Stephen Hiscock

In its first review, Zenith has rated two Morgan Stanley Investment Management (MSIM) global equities funds as “recommended”, following the partnership formed with SG Hiscock & Company in July to exclusively distribute the funds in Australia.

The funds are:

• Morgan Stanley Global Quality (hedged and unhedged): This fund invests in high quality companies that have the ability to consistently compound shareholder returns over time, and
• Morgan Stanley Global Sustain (hedged and unhedged): This fund uses a similar methodology to the quality strategy, offering a high quality, carbon light portfolio. The Fund also appeals to those seeking a tobacco-free, alcohol-free and fossil fuel-free portfolio.

Zenith said it “has a high opinion of MSIM’s differentiated and successful investment process, believing that it is clearly defined and consistently applied since 2009. Zenith believes MSIM’s investment team is well-resourced and highly experienced. In addition, we consider the team’s due diligence and understanding of investment opportunities to be detailed and thorough.

“Furthermore, Zenith holds a positive view on the arrangement between MSIM and SGH, believing that it pairs a highly successful global investment manager with a domestic distribution partner that has a solid footprint in the domestic market.”

Zenith also commented on MSIM’s ESG approach, with a dedicated ESG resource within the investment team.

“Zenith believes that this qualitative analysis of a company’s operations is crucial on a forward basis, given that a company’s performance with regards to ESG considerations is increasingly being reflected in the company’s share price.”

Stephen Hiscock, CEO of SG Hiscock & Company, said both funds have performed very strongly particularly through the recent market volatility.

“The recent market downturn has highlighted the importance of actively managed, high conviction investment strategies that capture the upside of market movements but minimise the impact of a downturn.

“The funds provide Australian investors with access to the MSIM team’s very successful global equities capability which has a strong focus on quality and sustainability.

“The Global Sustain Fund invests in high quality companies at reasonable valuations that can sustain their high returns on operating capital over the long term, offering a superior approach to ESG investing with a clearly defined process.  It provides attractive long-term returns with less long-term volatility than the broader market.

“The Global Quality Fund focuses on high-quality, resilient, well managed companies with the aim of compounding shareholder wealth at attractive rates over the long term.

“The team believes there are two key principles to investing: firstly, the best route to long-term returns is through compounding and providing a measure of relative downside protection; and secondly, high quality businesses can generate strong returns over the long term.

“Both funds are offered in a hedged and unhedged version, allowing investors to select the option that best suits their own situation,” Mr Hiscock said.

Morgan Stanley Investment Management Australia managing director, Daniel Vanden Boom, said SG Hiscock & Company has strong existing relationships among dealer groups and independent financial advisers which the Partnership Program will build upon.

“MSIM has been serving institutional investors in Australia for 25 years and currently manages in excess of A$11 billion. This includes an established client base in our Global Quality and Global Sustain strategies which we’ve been eager to offer to retail investors for some time.”

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