Commentaries

14 December 2018

Thomas de Saint-Seine

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

The RAM (Lux) Systematic Funds – Emerging Markets Equities Fund returned 2.46%* (Ip USD Class – net of fees), underperforming the MSCI Emerging Markets TRN$ which returned 4.12%. Given the fact that November proved to be a particularly difficult month for a number of our competitors, following important sector rotations and technical factors impacting many type of approaches from quantitative to more traditional funds, we believe that despite underperforming, our Fund has limited its drawdown in comparison to peers thanks to our strong fundamentals. Our Value style bucked the trend, marginally outstripping the index, as the recent price declines across emerging markets enabled Value picks to prosper. But it was in particular our Machine Learning strategy that helped us during these last weeks of November, thanks to the greater fundamentals of the underlying selected. From a country perspective, it was our China and Hong Kong pics which detracted, particularly within our GARP/Momentum and Defensive engines, as China experienced a particularly strong month with our engines unable to capture this new trend. On the positive side both Taiwan and South Korea were strong contributors, with our Momentum and Value engines particularly alpha generative here. Sector-wise, losses were contained in the Financials and Communication Services sectors. The latter sector giving back after being such a positive contributor in October. Year-to-date our Fund remains slightly below the benchmark but in strong position to close the year in line with it, should the environment start returning to fundamentals. Indeed, on a price-earnings basis, our Fund is offering the best value to investors since we began managing the Strategy back in 2009, one of the largest differentiators of quality vs the index.

*Sources : RAM Active Investments