Morgan Stanley Investment Management today announced the launch of its new Morgan Stanley Institutional Fund Trust (MSIFT) Ultra-Short Income Portfolio, a conservatively managed fund that may be appropriate for cash investors.
The reforms to SEC Rule 2a-7 which govern money market funds and are effective this October will require institutional Prime money market funds to operate with a floating net asset value (NAV) and face the possible imposition of liquidity fees and/or redemption gates. As a result of these reforms, investors in prime money market funds who are concerned about the potential imposition of liquidity fees and gates will be forced to re-evaluate their current cash investment strategies. Conservatively managed ultra-short funds are being considered by many cash investors as a potentially intriguing vehicle for cash investments.
“This is a member of a new category of funds, Conservative Ultra-Short,” said Jonas Kolk, Managing Director and Chief Investment Officer for Global Liquidity. “Because the ‘ultra-short’ category lacks specificity – with some funds managed very conservatively and others aggressively, with durations close to a year and credit quality that dips into the high yield space – `it is critical for investors to look under the hood of ultra-short funds to see how their investment engines run. Not all ultra-short funds are created equal.”
The MSIFT Ultra-Short Income Portfolio provides a compelling alternative for cash investors. It focuses on capital preservation and liquidity, has an initial NAV of $10.00 that may float, a maximum weighted average maturity of 90 days, a conservative investment approach, daily liquidity, a diversified portfolio, AAA/V1 rating1 and the same experienced and specialized team that manages the Morgan Stanley Institutional Liquidity Funds.
“In many ways, a very conservatively managed ultra-short income fund can provide great utility to a cash investor” said Fred McMullen, Managing Director and Head of Client Engagement for Global Liquidity. “We’re advising clients to expedite their analysis and expedite their decision-making timeframe, because a lot is going to change between now and October.”
The MSIFT Ultra Short Income Portfolio is not a money market fund and does not seek to maintain a stable net asset value.
Morgan Stanley Investment Management's Global Liquidity Solutions business offers a unique value proposition to its clients to navigate the evolving cash investment landscape – direct and easy access to a combination of expertise, resources and investment solutions, including money market, ultra-short and short duration products.
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. 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 www.morganstanley.com.
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 1-800-236-0992. Please read the prospectus carefully before investing.
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. Accordingly, you can lose money investing in these portfolios Please be aware that these portfolios 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. The Portfolio is more susceptible to any economic, business, political, regulatory or other developments that adversely affect issuers in the financial services industry than a fund that does not concentrate its investments in the financial services industry. See the Fund’s prospectus for complete details on risks.
CRC 1492765 05/16
1 As of 4/29/16, Fitch Ratings has assigned an 'AAA/V1' Fund Credit Quality Rating (FCQR) and Fund Volatility Rating based the fund's investment and credit guidelines, the portfolio's expected credit quality, maturities and diversification, and Morgan Stanley Investment Management Inc.'s capabilities as investment advisor.