AXA IM Rosenberg Equities’ Global Emerging Markets Small Cap strategy hits three-year milestone
May 31, 2018 — AXA Investment Managers (AXA IM) Rosenberg Equities’ Global Emerging Markets (GEM) Small Cap strategy recently hit its three-year anniversary, marking a track record of success. The strategy aims to provide U.S. institutional investors with access to the alpha potential offered by emerging market companies with market capitalizations between $100 million and $2.5 billion.
Rosenberg Equities analyzes nearly 200 financial statement items across a broad selection universe of GEM Small Cap companies, a segment known for wide mispricings, comprised of approximately 6,500 companies worldwide. The team’s proprietary bottom-up stock selection approach aims to capture alpha ideas while taking informed liquidity risk and minimizing transaction costs. As the majority of companies in the GEM Small Cap universe are not widely followed by analysts, the gap between stock prices and company fundamentals can be especially large. To capture these mispricings and identify investment opportunities, Rosenberg Equities seeks to leverage its proprietary perspectives on fair value and the growth and stability of near-term earnings across the broad universe of GEM Small Cap companies.
In addition to fundamental analysis of the thousands of small cap companies across the developing world, Rosenberg leverages its unique data-driven approach to investing by incorporating alternative datasets and techniques, such as natural language processing of news sentiment, into its process. Rosenberg has also systematically integrated environmental, social and governance (ESG) considerations into its approach, targeting improvement in specific ESG KPIs alongside traditional performance metrics.
Kevin Chen, Rosenberg Equities Chief Investment Officer for Asia, said: “We knew from our initial research that emerging markets small cap would be an exciting area for us and we are pleased of our progress as well as the opportunities ahead. Emerging markets are growing faster than developed markets and will likely continue to do so in the long term. Further, we believe small caps, which tend to be domestically oriented and therefore a purer play on these countries’ development, can be a highly effective way to capture equity market upside potential. We believe the space will continue to be attractive for investors and a helpful diversifier in investors’ portfolios.”
AXA IM’s Rosenberg Equities business has 30 years of experience in managing small cap strategies across a variety of market conditions. The GEM Small Cap strategy leverages Rosenberg’s breadth of experience and track record managing both small cap and emerging market strategies launched in 1987 and 2006, respectively.
The GEM Small Cap strategy is available to U.S. institutional investors, as well as to investors in other regions of the world through segregated accounts. For more information about the GEM Small Cap strategy and AXA IM’s suite of capabilities, please visit www.axa-im-usa.com.