Commentaries

11 June 2020

Emmanuel Hauptmann

RAM Active Investments RAM (Lux) Systematic Funds -Emerging Markets Equities

The RAM (Lux) Systematic Funds – Emerging Markets Equities Fund finished the month up 3.36%* (Ip USD Class – net of fees), while the MSCI Emerging Markets TRN$ returned 0.77%. Emerging markets stocks finished the month in positive territory following a strong end to May as sentiment gradually improved on the gradual reopening of both the domestic and global economy. However, EM underperformed their developed counterparts as investor focus remained on the pace of new infections and the actions of central banks. Subsequently we witnessed a slew of central bank action across China, Thailand, South Korea, Turkey and South Africa all aimed at preventing lasting economic harm from the virus. We witnessed last month the continuation of the performance reversal of our Value and Small/Mid-cap selections, which delivered substantial alpha after years of lagging the market. At a strategy level, Momentum and Machine Learning engines also contributed nicely, while our Defensive strategy was the month’s relative underperformer. Broadly stock selection across all market cap segments drove our Fund’s relative outperformance, which also enabled us to print positive year-to-date performance. Country-wise we saw pockets of outperformance across Asia, with momentum names in Taiwan and Malaysia enjoying a strong month. Our off-benchmark picks in our value model within Australia’s Materials sector also helped to drive gains. May again saw the market beginning to refocus on actual growth and fundamentals, which helped to power our selection engines. At a sector level, IT and Health Care names were the primary drivers of returns, with those stocks with the best sector-relative cash flow generation and profitability outperforming. 

Source: RAM Active Investments