Commentaries

14 December 2020

Emmanuel Hauptmann

RAM Active Investments RAM (Lux) Systematic Funds - Long/Short Emerging Markets Equities funds Maxime Botti Partner & Senior Systematic Equity Fund Manager

The RAM (Lux) Systematic Funds - Global Equities Sustainable Alpha Fund (Class-I USD net of fee*) posted a performance of -5.18%. 

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. This tail event has been amplified furthermore by a strong short covering on November 9th, as illustrated by levels of short interest decreasing sharply, despite being already at low levels.
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 saw particularly re-allocation on our short Book, reducing our exposure in Australia, South Korea and China. Our model is now net long China and Hong Kong.
We believe that the fund can be a strong diversifier next to long equities and long credit in the environment lying ahead. After this market rotation, we see some degree of adjustment in the book on the momentum side, reducing risk on some lockdown plays. We continue to see a lot of asymmetry in valuation within our books that could benefit us in a risk-off environment.
This month we changed the fund name to Global Equities Sustainable Alpha to represent the emphasis the fund will aim on sustainable factor we are looking it at during our selection process. We remain at your disposal for any question concerning how the ESG factors are integrated.

Source: RAM Active Investments.