Commentaries

15 March 2019

Thomas de Saint-Seine

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

The RAM (Lux) Systematic Funds - Long/Short Global Equities Fund fell by -1.68%* (PI USD class – net of fees) in January. The Federal Reserve’s U-turn since December continued to support global equities, enabling the continuation of their upwards trajectory for a second consecutive month. Our month’s negative performance was owing to the continuation of the rebound of lower-quality higher beta names, with little fundamental justification for their performance. The continuation of this risk-on environment has continued to be highly supportive of equities, turned out to be unaccommodating for fundamentally-driven investors, with the dispersion between good and bad stocks converging greatly. We did, however, fare much better than many of our peers in this space, where we have managed our downside in a more controlled manner. Broadly we suffered across both sides of the book in February. Our short engines outperformed the market, with Value performing marginally better than Momentum. On the long side, our Momentum engine was the best relative performer, while Value was the worst. While our beta-neutral approach performed admirably during Q4’s deleveraging phases, 2019 has proven more difficult for our Fund. The question remains, how long will value, low volatility stocks lag for? Market commentators are increasingly questioning the historic valuation spreads across the different regions. RAM’s funds are well positioned to benefit from a recovery of companies which exhibit low-volatility characteristics with strong balance sheets.

*Sources : RAM Active Investments