After launching its first actively managed international stock fund, Charles Schwab Investment Management plans more funds in that space. The firm is hiring international researchers and looking into more international offerings. "With more than half of the world's stock market value trading on non-U.S. exchanges, international exposure is a key component of equity portfolio diversification," said Eric Thaller, portfolio manager of the new Schwab International Core Equity Fund.
Schwab hired an international trader, an international portfolio manager and an international researcher to support International Core Equity. Vivienne Hsu, also a portfolio manager on International Core Equity, said the firm is looking for more international researchers, though she would not provide specifics. She said Schwab plans more international funds—either through the in-house team or subadvisors such as Mondrian Investment Partners—but added that it is too early for details.
Hsu said Schwab thinks some of its quantitative domestic strategies
can extend to international funds. For example, she said, the new international offering employs a strategy parallel to the one behind the domestic
Schwab Core Equity Fund, as it rates companies using the same four basic criteria: fundamentals, valuation, momentum and risk.
Schwab’s quant group uses Schwab Equity Ratings—in-house research that rates more than 3,000 stocks and assigns each a letter grade from A through F.
In November Randall Merk, ceo of Charles Schwab Investment Management, told FA the firm would launch more actively managed funds in areas new to the firm (FA, 12/3).
