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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 fourth quarter of 2007, 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 (1.28%), international stocks (1.56%), municipal bonds (0.85%) and taxable bonds (1.02%). Morgan Stanley's mutual funds show a good balance with 47% invested in domestic stocks and over 28% 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 63.5% of funds being no-load mutual funds. The average return for the Morgan Stanley family of mutual funds is just 14.98% over the last five years (November 2007).
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 592 million in assets under management, this large growth mutual fund places heavy emphasis on the services sector (68% of assets). Top holdings include Monsanto Company, Google, Inc., and Amazon.com. Inc. The fund carries a deferred load of 5.00% and an expense ratio of 2.30%. The fund requires a minimum investment of $1,000 and the average return over the last five years was 17.95%. (November 2007)
- Morgan Stanley Institutional International Real Estate (MSUAX) - with just under $1.7 billion 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 (94.5%). Top holdings include Land Securities, British Land and Unibail-Rodamco. This no-load mutual fund carries a modest expense ratio of 0.95% and the minimum investment was $500,000. The fund's average return over the last five years is 27.6%. (November 2007)
- Morgan Stanley Institutional Municipal (MPMFX) - with $953 million in assets, this fund's focus in on municipal bonds. With this bond fund, most of the money is invested in government securities. Top holdings include U.S. Treasury Notes (22% of assets), JPMorgan Chase Co Swaps, and Lehman Int Rate Swap. The fund carries with it a low expense ratio of 0.49% and the fund does not carry a front load. The minimum investment is $5,000,000 and the fund's average return over the past five years is 4.51%. (November 2007)
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