Ruffer Investment Company Overweight Japan: Market Commentary ~ market folly

Wednesday, April 13, 2011

Ruffer Investment Company Overweight Japan: Market Commentary

Continuing our expanding coverage of hedge fund managers, today we focus on Jonathan Ruffer and Ruffer Investment Company. Ruffer is headed to be on par with other talented UK managers that we've covered like Odey Asset Management and Lansdowne Partners. Ruffer has returned approximately 16% per year since inception in 2004.

Jonathan Ruffer starts his most recent commentary by pointing out that the financial press has become more interested in his firm's views as his firm has grown. Though not part of the press, Market Folly is jumping on the bandwagon as his commentary is intriguing and pertinent.

Main Takeaways

Ruffer has almost one-third of their equity exposure in Japan. Clearly, they favor the country and see it as a compelling opportunity. Ruffer writes, "while in the short term the direction of the markets is anybody's guess (and may well be frighteningly volatile), this is a turning point which will introduce the structural changes in Japan and, in turn will lead to a sustained bull market for lasting years. There is, frankly, no other market for which this is a remotely possible outcome."

The investment firm expects the Bank of Japan to pump liquidity into the system. They note that this will be bad for the yen (but good for the country overall). In past months, we've pointed out how some hedge funds have shorted the yen.

Some of Ruffer's investments in this arena have included Prospect Japan Fund (PJF) and Japan Residential Investment (JRIC). Ruffer actually owned some of these names in 2010 before the crisis even hit. He is unwavering in his conviction, it seems.

Embedded below is the latest market commentary and investment review from Jonathan Ruffer:

You can download a .pdf copy here.

For more coverage of UK-based managers, we've posted Odey's thoughts on agriculture & commodities, as well as Lansdowne's portfolio activity.

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