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 We've already talked about the mutual funds that are available from Van Kampen and their relationship to Morgan Stanley. Here we're going to focus strictly on Morgan Stanley mutual funds, how they are offered, and how they are performing.
Morgan Stanley Family of Mutual Funds
Among the investment community, Morgan Stanley is a well known and respected name and this is clearly demonstrated in their size. In the third quarter of 2008, Morgan Stanley claimed to have nearly $740 billion under management. As a company, they've got nearly 55,000 employees in over 600 offices in 32 countries.
In 1997, Morgan Stanley, based in New York, and Dean Witter, based in San Francisco, combined giving the company a coast-to-coast feel. Dating back to 1924, Morgan Stanley has a rich history of supplying financial services to individuals, institutional investors and the banking community.
The Morgan Stanley family of mutual funds is broken down into five major categories - Global / International, Growth Funds, Growth and Income, Income and Tax-Free bond funds. Morgan Stanley offers investors a full range of investment services including Roth IRAs, Traditional IRAs, 529 Plans and management of 401k Plans.
Morgan Stanley Funds Fee Structure and Returns
Morningstar ratings indicate that the expense ratios of mutual funds offered through Morgan Stanley are average across the board including domestic stocks (1.31%), international stocks (1.42%), municipal bonds (0.94%) and taxable bonds (1.02%). Morgan Stanley's mutual funds show a good balance with 43% invested in domestic stocks and over 30% invested in international stock funds.
The minimum investment to open an account at Morgan Stanley is $1,000, however, as we will explain later on these thresholds increase dramatically for institutional investors. Unfortunately, the below average expense ratios are many times accompanied by a load with only 66.5% of funds being no-load mutual funds. The average return for the Morgan Stanley family of mutual funds is just 8.26% over the last five years (August 2008).
Top Rated Morgan Stanley Mutual Funds
The good news is that all three of the top rated mutual funds from Morgan Stanley do not carry a sales load. All three funds are also open to new investors; however, two of the three top rated funds are restricted to institutional investors.
The following is our list of top rated mutual funds from Morgan Stanley:
- Morgan Stanley Cap Opportunities B (CPOBX) - with $450 million in assets under management, this large growth mutual fund places heavy emphasis on the services sector (54% of assets). Top holdings include Monsanto Company, Google, Inc., and Ultra Petroleum Corporation. The fund carries a deferred load of 5.00% and an expense ratio of 2.08%. The fund requires a minimum investment of $1,000 and the average return over the last five years was 9.43%. (August 2008)
- Morgan Stanley Institutional International Real Estate (MSUAX) - with just under $910 million in assets under management, this fund is no longer open to institutional investors interested in the international real estate market. Nearly all money is invested in stocks found in the financial services sector (93.2%). Top holdings include Land Securities, British Land and Unibail-Rodamco. This no-load mutual fund carries a modest expense ratio of 0.94% and the minimum investment was $500,000. The fund's average return over the last five years is 15.64%. (August 2008)
- Morgan Stanley Inst US Real Estate I (MSUSX) - with $1.0 billion in assets, this fund's focus in on real estate. Top holdings include Simon Property Group, Inc., Equity Residential, and AvalonBay Communities, Inc. The fund carries with it an expense ratio of 0.88% and the fund does not carry a front load. The fund is currently closed to new investors and the fund's average return over the past five years is 16.98%. (August 2008)
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