Commentaries

14 December 2020

Emmanuel Hauptmann

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

The RAM (Lux) Systematic Funds - Emerging Markets Equities Fund (Class-IP USD net of fee*) posted a performance of 7.13% vs 9.25% for the MSCI EM TRN$ Index. 
The news of a surprisingly efficient vaccine for the pandemic by Pfizer on November 9th 2020 at a time when the second wave was strongly impacting again the fundamentals of all Lockdown-hit industries led to a historically violent market rotation in favour of these industries.
In this environment where numbers of companies that were destroying cash flow, presenting negative earnings, price dynamics, were bought massively, we suffered in Taiwan (Semiconductor and Leisure Products) and South Korea (Technology Hardware, Biotechnology. On the positive, we had good selection in China and India that limited our relative underperformance during the month. At a strategy level, Our Low Risk engines were the most hit by the risk-on move by the market, lagging significantly given their bias towards non-cyclical stocks, in Consumer Staples and Communication services particularly.
Over the month, we reduced our overweight in Taiwan and Thailand while increasing our exposure in China and Singapore. At a sector level, we reduced our allocation in Communication Services and Materials, favouring stocks in Financials and Industrials.
Despite this difficult month for our fundamental approach, we are well positioned to benefit from a potential increase volatility ahead.

Source: RAM Active Investments