Fundamental Small/Mid Core Equity Strategy
Fundamental Small/Mid Core Equity Strategy

Fundamental Small/Mid Core Equity Strategy


The Fundamental Small/Mid Core Equity Strategy represents an actively managed strategy that seeks to outperform the Russell 2500 Index with a focus on risk management. The strategy looks for small to mid-sized companies with strong free cash flow, attractive valuations, profit margin expansion opportunities, strong management and changing internal dynamics.

Investment Approach

Using a rigorous fundamental approach to stock selection, the team seeks to identify undervalued equities.

Emphasis on Stock-specific Fundamentals

Analysis of individual securities with the goal of assessing intrinsic value by balancing potential rewards and risks, using conservative assumptions.

Orientation Toward Risk Management

Risk management is integral to the process and includes analysis of risk factors, position sizing, portfolio monitoring, liquidity analysis and forensic accounting by an independent party.

Rich Pool of Intellectual Capital

Proprietary research as well as a vast array of internal and external information sources are used to make portfolio decisions.

Investment Process
Team Approach

Each team member brings their own unique industry experience and skill set to the evaluation process, while leveraging a common, time-tested investment approach.

Bottom-up Approach to Stock Selection

The team determines a security’s “fair value” using traditional macro and fundamental  factors – such as sales growth, profit margins, and earnings. These criteria are analyzed in concert with critical inputs such as investor sentiment and estimate revision trends.

Risk Management Orientation

The investment process is driven by a recognition that every decision balances potential risk with potential reward. The quality and sustainability of a company’s earnings and cash flow is a core component of this approach. The team’s internal analysis is supported by an independent forensic accounting firm.

Portfolio Managers
Head of Fundamental Equity Advisors Team
35 years industry experience
Managing Director
19 years industry experience
Executive Director
17 years industry experience


Diversification does not protect you against a loss in a particular market; however it allows you to spread that risk across various asset classes.

There is no assurance that a Portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the Portfolio will decline. Accordingly, you can lose money investing in this Portfolio. Please be aware that this Portfolio may be subject to certain additional risks. In general, equity securities' values also fluctuate in response to activities specific to a company. Investments in foreign markets entail special risks such as currency, political, economic, and market risks. American Depositary Receipts (ADRs)represent an ownership interest in securities of foreign companies and involve many of the same risks as those associated with direct investment in foreign securities, including currency, political, economic and market risks. Exchange traded funds (ETFs) shares have many of the same risks as direct investments in common stocks or bonds and their market value will fluctuate as the value of the underlying index does. By investing in exchange traded funds (ETFs), the portfolio absorbs both its own expenses and those of the ETFs it invests in. Supply and demand for ETFs may not be correlated to that of the underlying securities. The strategy may, from time to time, emphasize certain market sectors. To the extent the strategy does so, it is more susceptible to economic, political, regulatory and other occurrences influencing those sectors. Stocks of small- and medium-capitalization companies entail special risks, such as limited product lines, markets and financial resources, and greater market volatility than securities of larger, more established companies. Besides the general risk of holding securities that may decline in value, closed-end funds may have additional risks related to declining market prices relative to net asset values (NAVs), active manager underperformance, and potential leverage. Some funds also invest in foreign securities, which may involve currency risk.


This communication is only intended for and will be only distributed to persons resident in jurisdictions where such distribution or availability would not be contrary to local laws or regulations.

There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. Past performance is no guarantee of future results.

A separately managed account may not be suitable for all investors. Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required. For important information about the investment manager, please refer to Form ADV Part 2.

Any views and opinions provided are those of the portfolio management team and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring. The views expressed do not reflect the opinions of all portfolio managers at Morgan Stanley Investment Management (MSIM) or the views of the firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

All information provided has been prepared solely for information purposes and does not constitute an offer or a recommendation to buy or sell any particular security or to adopt any specific investment strategy. The information herein has not been based on a consideration of any individual investor circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. To that end, investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.


The indexes are unmanaged and do not include any expenses, fees or sales charges. It is not possible to invest directly in an index. Any index referred to herein is the intellectual property (including registered trademarks) of the applicable licensor. Any product based on an index is in no way sponsored, endorsed, sold or promoted by the applicable licensor and it shall not have any liability with respect thereto.

The Russell 2500® Index is an index that measures the small to mid-cap segment of the U.S. equity universe, commonly referred to as "smid" cap. It includes the smallest 2500 securities in the Russell 3000.

The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.

Morgan Stanley Investment Management is the asset management division of Morgan Stanley.  


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