Morgan Stanley Investment Management (MSIM) has launched the Morgan Stanley Investment Funds (MS INVF) and the Morgan Stanley Funds UK Global Brands Equity Income Fund (GBEI).
The new fund is designed to offer an enhanced income version of the Global Brands Fund, in both Luxembourg SICAV and UK domiciled OEIC fund formats.
GBEI invests in a portfolio of high quality stocks in line with that of the MS INVF Global Brands Fund. It generates income, currently targeting a yield of 4 per cent per annum, from a combination of dividends from high quality stocks and premiums from index option overwriting.
As of 30 June, the MS INVF Global Brands Fund I shares delivered 10.3 per cent net annualised total returns vs the MSCI World Net Index, which delivered 3.8 per cent since the fund’s inception on 30 October 2000.
GBEI aims to provide investors with attractive and sustainable income while still offering long-term compounding of capital and relative downside protection.
The international equity team manages GBEI, supported by the solutions and multi asset team, specialists in the implementation of option strategies. London-based portfolio managers William Lock, Bruno Paulson and Dirk Hoffmann-Becking are the key portfolio managers for GBEI.
The international equity team manages AUM of USD34 billion across its four strategies as of 30 June.
William Lock (pictured), head of MSIM’s international equity team, says: “We believe the GBEI portfolio’s high quality bias offers a far more robust approach to income generation than that typically offered by high dividend or income funds. We focus on the underlying company fundamentals and free cash flows, which means dividends are more likely to be sustainable and growing. The companies in GBEI make a high return on capital and are capital light. This means they can afford to pay out, and keep paying out, dividends to shareholders. We would argue ours is ‘income, the right way’, as it offers sustainable dividends in addition to compounding of capital.”