Commentaries

12 July 2021

Emmanuel Hauptmann

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

The RAM (Lux) Systematic Funds - Emerging Markets Equities Fund (Class-PI USD net of fee) slightly underperformed in June -0.71% vs 0.17% for the MSCI Emerging Markets TRN$ Index, while since the beginning of the year the fund continues to outperform, +15.70% vs 7.45%. 

EM Equities halted their march higher as a more hawkish Fed at the beginning of the month and a different stance on current inflation risks led to profit-taking in Equities. Emerging markets were more volatile, along with some reversal of prior months’ Value out-performance vs Growth. The fund lagged slightly, in a flat market (MSCI EM TRN up 0.2%) bringing the fund YTD performance much higher than the market-cap based index as some of or Large Cap Momentum picks and our Machine Learning strategy detracted returns. Some of the fund’s financial picks in China contributed negatively to performance, as some of the most attractively valued securities firms in China saw profit-taking over the month. The Value bias in our Machine Learning selection also detracted last month as the strong decrease of Treasury yields after the Fed comments hurt Value-biased companies. On the other side, the fund’s underweight position to very highly valued Chinese EV manufacturers listed in the US cost significantly to the fund on a relative basis as the latest retail-led speculative buying targeted this type of names again last month. We saw a reduction of Taiwan, our largest country allocation, last month to the benefit of Australia and South Korea, while also seeing a reduction of the fund cyclical exposure, in favor of HealthCare.

Source: RAM Active Investments