Monthly Investment Report - March 2026

14 April 2026

RUFFER INVESTMENT COMPANY LIMITED

(a closed-ended investment company incorporated in Guernsey with registration number 41966)

(the "Company")

Attached is a link to the Monthly Investment Report for March 2026:

http://www.rns-pdf.londonstockexchange.com/rns/2843A_1-2026-4-13.pdf

The major event in March was undoubtedly the joint US-Israeli attack on Iran. Crude oil prices rose by over 60% in March (and by 94% in the quarter, the largest move since the Gulf War in 1990). All other asset prices fell: risk assets such as equities and corporate bonds, but also safer assets such as government bonds. Perhaps most revealingly, gold bullion - long touted as the ultimate geopolitical hedge - fell 12%.

The fund has so far absorbed the pain of falling risk assets without a commensurate response from our hedges. This is a familiar dynamic in the early stages of a market dislocation, when equities typically move first and fast before our hedges catch up as the stress broadens. Some of that equity pain was understandable: markets that we like - such as the UK, Europe and Japan - were hard hit by the threat of a sudden stop in energy and product flows out of the Persian Gulf. The scale of the run-up in the gold price over the last three years could not all be the result of price-insensitive central bank buying, and as mentioned the volatility of March brought more sellers of gold than might have been expected (though gold did in fact top in January).

The Board continued their buybacks over the first quarter of 2026, purchasing 0.4 million shares. This was a slower pace relative to previous quarters, given the discount to NAV has materially narrowed. This brings the total purchased since 31 December 2024 to 38 million shares, or £106m, which equates to 11% of the shares outstanding at the start of 2025.

The fund's protections provided largely positive performance. The crude oil allocation, alongside the energy equities, had been topped up in October, December and February and was around 5% of the portfolio coming into the Iran war. These were the major positive contributors for the month.

The credit and volatility protections also performed positively, some of the very few protective assets globally to do so. Credit spreads had already risen in February as markets began to worry about private credit funds' exposure to software companies being disrupted by AI. The other shock protection, the yen, provided no positive return as Japan was perceived to be a major terms-of-trade loser from the crisis, but offers excellent prospective returns should the market crisis worsen.

There was plenty of activity and dynamism in the month: we moved quickly to sell stocks that didn't price a prolonged conflict, primarily the allocation to Chinese A-shares (sold to 0%). The crude exposure was also actively traded. The major addition to the portfolio was bonds, with 15% allocated to five year gilts. We like the set-up: many hedge funds were caught with too much exposure to short dated UK bonds when inflation expectations (and thus Bank of England hike expectations) rose sharply, leaving bond yields inappropriately high. The UK is not currently being well run. Even so, it's unlikely to deliver interest rate hikes in response to a shock that seems set to slow an already weakening economy.

Bonds in the UK, the US and Japan offer good each-way attractiveness to the fund here: if things improve in the Iran conflict, then yields will fall alongside inflation expectations. If oil prices rise further or equity markets fall, then the likelihood of an economic downturn increases sharply and bond yields should fall to reflect that. Higher yields are most likely to be caused by a fiscal (government spending) response to the pain being felt in the economy, and we judge that a large spending package is much less likely than in 2022.

We live in a volatile world: the events in Iran risk masking the significant weakness in private credit markets and, increasingly, the US labour market. We have one eye (and a quarter of the portfolio) on the capital expenditure boom in the rest of the world, but overall the fund remains positioned to be protected against further market stress.

Enquiries:

Apex Fund and Corporate Services (Guernsey) Limited

Company Secretary

James Taylor

DDI: +44 (0) 20 3530 3600

Email: [email protected]