Review: Morgan Stanley ACE (Across Capitalisation Equity) Fund: Finance Trading Times

Review: Morgan Stanley ACE (Across Capitalisation Equity) Fund

Morgan Stanley Mutual Fund has come out with its open ended equity scheme Morgan Stanley A.C.E (Across Capitalisation Equity) Fund.

Price per Unit: Rs. 10 (inclusive of entry load of 2.25% - which means that the entyr load charges of 2.25% will be automatically deducted from Rs. 10 and remaining will be invested)

NFO Period: open from February 11 to March 10. The fund will reopen for ongoing transactions from April 2008.

The distinct feature of this fund that sets it apart from other conventional mutual funds is that along with equity investments, this fund will also invest a portion in equity derivatives.

Morgan Stanley claims that the fund house follows a ‘community of boutiques’ model for fund managers, which aims to ensure that each investment strategy is managed by a dedicated team with specific experience in that strategy. For instance, this scheme will be managed by a fund manager who specialises in selection of second line shares. God know what it means – atleast I cannot understand it.

Investing some part of money in equity derivatives will be good for hedging or risk management, however, as explained in this article about hedging, it comes at a cost. Therefore, one may gain substantially if he is in a hedged position, only if he is lucky; and may loose limited if he is unlucky. He may also miss-out on a major bull run due to the hedged position.

So nothing new in this fund as well. Same old claims, same old concepts with jazzy buzzwords and keywords. Investors may try their luck if interested to see if they can make something extra from the 2.25% entry load charges. Table of Contents
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