Commentaries

14 December 2018

Thomas de Saint-Seine

RAM (LUX) SYSTEMATIC FUNDS – LONG/SHORT GLOBAL EQUITIES

The RAM (Lux) Systematic Funds - Long/Short Global Equities Fund returned -1.44%* (PI USD class – net of fees) in November. Despite our Fund faring much better than most of our peers, we still posted negative returns in November. Fundamentally-driven managers, 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 (but particularly in the U.S.), 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. Within our long engines Value, followed by GARP/Momentum detracted, while our Defensive strategy performed in-line with the wider index. Conversely, on the short side our Short Value engine was the most alpha generative, while our Short Momentum outpaced the market. At the country level, long and short pics in Japan detracted the most, while long pics in China & HK failed to offset losses stemming from our short engines. Positive contributions from the stock picking in UK shorts helped, as did long and short picks in Switzerland. The U.S. was a point in case; strong contributions from our long pics, almost entirely eroded by our short pics. Despite this difficult technical environment, we believe our beta-neutral approach can continue to deliver interesting alpha potential across both our long and short books to investors, we can expect to recover from this drawdown as fundamentals return as the driver of markets.

*Sources : RAM Active Investments