Morgan Stanley Mutual Fund Investors Won't Be Happy About This

Facebook IPO

Photo: Julia La Roche for Business Insider

Morgan Stanley has taken a lot of heat for its handling of the Facebook IPO.  Ever since the company went public three months ago, the stock has fallen 48 per cent.Obviously, Facebook investors are furious.

But some people probably don’t even realise they’re invested in Facebook because they are indirectly invested through mutual funds.

According the Wall Street Journal’s Aaron Lucchetti and Telis Demos, eight of the nine mutual funds with the most concentrated bets on Facebook are managed by Morgan Stanley.

Morgan Stanley Focus Growth Portfolio had 5.7% of its assets in Facebook shares as of July 31, according to Morgan Stanley’s website, while Morgan Stanley Institutional Opportunity Portfolio had 5.5% and Morgan Stanley Institutional Growth Portfolio had 4.8%. Others among the eight Morgan Stanley mutual funds range between 3.6% and 4.6%. Those proportions ranged between 5% and 7.8% on June 30, according to the most recent Morningstar data that included other fund families.

In June, a commentary on Morgan Stanley’s fund website noted that Facebook and other technology stocks were “the leading detractor in the portfolio this quarter,” attributing the decline in Facebook shares “to post-IPO volatility.”

The reporters note that these funds aren’t the largest institutional investors as measured by dollar value.

Read more at WSJ.com.

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