Systematic Equities Monthly Comments - January 2025

RAM Emerging Markets Equities

Emerging Markets started the year positive despite the volatility caused by Donald Trump’s announcements on tariffs, which led EM to lag their developed counterparts.

The RAM (Lux) Systematic Funds - Emerging Markets fund’s (hereinafter ‘the Fund’) (Class-IP USD net of fee*) was ahead of the MSCI EM index over the month, up 2.6% versus 1.8% for the index, as value picks contributed well over the month.

The fund’s underweight position in overvalued Indian Equities contributed positively, as Indian stocks significantly underperformed, finishing the month down more than 3%, dragged lower by cyclical names.

On the other hand, the strategy’s value picks in Brazil, whose exposure was increased in December, outperformed significantly, rebounding after months of lag. The stabilisation of the Brazilian Real and of local rates helped boost the local stocks’ recovery.

Our overweight positions in Thailand and Malaysia detracted performance as both countries’ equities underperformed the market, Healthcare picks lagging the most.

China remains a strong underweight given the overall low quality bias of the local names, despite some of China technology mega caps being among the top weighted names in the fund, as they still enjoy a compelling mix of growth potential and attractive valuation.

*Note: IP USD share class currently registered in LU, AT, CH, DE, DK, ES, FI, FR, UK, IT, NL, NO, SE, SG (foreign restricted recognised scheme). Please click on the above link to access the fund factsheet and obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

** The portfolio is actively managed with reference to a benchmark. While the product compares its performance against the Index, it does not try to replicate this benchmark and freely selects the securities that it invests in. The deviation with this benchmark can be significant.

RAM European Market Neutral Equity

The RAM (Lux) Systematic Funds –European Market Neutral Equity fund’s (Class-I EUR net of fee*) was flat over the month in a context of rising Equity markets. After a volatile start of the year, global Equities progressed on the back of encouraging signs of ongoing disinflation and resilient US jobs and growth dynamics.

There was over the month a very positive contribution of our statistical arbitrage strategy, which benefitted from the volatility caused by the US tariff saga and new state-of-the-art Large Language Models announcements.

Strong demand from the US and positive surprises in the luxury sector led to strength, short picks by the strategy in the sector being the largest negative contributor to the book.

It was offset by positive picks in the Healthcare sector, long positions in pharmaceuticals contributing positively to the book.

On the short side of the book, short picks in the Utilities sector performed well, as the DeepSeek-R1 model announcement led to downwards revisions for energy demand in the next years. Smaller, more efficient models and more optimal training processes also help envision more economical and ecological models in the future. The model announcement also helped put the spotlight on open-source Large Language Models, which are likely to see much wider adoption across industries and tasks.

*Note: I EUR share class currently registered in LU, AT, CH, DE, ES, FR, UK, IT, NL, SE, SG (foreign restricted recognised scheme). Please click on the above link to access the fund factsheet and obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

RAM European Equities

European Equities cautiously increased in the first half of January and surged in the second half. The RAM (Lux) Systematic Funds – European Equities fund’s (Class-IP EUR net of fee*) ended the month up 3.71%, lagging its benchmark – the MSCI Europe Index – up 6.5% over the month. Most of this lag came from an underperformance of the small and mid-cap segments compared to their large cap counterparts: the fund's strong overweight in SMIDs stocks was responsible for almost 2/3 of the fund's underperformance, while our large cap stocks were only slightly underperforming the benchmark.

Valuation dispersion in developed markets remains high, and this market cap spread in January further accentuated already high levels of market concentrations. We further develop this topic in our latest paper ‘Concentration & Opportunity.’

The fund’s industrial picks lagged, in particular in the Capital Goods industry, while our Healthcare picks overperformed.

The fund lagged in the UK and Sweden, where most of the underperforming Industrials and Financials picks were located.

*Note: IP EUR share class currently registered in LU, AT, CH, DE, DK, ES, FI, FR, IT, NL, UK, NO, SE, SG (foreign restricted recognised scheme). Please click on the above link to access the fund factsheet and obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

**The portfolio is actively managed using a benchmark. Although the product compares its performance to that of the MSCI Daily Net TR Europe Euro, it does not seek to replicate this benchmark and is free to choose the securities in which it invests. The difference with this benchmark may be significant.

RAM Stable Climate Global Equities

The RAM (Lux) Systematic Funds - Stable Climate Global Equities Fund’s (hereinafter the ‘Fund’) (Class-PI USD net of fee*)  delivered a strong performance in January, gaining 3.19%. This growth was supported by a robust rally in global developed equity markets, which rose approximately 3.5% during the month. The return of Donald Trump’s to the White House provided a tailwind for US equities, while European markets significantly outperformed, surging over 7%. This was particularly beneficial for the fund, given its 26% allocation to European equities.

While most sectors ended the month in positive territory, the IT sector faced headwinds. The emergence of Chinese AI company DeepSeek raised concerns about the US technology sector’s ability to meet high market expectations. Despite this, the fund’s IT allocation performed strongly, driven by strong stock selection. On the other hand, the Healthcare allocation detracted from performance, in particular within the Pharmaceutical industry.

In its latest rebalancing, the strategy significantly increased its exposure to Consumer Staples while reducing allocations to IT, Healthcare, and Industrials.

*Note: PI USD share class currently registered in LU, AT, BE, FI, UK, NO, SE, SG (foreign restricted recognised scheme). Please click on the above link to access the fund factsheet and obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

RAM Global Equity Income

The RAM (Lux) Global Equity Income Fund’s (hereinafter the ‘Fund’) (Class-IP USD net of fee*) gained 3.54% in January, slightly outperforming its benchmark, the MSCI World High Dividend Yield, which rose 3.48%. Global developed equity markets rose around 3.5%, as the return of Donald Trump’s to the White House provided a tailwind for US equities. European markets significantly outperformed, surging over 7%.

Stock selection was strong in the U.S. (+51bps) but partially offset by weaker selection in Europe (-48bps). The fund’s overweight in Asia also weighed on performance. Energy and Financials were the top sector contributors, driven by favourable selection and allocation, while Healthcare, Industrials, and Consumer Discretionary detracted. Large-cap allocations delivered strong stock selection, while mid- and small-cap exposures detracted.

In its latest rebalancing, the fund reduced allocations to IT and Financials, while trimming exposure to Consumer sectors (Discretionary and Staples). 

*Note: IP USD share class currently registered in LU, AT, CH, DE, DK, ES, FI, FR, IT, NL, NO, SE, SG (foreign restricted recognised scheme). Please click on the above link to access the fund factsheet and obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

RAM Global Market Neutral Equity

The RAM (Lux) Global Market Neutral Equity Fund (Class-PI USD net of fee*)  gained 2.54% in January in a market favourable to risky assets (global developed equities up ~3.5%) and marked by highly dispersed equity valuations, benefitting our stock selection strategies.

We explore this, along with market-neutral fund performance in similar macro environments, in our latest paper, ‘Concentration & Opportunity.’

Near-term uncertainties and momentum shifts, linked to the Fed’s cautious policy stance and advances in open-source language models, boosted our short-term statistical arbitrage strategy, the top contributor in January.

Lower-frequency strategies also performed well, thanks to a broad-based contribution of our alpha engines, led by momentum inputs, though defensive inputs detracted.

Cyclical sectors outperformed, the Fund benefitting from its net long in Communication Services and strong IT stock selection, especially software long picks.

The Fund remains net long IT and Communication Services, has increased its Financials long, and still holds a net short in Utilities and Energy.

* Note: PI USD share class currently registered in LU, CH, DE, DK, ES, FI, UK, IT, NO, SE, SG (foreign restricted recognised scheme). Please click on the above link to access the fund factsheet and obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns

Important Information

Important Information: The sub-funds mentioned above are Sub-Funds of RAM (Lux) Systematic Funds, a Luxembourg SICAV with registered office: 14, Boulevard Royal L-2449 Luxembourg, approved by the CSSF and constituting a UCITS (Directive 2009/65/EC). Mediobanca Management Company S.A. 2 Boulevard de la Foire 1528, Luxembourg, Grand Duchy of Luxembourg is the Management Company.

The information and analyses contained in this document are based on sources deemed to be reliable. However, RAM Active Investments S.A. cannot guarantee that said information and analyses are up-to-date, accurate or exhaustive, and accepts no liability for any loss or damage that may result from their use. All information and assessments are subject to change without notice.
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