Commentaries

13 February 2019

Thomas de Saint-Seine

The RAM (Lux) Systematic Funds - Global Sustainable Income Equities Fund returned 8.00%* (Ip USD class - net of fees), outperforming the MSCI World High DY TRN index by 2.33%. Global stocks roared to life in January as investor concerns on the twin threats of the Fed’s overly aggressive rate-hiking and China’s economic slowdown, abated. Stocks in the U.S. surged owing to relatively strong corporate earnings, continued optimism about the domestic economy and a big shift in the Federal Reserve's interest rate plans for 2019. Our North American model was particularly alpha generative over the month, with both Canadian and U.S. picks proving extremely beneficial. Within the latter, our selection of both Financials and Health Care stocks (as well as a significant underweight to the latter) contributed the most. Elsewhere, we also witnessed valuable contributions from our European model; as our selection of Consumer Staples names across both France and UK, proved fruitful. Our Asian models also contributed, albeit to a lesser extent, with Australia the strongest contributor over the month. From a broad sector perspective, our relative underweight to defensive sectors (Health Care, Utilities and Consumer Staples) helped to drive outperformance. Within Health Care, a combination of prodigious stock selection and several key underweights proved extremely helpful. Elsewhere, a weak stock picking effect within the Consumer Discretionary sector was offset by our significant underweight to the sector. Our c.45% active exposure to the small and mid-cap segment also helped boost portfolio returns, outperforming their large cap counterparts

*Sources : RAM Active Investments.