Understanding the Impact of a Floating NAV on Money Market Fund Investments
 

Floating NAV money market funds require investors to consider and track different metrics when evaluating their holdings. When analyzing the performance of these funds, it is important to look at both income and price fluctuations, viewing these in a total return framework. The key concept is the tradeoff of NAV stability versus a potential for a higher return.

This tool is designed to help investors understand the potential risks and rewards of investing in Stable NAV funds versus Floating NAV funds by providing investors with the ability to analyze various yield and NAV movement scenarios. Please contact your Morgan Stanley Investment Management Relationship Manager with any questions.

Your hypothetical initial investment amount
10
2,000
 
The yield of stable NAV investment product
0.00
3.00
The yield of floating NAV investment product
0.00
3.00
 
The NAV at purchase date (only applicable for floating NAV investment product)
0.9950
1.0050
The NAV at redemption date (only applicable for floating NAV investment product)
0.9950
1.0050
 

This tool is provided for illustrative purposes only regarding the potential results given assumed rates of rate and NAV fluctuations. These are hypothetical and are not meant to depict the performance of specific investments.

There is no assurance that the hypothetical investment scenarios shown will be attained.

This webpage has been provided solely for information 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 hypothetical scenarios presented are based on the information you have provided and have not been based on a consideration of any individual client 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.

Income is based on a simple interest calculation with dividends being paid out in cash and not reinvested.

Net Asset Value (NAV) is the dollar value of a single mutual fund share, based on the value of the underlying assets of the fund minus its liabilities, divided by the number of shares outstanding. It is calculated at the end of each business day.

STABLE NAV FUNDS
You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Funds may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Funds’ liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Funds’ sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

FLOATING NAV FUNDS
You could lose money by investing in the Fund. Because the share price of the Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Funds’ sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

Please consider the investment objectives, risks, charges and expenses of the portfolios carefully before investing. The prospectus contains this and other information about the portfolios. To obtain a prospectus, download one at www.morganstanley.com/liquidity or call 1.800.236.0992. Please read the prospectus carefully before investing.

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

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Please be aware that liquidity instruments may be subject to certain additional risks. Fixed-income securities are subject to the ability of an issuer to make timely principal and interest payments (credit risk), changes in interest rates (interest-rate risk), the creditworthiness of the issuer and general market liquidity (market risk). In the current rising interest-rate environment, bond prices may fall and may result in periods of volatility and increased portfolio redemptions. Longer-term securities may be more sensitive to interest rate changes. In a declining interest-rate environment, the portfolio may generate less income.

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