AXA Investment Managers (AXA IM) has launched its Global Emerging Markets (GEM) Small Cap strategy, providing US institutional investors with access to the alpha potential of emerging market companies with market caps between USD100 million and USD2.5 billion.
The strategy is the latest addition from AXA Rosenberg, AXA IM’s systematic equity expertise.
In a segment known for wide mis-pricings, AXA Rosenberg analyses nearly 200 financial statement items across a broad selection universe of GEM Small Cap companies 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 minimising transaction costs. As the majority of companies in the GEM Small Cap universe have limited to no analyst coverage, AXA Rosenberg seeks to leverage its unique perspectives on fair value and earnings forecasts to identify investment opportunities across a uniform set of valuations.
Kathleen Houssels, Head of Research and Models for AXA Rosenberg, says: “We believe that small cap stocks in emerging markets can be a highly effective way to capture equity market up-side potential. Historically, these stocks have been less driven by global sector trends and more by the specific conditions in the market, which has resulted in lower correlation with developed world equities. As small cap stocks continue to gain traction in the investment community, this strategy is a natural addition to AXA Rosenberg’s other offerings, which include International and US Small Cap strategies.”
The GEM Small Cap strategy is available to US institutional investors, as well as to investors in other regions of the world through segregated accounts.