Commentaries

14 July 2020

Emmanuel Hauptmann

RAM Active Investments  RAM (Lux) Systematic Funds - European Equities Maxime Botti Partner & Senior Systematic Equity Fund Manager

The RAM (Lux) Systematic Funds – European Equities Fund returned 1.83%* (Ip-EUR class – net of fees) while the MSCI Europe TRN finished up 3.07%. On the surface, the positive performance of the European equity market conceals the violence of the style factor rotation, as we saw a continuation of the risk-on and short covering that characterized the month of May. During the rest of the month Equity markets traded sideways and we could finally see some return dispersion in favour of our engines, mitigating some of the beginning of the month drawdown.

On a country basis, our allocation in France and Germany has been detrimental to the performance, while our overweight and good selection in Sweden has been positive contributor in relative term. Looking at our sector allocation, we see some of our defensive positioning suffering (ie. Healthcare), and in parallel our stock picks in cyclical sectors have been often positive (Consumer Discretionary). Finally, the uncertainty we see in companies’ fundamentals and earnings revisions is likely to translate into more volatility in the next weeks and months, and the defensive positioning of our Momentum engines should be a positive driver of relative performance when that occurs.

We expect the last weeks positive behaviour of our Fund to continue and we remain confident in the ability of our strategies to deliver strong alpha over the coming quarters.

*Sources : RAM Active Investments