Commentaries

12 June 2019

Thomas de Saint-Seine

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

The RAM (Lux) Systematic Funds - Long/Short Global Equities Fund returned +2.17%* (PI USD class – net of fees) in May. Global stocks fell sharply following a serene start to the year, as trade tensions ratcheted higher. Developed and emerging stocks were not immune to President Trump’s newly enacted tariffs and potential expansion to Mexico and Australia threatened to further slow global economic growth. Political events also added to market unease as the UK’s PM Theresa May resigned and elections in Denmark, France, and Italy pointed toward increased populism. Our short book generated a positive contribution to performance, whereas the long book weighed on the performance of the Fund during the period. In a violent month for Value investors, our multi-angled approach enabled us to produced significant alpha in markets which appear close to capitulation, with the unwinding of positions by many market participants stark. Both our Momentum and Low Risk strategies performed extremely well, across both sides of the book, as did our newly deployed Machine Learning Strategy (ML). The ML Strategy, integrated across both sides of our Fund in May, has a lower inherent value bias than its EM and European cousins, which helped it to contribute positively over the month. Short picks in the U.S. and Japan were incredibly beneficial, as we witnessed a degree of dispersion especially in the more cyclical, higher beta names. Elsewhere, shorts in Canada and South Korea more than offset losses in our long book, providing the Fund with positive alpha. From a sector perspective, shorts in Energy and Health Care names, the latter a long-term short position, delivered nicely. Materials names in Australia and Germany also attracted the attention of our Short Value and Momentum engines.

*Sources : RAM Active Investments