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During January, the funds O accumulation shares

declined by 1.5%, from 476.93p to 469.92p. This

compares to a 2.0% decline in the STOXX Europe

600 in euro terms and a 3.1% decline on a

comparable, sterling-adjusted basis. The funds

equity exposure was 77.0% at the end of January;

with 0.8% of that figure in index put options, the

underlying long equity exposure figure was 76.2%.

At the end of December, the headline figure was

79.9%, and with 0.4% in index put options the

underlying long equity exposure was 79.5%.Elsewhere in the fund, the index-linked bond

weighting rose from 9.4% to 9.5% and the gold

bullion weighting rose from 0.9% to 1.0%. This left

the balancing cash position maintained at 11.7%.

Addressing currencies, the funds euro exposure is

fully hedged back into sterling; hence the latters

73% weighting at period end. In addition, the fund

holds 12% in Swiss francs, 10% in Swedish kronor,

4% in Norwegian kroner and 1% in US dollars, the

latter a function of our gold bullion holding.

Markets started January positively; momentum from

Decembers rally propelled European indices to

record highs by mid month, with any lingeringconcerns over tapering seemingly forgotten. The run

was broken by the dramatic devaluing of Argentinas

peso equity markets fell and then stabilised until

contagion was confirmed. Once the Turkish lira,

Brazilian real and South African rand were drawn

into the fray markets fell significantly further and

ended the month ~5% below their peak. Our put

options were effective, cushioning the fund from the

market downdraught.

Two of the funds stocks had significant moves in

January: Ilika up and Carclo down. Ilika invents, tests

and develops specialist metals. The business has

focussed on energy applications including solid

state batteries and fuel cells. Not surprisingly,development took longer than expected and the

share price was uncomfortably weak throughout

2013. Our patience and confidence was rewarded

JANUARY 2014ISSUE 132

CF RUFFEREUROPEANFUNDProviding capital growth by investing in a diversified pan-European portfolio

when Ilika announced the worlds first process to

produce stacked solid state batteries the

technology has huge commercial potential enabling

smaller, lighter, longer-lasting and quicker-charging

batteries for smart phones and other consumer

applications. Carclo on the other hand disappointed

the market by reducing its near-term revenue

forecast for Conductive Inject Technology, due to

slower than anticipated ramp-up of programs using

XSense. Despite the setback management remains

confident that metal mesh will become a dominantstandard for touch screen technology, and we

continue to believe the XSense product is very

well positioned to take share of the $5bn touch

screen market.

In the past we have discussed our preference for

taking small positions in new stocks and raising the

weighting as our knowledge and confidence

increases. Recent market volatility enabled us to top

-up a number of holdings initiated in 2013. One

example is Kinnevik, a Swedish holding company,

which has successfully invested cash from mature

businesses to create market leaders in new

industries. Its current transformation is from

telecoms to digital/ecommerce where the jewel in

the crown is Zalando, Europes market leader in

fashion ecommerce and the fastest company in

history to reach 1bn sales. We think there is

hidden value in Kinneviks digital assets which also

include Russias leading online classifieds business

and Rocket Internet, which takes winning

online businesses models and duplicates them

rapidly worldwide.

Januarys volatility reminds us of Mr Markets erratic

behaviour. These periods are challenging to

navigate but provide us as stock pickers the

opportunity to buy quality companies at discounted

prices. Over the last few months we have beenpatiently compiling our shopping list of businesses

and have cash available to add bargains to the fund

when the time is right.

The fund aims to provide capital growth by investing in a diversified pan-European portfolio of predomi-

nantly equities, though fixed income securities may also be utilised if the Investment Manager believes

they will assist in meeting the overall objective of the fund.

Performance since launch on 5 June 2002

Investment objective

Monthly review

The funds prospectus and key investor information documents are provided in English and available on request or from www.ruffer.co.uk.

Issued by Ruffer LLP, 80 Victoria Street, London SW1E 5JL. Ruffer LLP is authorised and regulated by the Financial Conduct Authority. Ruffer LLP 2014

Percentage growth (O acc) %

31 Dec 2012 31 Dec 2013 23.2

31 Dec 2011 31 Dec 2012 7.4

31 Dec 2010 31 Dec 2011 -6.0

31 Dec 2009 31 Dec 2010 15.7

31 Dec 2008 31 Dec 2009 9.1

Source: Ruffer LLP

IMA sector ranking(Mixed investment 4085% shares)

Position/No. of funds

1 year 15/141

3 years 24/127

5 years 69/103Source: Lipper, Morningstar

ACD Capita Financial

Managers Limited

Depositary BNY Mellon Trust &

Depositary (UK) Limited

Auditors Grant Thornton UK LLP

Structure

Sub-fund of CF RufferInvestment Funds (OEIC)

UK domiciled UCITS

Eligible for ISAs

EU rules replaced TER with OCF as cost measure

Ruffer performance is shown after

deduction of all fees and management

charges, and on the basis of income

being reinvested. Past performance is

not a guide to future performance. The

value of the shares and the income from

them can go down as well as up and you

may not get back the full amount

originally invested. The value of

overseas investments will be

influenced by the rate of exchange.

Investment adviser Ruffer LLP

50

100

150

200

250

300

350

400

450

500

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Pricep

CF Ruffer European Fund O acc STOXX Europe 600 TR rebased

Share price as at 31 Jan 2014

O accumulation 469.92p

C accumulation 471.91p

% O class C class

Annual

management charge

1.50 1.20

Ongoing ChargesFigure (OCF)

1.56 1.26

Yield 0.17 0.50

Source: Ruffer LLP

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Austria

equities

2%

Finland

equities

3%France

equities

7%

Germany

equities

12%

Norway

equities

3%

Spain

equities

4%

Sweden

equities

9%

Switzerland

equities

10%

UK equities

27%

Gold and

gold

equities

1%

Options

1%

UK index-

linked gilts

9%

Cash

12%

Portfolio structure of CF Ruffer European Fund as at 31 Jan 2014

Source: Ruffer LLP

Fund information

Ruffer LLP

Ruffer LLP manages investments on a discretionary basis for

private clients, trusts, charities and pension funds. As at

31 January 2014, assets managed by the group exceeded16.2bn, of which over 7.3bn was managed in open-ended

Ruffer funds.

Asset allocation

Dealing Weekly forward to 10am Wednesday,

based on NAVPlus forward from 10am

on last Wednesday of the month

to last business day of the month

Dealing line 0845 601 9610

ISIN O class GB0031678161

C class GB00B84JVJ48

SEDOL O class 3167816

C class B84JVJ4

Ex dividend dates 15 March, 15 September

Pay dates 15 May, 15 November

Charges Initial charge 5%

Annual management charge

O class 1.5%, C class 1.2%

Enquiries

Ruffer LLP

80 Victoria Street

London SW1E 5JL

Tel +44 (0)20 7963 8254

Fax +44 (0)20 7963 8175

rif@ruffer.co.uk

www.ruffer.co.uk

Issued by Ruffer LLP, 80 Victoria Street, London SW1E 5JL. Ruffer LLP is authorised and regulated by the Financial Conduct Authority. Ruffer LLP 2014

Fund size 300.7m (31 Jan 2014)

No. of holdings 65 equities, 2 bonds (31 Jan 2014)

Minimum investment 1,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q302

Q103

Q303

Q104

Q304

Q105

Q305

Q106

Q306

Q107

Q307

Q108

Q308

Q109

Q309

Q110

Q310

Q111

Q311

Q112

Q312

Q113

Q313

Equities Bonds Cash Other

TIMOTHY YOUNGMAN Investment Director (Europe)

Moved into European equity research in 1985, after a period with

McKinsey & Co and at Manchester Business School. He moved

from Savory Milln to SG Warburg in 1988, and then to an

independent research boutique in 1999, before joining Ruffer in

2003. He co-manages the CF Ruffer European Fund.

Stock % of fund

UK Treasury index-linked 1.25% 2017 8.7

IP Group 5.6

Aurelius 4.0

Velocys 4.0

Raisio 3.2

Loomis 3.0

Sika 2.9

ORPEA 2.4

Emmi 2.3

Ebro Foods 2.0

Source: Ruffer LLP

Ten largest holdings as at 31 Jan 2014

GUY THORNEWILL Investment Director

Began at Threadneedle Investments in 1996 on the US equity desk and

as a fund manager. After four years in Paris at Jefferies International as

a pan-European stock-picking analyst on the sell side, returned to

London in 2007 to work for AllianceBernstein, researching Europeanmid-cap companies. A CFA charterholder, he joined Ruffer in 2009 and

co-manages the CF Ruffer European Fund.