12 June 2023
Multi Asset Monthly Comment - May 2023
RAM Global Multi Asset
The global economy continued to present a mixed picture in May, with services PMIs indicating expansionary levels and manufacturing signalling a contraction in activity. The Debt Ceiling impasse had a limited impact on risk assets, far less than what was feared by market participants. Global equities finished the month in decline. Market breadth indicators, particularly in the US, continued to deteriorate, primarily due to the significant rally in tech companies (i.e., companies involved in artificial intelligence). NVIDIA's strong sales and earnings growth have further increased dispersion both between and within sectors. Another positive area of performance was observed in the Japanese Equity market, which benefited from a strong rebound in private consumption, while inflation continued to rise. In China, the pace of economic recovery slowed down, increasing the likelihood of support from central authorities. The market pricing of the Fed's interest rate policy remained volatile in May. Credit indices in USD ended the month down, primarily due to the negative effect of interest rates, whereas EUR Credit outperformed overall. The USD appreciated against major Currencies and Commodities, including precious metals, closed in negative territory.
The Risk Reducing bucket was the main drag on performance in May. Strategies aimed at mitigating Equity downside and curve/duration trades in USD had the largest negative impact, followed by the gold-related strategy. Despite some intra-month fluctuations, equity index volatility remained relatively low throughout most of the month and disconnected from other major asset classes’ volatility. Single Name Equity exposures outperformed thanks to US Tech names, while Diversified Equities detracted from performance (Climate, European and Shareholder retribution exposures). Liquid Alternative exposures detracted from performance to the negative impact stemming from Equity Market Neutral strategies, primarily driven by the behaviour of short positions. The divergence in Fundamentals between long and short positions has become significant, indicating a higher potential positive return in the coming months. Within this category, Fixed Income Long/Short exposures made a positive contribution, while CTA/Macro strategies experienced a slight decline. The Traditional Fixed Income book delivered a flat performance as the positive performance of EUR HY exposures offset the negative impact of the IG exposure.
RAM (Lux) Systematic Funds -Global Multi-Asset Fund is a Sub-Fund of RAM (Lux) Systematic Funds, a Luxembourg SICAV with registered office: 14, Boulevard Royal L-2449 Luxembourg, approved by the CSSF and constituting a UCITS (Directive 2009/65/EC).
RAM (Lux) Tactical Funds -SUSTAINABLE NEXTGEN TMF* 2028 FUND and SUSTAINABLE FLEXIBLE FUND are a Sub-Funds of RAM (Lux) Tactical Funds, a Luxembourg SICAV with registered office: 14, Boulevard Royal L-2449Luxembourg, approved by the CSSF and constituting a UCITS (Directive 2009/65/EC).
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There is no guarantee that the holdings shown will be held in the future. The investment described concerns the acquisition of shares in the Sub-Fund and not in a specific underlying asset. Past performance is not a guide to current or future results. There is no guarantee to get back the full amount invested. The performance data do not take into accountfees and expenses charged on subscription and redemption of shares nor any taxes that may be levied. As a subscription fee calculation example, if an investor invests EUR 1000 in a fund with a subscription fee of 5%, the investor will pay to his financial intermediary EUR 50.00 on the investment amount, resulting with a subscribed amount of EUR 950.00 in fund shares. In addition, potential account keeping costs (by investor’s custodian) may reduce the performance. Some shares in the Sub-Fund apply a performance fee. Leverage intensifies the risk of potential increased losses or returns.
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Issued in Switzerland by RAM Active Investments S.A. which is authorisedand regulated in Switzerland by the Swiss Financial Market Supervisory Authority (FINMA). Issued in the European Union and the EEA by the authorisedand regulated Management Company, RAM Active Investments (Europe) S.A., 51 av. John F. Kennedy L-1855 Luxembourg, Grand Duchy of Luxembourg.
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