Commentaries

30 August 2019

Maxime Botti

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

The RAM (Lux) Systematic Funds - Long/Short Global Equities Fund returned 0.69%* (PI USD class – net of fees) in August. August proved to be a demanding month for global equity markets. Despite the month’s late rally, global equities finished the month in the red as persistent Trade War clouds remained, hamstringing the market, while the inversion of part of the U.S. Treasury curve (a historical indicator of an impending recession), sparked fears among investors. Broadly we saw emerging outperform developed market peers, while the U.S. and Europe outstripped Asia. A late August rally signalled a clear “risk on” mode to investors after President Trump tweeted that China were ready to come back to the negotiating table following a phone call. Trump’s tweet was enough to turn markets from red to green, with markets seemingly looking for reasons to rally. This environment is typically challenging for us, but we were able to retain most of our positive alpha. Broadly, positive performance was generated within our short engines, while our longs detracted. Within our long engines Value was the primary negative influencer here, with the style’s underperformance continuing unabated, while GARP/Momentum outperformed. Conversely, our short engines painted a very different picture: all highly alpha generative, with both our Short Value & Momentum engines vastly undercutting the wider market. August allowed our short engines to showcase their ability to deliver a nice negative diversification profile amid falling markets. At a country level we saw both Austria and Canada picks drive positive performance, the latter across both sides of the book. Elsewhere, in the U.S. our short picks were able to offset losses generated by our longs, providing an attractive complimentary alpha profile.

*Sources : RAM Active Investments