Commentaries

14 December 2018

Thomas de Saint-Seine

RAM Active Investments RAM (Lux) Systematic Funds - Long/Short Emerging Markets Equities funds Maxime Botti Partner & Senior Systematic Equity Fund Manager

The RAM (Lux) Systematic Funds - Long/Short Emerging Market Equities Fund returned -2.33%* (I USD class – net of fees) in November. Fundamental, and specifically equity hedge funds suffered significant losses as the continuation of October’s woes continued for a second consecutive month. The reduction of leverage by equity and hedge funds globally, which have reached their lowest levels since 2012, have increased the pressures on names held by us and our peers, causing selling pressure on longs and buybacks on our shorts. Broadly it was our long book which struggled amid this testing technical backdrop, while our short engines proved to be alpha generative. Our Machine Learning Strategy bucked the trend, comfortably providing the most alpha across both the long and short side. At the country level, losses where felt in Australia (across both sides of the book), China (shorts) and South Korea (shorts).. Excellent long pics in both South Korea and Taiwan emanated from our Momentum and Value engines. On a sector basis, longs across IT and Consumer Discretionary names proved fruitful, while shorts in Health Care and Industrials weighed. Despite this difficult technical environment, we believe our beta-neutral approach can deliver interesting alpha potential across both our long and short books to investors and capture new opportunities in emerging markets.

*Sources : RAM Active Investments