Morgan Stanley

Morgan Stanley Investment Management’s Applied Equity Advisors Team Launches Three New Equity Funds

Jun 20, 2016

Factor-based approach with a dynamic fundamental overlay to drive high active share investing

New York —

Morgan Stanley Investment Management announced the launch of three new funds: U.S. Core Portfolio, Global Core Portfolio, and Global Concentrated Portfolio, making the Applied Equity Advisors (AEA) investment team’s strategies available in a mutual fund format for the first time.

Led by Andrew Slimmon and Phillip Kim, who will act as portfolio managers for the Portfolios, the AEA team has been managing capital for over 15 years, focusing on high net worth and institutional investors in a separate account structure.  They are core equity managers who believe in a flexible approach to investing that provides an option for investors seeking a benchmark aware strategy that incorporates both quantitative and fundamental approaches to investing.

“We believe it’s important to be able to capture outperformance relative to the benchmark regardless of which style is in favor, value or growth,” said Slimmon.  “By combining a factor-based approach with a dynamic fundamental overlay to drive stock selection in a high active-share portfolio, we’re able to pivot from growth to value and back in real time.”

The team’s framework seeks to capture 70 percent of the market’s returns using factor-based investing, with a dynamic fundamental overlay to drive high active share investing for the other 30 percent.  AEA’s approach has created significant demand for the team’s products across vehicle structures, and the launch of these three new funds will support that demand.

Clients can expect the team to invest in a highly active portfolio of stocks with attractive valuations, above-average appreciation potential and competitive dividend yields.  The team uses a combination of quantitative models and fundamental research.

Through a network of financial advisors and retail clients, as well as institutional accounts, the AEA team already managed combined AUM of $5.1 billion across its strategies as of March 31, 2016.  The three new portfolios bring these opportunities to retail and institutional investors seeking a comprehensive and flexible way to capture returns in a mutual fund vehicle.

The portfolios vary by concentration and region: the U.S. Core Portfolio will generally consist of 30 to 60 stocks with the flexibility to invest up to 20 percent in non-U.S. equities; the Global Core Portfolio will generally consist of 30 to 60 stocks and typically invest at least 40 percent in non-U.S. equities under normal market conditions; and the Global Concentrated Portfolio will generally consist of approximately 15 to 20 high-conviction stocks and typically invest at least 40 percent in non-U.S. equities under normal conditions, but have greater flexibility with respect to regional and sector allocations than the Global Core Portfolio.

The AEA team is part of the Multi-Asset & Solutions business at Morgan Stanley Investment Management, and the firm is committed to building out the team’s platform. “Morgan Stanley Investment Management is a client-oriented organization that develops products to deliver solutions and performance to our clients, and we believe that the AEA team has the expertise to truly understand what investment products address our clients’ needs,” said Jacques Chappuis, Co-Head of the Solutions & Multi-Asset Group. “These newest strategies broaden our offering to provide concentrated and core products that are in high demand.”

Morgan Stanley Investment Management, together with its investment advisory affiliates, has more than 590 investment professionals around the world and $405 billion in assets under management or supervision as of March 31, 2016.1  Morgan Stanley Investment Management strives to provide outstanding long-term investment performance, service and a comprehensive suite of investment management solutions to a diverse client base, which includes governments, institutions, corporations and individuals worldwide.

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, wealth management and investment management services.  With offices in more than 43 countries, the firm’s employees serve clients worldwide including corporations, governments, institutions and individuals.  For further information about Morgan Stanley, please visit

1Morgan Stanley Investment Management (“MSIM”) is the asset management business of Morgan Stanley. Assets are managed by teams representing different MSIM legal entities; portfolio management teams are primarily located in New York, Philadelphia, London, Amsterdam, Hong Kong, Singapore, Tokyo and Mumbai offices. Figure represents Morgan Stanley Investment Management’s total assets under management/supervision.

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 portfolio’s/fund’s relative outperformance.

U.S. Core Portfolio, Global Core Portfolio, and Global Concentrated Portfolio are a separate series of the Morgan Stanley Institutional Fund, Inc. fund family.

There is no assurance that a mutual fund will achieve its investment objective. Mutual funds are subject to market risk, which is the possibility that the market values of securities owned by the fund will decline and that the value of fund shares may therefore be less than what you paid for them. Accordingly, you can lose money investing in these Portfolios. Please be aware that these Portfolios may be subject to certain additional risks. In general, equities securities’ values also fluctuate in response to activities specific to a company. 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.

Investments in foreign markets entail special risks such as currency, political, economic, market and liquidity risks. Illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). 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. 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.

Please consider the investment objective, 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 or call 1-800-548-7786. Please read the prospectus carefully before you invest or send money.

Morgan Stanley Distribution, Inc.


CRC 1523116 Exp. 06/16/2017

Media Relations: Lauren Bellmare, 212.761.5303

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