit brinkmanship has returned with a vengeance. If the Brexit discourse is a re-run of last year and a deal can be agreed, our domestic UK stocks will do well (as will sterling) at a time when index-linked gilts may be under pressure - another example of trying to be not wrong rather than precisely right.

Japan stuck out in September not just because it was one of the few equity markets that registered a positive return but because it did so at a time of political change. The relatively seamless transition from Shinzo Abe to Yoshihide Suga, formerly his chief cabinet secretary, was in stark contrast to the political ructions elsewhere. We have written previously how rock solid balance sheets and high cash balances in Japanese companies have meant that they are ideally placed to ride through the events of this year. Compare this with the dividend cuts and capital raising seen closer to home. Suga has vowed to re-energise the third arrow of Abenomics: structural reforms. While this may not be shock and awe for investors, the effects may be meaningful. The announcement to speed up the digitisation of Japan's economy through a new Digital Ministry boosted some of the core Japanese holdings. Fujitsu and NEC (a recent purchase) will both benefit from an increase in IT spending and have performed well recently. Japanese equities remain an important part of the portfolio and make up a significant part of our equity exposure.

Taking stock three quarters of the way through the year, the investment strategy has delivered thus far - we protected investors through the turmoil of the first quarter and captured much of the bounce in the following six months. Looking ahead there are clear uncertainties with the US election, Brexit negotiations and, of course, the path of the virus. We need to tread a fine line between capturing opportunities for growth and keeping the portfolio protected in distorted markets, but the results so far are encouraging."

Enquiries:

Praxis Fund Services Limited

Gail Adams

DDI: +44(0)1481 755584

Email: [email protected]