MORGAN STANLEY AND THE MENTAL BLOCK Morgan Stanley Growth Fund was issued on 6th Jan 1994

and closes in just 3 days Q- Morgan stanley offers an exellent case study in investor education. What according to you went wrong and why ? Why is Morgan stanley story so important for investors? Ans:The following things went wrong for Morgan Stanley Growth Fund: The investors were not aware and buying the fund for wrong reasons. The investors failed to understand the NAV concept of fund , they didnt understand why it is trading at discounted price. It was a close ended fund and its aim and benefits for investors were not clear in public. A very large portfolio which was not transparent to investors.

All these things went wrong because Morgan Stanley didnt convey the right message to public that why should they go for this fund and what benefits are there in fund for them. These things went wrong because of a new concept which was not common with investors understanding, investors compared it with normal stock concepts.

The Morgan Stanley case study is important because: : The fund was intended for retail investors with an investment objective of long-term capital appreciation. And despite of poor initial performance the fund delevered 10.58% return on maturity. This encouraged the investors and opened path for new funds. : This case study introduced the investor awareness and NAV concept a necessary step before issuing any type of fund or scheme. The solution points to avoid such mistakes are: Right customer segmentation as per requirements of investor in future. Investor awareness before issuing. Transparency of funds portfolio and stragey for making profits should be mentioned in offer documents. Unique benefits of issued fund should be conveyed in investors.

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