Ruffer reports gains amid market volatility

LONDON - Ruffer Investment Company Limited, a Guernsey-incorporated closed-ended investment company, reported a positive performance in May 2025, as global stock markets showed strong returns following a period of volatility. The company’s progress was attributed to a combination of tariff de-escalation and strategic investment moves, according to its Monthly Investment Report for May 2025.

Equity markets have rebounded from the ’Liberation Day’ downturn experienced earlier in the year, with the S&P 500 index returning to positive year-to-date figures, albeit still below the all-time highs of February. This resurgence has been largely driven by the resumption of trade negotiations between the U.S. and China, resulting in significant tariff reductions by both countries. The U.S. slashed tariffs from 145% to 30%, while China cut its retaliatory tariffs from 125% to 10%.

Amidst improved market sentiment and unexpectedly robust economic data, Ruffer took advantage of the situation by increasing its equity exposure through S&P 500 call options, capitalizing on the lower implied volatility.

However, the bond market experienced turbulence due to concerns about the U.S. fiscal situation. The rollback of certain tightening measures and President Trump’s ’One Big Beautiful Bill’ Act, which extends tax cuts and boosts spending, have led to a divergence between the U.S. dollar and treasury yields. This phenomenon was not isolated to the U.S., as long-dated bonds saw sell-offs globally, with Japan’s 30-year yield reaching a record 3.18%.

Ruffer responded to these bond market movements by initiating a small position in 30-year Japanese government bonds, aiming to provide liquidity during times of market stress. The company maintains a low interest rate sensitivity in its portfolio, given structural concerns about inflation and government debt.

Looking ahead, Ruffer is focused on navigating market volatility while acknowledging the structural challenges that lie ahead. Investors are reevaluating their positions in U.S. assets and the dollar, as other countries plan to ramp up government spending. Additionally, the shift from monetary to fiscal policy dominance is heightening inflation concerns. Ruffer anticipates a future economic environment characterized by more volatile and higher inflation, which could affect the performance and correlation stability of equities and bonds.

This news is based on a press release statement from Ruffer Investment Company Limited.

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