Commentaries

L/S GLOBAL EQUITIES FUND MANAGERS' COMMENTS JANUARY 2020

13 February 2020

Thomas de Saint-Seine

RAM (LUX) SYSTEMATIC FUNDS – LONG/SHORT GLOBAL EQUITIES

The RAM (Lux) Systematic Funds - Long/Short Global Equities Fund returned +0.94%* (PI USD class – net of fees) in January. The coronavirus outbreak emanating from China has sent jitters across financial markets amid fears of a hit to the global economy. Emerging markets suffered to a greater extent than their developed counterparts, as with China’s domestic market closed for New Years, the contagion into wider Asia was palpable. Away from the virus, both the Federal Reserve and the BoE kept interest rates unchanged. For now. As expected in a such a risk-off market, alpha was difficult to generate within our long books, but our Low Vol/Defensive style was the month’s relative outperformer, while Value and Momentum long engines struggled. Conversely, on the short side, our models behaved exactly as they were designed to; identifying those names exhibiting negative fundamentals and decaying price trends. Here, our short Momentum was highly alpha generative, capturing exposed low-quality growth names. We also witness out short Quality and Value undercut the wider market, generating positive alpha overall. From a country perspective, our shorts in the U.S were the month’s strongest contributors, along with shorts in the UK and Japan. The U.S. market provided a fertile hunting ground for our models, with the uptick in volatility highlighting certain bio tech names with decaying fundamentals. On the sector front, Energy and Consumer Discretionary shorts proved fruitful, as did longs and shorts in Consumer Staples picks. 

*Sources : RAM Active Investments