13 January 2020

Thomas de Saint-Seine

RAM Active Investments  RAM (Lux) Systematic Funds - European Equities Maxime Botti Partner & Senior Systematic Equity Fund Manager

The RAM (Lux) Systematic Funds – European Equities Fund returned 2.58%* (Ip-EUR class – net of fees) outperforming the MSCI Europe TRN by 52bps. Equity markets ended the year at record highs as global investor sentiment improved on a phase one trade deal between the U.S. and China, and political certainty in the UK surrounding a concrete Brexit solution for PM Boris Johnson’s Conservative Party. The upbeat mood, coupled with relatively robust economic data and loose monetary policy by the world’s most influential central banks, sent European equity markets flying to their best year since the global financial crisis. From a strategy perspective, both our Momentum and Value styles were the month’s relative winners with the former enjoying a moderately stable period following the factor’s dramatic sell-off in September. Our Machine Learning engine also performed strongly over the period, while our Defensive Low/Vol weighed slightly amid this strong risk-on period. Country-wise, our models generated substantial alpha almost exclusively from a pure stock selection effect. Within our UK picks, Consumer Discretionary and Materials names were strong contributors to our outperformance. Elsewhere, we saw Sweden (Consumer Discretionary and IT) and Germany (IT and Energy) also contribute positively in a fertile month for active stock pickers. At a sector level, Consumer Discretionary and Industrials drove our strong relative performance, while our exposure to and selection of Financials names weighed. As we move into 2020, our relatively cautious positioning which focuses on fundamentals, will hopefully enable us to mitigate what could be a volatile period for equity markets. This low interest rate environment strengthens the opportunity set, and consequently, we believe, investors should emphasize bottom-up positioning over pure beta. 

*Sources : RAM Active Investments