For over twenty years, our unchanged investment philosophy for the global strategies we manage has been to own high quality companies with the potential to successfully compound over the long term. These companies compound by steadily growing while sustaining their high returns on operating capital. As investors, we persistently look to identify material risks or opportunities to this compounding, including environmental, social and governance (ESG) factors.
3 Reasons to Invest
Built on 25 years’ heritage of Quality investing, Global Sustain is our high-conviction, ESG-integrated global equity portfolio that is strong on engagement, light on carbon and built on quality.
Strong on engagement1
We engage directly — and often — with the management of companies we own. This includes systematic engagement with management on progress towards decarbonisation targets.
Read our latest Engage report >Read more on our Carbon Transition Engagement Program >
Meetings
and Engagements
Light on carbon2, 3
Global Sustain is a low carbon intensity portfolio, with around 20% of the carbon footprint of the MSCI AC World Index per $1m sales.
Read more on our Low Carbon Ambition >Tons
CO2E/$M Sales
Built on quality2,4
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.
Watch our High Quality, Low Carbon Investing videoGlobal Sustain versus ESG Peers
The value of the investments and the income from them can go down as well as up and an investor may not get back the amount invested.
Source: Factset, MSCI ESG, Trucost data, 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 – December 31, 2021 where material E, S, or G factors discussed. Data updated semi-annually.
2 Trucost data as of December 31, 2021 for the MSIF Global Sustain Portfolio. Updated semi-annually.
3 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 greenhouse gas (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).
4 Quality ratios are historical; valuation ratios shown are for the next 12 months. 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. Free cash flow yield is a financial ratio that measures a company’s operating free cash flow minus its capital expenditures per share and dividing by its price per share. Free cash flow yield ratio is calculated by using the underlying securities of the fund. December 31, 2021, updated semi-annually.
5 Funds included in peer group analysis: 30 largest global equity investment funds from FactSet and Morningstar databases with ESG, Environmental or Ethical focus, as defined by Morningstar, and where ESG considerations are reflected in the name of the fund.
The value of the investments and the income from them can go down as well as up and an investor may not get back the amount invested.
Source: Factset, MSCI ESG, Trucost data, 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 – December 31, 2021 where material E, S, or G factors discussed. Data updated semi-annually.
2 Trucost data as of December 31, 2021 for the Morgan Stanley Global Sustain representative account. Updated semi-annually.
3 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 greenhouse gas (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).
4 Quality ratios are historical; valuation ratios shown are for the next 12 months. 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. Free cash flow yield is a financial ratio that measures a company’s operating free cash flow minus its capital expenditures per share and dividing by its price per share. Free cash flow yield ratio is calculated by using the underlying securities of the fund. December 31, 2021, updated semi-annually.
5 Funds included in peer group analysis: 30 largest global equity investment funds from FactSet and Morningstar databases with ESG, Environmental or Ethical focus, as defined by Morningstar, and where ESG considerations are reflected in the name of the fund.
“Global Sustain is my high quality, low carbon portfolio. Dedicated and integrated ESG research is the only way to manage increasingly complex political, social and technological risks.”
Vladimir Demine
Head of ESG Research, International Equity Team
“Global Sustain is my high quality, low carbon portfolio. Active company engagement gives us the conviction we need to run concentrated high performance portfolios.”
Jill Ytuarte
Portfolio Specialist, International Equity Team
“Global Sustain is my high quality, low carbon portfolio. Your voice for encouraging global companies to speed up adoption of climate-friendly best practice.”
Alex Gabriele
Portfolio Manager, International Equity Team
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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.
INDEX DEFINITIONS
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 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.
Please consider the investment objectives, risks, charges and expenses of the funds carefully before investing. The prospectuses contain this and other information about the funds. To obtain a prospectus please download one at morganstanley.com/im or call 1-800-548-7786. Please read the prospectus carefully before investing.
Morgan Stanley Institutional Fund Inc. (MSIF) is an institutional mutual fund offering various active portfolios, including equity, fixed-income, international, emerging markets, real estate and growth.
Fund adviser MSIF is managed by Morgan Stanley Investment Management, Inc.
Morgan Stanley Investment Management (MSIM) is the asset management division of Morgan Stanley.
NOT FDIC INSURED | OFFER NO BANK GUARANTEE | MAY LOSE VALUE | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT A DEPOSIT
