Commentaries

15 March 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 by -1.45%* (Ip USD Class – net of fees) in February, underperforming the MSCI Emerging Markets TRN which was up 0.22%. Concerns over a potential sharp rebound in U.S. data, which would likely cause the dollar to rally and U.S. interest rates to rise, were the major concerns for emerging markets investors in February. Despite this headwind, the asset class was up sharply in the first part of the month, with Chinese stocks leading a sustained rally as optimism grew on positive talks between Trump and China’s top trade negotiator. However, this optimism was soon dampened leaving emerging markets trailing their developed counterparts over the month. Our selection of large cap names, relative to the index, was the primary reason for our underperformance in February. From a country perspective, our underweight to China & HK and Brazil, which were amongst the top two performance countries over the month, detracted markedly. We also felt losses stemming from Taiwan, with an unhelpful selection and allocation effect combined to weigh. On the positive side, our selection within South African stocks, specifically Financials and Materials names, contributed positively. At the sector level, we felt losses from our weak stock selection within Consumer Discretionary names, while our IT selection also detracted. Conversely, stock selection in and our significant underweight to Communication Services helped to boost portfolio returns, as did our selection of Industrials stocks.

*Sources : RAM Active Investments