Morgan Stanley Growth Fund –Invest in sensex@9200
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Value buys - The intrinsic value is close to market price
Forum Discription: Companies that sit on a large amount of cash or investments or land bank plays or having high dividend yield can be categorised under this segment. These companies have lower downside risks
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=133
Printed Date: 03/May/2025 at 6:00pm
Topic: Morgan Stanley Growth Fund –Invest in sensex@9200
Posted By: basant
Subject: Morgan Stanley Growth Fund –Invest in sensex@9200
Date Posted: 09/Aug/2006 at 9:34am
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Morgan Stanley– Invest in sensex @9200 Morgan Stanley Growth fund (Rs 34.70) was launched in 1994. Since then the fund manager has done little to be evaluated with his Indian counterparts. While during this period the better known Indian mutual funds like Reliance Growth and Franklin India Prima fund have multiplied wealth by over 15 times Morgan Stanley has done so by only 4 times. The fund comes up for redemption in 2008 and that makes it more interesting. because redemptions will be on NAV prices. SO an investor buying the fund units today will see a notional appreciation of 20.83% in his portfolio which will be realized in 2008. The NAV (Rs 41.99) is at premium of 20.83% to the market price.(Rs 34.70). This means that a person buying into Morgan Stanley Growth fund would be getting into an index level of 9200.The fund units are normally traded in the exchanges and can be bought like any other stock. The key highlights for this fund are:
Portfolio as on June 30, 2006 BHEL Siemens HLL ABB ITC Infosys Technologies HDFC Bank HDFC M&M Cipla ACC HCL technologies Wipro PNB Aban Lloyd Concor NTPC Hotel Leela UTI Bank Aventis Gammon Rico Auto Marico Pantaloon Retail NDTV Sector Weightage (%) Basic/Engineering 22.44 FMCG 12.85 Financial Services 12.64 Technology 11.97 Construction 9.64 Automobile 5.81 Services 5.76 Health Care 5.30 Energy 4.41 Metals & Metal Products 1.61 Textiles 1.28 Chemicals 0.85 Automobile 5.81 Services 5.76 Recommendation: Morgan Stanley is a classic case where investors would be betting more on the fund redemption date rather then the fund manager’s investing skills. The Sharpe ratio (0.39) for the fund is well below the sector leaders and the annualized return since inception is also quite inferior when compared to the better boys in business. Never the less the unit offers excellent scope for an investor with a two year perspective and he could do well by shifting more then 20% of his large cap portfolio into this stock.
Source: Media reports and valueresearchonline. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Replies:
Posted By: go4lalit
Date Posted: 28/Aug/2006 at 11:14am
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In the market, there is reason for everything. If a stocks trades at high PE, there is high optimism and if a stock does not move there is a reason. Like HPCL/BPCL.. If a stock trades at a discount, there is a reason. We make money when we cross the expectations.
The point I am trying to make is, what can be the reasons the "Morgan Stanley Growth Fund" trades at such a discount, when they have visibility.
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Posted By: basant
Date Posted: 28/Aug/2006 at 11:42am
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Morgan Stanley has been a disaster when it has come to managing the fund. Over the past 13 years this fund has grossly under performed its peers. So while Reliance Growth Fund Reliance Vision Fund and Franklin India Prima Fund have multiplied wealth 22 times, 16 times and 18 times respectively Morgan Stanley has been able to do it only four and a half times. The historical baggage weighs heavily on its shoulder. The NAV value is real but investors cannot encash it (it will be redeemed in 2008) but unlike a http://www.theequitydesk.com/forum/forum_posts.asp?TID=128 - Tata Investment which will never sell its holdings Morgan Stanley will have to redeem at NAV based prices.
Now if the market were to continue its one sided uptrend people might not make an incremental return in Morgan over the best Indian mutual funds since the fund's past history shows little in this regard. A combination of these plus general investor allergy for lock in funds makes up for the discount. But since the whole 17% NAV premium to Market price cannot be answered there lies the opportunity for the patient long term investor. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
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Posted By: go4lalit
Date Posted: 29/Aug/2006 at 12:28pm
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Even if it trades at 17% discount, It makes sense if someone beleifs that other fund manager will not outperform Morgan Stanley Growth Fund by more than 17% in Two years.
Also here we are trying to time the market, If the month where the redemtion is to be done becomes like May/06, it will be disaster to investors. Also redemption of 2400 crores will have some impact on the stocks. This is the disadvantage of all close ended funds.
These are reasons for this to trade at discount. This discount will narrow down as the fund move towards redemtion.
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Posted By: basant
Date Posted: 29/Aug/2006 at 12:41pm
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Generally the stocks are not sold and the fund just becomes open ended so ther redemption pressure is curtailed to a very large extent. Also the fund managers need not sell the full Rs 2400 crores in one day they would start selling 2 months ahead so it would work out to Rs 50 crores a day which any large cap stock can absorb. Now if that month is like May 2004 then either investors can just hang about or buy other stocks with that money since everything else will fall in value. Actually if it is like May 2004 the 17% premium will work in your favour in capping the downside.
The discount will narrow down but investors who have sufficently large exposure to large caps can move 20% of their large cap portfolio into this fund. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: reetesh
Date Posted: 09/Sep/2006 at 2:03am
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I am sorry about my stupidity, I should have posted my ABN view on that discussion only... But Mr. Basant suppose market is at 8000 or any index level which is below then what it is today even then they will redem it at 40.9 level if that be the case then sounds good but if it is not the case then I dont think it makes that much of sense.. ------------- When going gets tough, that’s when tough (people) gets going. |
Posted By: basant
Date Posted: 09/Sep/2006 at 8:29am
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No when the market falls the NAV will also fall but investors would have bought it at Rs 34.70 or eabouts so there is a greater cushion for the NAV since an investor who waits for 2 years gets that premium discount which ensures that he shall break even even if the market falls by 15- 18%. On the upside he will take in all the gains.
MSGF has gone up in the past 3 weeks! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 24/Jan/2007 at 11:58pm
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Basant jee
If one is bullish on India as an economy and also the markets, should one invest in MSGF even at current level of 46 to 47?
Would you kindly take out some time and study their latest portfolio to post your updated views.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: xbox
Date Posted: 24/Jan/2007 at 4:57am
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Since last 3 years I have beeing thinking about MSGF. Sometimes in favor and some times against. Needless to say I am/was confused. Mass redemption in 2009 is almost certainty, which will definitely affect it's return capability but passing-off 17-20% discount is also very hard to digest. Personally I think we can avoid this fund. It has no great past and of course future is quite shaky except current discount. One can find better Managed fund. If we take a note of difference between best performing and not-so-worst (average) performing fund, then we will never think of current discount from MSGF. Basant jee, That Sandeep sbarwal is lead fund manager of JM eq and JM emerging leader. Can you suggest any contrarian bet on Sandeep ? ------------- Don't bet on pig after all bull & bear in circle. |
Posted By: basant
Date Posted: 24/Jan/2007 at 8:46am
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Sandeep Sabrahawal was earlier with SBI and he really sent the NAV's to the skies.ALso allegedly tainted in the 2000 scam! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 17/Apr/2007 at 4:57pm
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the morgan stanley growth fund has added pantaloon retail to its portfolio it forms more than 1% of the fund others added are bharthi, praj, and tv 18 none of these stocks were presnt last yr ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 17/Apr/2007 at 5:05pm
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Interesting. I think they bought Tv18 at rs 650 in the QIP and so did DSP Merill Lynch - this is from unconfirmed information. Where did you see their March portfolio? Is it out?
Pantaloon was added at Rs 415 in the QIP - company confirmed in an email to me some time back. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tigershark
Date Posted: 17/Apr/2007 at 5:24pm
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the porfolio is available inall the pink pages today try et for starters although tv18 is just 0.71 but bharthi is 3.8 ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 17/Apr/2007 at 7:03pm
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I just saw that. Seems to be a classy portfolio and an ideal position for people to park their allocated funds for large cap investments.The logic remians the same as before. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: stockaddict
Date Posted: 18/Jul/2007 at 9:28pm
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Hi all,
I'm a new Memer and joined TED today. I just want to know the opinion of Members on Investing in Morgan stanley growth fund as it is currently available at a discount of about 12% in secondary market(Rs 49.80 vs around Rs 56.50 NAV) and is due for redemption in Feb 2009 which is only one and a half year away. So if you buy it today you get a downside cover and a bonus gain if markets continue to rise.
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Posted By: basant
Date Posted: 18/Jul/2007 at 9:41pm
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Without doubt it is a no brainer buy if you are invested in large caps! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kg
Date Posted: 10/Aug/2007 at 5:11pm
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hi basantji
while speaking to a friend in MF wrt to this fund , he told me to check out the unamortised launch and other expenses and said to check out if it is material - was trying to collect the info but was not able to figure out ...can u pl help .
regds
Krishna ------------- Lets rock |
Posted By: basant
Date Posted: 10/Aug/2007 at 5:29pm
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Should not be significant. Will have to check valueresearchonline.com but as per SEBI norms they cannot keep amortised expense without charging it tro NAV on daily basis.' ALso such expense is charged in 5 years here MSGF has been more then 13 years in existance so it should be charged already. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: sureshb
Date Posted: 10/Oct/2007 at 9:04pm
| nav of morgan stanley is 63.5.fund to mature in feb 2009.if sensex reaches to 25000 by feb 2009 as expected by everyone,morgan stanley's nav will be atleast 90.present market price is 56-57. purchasing it now should fetch about 50% in 15 months. |
Posted By: sureshb
Date Posted: 10/Oct/2007 at 9:43pm
| website of morgan stanley growth fund is www.msgfindia.com |
Posted By: xbox
Date Posted: 10/Oct/2007 at 5:44am
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nav of morgan stanley is 63.5.fund to mature in feb 2009.if sensex reaches to 25000 by feb 2009 as expected by everyone,morgan stanley's nav will be atleast 90.present market price is 56-57. purchasing it now should fetch about 50% in 15 months
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Reaching to 25K, index will give 32% returns and midcap index could give 70-80% return and TED XI could give triple digit returns.
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Posted By: stockaddict
Date Posted: 15/Oct/2007 at 6:23pm
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The sensex has reached 19000 today and morgan stanley closed at 57.85,NAV should be 66 today. I don't know whether the sensex can reach 25000 by Feb 2009 but if (and a big If) you get a 15 % correction it makes great sense to buy it then and with less than an year and a half remaining you can make decent returns with limited downside risk due to the cushion provided by discount to NAV while buying from market. I feel only good results can sustain the current unidirectional movement in sensex otherwise a big correction is on cards. |
Posted By: basant
Date Posted: 15/Oct/2007 at 6:28pm
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The portfolio is also very well laid out and I woudl second that opinion. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: PrashantS
Date Posted: 15/Oct/2007 at 8:24pm
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i know one thing that whenever people want a correction or expecting one...corrections never happen.....but it is scary ..25000 may be possiible ........1000 points these days are coming so fast Basantji are things similar to 2000 |
Posted By: basant
Date Posted: 15/Oct/2007 at 8:29pm
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No. people are cautious bull mkts do not end in when investors are cautious. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: tyler_durden
Date Posted: 15/Oct/2007 at 8:30pm
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look at t from %age points ... we had a big rally of close to 60% in sensex earlier also with minor corrections of 1-2% coming in between before we had a mayhem....so it is still 35% and we can go up a lot from here.... ------------- If you aren't fired with enthusiasm, you will be fired with enthusiasm. |
Posted By: tyler_durden
Date Posted: 15/Oct/2007 at 8:30pm
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do they end when they re euphoric  ------------- If you aren't fired with enthusiasm, you will be fired with enthusiasm. |
Posted By: tigershark
Date Posted: 15/Oct/2007 at 9:58pm
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yes very euphoric in your office provided you are not astockbroker or not in a stockbroking office everyone will be discussing shares, the taxi driver in mumbai will aply for ipos, you will get tips from the most unlikely of sources, you will hear of stories of how people have changed their jobs and have become investors, you will run out of money buying magazines describing the euphoria, having said that keep an eye on global risk appetite,that could change if funds either discover a new mkt or the fed stops printing ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: tigershark
Date Posted: 15/Oct/2007 at 10:14pm
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to give you apossible example of global credit risk, citigroup today has said that credit losses will plague the financial mkts for the rest of the year.us stocks have already had the largest fall this month.citigroups net is down 57% this qrt, if this noise now gets bigger and other large banks join in then global euphoria can becom cautious, we are going up because of global fund manager euporia rather than domestic euphoria.let us hope that citi warning is not that serious ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: Mohan
Date Posted: 15/Oct/2007 at 10:16pm
Any guarantes that it will not convert into a open ended fund ? This way not everybody will redeem. Redeeming the whole corpus under current situation will need planned divestment upto Feb 2009. MSGF cannot sell everything on last day to redeem units. ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: xbox
Date Posted: 15/Oct/2007 at 5:47am
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Any guarantees that it will not convert into a open ended fund ? This way not everybody will redeem
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It will be converted into Open ended MF. It is upto unit holders to decide on buy/sell. Their redemption cycle could be longer , as it was created 15 years ago and that time policies were quite different from now.
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Posted By: deveshkayal
Date Posted: 15/Oct/2007 at 11:07am
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5% in Infy is the only negative i see in the portfolio. I guess IT stocks will be trimmed after seeing the results. Ruchir does seem a smart manager. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: stockaddict
Date Posted: 19/Oct/2007 at 3:52pm
| Converting MSGF to open ended fund after Feb 2009 seems logical move; even otherwise they only got one fund if I am right. That will provide the exit route at NAV rates unlike now where it is at a discount to NAV. I was wondering in my previous post that it makes sense to buy it if the market falls and it has indeed fallen by about 10%. Let us hope some clarity emerges on P Notes issue though there is too much uncertainity right now. I am tracking it (currently trading @ 55.5 vs 63.61 Nav on Oct 18). Personally in the even of market falling further 10% and a price around 50-52 I would be comfortable in picking it up and holding till Feb 09. |
Posted By: stockaddict
Date Posted: 19/Oct/2007 at 4:05pm
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Prashant,
we should have seen the correction coming, only moot point was when(will it) and what(will cause it) after going to as low as 13700 intra day in Aug BSE rushed to 19000 in 45 days!! In any case the rise was to fast and too quick to make people uncomfortable. It could have been the world markets, some scam , slowdown in earnings or regulatory action that would end the party.I was reminded of Wipro in tech boom ; once i remember it was on circuit everyday for 9-10 days at a strech that too in the last leg of that IT boom evn at 100+PE. That was the way REL, Relinfra, RPL, RNRL etc were moving. I was 200 short on nifty on 16th Oct @5668 and squared off next morning around 5275 but not even in my wildest dreams I had hoped for such a nasty correction! It's all a matter of risk reward ratio if you chase momentum too long you are going to be caught on the wrong foot at some point. Buy low sell high and wait for the opportunity still works I guess and that is my takeaway.The challenge is to live up to that and hope we can implement it religiously.
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Posted By: agrawalr
Date Posted: 10/Dec/2007 at 3:56am
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Dear Investors You must be knowing that Morgan S Growth Fund is a close ended fund will be closing on Feb 2009. As with any close ended fund the discount reduces as the redemption date comes closer. Till last year we were getting 30% discount to NAV, till last few months 15% and today around 12%. If we see event at current price 12% discount is 13% return over a period of 14 months. Which is around 11-12% CAGR. Now if NAV doesn't go up one can get 11%, if the stocks in portfolio do bad - then one can loose upto 10% and if the stocks put average performance then we can expect 20-25% return in a year. This fund is very conservative and close ended fund becomes extra conservative towards the end. This should be more or less in-line with the sensex. Those who are happy with 20-25 upside and 10% downside can go for this even at today's rate. Somehow I don't believe much on entering on correction as the NAV will also correct but discount would remain same. Except it would reduce the downside risk as true for any other stock investment. But timing the market has never been easy. |
Posted By: basant
Date Posted: 10/Dec/2007 at 7:07am
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Absolutely agree on that. This is a must buy for people interested in large caps.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: np50
Date Posted: 17/Dec/2007 at 5:57pm
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basant sir. Any suggestions on the recents NFO's icici rela estate, DBS Chola small cap equity and kotak indo world infra. they are are closed ended. Are they worth buying or should i go for some other MF's.
regards
Nitesh
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Posted By: basant
Date Posted: 17/Dec/2007 at 6:46pm
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Old wine in new bottle avoid packaged food and buy the unpacked Rel growth, vision, stan chart premier, pru icici emerging star. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kulman
Date Posted: 06/Feb/2008 at 11:54am
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http://www.dnaindia.com/report.asp?newsid=1149518 -
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: akshayapandey
Date Posted: 05/Apr/2008 at 12:15pm
| In the current market scenario, when one is more concerned abput downside reather than uypside..this fund is a good investment..still available at a discount of about 8% to its nav.so in effect you are buying into market at 8% lower rate..So it is a good buy at current levels for anyone willing to invest with a perspective of about one year.. |
Posted By: kulman
Date Posted: 01/Dec/2008 at 7:34am
| http://www.bseindia.com/qresann/news.asp?newsid=%7B5B6F43AB-4585-459D-8DFB-003CB3AAEC0D%7D¶m1=1 - |
Posted By: stockaddict
Date Posted: 01/Dec/2008 at 10:01am
| If nifty falls to 2100 or so and MSGF still gives a discount of around 8% or so it can be bought as the portfolio is consisting of largecaps mainly.After Dec 15 one can review the situation again. |