Commentaries

10 October 2018

Maxime Botti

RAM Active Investments RAM (Lux) Systematic Funds - Emerging Markets Core Equities Maxime Botti Partner & Senior Systematic Equity Fund Manage

 

The RAM (Lux) Systematic Funds – Emerging Markets Core Equities Fund returned +1.12%* (Ip USD Class – net of fees) in September, outperforming the MSCI Emerging Markets TRN by 1.65%. Our selection engines generating substantial alpha over the month, with an outstanding positive allocation effect (and positive stock selection effect) responsible for the outperformance. China was this month’s basket case, as the country suffered from the on-going trade war with the U.S., coupled with sign of a cooling economy, our weighty underweight proved highly beneficial. Interestingly, despite this underweight, our selection engines were still well positioned to identify profitable stocks, creating an ideal situation. Elsewhere stock selection in and an overweight allocation to Russia was also profitable for the Fund. In terms of detractors at the country level, Brazil weighed owing to an unhelpful currency and allocation effect (underweight). At a sector level we witnessed positive contributions from Industrials and Consumer Discretionary sectors. Conversely our IT allocation weighed, primarily in Taiwan and South Korean picks. Within the Communications Services (which was our strongest stock picking sector), several South Korean names contributed here, with one name in particular benefitting from a strategic partnership announcement over the month. In terms of portfolio changes at the country level we saw an increase across our China & HK, Russia and South Africa exposure at the expense of Malaysia, India and South Korea. Changes at the sector level saw our IT and Consumer Staples exposures trimmed at the expense of Energy and Health Care.

*Sources : RAM Active Investments