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Ruffer positive on Japan

The CF Ruffer Japanese fund aims for growth by investing mainly in Japanese equities but its wide remit allows for investment in other assets and regions if deemed necessary.

The portfolio will have a bias towards deep value and special situations but there will be no sector bias. The performance benchmark is the Topix index but manager Kentaro Nishida will not be constrained by this index. Nishida joined Ruffer last year and previously worked for SG Warburg Securities and James Capel & Company.

Ruffer Investment Management recognises that there have been many false dawns for Japan and that the global credit crunch and its aftermath have taken their toll on Japanese equities. Japan has suffered due to its heavy demand on exports, weak domestic demand for the goods it produces and the strength of the yen.

However, Ruffer is more optimistic than some fund management groups. It sees current market conditions as the perfect opportunity to take advantage of price inefficiencies in the Japanese equity market. The valuations of many well run businesses are at depressed levels and Ruffer will explore mid and small caps because this is where it believes the most extreme price anomalies are found.

This fund may appeal to investors who share Ruffer’s optimism on Japan but they will need to be prepared for higher than average volatility.

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