Commentaries

14 February 2020

Thomas de Saint-Seine

RAM Active Investments  RAM (Lux) Systematic Funds - North American Equities Maxime Botti Partner & Senior Systematic Equity Fund Manage

The RAM (Lux) Systematic Funds - North American Equities Fund ended the period down -0.57%* (PI USD class - net of fees), while its benchmark the MSCI North America TRN$’s, returned +0.13%. The rapid spread of deadly virus from China remained at the forefront of global equity investors’ minds and exposed the fragility of markets in January. Concerns that the impact could develop into a global pandemic meant U.S. stocks suffered their worst losses at the end of the month, with markets focused on the spreading virus. Away from the virus, the Federal Reserve kept interest rates unchanged and said its policy is appropriate for now, signalling it will remain on hold for the foreseeable future as the U.S. election approaches. Strong quarterly earnings reports, for the most part, kept U.S. equities above water for most of the month, offsetting losses felt from the negative sentiment surrounding the virus. Broadly, energy stocks were pressured by falling oil prices, and our significant relative underweight proved extremely positive overall. Additionally, our allocation to Financials (Banks & Insurance) brought an additional source of alpha. On the negative side, losses were felt within our Consumer Discretionary pics, primarily within the retail sector, while Health Care and IT names detracted further. From a market cap perspective, the mid and small caps names produced the weakest returns, while large caps continued their relative outperformance over the month. 

*Sources: RAM Active Investments