Portfolio solutions for a complex world
Multi-Asset Portfolio Solutions (MAPS) offers diversified investment portfolios that leverage Morgan Stanley’s award-winning research.
As of Friday, 21 June 2024 the Morgan Stanley MAPS Core Conservative Model, Morgan Stanley MAPS Core Balanced Model and the Morgan Stanley MAPS Core Growth Model (Models) will be exclusively available to Morgan Stanley clients.
MAPS is our latest evolution in managing your wealth. It is a series of professionally-managed, cost-effective investment portfolios with exposure to both domestic and global markets.
Each of our MAPS portfolios are designed to achieve consistent returns with lower volatility than investing in single asset classes, like Australian shares. This is achieved by delivering an actively-managed diversified portfolio that invests in Australian and international assets - including shares, listed property securities, fixed interest securities and cash.
Morgan Stanley’s Investment Solutions team builds the MAPS portfolios by drawing on insights from our research team. The team builds on models published by our research team and makes them available through a Separately Managed Account (SMA) structure for you to easily access.
Within an SMA structure, your portfolio is professionally managed, however you retain direct beneficial ownership of each of the underlying assets.
When you choose a MAPS portfolio through an SMA structure, you effectively outsource all portfolio construction, implementation and administration responsibilities and you receive detailed reporting on a monthly basis.
Our Investment Solutions team has a high level of conviction in the expertise of our Wealth Management Research team. Their investment philosophy is robust, flexible, built on leading insight and specifically aligned to the needs of Australian investors, with the overarching objective to optimise risk-adjusted returns through the cycle. Our research team believes there are several opportunities to add value during the investment process: appropriate asset allocation strategy, sensible active-passive decisions, quality manager selection and best practice portfolio construction and risk management.
Morgan Stanley Wealth Management Research’s strategic asset allocation (SAA) is at the foundation of every portfolio and a critical determinant of long-term risk-adjusted returns. As a result, they devote significant intellectual capital to its construction.
However, in keeping with the principle of flexibility they also place considerable emphasis on tactical asset allocation (TAA) as a source of value. As markets evolve, a responsive TAA is key to ensuring portfolios are appropriately positioned to capture opportunistic beta (the return delivered by market movements).
Our research team’s philosophy is to separate active/passive allocation decisions from manager selection as they believe it leads to better portfolio outcomes. Their work suggests that neither active nor passive managers are categorically better. Rather, their relative attractiveness depends largely on the investment environment. As a result, we recommend allocating opportunistically to active and passive strategies with the over-arching goal of achieving the most efficient portfolio implementation.
The potential for risk-adjusted return enhancement through solid manager selection has motivated Morgan Stanley to develop and enhance tools and processes targeted to deliver risk-adjusted value in constructing investor portfolios. Morgan Stanley has a comprehensive program for filtering and selecting quality fund managers to deliver exposure to each asset class. This includes quantitative tools for ranking fund managers and extensive qualitative due diligence to identify the select group of active managers most likely to deliver consistent outperformance.
Portfolios are constructed to synthesise asset allocation, active/passive and manager selection decisions. Our Investment Solutions team adheres to a strict portfolio construction methodology, which is founded in a deep understanding of investor needs, emphasises the importance of asset allocation, incorporates insight from a broad range of sources – both proprietary and external – and is acutely aware of the importance of risk management.
Outstanding historical performance
Built on Morgan Stanley’s award-winning research
Broad diversification across asset classes
International exposure
Active risk management
Regular research insight
Full performance tax and reporting
Robust security selection
Access to national presentations
Lower volatility
The MAPS portfolios are built on models published by the Wealth Management Research team. The research team’s Core Balanced Listed Model Portfolio has returned more than 10.1% per annum since inception (June 2012). This is 2.5% per annum more than the peer group average (Morningstar Australia Fund Multisector Balanced Category Average) after subtracting manager fees.
Source: Morningstar, Morgan Stanley Wealth Management Research. Results shown represent total return (including dividends). Past performance is no guarantee of future results. The portfolio is hypothetical and does not include actual trades; results do not include transaction costs/fees. Return data from 25 June 2012 to 31 December 2021. Morningstar Category Average (“peers”) is the Morningstar Australia Multisector Balanced Category Average. Performance is net of ICRs (indirect cost ratio).
Morgan Stanley’s award winning research department is made up of more than 600 analysts, economists and strategists operating out of 21 countries. For the seventh year in a row, we placed #1 in the Institutional Investor All Asia Research Team Survey.
Morgan Stanley Wealth Management Australia was recognised by the Institute of Managed Account Professionals (IMAP), the only industry body actively supporting Managed Accounts in Australia.
At Morgan Stanley, we firmly believe asset allocation is the most important determinant of portfolio performance over the long term and, as a result, our Wealth Management Research team dedicates a significant amount of intellectual capital to the process. Our Investment Solutions team capitalises on this work to construct MAPS portfolios that deliver a truly diversified global asset allocation with investments in equities, fixed income, currencies and commodities.
Australian shares make up less than 2% of the value of all the shares listed on global exchanges. If you add government and corporate debt, the Australian market shrinks to just 0.5% of the global pool of assets.
We believe that your portfolio benefits from owning a much broader range of assets. The MAPS portfolios provide access to global equities and global fixed income in addition to local assets.
Morgan Stanley Wealth Management Research uses tactical asset allocation to respond to the constantly evolving market and economic outlook, based on the data generated by Morgan Stanley’s global network of analysts, strategists and economists.
The research team monitors its models continuously and regularly recommends appropriate tactical positioning to our Investment Solutions team for consideration and implementation through MAPS.
When you’re invested in MAPS through SMA, you have access to regular updates from Morgan Stanley’s Wealth Management Research team which explain the latest thinking with regard to asset allocation and portfolio positioning. These updates go into detail regarding the rationale behind tactical asset allocation decisions and any portfolio moves to make it easy for you to be fully informed regarding your investments.
We believe a robust security selection process adds real value to portfolios. The key is identifying which managers will add value to the portfolio and which are likely to underperform. But that’s far from easy – looking at past performance alone is of limited value.
Morgan Stanley has a range of proprietary quantitative tools which our Wealth Management Research team uses to identify evidence of consistent added value, overarching quality, transparency, liquidity and cost-effectiveness.
Every quarter, our Wealth Management Research team conducts a series of presentations across Australia. As an investor in MAPS through the SMA structure, you have the opportunity to hear directly from the team regarding the decisions they are making which have direct relevance to your portfolio.
Investing in a single asset class (such as Australian shares) is inherently more volatile than diversifying your portfolio across a carefully selected range of asset classes. There is a trade-off, however, between volatility and returns. Diversification does not guarantee greater returns; it’s designed to deliver more consistent returns.
The rolling 12-month return chart below shows that a 100% Australian shares portfolio is noticeably more volatile than a balanced portfolio.
Source: Output generated using Morgan Stanley Wealth Management’s Asset Allocation Tool. Recommended Strategic Asset Allocation (SAA) weights are applied retrospectively and simulated returns are calculated assuming a historical investment in an index, rather than an underlying recommended ETF/Fund. See Asset Allocation Insights: SAA Part II: Long Term SAA Portfolios, 27 March 2017 for further details.
Please contact the Morgan Stanley Distribution Team at msmaps@morganstanley.com.