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ii Super 60 - Morgan Stanley Global Brands Equity Income

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ii Super 60 investments:
Morgan Stanley Global Brands Equity Income

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new addition This fund is a new addition to the Super 60 investments. Find out more

Asset Group Asset Sub-Group Investment Category
Equities Global equity income Income

Selection rationale:
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.

July 2020

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New addition

On 20/07/20 the Investment Selection Committee decided to add the Morgan Stanley Global Brands Equity Income fund to ii’s Super 60 rated list, making it the first new addition since the launch of the Super 60. In-line with our stated methodology, we have conducted rigorous quantitative analysis on the fund and met the investment team before making our final decision. The fund, which is featured as the ‘Income’ option in the Global Equity Income category, showed exceptional qualities in terms of investment process, performance and capital protection, income generation, strength of the team, transparency, and value for money. All this helped us to build conviction in the fund during our due diligence process.

(20 July 2020)

Risk warnings

Past performance of the underlying constituents is not a guarantee of future performance. The value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. 

Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab. 

The information we provide in the ii Super 60 investments list is an opinion provided by ii or one of its partners on whether to buy a specific investment. Please note that none of the opinions we provide are a “personal recommendation”, which means that we have not assessed your investing knowledge and experience, your financial situation or your investment objectives. Therefore you should ensure that any investment decisions you make are suitable for your personal circumstances.

If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor. 

Any changes to the ii Super 60 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Outlook.

Details of all recommendations issued by ii during the previous 12 month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies mentioned in the ii Super 60 investments list, which could create a conflict of interest. Any member of staff intending to complete some research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of this ii Super 60 list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the list. This is to avoid personal interests conflicting with the interests of the recipients of this ii Super 60 investments list.