Commentaries

9 January 2019

Thomas de Saint-Seine

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 -2.71%* (Ip USD Class – net of fees) in December, narrowly underperforming the MSCI Emerging Markets TRN by 5bps. Emerging market equities remained suppressed in December, mirroring the concerns throughout 2018 over the protracted trade wars between the U.S. and China. In addition, lower oil prices, higher U.S. interest rates and slowing growth in China also troubled emerging markets over the month. Our mid/large cap approach to investing in the region performed inline with the index, mirroring 2018 overall. At the country level our significant underweight to China (with the country indicating a deceleration of its domestic economy) helped to drive outperformance. Elsewhere, we also saw both Poland and South Africa help to boost gains. Within the former it was a combination of picks within Financials and Energy, while in the latter, it was Consumer Staples names. On the negative side, stock selection in and our underweight to Indian names detracted. Here, both Indian Financials and IT names enjoyed a profitable month, weighing upon our returns. From a sector perspective, we saw Chinese Consumer Discretionary and South Korean Industrials picks generate substantial alpha. We felt losses emanating from both the Communication Services and Materials sectors, but the latter’s losses were softened by a helpful positive allocation effect.

 *Sources : RAM Active Investments