RAM Emerging Markets Equities

Emerging Equities (MSCI Emerging Markets Index TRN) were down 3.9% in October as higher US interest rates put pressure on global risky assets.
The RAM (Lux) Systematic Funds - Emerging Markets fund (Class-IP USD net of fee) outperformed the index by around 30bps over the month, helped by resilient Low Risk and Machine Learning strategies in the downside.*
The fund’s underweight exposures to China Communication Services and to South-Korean Materials stocks were among the best contributors to performance relative to the index.
Taiwanese consumer discretionary picks contributed also positively to relative performance.
Our underweight to India kept detracting despite the country being more and more stretched from a valuation perspective relative to other emerging markets.
The strategies increased exposure to Chinese stocks over the month, with some of the largest Chinese Tech names coming back into our top positions given more positive earnings dynamics and attractive valuations.
Some Brazilian names were added to also in the last weeks, while the fund’s South Korean exposure was trimmed slightly.
 

*Note: IP USD share class currently registered in LU, AT, CH, DE, DK, ES, FI, FR, UK, IT, NL, NO, SE, SG (foreign restricted recognised scheme). Please refer to the fund factsheet to obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

RAM European Equities

European Equities heavily fluctuated over the month, the first half being particularly volatile, and the second half seeing a strong decline. The RAM (Lux) Systematic Funds – European Equities fund (Class-IP EUR net of fee) ended the month down 3.51%, particularly penalised by its Small and Mid Cap segments overweight, in line with its benchmark (-3.56%).*
The fund’s benchmark (MSCI Daily Net TR Europe Euro) was particularly penalised by both its growth and value components. European low volatility stocks only declined around 1% over the month, helped by a strong first half of the month. The fund’s momentum book underperformed the benchmark, our other books being in line.
The fund was in line in Industrials, our strongest allocation. It overperformed in Consumer Staples (our second biggest allocation), stabilising the fund’s performance in the second half of the month. It underperformed in Healthcare, the fund’s selection failing to capture the upside in the first half of the month. The fund strongly overperformed in Utilities, Communication Services and Energy. It underperformed in Consumer Discretionary (the fund’s worst performing sector over the month) and Information Technology (especially in the Software/Services industry).
The fund strengthens its position in Industrials, and decreases its position in Consumer Staples and Financials.
The fund underperformed in the UK and France, but overperformed in Germany, its three biggest allocations. It strongly overperformed in the Netherlands (thanks to strong Consumer Staples and Communication Services picks) and Sweden (with a great performance in Materials and Healthcare). The fund underperformed in Denmark, Finland, Italy and Portugal.
The fund is currently building back its position in the Nordics, and reducing its position in the UK and France.
The fund’s selection in the Large Cap segment positively contributed to the fund’s relative performance. The fund’s overweight in the Small and Mid Cap segments strongly penalised the fund. The Mid Cap segment was the benchmark’s worst performer over the month, and the Small Cap segment was the fund’s worst performer over the month.

*Note: IP EUR share class currently registered in LU, AT, CH, DE, DK, ES, FI, FR, IT, NL, UK, NO, SE, SG (foreign restricted recognised scheme). Please refer to the fund factsheet to obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns. The portfolio is actively managed on a discretionary basis using a benchmark. Although the product compares its performance to that of the MSCI Daily Net TR Europe Euro, it does not seek to replicate this benchmark and is free to choose the securities in which it invests. The securities in which it invests. The difference with this benchmark may be significant.

RAM Long Short European Equities

European Equities (MSCI EU TRN) corrected by 3.6%  in October as higher interest rates kept putting pressure on economic activity and on risk assets.
In a similar way as during September, lower quality/unprofitable growth companies were the most impacted during the downside, which supported the performance of our short positions.
The RAM (Lux) Systematic Funds – Long/Short European Equities fund (Class-I EUR net of fee) provided strong return diversification in the downside of bonds and risky assets, progressing by 1.85% over the month.*
A lot of the returns were generated in the industrial sector, where overall our long selection of strong free-cash-flow manufacturers significantly outperformed our short selection of speculative growth companies.
Plays in the Auto manufacturing sector on the long side were among the top picks, while renewable energy stocks (fuel cell, hydrogen, wind turbines) were among the names delivering the best short returns as high valuations get challenged by dimming growth prospects.
The Energy sector was also rich in positive contributors on both sides of the book, long names ending the month in positive territory.
Over the last month, the strategies have added net exposure to Industrials and Energy, while reducing the net Long in IT and Consumer Discretionary.

*Note: I EUR share class currently registered in LU, AT, CH, DE, ES, FR, UK, IT, NL, SE, SG (foreign restricted recognised scheme). Please refer to the fund factsheet to obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

RAM Long Short Global Equities

The RAM (Lux) Systematic Funds - Long/Short Global Equities fund (Class-PI USD net of fee) returned -0.06% in October, while Global equities continued their correction on the back of higher rates and geopolitical tensions.*
October was a month of consolidation for our market neutral funds, after the strong performance contribution of the short book after the summer.
Valuation levels remain stretched among our short picks despite the September correction in growth stocks, particularly unprofitable tech companies that rallied in July.
Once again, the top contributor was the short book, with good performance from shorts in the Consumer Discretionary sector, in particular among biotechs, food delivery and renewable energy companies.
The higher frequency alpha engines, which capture short term price mean reversion, continued to perform well, being the best performing alpha engines year-to-date.
The fund remains net long positions in IT and Healthcare, has continued to increase longs in Financials and remains net short in Materials and Utilities.

*Note: PI USD share class currently registered in LU, CH, DE, DK, ES, FI, UK, IT, NO, SE, SG (foreign restricted recognised scheme). Please refer to the fund factsheet to obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

RAM Stable Climate Global Equities

The RAM (Lux) Systematic Funds - Stable Climate Global Equities Fund (Class-PI USD net of fee) registered a 2.76% decline during the month.*
Markets extended their downturn, influenced by persistent geopolitical strife and climbing interest rates.
For the third consecutive month, stocks with lower volatility outshone the rest of the market. High income factors continued to be favourable. Conversely, Growth names, along with highly shorted stocks, were the most adversely affected.
All sectors ended the month negatively, with the exception of Utilities, which provided a boost to the fund owing to its taxonomy-aligned exposure.1 The models identified strong picks in Healthcare, such as Cigna Group, and in Consumer Discretionary, including Deckers Outdoor Corp.
Echoing September's trends, the fund's Large Cap exposure outperformed Mid Cap, as smaller companies were hit harder by market sell-offs. However, the impact of Mid Cap underperformance was lessened by selective strength in this segment.
Notable selections in Europe, particularly in the UK and Spain, contributed positively, while selections in Japan detracted from performance.
Healthcare and Financials remain the fund's predominant exposures.
The portfolio's Carbon footprint aligns with the fund's sustainability ambitions, showing a realised Carbon footprint and Greenhouse Gas Intensity (covering Scope 1, 2, and 3) that is significantly lower than the global equity market average, exceeding a 50% reduction.
ESG leaders and Low Carbon stocks performed in line with the main index.

*Note: PI USD share class currently registered in LU, AT, BE, FI, UK, NO, SE, SG (foreign restricted recognised scheme). Please refer to the fund factsheet to obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns.

¹Regulation (EU) 2020/852

RAM Global Sustainable Income Equities

The RAM (Lux) Systematic Funds - Global Sustainable Income fund (Class-IP USD net of fee) witnessed a 2.67% decrease. By contrast, its benchmark, the MSCI World High Dividend Yield Index TRN$, experienced a 3.65% drop, whereas the Global equity market index fell by 2.90% over the same timeframe.*
Markets continued to correct due to escalating geopolitical tensions and persistently rising interest rates.
For the third month in a row, stocks characterised by low volatility surpassed the broader market's performance. Similarly, high income factors also remained popular. The Dividend Yield factor delivered robust positive results, with top decile stocks outperforming the lowest decile by 2.79%. The Share Buyback factor also showed favourable performance, albeit to a smaller degree, with top decile stocks exceeding those in the lowest decile by 1.65%, which adversely affected the fund's comparative performance against its High Dividend Yield benchmark.
At the country level, continuing the trend from September, stock selection in the US contributed most positively to the fund's performance. Europe, Asia, and the Pacific ended the month broadly in line with the index.
All sectors concluded the month down, except for Utilities, which benefitted the fund due to its alignment with taxonomic exposure.1 The fund's models made strong selections in Healthcare, Financials, and Consumer Discretionary sectors, specifically in Specialty Stores such as Murphy USA, Inc. and O’Reilly Automotive, Inc.
Thanks to astute stock selection, the fund's Large Cap holdings added 60 basis points to its relative performance. Mid Cap holdings also made a significant contribution, bolstered by a favourable allocation effect.
The fund continues to hold a predominant overweight position in Financials and Consumer Discretionary stocks, while maintaining an underweight stance in Materials and Energy stocks, in accordance with its sustainability goals. The fund promotes environmental characteristics and is classified as article 8 SFDR (Regulation (EU) 2019/2088).
The portfolio's Carbon profile is in harmony with the objective of the sustainable investments performed by the fund, with a reported Carbon footprint and Greenhouse Gas Intensity (Scope 1, 2, and 3) that are below its benchmark.
ESG leaders and Low Carbon stocks closed the month on par with the main index.

*Note: IP USD share class currently registered in LU, AT, CH, DE, DK, ES, FI, FR, IT, NL, NO, SE, SG (foreign restricted recognised scheme). Please refer to the fund factsheet to obtain a global overview of performance since inception. Past performance is not a reliable indicator of future returns. The portfolio is actively managed on a discretionary basis using a benchmark. Although the product compares its performance to that of the MSCI World High Dividend Yield Net Index, it does not seek to replicate this benchmark and is free to choose the securities in which it invests. freely chooses the securities in which it invests. The difference with this benchmark can be significant.

¹Regulation (EU) 2020/852

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Important Information

Important Information: The sub-funds mentioned above are Sub-Funds 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 Active Investments (Europe) S.A., 51 av. John F. Kennedy L-1855 Luxembourg, Grand Duchy of Luxembourg is the Management Company.
The information and analyses contained in this document are based on sources deemed to be reliable. However, RAM Active Investments S.A. cannot guarantee that said information and analyses are up-to-date, accurate or exhaustive, and accepts no liability for any loss or damage that may result from their use. All information and assessments are subject to change without notice.
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Please refer to the Key Investor Information Document and prospectus with special attention to the risk warnings before investing. For further information on ESG, please refer to https://www.ram-ai.com/en/regulatory-information and the relevant Sub-Fund webpage (section ‘sustainability-related disclosures’). The prospectus, constitutive documents and financial reports are available in English and French while PRIIPs KIDs are available in the relevant local languages. These documents can be obtained, free of charge, from the SICAVs’ and Management Company’s head office and www.ram-ai.com, its representative and distributor in Switzerland, RAM Active Investments S.A. and the relevant local representatives in the distribution countries.
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