Commentaries

May 2020 - Adapting to the environment - Tactical Fund Manager's Comments

11 June 2020

Ani Deshmukh, Clement Perrette, Gilles Pradère

Strong tenure of global fixed income markets

  • Global risk assets surged on the back of hopes that a V-shaped recovery of the economy is taking place
  • Central banks and fiscal authorities’ omnipresence and announcements of further measures to bring back the economy to normality helped boost sentiment
  • May’s US job market figures came in much better than anticipated
  • IG and HY bonds continued to perform extremely well, namely due to credit spread tightening
  • Cyclical sectors such as Financials, Energy and Industrials were the most supported ones in this risk-on environment
  • IG issuance was near-record and perfectly absorbed by strong investors’ demand
  • In interest rates, yield curves slightly steepened in developed markets overall

Central banks’ balance sheet – more to come…

Central banks and Governments have continued to expand their support to the economy. Germany and France proposed to their European partners a first step towards some form of debt mutualization. Even if this project is designed to be limited and temporary, it would enhance Eurozone Governments’ ability to manage the current challenging period. Combining the Fed, the ECB and the BoJ balance sheet size, the increase over the last months has been massive and there’s more to come.

Source: Bloomberg, RAM AI, as of 31.05.2020


RAM Global Bond Total Return Fund

The B USD share class delivered a solid performance of +1.88% in May, bringing its YTD performance to +2.41%.
All our performance engines, i.e. Traditional, Non-Traditional and FX, performed positively in May. Our tactical approach focused on capital preservation while participating to the upside proved to be rewarding in a challenging investment environment since the beginning of the year.

The below timeline illustrates how the positioning of the fund has been adapted to the changing macroeconomic environment.

 

Source: RAM AI

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