Ruffer (RICA) has improved the terms of the 1% annual management charge it pays its fund managers. From January the £844m defensive global portfolio will pay 1% of the company’s market capitalisation or net assets, whichever is lower.
“The revised structure creates greater alignment between the company and the investment manager,” said chair Nicholas Pink. It will mean the Ruffer limited liability partnership will be paid less when shares in the company trade below asset value.
The change in calculating the management fee was announced in Ruffer’s 2026 annual report published today. Pink said a “key action” in the year to 30 June had been improved discount control with the average gap between Ruffer’s share price and its net asset value (NAV) falling from 4.6% in the year to 30 June 2025 to 2.4% in the latest 12-month period.
“The proportion of the time that RICL shares have traded at a discount to NAV of wider than 5% has dramatically reduced over the past two years. The board believes that this focus on discount control is an important tenet for a company which has the aim of capital preservation,” said Pink.
As previously reported in July, when Ruffer published its manager’s end-of-year review, the narrowing discount meant shareholders received a total 5.5% return that was slightly ahead of the portfolio’s 4.6% underlying return. Although the NAV performance fell short of the objective of twice the Bank of England base rate, as it has also done over three and five years, over 10 and 20 years the company had exceeded its hurdle.
“Over the entire 22 years since inception to 30 June 2026, the company has delivered an annualised NAV total return of 6.7%, exceeding the objective of twice the Bank of England base rate, which averaged 4.1% for the same period. This has been achieved with lower volatility than equities and bonds,” Pink said, highlighting the benefits of the multi-asset approach of Alexander Chartres, Jasmine Yeo and Ian Rees.
Our view
Matthew Read, senior analyst at QuotedData, said: “While Ruffer did what it says on the tin this year – preserving capital and delivering a positive NAV return despite some turbulent markets – its return fell short of it twice-base-rate objective. By its own admission, a conventional 60:40 portfolio would have returned around 15% during the year and so the cost of maintaining protection while risk assets prospered was significant. The perennial challenge for Ruffer is that this protection can look frustratingly expensive until it is needed.”
