Commentaries

17 September 2018

Emmanuel Hauptmann

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

 

The RAM (Lux) Systematic Funds – Emerging Markets Equities Fund returned -3.30%* (Ip USD Class – net of fees), underperforming the MSCI Emerging Markets TRN$ by 60bps. The situation in Turkey had a significant detrimental impact on performance, from both an allocation and currency perspective, but not from a selection effect perspective, which was actually a relative contributor. Strategy-wise we witnessed a strong positive contribution from our Defensive engine, which helped to protect the Fund during the month’s woes. The engine was well positioned with significant overweights to both Taiwan and Thailand and subsequent underweights in Brazil and South Africa. The month’s biggest laggards were our Machine Learning and Value engines (the latter suffering particularly on the downside and its over-exposure to Turkey), while the former (despite a difficult August) remains ahead of the wider index since its deployment in April. August’s strongest contributors from a broad country perspective varied by strategy, showing the benefits of our multi-strategy approach. Our Momentum engine’s performance was driven by contributions from South Africa, Brazil and Russia, while Value benefitted from positions in South Korea, Australia and China. From a sector perspective, we saw positive performance generated in both Materials (a long-standing outperformer for our Fund) and Consumer Discretionary. Conversely, performance was dragged down by both a negative stock selection and currency effect in the IT sector, and weak stock selection in Industrials. Our selection of China and Indian IT stocks were largely positive, despite our continued material underweight here. In terms of allocation changes over the month, aside from our substantial reduction of Turkey, we also trimmed our exposure to Hong Kong & China. Elsewhere we topped up our allocation to three of the four BRIC countries: India, Russia and Brazil.

*Sources : RAM Active Investments