Commentaries

11 June 2020

Emmanuel Hauptmann

The RAM (Lux) Systematic Funds - Global Sustainable Income Equities Fund finished April up 3.72%* (Ip USD class - net of fees), with the MSCI World High DY TRN index returning 2.09%. Optimism surrounding the gradual reopening of the global economy was the primary driver of sentiment in May. Broadly, developed markets outperformed their developed peers, with investor sentiment heavily focused on infection rates and recoveries as well as which economies could better weather the associated storm. Signs of a rebound from the global coronavirus lockdown helped bolster global equities and push safe haven assets lower. Markets digested more signs of economic bottoming in global data, including improving business in consumer discretionary, leisure and manufacturing. This positive sentiment is largely underpinned by the actions of global central banks, which continued in May, as Europe reacted extremely positively to a proposed €750 billion recovery fund, the Fed’s saw its balance sheet grown by 70% to $7.1T (since the start of March), China, South Korea and other EM countries all took monetary action. 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. A positive selection effect particularly in the U.S., but also in Switzerland and the UK, drove returns as we saw the market beginning to refocus on actual growth and fundamentals, which helped to power our selection engines. Within the U.S., Consumer Staples & Discretionary names drove returns, while we also saw a helpful overweight to Materials boost gains further. Sector-wise, both Consumer sectors (Discretionary & Staples), Real Estate and Utilities were all positive contributors for the month. 

*Sources : RAM Active Investments.