9 April 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 -11.69%* (PI USD class - net of fees), while its benchmark the MSCI North America TRN$’s, dropped by -13.18%. North America fared much better relative to their European and Emerging Market peers, as investors appeared encouraged by further aggressive monetary policy actions and the passage of an unprecedented level of fiscal stimulus. Despite the rapid rise in Coronavirus cases spreading across the U.S. and Canada, the Fed’s unlimited QE, along with credit buying, proved to be a clear positive for the smoother functioning of the markets in short-term at least. This “relief rally” helped by the announcement of a $2.2 trillion stimulus package, came in tandem with New York Governor, Andrew Cuomo’s statement on a slowing growth rate in hospitalisations were evidenced. The end of the month saw the S&P500 experience its largest daily rally since October 2008, and the Dow Jones Index marked its best three-day stretch since 1931. However, until there is some semblance of flattening the virus spread curve, we cannot make any kind conclusions about the long, medium or short-term impact on the economy. Our Fund’s outperformance was driven by our positive allocation effect, with Health Care and Energy sectors contributing positively. Our significant relative underweight to beaten-down energy shares outperformed as oil prices plummeted to their lowest level since x. Similarly, our relative overweight to Health Care and specific pharmaceutical names which showed remarkable resilience during this sell-off, contributed strongly. Conversely, our modest overweight to the hard-hit Consumer Discretionary sector weighed, with our slightly positive allocation effect failing to offset our negative stock picking here.

*Sources: RAM Active Investments