Ruffer cuts dollar exposure as it warns on 'consensus trade'

The managers of the Ruffer investment company have slashed their exposure to the US dollar on fears it is no longer fit to act as a hedge, and have moved into the Japanese yen instead.

Hamish Baillie and Steve Russell, who run the £335m investment trust, cut their US dollar holdings from 22% at the end of last year to 13% in January. The exposure to the yen has been accordingly increased to 10%, as the duo feel it now offers a better hedge in the event of market falls. "The dollar has become a consensus trade and its protective qualities have waned as it has moved from a risk-off to a risk-on currency; strong US growth translates into earlier interest rate rises," the managers said. "We believe the yen offers greater protection in the event of falling markets. St...