STEPHEN CRANSTON: Morgan Stanley believes compounders are the most resilient in a downturn
These stocks are characterised by strong free cash flow, which is reinvested in innovation and marketing to stay relevant
It is a credit to Nedgroup’s multimanager unit that it incorporates two very different styles of asset manager in its global fund. It invests with a Morgan Stanley Investment Management team that picks its shares by focusing on dependable compounders, but also includes the more classical value approach of San Francisco-based Dodge & Cox.
Nic Sochovsky at Morgan Stanley says there are two ways to lose money on equities: either the multiple (p:e ratio) contracts, or the earnings go away. Morgan Stanley’s global franchise composite has provided a 14.1% annualised return since inception in 1996, well above the 6.4% for the benchmark MSCI World Index.