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Commentaries

2 July 2019

Emmanuel Hauptmann

RAM Active Investments  RAM (Lux) Systematic Funds - North American Equities Maxime Botti Partner & Senior Systematic Equity Fund Manage

The RAM (Lux) Systematic Funds - North American Equities Fund finished up +6.55%* (PI USD class - net of fees) over the month, underperforming the MSCI North America TRN$ which returned +6.93%. The Federal Reserve reinforced investor expectations for an interest rate cut later this year, powering strong gains for stocks and lifting the MSCI North America Index to record highs. The removal of the word “patient” from the Fed’s statement was enough to propel U.S. markets even higher, with technology names outperforming the broad market, and large-cap defensive sectors that pay relatively high dividends, also posted healthy gains. The Fed’s statement also pushed Treasury yields lower, with the 10-year yield trading below 2.0% for the first time since last 2016. Elsewhere, we saw small and mid-caps, naturally underperform their large cap counterparts. Investor sentiment surrounding the U.S. and China trade dispute also shifted to an increasingly positive view, providing another source of support for domestic stocks. Amid a rally of this nature (i.e. not fundamentally driven), our models were unable to keep pace with a market almost entirely underpinned by central banks. Naturally, those sectors with more to gain from the Fed’s dovish stance rocketed, with both Financials (Banks, Property) and IT (Semiconductors, Technology Hardware) enjoying a serene month. Our Fund’s significant underweight to Real Estate and Industrials (Aerospace & Defense) helped to stem losses suffered elsewhere. 

*Sources : RAM Active Investments