6 December 2019

Emmanuel Hauptmann

RAM Active Investments RAM (Lux) Systematic Funds - Emerging Markets Core Equities Maxime Botti Partner & Senior Systematic Equity Fund Manage

The RAM (Lux) Systematic Funds – Emerging Markets Core Equities Fund finished down -0.15%* (Ip USD Class – net of fees) in November, performing in line with the MSCI Emerging Markets TRN. Markets were again at the mercy of the sentiment surrounding the latest Sino-U.S. trade deal. Investors remaining hungry for evidence of progress on the finalisation of a so-called “phase one trade deal”, with markets largely in a holding pattern prior to any confirmation. The current narrative suggests that everything is rosy in global equity markets, with the Federal Reserve’s decision to cut interest rates three times helping to avert a nascent recession. Bizarrely, market sentiment appears to be improving even as the underlying economic data appears to be worsening. Economic data over the month indicates that both the U.S. and Chinese economies have begun to experience negative effects related to the two-year-old trade war, with economic growth in China slowing to a 30-year low. Growth in the United States has also slowed. Emerging markets vastly underperformed their developed counterparts (in dollar terms) over the month, with the strengthening of the U.S. dollar the primary factor. Our portfolio losses stemmed almost entirely from our China allocation and selection. Here, our allocation within coupled with weak selection effect across cyclical sectors such as Financials, Consumer Discretionary and Communication Services weighed. On the positive side, Brazil and South African picks were profitable. In the former, we saw Energy and Financials names contribute nicely. At a sector level, our relative underweight to Consumer Discretionary names played against us, while positive picks across Materials and Financials helped to keep our portfolio in-line with its benchmark.

*Sources : RAM Active Investments