2 July 2019

Emmanuel Hauptmann, 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 returned 6.32%* (Ip USD Class – net of fees) in June, outperforming the MSCI Emerging Markets TRN which was up +6.24%. Trade concerns, political indecision and slowing growth all abated in June, as markets were increasingly focused on the rhetoric surrounding the world’s central banks. The Fed reinforced investor expectations for an interest rate cut later this year, while the ECB suggested additional eurozone stimulus could be necessary. China’s market rallied on news that Beijing and Washington officials would resume their negotiations, after talks faltered in May. Brazil rose strongly, as the increasing likelihood of lower domestic and overseas interest rates in the coming months bolstered investor sentiment, sending stocks to fresh all-time highs. However, there appears a palpable disconnect between the central bank-led rally with investors unwilling to price in their downside risks, and the fact that leading indicators continue to soften; not a good omen for the business cycle nor corporate profits. Further downside risks to the global economy could thus translate into an outright earnings recession, a scenario which is not reflected in investor’s portfolios. Overall, large-cap stocks—supported by gains in the more defensive sectors, outperformed both mid and small-caps, which helped to drive our outperformance. Broadly, our Fund’s outperformance was a direct result of our positive stock selection, while we suffered a little across allocations and currency. On a country basis, prudent stock selection across Taiwan (IT), India (Financials) and Russia (Materials) all drove positive performance over the month. Conversely, our negative allocation effects, specifically our underweights to both China’s Communication Services and Consumer Discretionary sectors detracted. At a sector level, our selection of Real Estate and Materials names were hugely beneficial over the month.

*Sources : RAM Active Investments