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geographic preferences. Each STEP7 represents a selection of hand-picked stocks that are chosen by PST and packaged into one unit that you can purchase in a single transaction, but you own each component stock individually.

STEP model portfolios are monitored for changes and occasionally rebalanced; any recommended change will be communicated to you by your Financial Advisor. It is then your decision to implement the recommended change or not. This dynamic investment process allows you to maintain full control of your investments, providing you with liquidity and flexibility in your investment decisions.

Options Options are often used by investors seeking alternative methods to meet their investment objectives such as income generation, speculation and risk management. Our dedicated team of specialists can work with your Financial Advisor to incorporate option strategies into your portfolio. Speak to your Financial Advisor to discover more about the opportunities and risks within the options8 market.

Structured Investments While sometimes classified as ‘alterative’ investments, structured investments, such as equity linked notes, often overlap with traditional holdings and as such may be classified within an equity allocation. Structured investments enable suitable investors to balance risk and reward in ways that may be difficult to achieve effectively with traditional investments. Your Financial Advisor can provide you with access to our full calendar of upcoming registered deals linked to a variety of asset classes.9

Exploring Special Situations At Morgan Stanley we recognize that your investment needs are often complex, requiring sophisticated investment solutions. Our Special Situations Group (SSG) can work with you and your experienced Financial Advisor to identify specific opportunities in the capital markets, within your particular risk parameters and investment goals, which may potentially enhance your portfolio. The group explores trade opportunities (both long and short positions) in multiple asset classes including fixed income, options, and equities, while taking into consideration both macro and micro-economic conditions. For sophisticated investors looking to invest in these markets, SSG may provide attractive investment ideas to consider for your portfolio.

Margin Borrowing: Leverage the Power of Your Brokerage Account Margin10 can be a powerful investment and financing tool. Borrowing money from Morgan Stanley in your brokerage account and using qualifying securities as collateral, can potentially increase your purchasing power. Using margin may provide both the benefits and the risks associated with investing leveraged money, which may include losing more than the initial investment; as such, margin is not for everyone. Speak to your Financial Advisor about opening a margin account.

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 equity 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.


Strategic Equity Portfolios (STEPs) are structured and monitored on an ongoing basis by members of Morgan Stanley’s STEP Portfolio Strategy Team and may be purchased in a single transaction as individual stocks. Periodically, changes to the portfolios are recommended; investors then decide whether the recommendation makes sense for their particular financial situation. After an investor purchases the STEP, the same stocks will remain in his or her account unless individual stocks are bought or sold in response to subsequent changes in the model STEP or as otherwise individually determined by the investor. Such transactions will incur applicable commission charges.


Options are not suitable for all investors. Before engaging in the purchase or sale of options, investors should understand the nature of and extent of their rights and obligations and be aware of the risks involved, including, without limitation, the risks pertaining to the business and financial condition of the issuer of the underlying security or instrument. Options investing, like other forms of investing, involves tax considerations, transaction costs and margin requirements that can significantly affect the profit and loss of buying and writing options. The transaction costs of options investing consist primarily of commissions (which are imposed in opening, closing, exercise and assignment transactions), but may also include margin and interest costs in particular transactions. Transaction costs are especially significant in options strategies calling for multiple purchases and sales of options, such as multiple leg strategies, including spreads, straddles and collars. If you are considering options as part of your investment plan, your Morgan Stanley Financial Advisor or Investment Representative is required to provide you with the “Characteristics and Risks of Standardized Options” booklet from the Options Clearing Corporation. You should not enter into options transactions until you have read and understood the Disclosure Document, and discuss transactions costs with your Financial Advisor or Investment Representative. Please ask your Morgan Stanley Financial Advisor, Investment Representative or call Morgan Stanley’s Options Help Desk at 1.800.877.8766 for a copy of the booklet.


An investment in Morgan Stanley Structured Investments involves risks, which can include but are not limited to: Fluctuations in the price, level or yield of underlying instruments, interest rates, currency values and credit quality, substantial loss of principal, limits on participation in appreciation of underlying instrument, limited liquidity, credit risk and conflicts of interest.


Margin can be very risky, and is not suitable for all investors. Before opening an account, you should fully understand the risks associated with margin. These risks include: You can lose more money than invested; You may have to deposit additional cash or marginable securities on short notice to cover market losses; You may be forced to sell some or all securities when there is a decline in account equity value; some or all of the securities may be sold without prior notice in order to maintain account equity at required maintenance levels.

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 qualifications at the end of this material.

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