Performance of trust vs sector since 11 March
Source: Financial Express Analytics
Financial Express data shows the investment trust, which usually storms ahead of its rivals in terms of performance, losing investors 0.43 per cent in the four weeks since the disaster.
"We were saved from worse losses by the fact that our third-biggest holding there, INPEX, went up quite sharply," said Ruffer.
INPEX is a major oil company with a significant liquefied natural gas (LNG) project in Australia.
"It was exceptionally cheap anyway, but the realisation that Japanese industry is likely to second-source away from nuclear-powered utilities has meant that the outlook for INPEX has improved greatly," Ruffer continued.
At the other end of the scale, the worst-performing stock in the portfolio was the managers’ old favourite T&D, which, together with the stockbroker Daiwa, dropped sharply.
"It highlighted the excellence of our sale of Nomura at pretty much a peak price about six weeks ago," the managers pointed out.
At the end of 2010 the Ruffer team regarded the prospect of a tradeable rally in Japan with the fear that, if and when this rally materialised, it would take the pressure off the Bank of Japan's need to tackle the structural problems of the country's economy.
The statement from Ruffer and Russell continued: "The combination of a high oil price, high yen and the certainty of economic contraction in the short-term means that Japan will be forced to address these structural problems, which means pursuing an unambivalently inflationary policy."
"Thus the outlook now is reversed from end-year: an uncertain short-term future for the stockmarket, but a much increased likelihood of a structural bull market in Japan."
"It is the only market in the world of which this can be said."
Also in the past month, Ruffer and Russell sold their remaining holdings in Pfizer, switching into Johnson & Johnson, and reinforced the theme by adding GlaxoSmithKline shares.
"Treasury Inflation Protected Securities (TIPS) did well, and there was a satisfactory performance from the UK index-linked. Elsewhere, there was nothing very interesting to report," the managers added.
The trust is trading at a premium to net asset value of 6.5 per cent, according to Trustnet, and posted a 194.1p NAV per share at the end of last month.