Commentaries

10 October 2018

Maxime Botti

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

 

The RAM (Lux) Systematic Funds – Emerging Markets Equities Fund returned 0.49%* (Ip USD Class – net of fees), outperforming the MSCI Emerging Markets TRN$ which returned -0.53%. September experienced a particularly turbulent month as the pressure emanating from the on-going trade war between the US and China saw further escalation before the rise in oil prices helped some export-reliant countries clawback part of the losses felt earlier in the month. From a strategy perspective our Defensive engine was the key contributor to the month’s outperformance; a continuation of the stellar performance that our conservative approach has generated since January’s highs. Elsewhere our Momentum engine also outpaced the broader market; however our Machine Learning (“ML”) and Value engines lagged slightly. Our strongest contributors at the country level included China (Value & Momentum), Russia (Momentum) and Turkey (ML). Within China it was our prudent stock selection within Consumer Discretionary and Communication Services names which drove gains here. September’s detractors at the country level where primarily contained within our Taiwan and Brazil picks. Within the former, a weak stock selection effect from our Momentum engine within the IT sector was to blame here. At a sector level we witnessed positive contributions from our Communication Services and Consumer Discretionary picks, while stock selection within Industrials also contributed nicely. Our stock picking within the IT sector was weak, with losses stemming from a Taiwanese heavyweight which witnessed a precipitous decline on the last day of trading in September, hurting the Fund. From an allocation perspective changes were muted this month with our models increasing their exposure to Russia and China & HK while reducing India and Malaysia. Changes at the sector level were similarly subdued with our IT exposure reduced while Materials and Industrials were increased.

*Sources : RAM Active Investments