Commentaries

14 July 2020

Emmanuel Hauptmann

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 up 1.50%* (PI USD class - net of fees), while its benchmark the MSCI North America TRN$’s, returned 2.30%.

In June the US market continued to rise sharply following march lows, approaching February all time high supported by unprecedent stimulus. Investors seemed to show little concern on the earnings seasons coming up, and on the rise in Covid-19 cases in the US. Neither polls suggesting an intense battle in the economic front between the candidate in the US elections had impact on growth prospects in investor minds.

In this on-way market, the fund underperformed given its defensive allocation (Pharmaceuticals, Consumer Staples), and the fund’s underweight in Hardware companies. The positive selection in Communication services, Industrials, and financials were able to mitigate slightly the negative relative performance results in June. Finally, the uncertainty we see in companies’ fundamentals and earnings revisions is likely to translate into more volatility in the next weeks and months, bringing more dispersion in the US market.  We are then comfortable with the re-allocation of our model in US, that increase our exposure in IT, and Consumer Discretionary, and our decrease allocation in Utilities, Consumer Staples, and Healthcare. 

*Sources: RAM Active Investments