Commentaries

30 August 2019

Maxime Botti

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 ended the month down -2.41%* (PI USD class - net of fees), underperforming the MSCI North America TRN$ by 0.64%. U.S. equities saw their first monthly decline since May, as consumer sentiment slid and a tariff deadline in the ongoing U.S./China trade war loomed. August also witnessed the inversion of part of the U.S. Treasury curve, which sparked recession fears among investors. The reignition of the Trade War and uncertainty surrounding the Fed’s future role in problem solving issues they did not create elevated concerns about downside risks to the economic outlook, reflected in a selloff in equities and a rally in prices of developed government bonds over the month. However, towards the end of the period, markets reversed course signalling a “risk on” mode to investors after President Trump said China is ready to come back to the negotiating table following a phone call. This tweet was enough to turn markets from red to green, with markets seemingly looking for reasons to rally. We saw positive performance generated in Consumer Staples (Packaged Food & Meat) names, with a helpful stock selection and underweight proving helpful here. Energy picks also generated alpha, with our relative underweights to Oil & Gas Exploration and Storage & Transportation proving profitable. Conversely, IT and Real Estate picks weighed heavily. In the former, our overweight to specific Communications Equipment and weak selection of Hardware names dragged returns lower. 

*Sources : RAM Active Investments