Ruffer trio: We are faced with a conundrum on index-linked bonds

Keeping sterling allocation high

The managers of the Ruffer Investment Company have said it is facing a difficult decision on what to do with its index-linked bond allocation, which has been a key holding for the trust but has not performed as well in recent months.

Last year, Ruffer managers Steve Russell (pictured), Hamish Baillie and Duncan MacInnes called index-linked bonds the "crown jewel" of the portfolio, supported by sterling weakness in the aftermath of the Brexit vote. However, in the company's report for the six months to the end of December 2016, the managers said the outlook for index-linked bonds going forward was not clear and put the company in a "conundrum" with regards to investing in the asset class. The managers said the holdings in index-linked bonds, as well as gold, have performed particularly well up until October, when a...