- Yield History3.73%
- 3 Year sharpe0.82
- 3 Year alpha-0.9
- Distribution Typeaccumulation
- BenchmarkMSCI World NR GBP
- Legal StructureOpen Ended Investment Company
- Fund Size (month end)Open Ended Investment Company
- IA SectorGlobal Equity Income
- Manager GroupMorgan Stanley
- DomicileUnited Kingdom
Morgan Stanley Global Brands Equity Income Fund is run by the highly experienced and well-resourced International Equity team at Morgan Stanley. It seeks to provide investors with an attractive yield of around 4% per annum alongside long-term capital growth and performance has also been relatively resilient during the recent market downturn.
The team takes a high-conviction approach and runs a highly concentrated portfolio of around 20-40 holdings. The income the fund generates comes in two forms. The underlying companies in the portfolio have an average dividend yield of around 2%. The fund’s income is boosted to 4% by a derivatives-based strategy for which the fund receives regular premiums.
The investment process is well-defined and a stock needs to tick a number of boxes before being considered for inclusion. These include durability of the franchise, sustainable returns on capital, and strong revenue streams.
The fund is not constrained by an index benchmark and does not take bets on regions or market sectors. The investment process is purely based on individual stock merits. The result is a strong long-term track record of generating income and delivering returns in excess of both the MSCI World index benchmark and the Investment Association’s Global Equity Income sector average. The strategy has generated better risk-adjusted returns and lower volatility than its peer group.
This fund could be suitable for investors seeking a higher income than that supplied by core equity funds, while at the same time looking for a good balance between income and capital appreciation. It could also provide diversification benefits beyond traditional income maximising strategies, which tend to find opportunities in more cyclical and economically sensitive areas of the market such as Financials and Energy.