Morgan Stanley Mutual Funds

We've already talked about the mutual funds that are available from Van Kampen and their relationship to Morgan Stanley.  In this publication, the focus is going to be on Morgan Stanley mutual funds.  This includes a brief background of Morgan Stanley's mutual funds, followed by a review of fees and loads.  Finally, we'll talk about the performance of the funds offered to investors.

Morgan Stanley Family of Mutual Funds

Among the investment community, Morgan Stanley is a well-known and respected name.  The value Morgan Stanley commands in the market is clearly demonstrated in their size.  In the third quarter of 2008, Morgan Stanley claimed to have over $800 billion in assets under management.  As a company, they've nearly 60,000 employees in over 1,300 offices in 42 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 the expense ratios of mutual funds offered through Morgan Stanley are Average across the board.  This includes domestic stocks (1.49%), international stocks (1.47%), as well as taxable bonds (1.03%).  Morgan Stanley's mutual funds show a good balance with 50% invested in domestic stocks and over 38% invested in international company stocks.

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 average expense ratios are sometimes accompanied by a load.  Approximately 81% of Morgan Stanley funds are no-load mutual funds.  The average return for the Morgan Stanley family of mutual funds is just 5.82% over the last five years (May 2011).

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 a list of top rated mutual funds from Morgan Stanley:

• Morgan Stanley Inst Mid Cap Growth I (MPEGX) - with $7.8 billion in assets under management, this mid-cap growth mutual fund places heavy emphasis on the industrials sector of the economy.  Top holdings include Priceline.com, Inc., Illumina, Inc., and Wynn Resorts, Ltd.  This no load mutual fund has an expense ratio of 0.68%.  The fund requires a minimum investment of $5 million, and the average return over the last five years was 9.22%. (May 2011)
• Morgan Stanley Inst Opportunity H (MEGHX) - with just under $300 million in assets under management, this large growth mutual fund is focused on the technology and financial services sectors of the economy.  Top holdings include Amazon.com, Inc., Apple, Inc., and Google, Inc.  This fund carries a 4.75% front load, and an expense ratio of 0.97%.  The minimum investment is $25,000.  The fund's average return over the last five years was 7.76%. (May 2011)
• Morgan Stanley Inst Focus Growth I (MSAGX) - with $24.8 million in assets, this large growth mutual fund's focus is on the technology and consumer cyclical sectors of the economy.  Top holdings include Amazon.com, Inc., Apple, Inc., and Google, Inc.  The fund carries with it an expense ratio of 1.00%, and the fund does not carry a front load.  The fund is currently open to new investors, and requires a minimum investment of $5 million.  The fund's average return over the past five years was 7.15%.  (May 2011)

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