AXA Rosenberg has extended its global research focus into emerging markets and has struck a tentative accord to apply that research through a subadvisory agreement with Charles Schwab & Co. AXA’s asset allocation models have traditionally focused on developed countries where corporate data is readily available. But there is now more corporate accounting data from the developing world. There is also a need to find new small- and medium-cap companies outside of over-fished ponds in the developed world, said Steve Dean, director of global product strategy at AXA. AXA already has some exposure to emerging markets in South Korea, Indonesia and India but the new research will open markets in Eastern Europe, South Africa and Israel. The new fund is expected to open sometime this summer, Dean said. AXA currently subadvises more than two dozen mutual funds distributed through various Schwab platforms, including the discount broker’s defined contribution programs, under the Laudis Funds brand.
AXA addresses political and market risk by diversifying into multiple countries instead of taking a single-country approach, such as a Mexican equity fund. The Laudus investment will likely be a continuation of an international small-cap fund that invests mainly in Europe and other developed countries that closed in the fourth quarter of 2005, Dean said. “It [the new Laudus fund] may even be called the Laudus Discovery fund. We haven’t named it,” Dean said. Sondra Harris, a Schwab spokeswoman, declined to comment on at least one Laudus fund in registration that Dean may have referred to but could not reach him by press time to verify that the two funds were the same.