The longest serving manager of the struggling Ruffer Investment Trust has stepped down.
Steve Russell, who has run the £412m trust since it was founded in 2004, decided to step down but he will continue to work for Ruffer, the investment management business that works with private clients and institutions.
The Ruffer Investment Trust will now be run by the other two named managers, Hamish Baillie and Duncan MacInnes.
The trust has starkly under performed recently, losing 2 per cent over the past three years, while the average return for the average trust in the AIC Flexible Investment sector was 20 per cent in the same time period.
The trust currently trades at a 3.4 per cent discount to net asset value.
One of the reasons for the underperformance was the company’s view that inflation will rise sharply as a result of global central banks' policies of quantitative easing and low interest rates.
Inflation has not been a feature of the global economy in recent years, meaning the performance of assets such as index linked bonds, the return from which is determined by the prevailing interest rate, has been poor.
In a scenario where inflation is a major problem in an economy index linked government bonds are an attractive investment, as the income received rises as central banks put rates up to combat inflation.
Ashe Windham, chairman of the board of the Ruffer Investment Trust, said in a stock exchange announcement yesterday afternoon (October 7): "Steve Russell has been helping to manage the company's investments for fifteen years and has provided invaluable support for Jonathan Ruffer, when he was lead manager, and since 2011 has provided similar backing for Hamish, for which the directors are very grateful.
"This transition has been planned for some time. As 'a slice of Ruffer', the Ruffer Investment Company is a great vehicle through which to access Ruffer's collective vision and management expertise, especially since it is now trading at a slight discount to its net asset value. "