Is it worth it? All You Need To Know

Morgan Stanley Investment Management is a leading international investment management firm and provider of funds. Today I offer you the review of one of them, called Global Opportunity Fund.

The investment aims to seize the best return opportunities on international markets, with the aim of achieving long-term capital growth.

Let’s find out how the portfolio is distributed, how the fund is managed, what performances it has achieved in the past and how much it costs to subscribe to it.

At the end I will give you some ideas to think about.

Enjoy the reading.

Morgan Stanley: due parole

Before starting with the presentation of the fund, I always want to first present the institution that offers the same instrument, precisely because I believe it is important to find out about the company in which you are going to invest.

Morgan Stanley Investment Management is an investment firm that offers clients, advisors and business partners around the world innovative and highly relevant solutions. Indeed, they are focused on offering investment excellence, as well as diversity in perspectives.

Con Morgan Stanley you will have a wide range of strategies at your disposal, with investments in all public and private markets.

The firm also has expertise in responsible and sustainable investing, being a leader in this field with more than $45 billion of assets under management across equities, bonds and multi-asset alternative instruments.

The company also has a partnership with Eaton Vancewhich allows them to further enhance the level of offer to clients, with a wide range of complementary and high quality investment solutions.

Clarification

When you subscribe for shares of the Global Opportunity Fund you are actually investing in a sub-fund which belongs to the UCITS “Morgan Stanley Investment Funds”; incorporated under Luxembourg law and managed by MSIM Fund Management (Ireland) Limited, part of the Morgan Stanley group.

I umbrella funds they are very widespread, within they bring together multiple investment portfolios with different objectives and strategies. Each sub-fund constitutes separate assets from the others but, in general, it is possible for the investor to transfer his holding from one sub-fund to another.

In turn, the sub-funds may issue one or more share classes which have specific fee regimes and subscription arrangements. Having made these clarifications of a purely informative nature, we can move on to the most important questions.

How the sub-fund is structured, what it invests in

Global Opportunity Fund invests globally in high quality, established and emerging companies which the management team believes are undervalued at the time of purchase, but have sustainable competitive advantages.

Indeed, at least 70% of the sub-fund’s investments will be in corporate shares, including depositary receipts.

Its benchmark

The selection of issuers has no geographical limits but takes into account, without constraints, the composition of the index MSCI AllCountry World Net Indexused as a benchmark.

The management style is therefore activeand its management is not constrained by the composition of the benchmark.

Geographical and sectoral composition

If we focus on his geographical composition we can note that the regional exposure sees North America in first place with 56.51%, followed by the Pacific basin with 11.44% and the Indian subcontinent with 9.67%. The Eurozone is in fourth position with 9.49%.

We now shift our focus to thesector allocation and we see how companies investing in discretionary consumer goods are in first place with 28.37%, followed by those engaged in the information technology sector with 28.195 and by the industrial sector with 17.65%.

Among the main positions in the portfolio we find Uber, Moncler, MercadoLibre, e Disney.

Risk profile

The evaluation of the risk profile of the sub-fund is based on historical volatility, therefore it may not be a reliable indication.

Nonetheless, we need it to frame the investment profile and understand if it suits your characteristics.

The fund has been classified in the category “5”, medium risk – valuation quite consistent with a stock investment.

Proceeds Use Policy

How are the proceeds? It depends on the share class you subscribe to. For example, class “A” shares, reserved for retail investors, are of the ad type accumulation, therefore the accrued proceeds are not distributed among the participants but are reinvested in the Sub-Fund.

Subscription and redemption methods

To subscribe for class A shares, obtain and complete the subscription formavailable on the website or from the Management Company.

The sub-fund’s shares can be redeemed on demand, with transactions effected on a daily basis.

Investors can also switch their class A shares into any other class or sub-fund.

costs

The costs of permanence in the fund (for class A shares) are broken down as follows:

• Only one commission withdrawn at the time of subscription, a maximum of 5.75% of the capital (before it is invested);
• Redemption Fee not foreseen;
• Current fees withdrawn from the fund in one year, equal to 1.84%, of which 1.60% for management;
• No fees of performances.

Even though this is a maximum percentage, and therefore the loading could be lower, 5.75% is very high; it represents a significant percentage that is taken out of your capital even before you invest it.

This is a typical problem of actively managed mutual funds.

Past returns

I past returns they are useful to the extent that they are read as evidence of the manager’s work, just to understand if the objectives have actually been achieved, because as we well know, past returns cannot be taken as a forecast for the future.

Performance data has been calculated including taxes, ongoing charges and transaction costs, but excluding entry and exit charges.

As you can see, the fund has outperformed its benchmark more than once, nevertheless, the variation in results from year to year is marked.

Funds rarely beat the benchmark, therefore it is positive that the Fund has succeeded, however, means that the risk assumed is much higher.

If you want to subscribe to the shares of the Sub-Fund you must be prepared for all of this and you must consider the very high entry costs.

Morgan Stanley Global Opportunity: Opinions

At this point you expect me to tell you whether or not it is worth investing in the sector Global Opportunity Fund. I’m sorry to disappoint you but I can’t tell you what’s best for you, because I don’t know you.

But I can give you some tips that will make your job easier…

And investment in stock markets requires a good propensity to risk and a time horizon of many years. Your goal must be to increase capital significantly, also favoring the income accumulation policy.

However, you have to pay attention to some aspects: i costs decidedly high, the lack of transparency of the manager (who in fact makes choices independent of the benchmark) and the riskiness of the Sub-Fund, which could turn out to be more volatile than expected.

That doesn’t mean you don’t have to invest in it, but know what you’re doing.

The investment landscape is very broad, not necessarily i actively managed mutual funds they are the best solution. Read my guide on things to know before investing in mutual funds to elaborate on my thoughts.

I admit I’m biased, because I don’t invest in mutual funds – I don’t like them and I don’t care. But I don’t want to convince you at all costs to think like me.

Funds are more or less useful tools, depending on the case, but it often happens that they are not consistent with the saver’s needs.

That is why we should first define i own goals and its own investment strategy, also evaluating other avenues. There strategy in fact it comes before the choice of tools!

Regardless of the tool used, study and training are the best investment, the only one that can guarantee you important benefits.

First of all, you will be more independent in your choices and then you won’t be fooled by those who want to sell you pre-packaged solutions.

An informed investor, aware of his goals and with a well-defined strategy, will hardly buy ineffective and potentially harmful tools.

Personally I prefer tools such as ETF, which I find more efficient than mutual funds in some respects. If you want to know more about ETFs you can read this guide.

Other useful resources

On Affari Miei you will also find guided paths for investing, suitable for the different stages of savings and life:

See you soon.