Commentaries

30 April 2019

Emmanuel Hauptmann

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 returned 1.07%* (Ip USD Class – net of fees) in April, underperforming the MSCI Emerging Markets TRN which was up 2.11%. April saw a continuation of the strong start to 2019, as this longstanding growth cycle, fuelled in part by Central Banks’ dovish tone, have continued to support risky assets. While the US/China trade deal has taken a back seat, investors continued to ride the fundamentally-agnostic trade, with large caps continuing their dominance over their small cap counterparts. A strong start to April flattened and turned negative, as China, which is bracing itself for multiple upcoming headwinds amid signs from the PBOC that it’s contemplating reducing its stimulus. Elsewhere the turmoil in Turkey and Argentina failed to dampen broader EM’s enthusiasm, but remains a useful reminder of the complacency which is rife amongst some investors. Stock selection in high-beta names in China were the primary reason for our relative underperformance, with Communication Services and Real Estate selection proving unhelpful. Elsewhere, stock picking in Consumer Discretionary and Materials names also weighed, the beneficiaries of some strong quarterly earnings news. On the positive side, our models found attractive names amongst Indian Financials names, coupled with our significant relative underweight here. Sector-wise, losses were found across Communication Services and Real Estate names, primarily in Asia, where lower-quality growth picks outpaced high-quality value ones. Energy names proved incredibly positive for our Fund, with our slight overweight specifically to Brazil and China generating alpha.

*Sources : RAM Active Investments