MS Global Franchise Fund

MS Global Franchise Fund

Last Update: 2014-05-30

Number of Stocks: 27
Number of New Stocks: 1

Total Value: $598 Mil
Q/Q Turnover: 6%

Countries: USA GBR SWE FRA CHE ITA DEU
Details: Top Buys | Top Sales | Top Holdings  Embed:

MS Global Franchise Fund' s Profile & Performance

Profile

Morgan Stanley Institutional Fund Global Franchise Portfolio Class I (MSFAX) was established on 11/28/2001. The net assets are $488.09 million and the turnover rate as of 12/31/2012 is 34%. The fund seeks long-term capital appreciation by investing primarily in equity securities of issuers located throughout the world that they believe have, among other things, resilient business franchises and growth potential.

Investing Philosophy

The team follows a distinct and disciplined investment process based on bottom-up stock selection, with sector, industry and stock weightings driven by the team's assessment of each stock's quality and valuation characteristics.

(1) Investable universe:
Companies are screened based on financial metrics that the team believes are associated with strong franchise businesses. The key financial characteristic of these companies is that they enjoy sustainable, high unlevered return on invested capital (ROIC), which is generated by a combination of recurring revenues, high gross margins and low capital intensity. This combination helps support strong free cash flow generation, which, crucially, must be either reinvested at similarly high returns or distributed to shareholders.

(2) Security selection:
The team looks for high-quality businesses with the following characteristics: difficult-to-duplicate intangible assets that protect the durability of the franchise; a sustainable, high ROIC on an unlevered basis; high gross margins and low capital intensity; a reliably recurring revenue stream; and financial strength and capable management.
The team monitors signs of franchise abuse, including failing to re-invest capital in high ROIC businesses, preventing compounding by retaining excessive cash and earnings-per-share targets having precedence over ROIC, which rewards short-sighted behavior.

Historical Allocation of Stock, Bonds, Cash

Total Holding History

Performance of Morgan Stanley Global Franchis

YearReturn (%)S&P500 (%)Excess Gain (%)
201319.731.55-11.8
201215.3815.4-0.0
20119.382.087.3
3-Year Cumulative51.1 (14.7%/year)55 (15.7%/year)-3.9 (-1%/year)
201014.0715.06-1.0
200929.6526.463.2
5-Year Cumulative123.4 (17.4%/year)125.5 (17.7%/year)-2.1 (-0.3%/year)
2008-28.88-378.1
20079.585.614.0
200621.615.795.8
200511.914.917.0
200413.77121.8
10-Year Cumulative169.6 (10.4%/year)104.1 (7.4%/year)65.5 (3%/year)
200327.9228.7-0.8
20028.1-22.130.2

Commentaries and Stories

Add Notes, Comments or Ask Questions

User Comments

No comment yet

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide