Commentaries

14 December 2020

Emmanuel Hauptmann

RAM Active Investments  RAM (Lux) Systematic Funds - US Sustainable Equities Maxime Botti Partner & Senior Systematic Equity Fund Manage

The RAM (Lux) Systematic Funds - US Sustainable Equities Fund (Class-PI USD net of fee*) posted a performance of +8.67% vs +11.62% for the MSCI North America Index TRN$. 


As the news of efficient Covid-19 vaccines led to a major risk-on for global Equities, the fund lagged as it was impacted by its cautious positioning in a context of unclear earnings trends. In the most severe rotation ever witnessed from Growth to Low Quality stocks, the fund was negatively impacted by its Health Care selection and its low exposure to banks and energy stocks. The stay-at-home environment also impacted heavily a number of industries’ such as companies within hospitality, leisure services, transport, airlines, etc. These companies with negative earnings and price momentum dynamics were underweighted in our book because of weak fundamentals and ESG levels. Indeed those companies were often within highly CO2 emitting industries . The perspective of a vaccine changed the expectation of most investors, leading to a rebound of up to 30% in some names. The fund’s exposures to consumer staples and gold mining, industries resilient to the Covid shock, were among the month’s worst detractors.

In this risk-off environment, the fund mainly re-allocated out of Healthcare to Information Technology, Financials, and Industrials. Our main active allocation remains within Healthcare, Information Technology, Industrials (overweight) and Financials, Communication Services, Consumer Discretionary Services (underweight).
Despite this difficult month for our fundamental approach, we are well positioned to benefit from a potential increase volatility ahead.

 

Source: RAM Active Investments