Developing Opportunity Portfolio
Share Class :
 
MDOEX CUSIP: 61768B869
Developing Opportunity Portfolio
MDOEX CUSIP: 61768B869
Share Class :

Developing Opportunity Portfolio

SHARE CLASS :
MDOEX CUSIP: 61768B869
 
 
 
 
Investment Objective
Seeks long-term capital appreciation.
Investment Approach
The Fund seeks long-term capital appreciation by investing primarily in high quality companies located or operating in developing or emerging market countries, with capitalizations within the range of companies in the MSCI Emerging Markets Net Index. To achieve its objective, the investment team typically favors companies it believes have sustainable competitive advantages that can be monetized through growth. The investment process integrates analysis of sustainability with respect to disruptive change, financial strength, environmental and social externalities and governance (also referred to as ESG).
 
 
Pricing & Performance

Short-term returns may not be indicative of the fund's long-term performance potential.

As of 08/31/2020

As of 09/25/2020

As of 08/31/2020

As of 09/25/2020


Performance of $10,000 invested
Performance of $10,000 invested

    
Past performance is not indicative of future results.
 
 
Average Annual Total Returns As of 08/31/2020 As of 06/30/2020
 
 TIMEFRAME:
 
1 YR 3 YRS 5 YRS 10 YRS Since Inception
MDOEX -- -- -- -- 29.50
MSCI Emerging Markets Net Index (%) -- -- -- -- 1.16
Lipper Category Average (%) -- -- -- -- --
Morningstar Category Average (%) -- -- -- -- --
1 YR 3 YRS 5 YRS 10 YRS Since Inception
MDOEX -- -- -- -- 6.10
MSCI Emerging Markets Net Index (%) -- -- -- -- -9.15
Lipper Category Average (%) -- -- -- -- --
Morningstar Category Average (%) -- -- -- -- --
Average Annual Total Returns
As of 08/31/2020
TIMEFRAME MDOEX MSCI Emerging Markets Net Index (%) Lipper Category Average (%) Morningstar Category Average (%)
1 Yr -- -- -- --
3 Yrs -- -- -- --
5 Yrs -- -- -- --
10 Yrs -- -- -- --
Since Inception 29.50 1.16 } -- --
As of 06/30/2020
TIMEFRAME MDOEX MSCI Emerging Markets Net Index (%) Lipper Category Average (%) Morningstar Category Average (%)
1 Yr -- -- -- --
3 Yrs -- -- -- --
5 Yrs -- -- -- --
10 Yrs -- -- -- --
Since Inception 6.10 -9.15 } -- --
Past performance is not indicative of future results. The Portfolio's calendar year returns do not include the deduction of any applicable sales charges.
 
 
 
 
Composition As of 06/30/2020
  Fund Index
Consumer Discretionary 37.76 17.38
Financials 12.16 19.07
Information Technology 12.12 16.93
Communication Services 10.32 13.50
Consumer Staples 10.28 6.48
Industrials 0.62 4.69
Health Care 0.33 4.30
Cash 17.82 --


Geography As of 06/30/2020
  Fund Index
Pacific Basin 55.24 71.18
Indian Sub-Continent 10.24 8.04
North America 9.36 --
South America 8.13 6.29
Central America 0.62 1.73
Cash 17.82 --


Holdings As of 08/31/2020
Fund Index
Meituan Dianping 8.07 1.83
TAL Education Group 5.80 0.44
Alibaba Group Holding Ltd 5.08 8.41
Foshan Haitian Flavouring 5.06 0.07
Magazine Luiza 4.94 0.19
HDFC Bank Ltd 4.79 --
Taiwan Semiconductor Mfg Co. Ltd 4.79 5.58
MercadoLibre Inc 4.74 --
Naver Corp 4.55 0.52
Tencent Holdings Ltd 4.46 6.12
Total 52.28 --

Complete holdings for Developing Opportunity Portfolio will be publicly available on a quarterly basis
45 calendar days after the quarter-end by calling (800) 548-7786 or emailing client service at msimcs@morganstanley.com



Portfolio Characteristics
Fund Index
Active share (%) 81.93 --
Return on invested capital (%) 84.39 17.10
Return on assets (%) 5.98 3.40
5 year free cash flow growth (%) 22.85 7.75
5 year sales growth (%) 20.39 9.97
Net cash to equity (%) 20 -31
Number of holdings 31 1,385
Weighted average market capitalization ($B) 114.94 84.63
 
 
Investor
Kristian Heugh
Managing Director
19 years industry experience
 
 
 
Resources
Prospectus & Reports
SAI
 
 
 
 
 

Class C shares include deferred sales charge of 1.00% which declines to zero after first year.

Where the net expense ratio is lower than the gross expense ratio, certain fees have been waived and/ or expenses reimbursed. These waivers and/or reimbursements will continue for at least one year from the date of the applicable fund’s current prospectus (unless otherwise noted in the applicable prospectus) or until such time as the fund's Board of Directors acts to discontinue all or a portion of such waivers and/or reimbursements. Absent such waivers and/or reimbursements, returns would have been lower. Expenses are based on the fund's current prospectus. The minimum initial investment is $5,000,000 for Class I shares.

Class IS shares, are being offered only to eligible investors who must meet a minimum initial investment of $10,000,000 or be a defined contribution, defined benefit or other employer sponsored employee benefit plan, whether or not qualified under the Internal Revenue Code of 1986, as amended (the "Code"), in each case subject to the discretion of the Portfolio's investment advisor.

Subject to change daily. Fund information is provided for informational purposes only, and should not be deemed as a recommendation to buy or sell any security or securities in the region presented.

Performance information for very short periods should not be the sole factor in making an investment decision because short-term returns may not be indicative of the strategy's long-term performance potential.

Returns for less than one year are cumulative (not annualized). Performance of other share classes will vary.

Returns are net of fees and assume the reinvestment of all dividends and income.

Growth of Investment illustration is based on an initial investment of $10,000 made since fund inception, assumes reinvestment of dividends and capital gains and application of fees, but does not include sales charges. Performance would have been lower if sales charges had been included. Results are hypothetical.

This material is a general communication, which is not impartial and all information provided has been prepared solely for informational and educational 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.

PORTFOLIO CHARACTERISTICS DEFINITIONS
5 year free cash flow growth
 is the compound annual growth rate of Free Cash Flow over a 5-year period. It is calculated by [Free Cash Flow(0) / Free Cash Flow(-5)]1/5 – 1. 5 year sales growth is the compound annual growth rate of Sales over the last 5 years. It is calculated by [Sales (0) / Sales (-5)]1/5 – 1. Active Share is the fraction of the portfolio or fund that is invested differently than its benchmark as of the last day of the reporting period. A portfolio with a high degree of Active Share does not assure a fund’s relative outperformance. Active Share calculation may consolidate holdings with the same economic exposure. The Net Asset Value (NAV) per share is determined by dividing the value of the fund's portfolio securities, cash and other assets, less all liabilities, by the total number of common shares outstanding. The common share market price is the price the market is willing to pay for shares of the fund at a given time. Net cash to equity is the ratio of a company’s cash on hand against the total net worth of the company. It is calculated by [(Total Cash and cash equivalents – Total Liabilities) / Shareholder’s Equity]. Return on assets (ROA) is a measure of a company’s profitability, equal to a fiscal year’s earnings divided by its total assets, expressed as a percentage. Return on invested capital (ROIC) represents the performance ratio measuring a company’s percentage return on its invested capital. Income statement items as of latest reported fiscal period, and Balance Sheet items from one period earlier. ROIC is calculated by dividing Net Income by (Property, Plant & Equipment + Working Capital + Short Term Debt - Cash & Equivalents). ROIC has a cap of 200% and a floor of 0%, ex Financials and Real Estate Sectors. Weighted Average Market Capitalization is an average of the market capitalization of stocks comprising a portfolio or index, adjusted by each stock’s weight in the portfolio or index.

Turnover is sourced from the fund’s current prospectus.

The index data displayed under allocations are calculated using MSIM and other third-party methodologies and may differ from data published by the vendor.

RISK/RETURN DEFINITIONS
Excess Return 
or value added (positive or negative) is the portfolio’s return relative to the return of the benchmark. Alpha (Jensen's) is a risk-adjusted performance measure that represents the average return on a portfolio or investment above or below that predicted by the capital asset pricing model (CAPM) given the portfolio's or investment's beta and the average market return. Prior to 6/30/2018 Alpha was calculated as the excess return of the fund versus benchmark. Beta is a measure of the relative volatility of a security or portfolio to the market's upward or downward movements. Information ratio is the portfolio’s alpha or excess return per unit of risk, as measured by tracking error, versus the portfolio’s benchmark. R squared measures how well an investment’s returns correlate to an index. An R squared of 100 means the portfolio performance is 100% correlated to the index’s, whereas a low r-squared means that the portfolio performance is less correlated to the index’s. Sharpe ratio is a risk-adjusted measure calculated as the ratio of excess return to standard deviation. The Sharpe ratio determines reward per unit of risk. The higher the Sharpe ratio, the better the historical risk-adjusted performance. Standard deviation measures how widely individual performance returns, within a performance series, are dispersed from the average or mean value. Tracking error is the amount by which the performance of the portfolio differs from that of the benchmark. Upside/downside market capture measures annualized performance in up/down markets relative to the market benchmark.

RISK CONSIDERATIONS
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 and that the value of portfolio shares may therefore be less than what you paid for them. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this portfolio. Please be aware that this portfolio may be subject to certain additional risks. In general, equities securities’ values also fluctuate in response to activities specific to a company. Investments in foreign markets entail special risks such as currency, political, economic, market and liquidity risks. The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed countries. Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks. Focused Investing. To the extent that the Portfolio invests in a limited number of issuers, the Portfolio will be more susceptible to negative events affecting those issuers and a decline in the value of a particular instrument may cause the Portfolio’s overall value to decline to a greater degree than if the Portfolio were invested more widely. China Risk. Investments in China involve risk of a total loss due to government action or inaction. Additionally, the Chinese economy is export-driven and highly reliant on trade. Adverse changes to the economic conditions of its primary trading partners, such as the United States, Japan and South Korea, would adversely impact the Chinese economy and the Fund’s investments. Moreover, a slowdown in other significant economies of the world, such as the United States, the European Union and certain Asian countries, may adversely affect economic growth in China. An economic downturn in China would adversely impact the Portfolio’s investments. Risks of Investing through Stock Connect. Any investments in A-shares listed and traded through Stock Connect, or on such other stock exchanges in China which participate in Stock Connect is subject to a number of restrictions that may affect the Portfolio's investments and returns. Moreover, Stock Connect A shares generally may not be sold, purchased or otherwise transferred other than through Stock Connect in accordance with applicable rules. The Stock Connect program may be subject to further interpretation and guidance. There can be no assurance as to the program’s continued existence or whether future developments regarding the program may restrict or adversely affect the Portfolio's investments or returns. Liquidity Risk. The portfolio may invest in restricted and illiquid securities, which may be difficult for the portfolio to sell at a reasonable price.

Rankings: The percentile rankings are based on the average annual total returns for the periods stated and do not include any sales charges, but do include reinvestment of dividends and capital gains and Rule 12b-1 fees. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1.

Ratings: The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Ratings do not take into account sales loads.

© 2020 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

OTHER CONSIDERATIONS
The MSCI Emerging Markets Net Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI EM Net Index assumes the reinvestment of dividends after the deduction of withholding tax and approximates the minimum possible dividend re-investment, whereas the MSCI EM Gross Index assumes the maximum possible dividend reinvestment. The benchmark is used for comparative purposes only. The index is unmanaged and does not include any expenses, fees or sales charges, which would lower performance. It is not possible to invest directly in an index.

The index is unmanaged and does not include any expenses, fees or sales charges. It is not possible to invest directly in an index.

Please consider the investment objective, risks, charges and expenses of the fund carefully before investing. The prospectus contains this and other information about the fund. To obtain a prospectus, download one at morganstanley.com/im or call 1-800-548-7786. Please read the prospectus carefully before investing.

Morgan Stanley Investment Management (MSIM) is the asset management division of Morgan Stanley.

 
 

WAM is the weighted average maturity of the portfolio. The WAM calculation utilizes the interest-rate reset date, rather than a security's stated final maturity, for variable- and floating- rate securities. By looking to a portfolio's interest rate reset schedule in lieu of final maturity dates, the WAM measure effectively captures a fund's exposure to interest rate movements and the potential price impact resulting from interest rate movements.

 

WAL is the weighted average life of the portfolio. The WAL calculation utilizes a security's stated final maturity date or, when relevant, the date of the next demand feature when the fund may receive payment of principal and interest (such as a put feature). Accordingly, WAL reflects how a portfolio would react to deteriorating credit (widening spreads) or tightening liquidity conditions.

 

Tracking error and information ratio are calculated using the Portfolio's Blended Index (added October 2, 2013), as this is a better representation of the Portfolio's global multi-asset strategy. The investment team manages the Portfolio relative to this Blended Index.

 

Excess return versus Custom Benchmark is calculated using the Portfolio's Blended Index based on the period since it was added as a benchmark on October 2, 2013.

 

NTM = Next Twelve Months

 

LTM = Last Twelve Months

 

Because the Portfolio had not commenced operations as of the most recent fiscal year end, no portfolio turnover rate is available for the Portfolio.

 

The Reorganization occurred on January 6, 2015. The inception date reflects the inception date of the Private Fund.

 

Global equities is represented by the MSCI All Country World Index.

 

Net exposure % calculated as [(MV of long cash security and derivative positions)-(absolute value of MV in short derivative positions)]/(portfolio MV)

 

Gross exposure % calculated as [(MV of long cash security and derivative positions)+(absolute value of MV in short derivative positions)]/(portfolio MV).

 

Fixed income net and gross exposure is duration adjusted (U.S. Treasury 10-Year equivalents)

 

Security ratings disclosed above have been obtained from Standard & Poor's Ratings Group ("S&P"). S&P's credit ratings express its opinion about the ability and willingness of an issuer to meet its financial obligations in full and on time.'AAA' is the highest rating. Any rating below 'BBB-' rating is considered non-investment grade. Ratings are relative and subjective and are not absolute standards of quality. Ratings apply only to the underlying holdings of the portfolio and does not remove market risk. "NR" or "Not Rated" indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a matter of policy. Futures are not rated.

 

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