14 December 2020

Emmanuel Hauptmann

The RAM (Lux) Systematic Funds - Stable Climate Global Equities Fund (Class-IP USD net of fee*) posted a performance of +9.74% vs +12.79% for the MSCI World 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 that left high quality sustainable names behind. 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
In this risk-off environment, our model remains underweight in Information Technology and Financials, while overweight in Healthcare, Consumer Staples. At a country level, we remain underweighted in United States and Japan, and our allocation in France pass from overweight to underweight. Switzerland is now our largest overweight.
Finally, despite this difficult month for our fundamental approach, we are well positioned to benefit from a potential increase volatility ahead.

Source: RAM Active Investments.