Commentaries

14 November 2018

Emmanuel Hauptmann

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 fell by -8.51%* (Ip USD Class – net of fees) in October, outperforming the MSCI Emerging Markets TRN by 20bps. Our mid-large cap approach to investing in this region proved highly beneficial as our selection engines outpaced their respective market cap segments.  Generally our selection engines generated alpha over the month, with an outstanding positive stock selection effect (and useful allocation effect) driving outperformance. From a country perspective, China continues to offer a fertile environment for our engines; here Consumer Discretionary names contributed the most. Staying within China, our significant underweighting to the IT sector proved fruitful, as these stocks struggled for traction amid an underwhelming Q3 earnings season. Our engines also generated positive performance from South Africa pics, with the IT sector again helpful for us. Lastly, South Korean pics where alpha generative overall. In terms of detractors, losses were contained within Brazil. Here an unhelpful underweight coupled with a negative currency effect eroded slightly our month’s gains. Sector-wise naturally it was the aforementioned IT and Health Care sector which drove returns. Conversely, our underweight to and weak stock selection in Financials detracted the most. In terms of portfolio changes at the country level we saw an increase across Brazil and Israel and a significant increase to South Korea which came at the expense of China & HK, South Africa and Thailand. Changes at the sector level saw our Energy and Financials allocation increase substantially, while our Real Estate, Health Care and Consumer Discretionary weights were reduced as a result.

*Sources : RAM Active Investments