Morgan Stanley is seeking to merge three of its smaller funds into larger offerings, according to documents filed today with the Securities and Exchange Commission. The three funds that would be merged, provided shareholders approve the proposal, are the Morgan Stanley S&P Select Fund, the Morgan Stanley Competitive Edge Best Ideas Fund and the Morgan Stanley Capital Growth Securities fund.
Morgan Stanley has proposed merging the $91 million S&P 500 Select fund into the firms $2 billion S&P Index fund, according to one filing. The Select fund has posted returns of negative 11.5% and negative 14.7% in 2000 and 2001, respectively, according to Morningstar.
The $852 million Competitive Edge fund would be merged into firms gigantic $10.73 billion Dividend Growth Securities fund. The Competitive Edge fund has also not performed well recently, down 18.1% in 2000 and 23.9% in 2001, according to Morningstar.
In addition, the $305 million Capital Growth Securities fund, which yielded returns of 0.8% in 2000 and negative 27.1% in 2001, according to Morningstar, would be merged with the Morgan Stanley American Opportunities Fund. That fund now stands at $7.16 billion.
Morgan Stanley could not be reached for comment by press time and information as to why the mergers are being proposed was scant. The boards of directors of each of the three funds voted today to recommend merging the assets. The shareholder vote will take place at meetings scheduled for June 19, according to the filings.