Commentaries

9 August 2019

Thomas de Saint-Seine

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 +1.05%* (PI USD class - net of fees) over the month, marginally underperforming the MSCI North America TRN$ which returned +1.40%. July witnessed the S&P500 moving above the 3000 mark, establishing a new historical high. The fears that returned in May (trade wars, US debt ceiling etc), which resulted in a broad sell-off of close to 7%, have seemingly been quickly forgotten. With the Federal Reserve providing the accommodative backdrop for domestic equity markets, investor attention was instead focused on the rhetoric attached to rate cuts. Here, markets were left disappointed amid a cautious outlook. July also witnessed the reemergence of the global trade war with President Trump threatening a 10% tariff on a further $300bn of Chinese goods, with the news coming at the end of the month we witnessed a sharp spike in volatility. On a sector basis, we generated alpha across Communication Services and Energy names, both from a selection and allocation perspective. Within the former, interactive media & services was a particularly fruitful area for our models, with some heavyweight names adding to performance. Within the latter, Oil & Gas Exploration & Production underweights were extremely beneficial, with the sector as a whole one of the worst-performing in July. On the negative side, our overweight to pharmaceuticals within the Health Care sector weighed after the White House withdrew a plan to overhaul the rebates that drug makers pay insurers and distributors. We also witnessed a negative contribution from IT picks, with weak stock picking within Hardware and Storage. The U.S. Technology sector continues to be the main driver of domestic markets, with the sector the best-performer across the month and throughout 2019.

*Sources : RAM Active Investments