FIXED INCOME INVESTING WITH MORGAN STANLEY

Transcription

1 FIXED INCOME INVESTING WITH MORGAN STANLEY

2 FIXED INCOME INVESTING WITH MORGAN STANLEY At Morgan Stanley, we bring the global resources of our investment banking, underwriting and trading organizations to support your individual style of investing. We can offer you access to superior resources and an unwavering dedication to helping you succeed in the fixed income marketplace. Whether you are looking to build a portfolio that provides enhanced discretionary income, minimizes income tax exposure, or provides a hedge against future movements in interest rates, you can be assured that the solutions we offer and the service we deliver will be supported by the full capabilities of Morgan Stanley. Our aim is clear: to be your first choice for fixed income investing. FIXED INCOME SOLUTIONS FROM MORGAN STANLEY Because of our vast resources, we are able to provide you with a wide array of both taxable and tax-exempt fixed income investments, from money market eligible fixed income investments to long-term bonds and structured investments. Our heritage as a leading investment house, combined with the sophistication and depth of our global resources delivered at the local level, provide a significant advantage to both our Financial Advisors and our clients. Access. Opportunity. Variety Asset allocation 1 decisions should be based on an appropriate balance of stocks, bonds and cash (or cash alternatives) within your portfolio. To help ensure that your portfolio is allocated among the securities that can most effectively meet your needs, it is important that you have access to the right range of investments. That s where Morgan Stanley can help. Our extensive primary and secondary inventory represents the full spectrum of the bond marketplace up to and including large multi-billion dollar issues with a global appeal. Custom Tailored Investments We understand that every investor has unique investment needs and goals, many of which require targeted solutions. Your Financial Advisor can work with you in designing creative solutions, enabling you to position your portfolio around your specific requirements. Choose from a wide range of fixed income investments: 2 Credit Sensitive Interest Rate Sensitive Alternative Investments Corporate Bonds (Investment Grade and High Yield) $25 Par Preferred Securities Convertible Securities Foreign Bonds Emerging Markets Debt Municipal Bonds Certificates of Deposit Federal Agency Securities Mortgage Backed Securities Treasury Securities Zero Coupon Bonds (Taxable and Tax-exempt) Cash Management Securities Structured Investments Precious Metals Foreign Exchange Your Morgan Stanley Financial Advisor can provide you with a wide range of educational literature discussing many of the investments listed above. 1 Asset allocation does not assure a profit or protect against loss in declining financial markets. 2 The above are general categories only; all investments shown may be characterized in more than one category. The alternative investments listed, including precious metals, foreign exchange and some structured investments, are not fixed income products. This material has been prepared for informational purposes only and is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This is not a research report and was not prepared by the Morgan Stanley research department. It was prepared by Morgan Stanley sales, trading or other non-research personnel. Past performance is not necessarily a guide to future performance. Please see additional important information and

3 TAKE ADVANTAGE OF SPECIALIZED SUPPORT Portfolio Positioning to Match Your Current and Future Needs Your Financial Advisor can provide you with additional support from the Morgan Stanley Portfolio Strategy Group for periodic review and analysis of your fixed income portfolio. These professionals can assist you in positioning your portfolio to match your current and future goals in ever-changing market conditions. Our complementary Fixed Income Portfolio Review is available to investors with fixed income portfolios in excess of $500,000. Advice on Interest Rate and Credit Sensitive Issues Our Special Situations Group focuses on interest rate and credit sensitive issues on both a macro and micro economic level. These professionals can provide you with insight on how these factors may impact your bond portfolio. Our fixed income specialists identify specific opportunities that may enhance your portfolio and make suggestions that reflect your individual investing parameters, based upon research and trading analysis. The Power of Morgan Stanley on Your Desktop; Online Access to Your Account ClientServ, Morgan Stanley s proprietary, secure internet platform, connects you to a wealth of research, market expertise, financial applications, market data and proprietary information, as well as detailed reporting on the positions in your accounts. In addition, ClientServ s integrated, custom-tailored suite of applications allows you to add information modules and quick links. ClientServ is an integral part of Morgan Stanley s commitment to provide you with a first rate level of service. Proprietary Solutions that Generate Predictable, Monthly Income Offered exclusively through Morgan Stanley, Municipal Bond Check-A-Month Portfolios (M-CAMPs ) are professionally structured investment portfolios, each consisting of six individual high-quality municipal bond issues. The bonds have staggered coupon payment dates that generate twelve consecutive monthly tax-exempt 3 interest payments, every year, over the life of the bonds. M-CAMPs trade in multiples of approximately $30,000 (six bonds at $5,000 each), plus accrued interest and are not managed; each investor owns, and may sell, each bond as he or she chooses, therefore each bond issue maintains its individual liquidity and there are no management fees. The Cash Management Roll Program The fixed income market provides a wide array of cash management securities ranging from commercial paper to U.S. Treasury bills and auction rate securities. 4 Morgan Stanley s Fixed Income Cash Management Group focuses on devising personalized cash management strategies 5 that offer our clients short-term fixed income investment alternatives. If you are looking to invest over $1 million in short-term debt, the roll program can be utilized to automatically reinvest principal amounts coming due in your Morgan Stanley brokerage account. Ask your Financial Advisor for more information on this program. A leader in the financial services industry, Morgan Stanley has long been known for its sound business principals, financial strength and tradition of helping investors build, manage and preserve financial wealth. 3 Municipal bonds are generally federally tax-exempt. Typically, state tax-exemption applies if securities are issued within one s state of residence. Likewise, local tax-exemption applies if securities are issued within one s city of residence. Some bonds may be subject to the alternative minimum tax (AMT). 4 A full and complete description of Morgan Stanley's Material Auction Rate Securities Practices and Procedures is available at or request a copy from your Financial Advisor. 5 Cash management strategies may be suitable for certain investors to help them better manage their short-term cash. The term cash management strategies does not imply that investments are managed by your Morgan Stanley Financial Advisor. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the Morgan Stanley research department. Please refer to important information and

4 GET VALUABLE INSIGHTS FROM OUR STRATEGISTS Morgan Stanley offers resources and strategy services designed to help keep our clients informed of product and sector-specific market trends, as well as the overall economic environment and the potential effects economic variables may have on the fixed income market. Publications To keep you informed about current market analysis, your Morgan Stanley Financial Advisor can provide you with valuable market insight and commentary from our economists and strategists via market commentary periodicals: Fixed Income Strategy Review & Outlook Produced by our senior fixed income personnel, this monthly publication focuses on the fixed income market, the economy and technical analysis. Monthly Interest Rate Outlook Wondering which direction interest rates will go? Our strategist assesses factors that may affect the bond market in the coming month. Municipal Bond Monthly Our newsletter delivers comprehensive, thoughtful analysis and insights on current events and economic trends that could potentially impact the municipal market. Bond Allocator Quarterly Since each individual s personal needs, goals and tolerance for risk differ, our fixed income strategist has formulated a number of recommended fixed income portfolio allocation models. Portfolio guidelines are available for Conservative, Moderate, and Aggressive investors, as well as a tax-advantaged portfolio model for investors seeking to maximize tax-exempt income potential. These allocation themes are supported by a fundamental analysis of value in various fixed income products markets and an in-depth discussion of value on the maturity curve. Quarterly Flow of Funds Review Our quarterly publication reviews the Federal Reserve Board s Flow of Funds report, discussing the significant shifts in the debt market data and potential underlying rationales for these changes. Morgan Stanley s bond professionals provide valuable information to help clients assess investment risk on a broad range of debt, derivatives and related securities. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the Morgan Stanley research department. Please refer to important information and

5 WHY MORGAN STANLEY? The Expertise of Morgan Stanley Market capitalization of approximately $105 billion. 6 Credit rating of Aa3 by Moody s Investor Service and A+ by Standard & Poor s, among the highest in the securities industry. 7 Extensive secondary trading and underwriting capabilities in New York and San Francisco locations. Over 8,000 Financial Advisors with access to investments from a syndicated network of over 175 brokerage firms. Morgan Stanley s Fixed Income Highlights Broad securities inventory, generally representing more than 15,000 different bond positions daily Leading underwriter of: Corporate debt 8 Domestically issued debt 8 Global and international bonds 8 Investment grade debt 8 Municipal debt 9 $25 Par Preferred Securities 8 At Morgan Stanley, we recognize you have many choices. The advantages we offer as a leader in the fixed income marketplace have made us the preferred choice for many investors. Our goal is to earn your respect and build a strong and rewarding relationship. We do this through hard work, personalized attention and effective solutions and results. Through your Morgan Stanley Financial Advisor you will have access to the best resources, solutions and professional advice we have to offer. 6 Morgan Stanley 2 nd Quarter 2007 results. 7 Ratings shown are as of January 2007 and are subject to change. 8 Bloomberg, January Thomson Financial, Full year 2006 The market value of fixed income securities fluctuates. If bonds are sold prior to maturity, prices may be higher or lower than the original purchase price or maturity value. Circular 230: Morgan Stanley does not render advice on tax and tax accounting matters to clients. This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the Morgan Stanley research department. Please refer to important information and

6 Important Information and Qualifications This material was prepared by sales, trading or other non-research personnel of Morgan Stanley & Co. Incorporated (together with its affiliates, hereinafter Morgan Stanley ). This material was not produced by a Morgan Stanley research analyst, although it may refer to a Morgan Stanley research analyst or research report. Unless otherwise indicated, these views (if any) are the author s (if any author is noted) and may differ from those of the Morgan Stanley fixed income or equity research department or others in the firm. This material should not be viewed as advice or recommendations with respect to asset allocation or any particular investment. This information is not intended to, and should not, form a primary basis for any investment decisions that you may make. Morgan Stanley is not acting as a fiduciary under either the Employee Retirement Income Security Act of 1974, as amended ( ERISA ) or under section 4975 of the Internal revenue Code of 1986 as amended ( Code ) in providing this material. This material was prepared by or in conjunction with Morgan Stanley trading desks that may deal as principal in or own or act as market maker or liquidity provider for the securities/instruments (or related derivatives) mentioned herein and may trade them in ways different from those discussed in this material. The trading desk may have accumulated a position in the subject instruments based on the information contained herein. Trading desk materials are not independent of the proprietary interests of Morgan Stanley, which may conflict with your interests. Morgan Stanley may also perform or seek to perform investment banking services for the issuers of the securities and instruments mentioned herein. 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