Strong on Engagement
Light on Carbon
Built on Quality

 

3 years of performance

Launched over three years ago and built on 25 years’ heritage of Quality investing, Global Sustain reflects our belief that there doesn’t have to be a trade-off between long-term performance, principles and planet.

Performance Icone

PERFORMANCE

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PRINCIPLES

Screening Policy
Planet Icon

PLANET

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3 reasons to invest

A high quality, ESG-integrated global equity portfolio that is strong on engagement, light on carbon, built on quality.

1

Strong on engagement1

We engage directly — and often — with the management of companies we own. This includes regular dialogue with management on progress towards decarbonisation targets.

Read our latest Engage report >
2020 MEETINGS
AND ENGAGEMENTS
 
 
2

Light on carbon2

Global Sustain is a reduced carbon intensity portfolio, with just 20% of the carbon footprint of an average company in the MSCI AC World Index.

Read more on our Low Carbon Ambition >
TONS
CO2E/$M SALES
 
 
3

Built on quality3

We seek sustainably high return businesses that can compound over time. Global Sustain, like our other global strategies, is a leader on quality relative to the peer universe.

 
GLOBAL SUSTAIN
VERSUS ESG PEERS3

Source: FactSet, MSCI ESG, Morgan Stanley Investment Management.

1 All interactions between International Equity Team portfolio managers and company management or non-executive board members from January 1, 2021 - June 30, 2021 where material E, S, or G factors were discussed. Data updated annually.

2 Trucost data as of June 30, 2021 for the Morgan Stanley Global Sustain representative account. Trucost defines a portfolio’s carbon intensity as the carbon emissions (Scope 1 and 2) of a portfolio per $1 million invested or per $1 million of portfolio companies’ sales. The portfolio-level statistics show the weighted average carbon intensity (WACI). Global Sustain seeks to achieve a GHG emissions intensity that is significantly lower than that of the reference universe (which is defined, only for the purposes of comparing GHG emissions intensity, as companies of the MSCI AC World Index that have a market capitalisation greater than US$5 billion).

3 ROOCE (Return on Operating Capital Employed) = EBITA (Earnings Before Interest, Taxes and Amortization)/PPE (Property, Plant,Equipment) + Trade Working Capital (excludes goodwill), last twelve months (LTM), Ex-Financials. EBIT Margin Stability is (1-(std deviation)/mean))10 year average. Data as of June 30, 2021.

Source: FactSet, MSCI ESG, Morgan Stanley Investment Management.

1 All interactions between International Equity Team portfolio managers and company management or non-executive board members from January 1, 2021 - June 30, 2021 where material E, S, or G factors were discussed. Data updated annually.

2 Trucost data as of June 30, 2021 for the Morgan Stanley Global Sustain representative account. Trucost defines a portfolio’s carbon intensity as the carbon emissions (Scope 1 and 2) of a portfolio per $1 million invested or per $1 million of portfolio companies’ sales. The portfolio-level statistics show the weighted average carbon intensity (WACI). Global Sustain seeks to achieve a GHG emissions intensity that is significantly lower than that of the reference universe (which is defined, only for the purposes of comparing GHG emissions intensity, as companies of the MSCI AC World Index that have a market capitalisation greater than US$5 billion).

3 ROOCE (Return on Operating Capital Employed) = EBITA (Earnings Before Interest, Taxes and Amortization)/PPE (Property, Plant,Equipment) + Trade Working Capital (excludes goodwill), last twelve months (LTM), Ex-Financials. EBIT Margin Stability is (1-(std deviation)/mean))10 year average. Data as of June 30, 2021.

 

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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 value of securities owned by the portfolio will decline. 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 strategy. Please be aware that this strategy may be subject to certain additional risks. Changes in the worldwide economy, consumer spending, competition, demographics and consumer preferences, government regulation and economic conditions may adversely affect global franchise companies and may negatively impact the strategy to a greater extent than if the strategy's assets were invested in a wider variety of companies. 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. The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed markets. Non-diversified portfolios often invest in a more limited number of issuers. As such, changes in the financial condition or market value of a single issuer may cause greater volatility. Illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). ESG strategies that incorporate impact investing and/or Environmental, Social and Governance (ESG) factors could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. As a result, there is no assurance ESG strategies could result in more favorable investment performance.

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 appropriate 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.

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The MSCI All Country World Index (ACWI) is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The MSCI World Index is a free float adjusted market capitalization weighted index that is designed to measure the global equity market performance of developed markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends. The index is unmanaged and does not include any expenses, fees or sales charges. It is not possible to invest directly in an index.

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

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