Systematic Equities Monthly Comments - October 2024

RAM Emerging Markets Equities

Positive economic news out of the US have led the market to anticipate fewer rate cuts by the Fed, yields rising sharply, with Equity markets correcting in the last week of the month. Emerging markets underperformed as the higher rates boosted the US dollar. 
The fund out-performed in October in a down market, with the MSCI EM index giving back 4.5%. The growth/momentum stocks retained in the selection were the top contributors to the fund's relative returns while value picks tended to detract on average. The strategy's underweight position in India contributed positively, as the most highly valued local stocks underperformed significantly last month. India remains the largest underweight in the fund given the stretched valuation of local names versus their industry peers. 
Our Chinese selection strongly outperformed the broad market, as the consumer discretionary positions built in the last couple of months were resilient in October.  After the good timing of the strategy and the capture of the China stimulus upside, our strategies have started taking profit and reducing exposure to the country again, in favour of Thailand, Brazil and South Korean opportunities.  

*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 on a discretionary basis 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

Positive economic news out of the US have led the market to anticipate fewer rate cuts by the Fed, yields rising sharply, with Equity markets correcting in the last week of the month. European stocks under-performed over the month, ending down 2.1%. 
The Fund was up over the month thanks to strong net selection in consumer discretionary, utilities and financials, with particularly strong performance of our short single names book. Valuation dispersion and low short interest across European single names still translate into very compelling opportunities for stock selection. Consumer discretionary short positions in luxury and distillers were the best performers over the month as their negative earnings momentum persists given weak China sales dynamics. Renewable energy shorts contributed positively also.  Value, quality and momentum inputs all contributed positively to the returns of our selection  over the month. Net sector exposures were reduced over the month, the net short exposure to materials being neutralized, while the net Long exposures to financials and industrials were reduced. The largest net Long exposure in the book is now healthcare    

*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

Europe saw a strong momentum move in the first half of the month followed by a momentum break in the second half, resulting in the Benchmark (MSCI Europe Index) being down 3.24% over the month. Our Machine Learning book was the best performing over the month, as it held well in the downside in the last week of the month. Our Industrials selection lagged, while our defensive picks in the Consumer Staples and Health Care sectors overperformed. Our underweight in Financials detracted the fund’s relative performance, with European names showing strong results publications for Q3. Consumer Discretionary names showed a strong overperformance, because of weak results linked to China. Our allocation in defensive sectors remains stable and high, while we increased our Industrials and Financials exposure. Our UK and German selections lagged but, thanks to the GBP performance, the impact on the fund was limited. Our Swiss and Dutch selections strongly overperformed. The fund further shifted its French and German exposures towards the UK and the Netherlands.

*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 on a discretionary basis 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) Stable Climate Global Equities Fund (Class-IP USD, net of fees) declined by 3.57% in October.
Global equity markets were volatile in October, with the MSCI World Index finishing the month down approximately 2%, as U.S. consumer confidence surged, inflation expectations rose, and U.S. rates were repriced. 
Most sectors ended the month in negative territory. The strategy, however, identified strong picks in Information Technology and Financials. 
The fund's small- and mid-cap allocations underperformed compared to large-cap companies, as smaller segments were less favored. 
The U.S. allocation outperformed the rest of the fund, while Europe was the main detractor.
In the latest rebalancing, the strategy increased allocations to Information Technology and Utilities while reducing positions in Industrials and Communication Services.

*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.

**For further information on ESG, please refer to https://www.ram-ai.com/en/regulatory-information and the relevant Sub-Fund webpage (section ‘sustainability-related disclosures’).

RAM Global Equity Income

Global equity markets were volatile in October, with the MSCI World Index finishing the month down approximately 2%, due to surging U.S. consumer confidence, increasing inflation expectations, and repricing of U.S. rates. Dividend Yield and Share Buyback factors ended the month close to flat from a long-short perspective.
U.S. exposure was the main driver of outperformance, thanks to strong stock selection. Financials delivered robust performance, benefiting from both allocation and selection effects, along with IT and Consumer Staples. Healthcare and Consumer Discretionary posed challenges for the strategy. The fund's mid-cap allocation was a positive contributor to relative performance despite broader market underperformance in this segment, owing to a strong allocation effect.
In the latest rebalancing, the strategy reduced allocations to Healthcare and Financials, while increasing exposure to Consumer Discretionary and Industrials.
 

*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

Global equity markets were volatile in October, the MSCI World index finishing the month down ca. 2%, as US consumer confidence surged, inflation expectations increased and US rates repriced. The Fund benefited from strong net selection in consumer discretionary, utilities and information technology, with particularly strong performance of our short single names book. Among utilities, expensive renewable energy shorts contributed positively. Consumer discretionary short positions in online retailers / online gambling services and home builders also contributed strongly as their negative earnings momentum persists. Value, quality and momentum inputs all contributed positively to the returns of our selection over the month, as well as the short-term statistical arbitrage engine, which benefitted from market volatility. Valuation dispersion across stocks in the Fund’s global universe has created compelling selection opportunities, from which the Fund has benefited so far this year. It remains elevated across sectors, in particular industrials and IT, the two biggest gross exposures of the Fund.

*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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Authority. Issued in Switzerland by RAM Active Investments S.A. (Rue du Rhône 8 CH-1204 Geneva) which is authorised and regulated in Switzerland by the Swiss Financial Market Supervisory Authority (FINMA). Issued in the European Union and the EEA by the authorised and regulated Management Company, Mediobanca Management Company SA, 2 Boulevard de la Foire 1528 Luxembourg, Grand Duchy of Luxembourg. The source of the above-mentioned information (except if stated otherwise) is RAM Active Investments SA and the date of reference is the date of this document, end of the previous month.