MS Global Franchise Portfolio's Strategic Moves: A Deep Dive into Heineken NV's Significant ...

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Insights from the Latest N-PORT Filing for Q2 2024

The MS Global Franchise Portfolio (Trades, Portfolio), managed by Morgan Stanley Institutional Fund Global Franchise Portfolio Class I (MSFAX), recently disclosed its investment activities for the second quarter of 2024. Established on November 28, 2001, the fund is steered by a seasoned investment team that employs a rigorous, bottom-up stock selection process. This approach focuses on identifying high-quality companies characterized by sustainable, high unlevered return on invested capital (ROIC), robust free cash flow generation, and strong franchise value.

MS Global Franchise Portfolio's Strategic Moves: A Deep Dive into Heineken NV's Significant Reduction
MS Global Franchise Portfolio's Strategic Moves: A Deep Dive into Heineken NV's Significant Reduction

Summary of New Buys

During this quarter, MS Global Franchise Portfolio (Trades, Portfolio) expanded its portfolio by adding new stocks, including:

  • The most significant addition was CME Group Inc (NASDAQ:CME), with 39,131 shares, accounting for 0.28% of the portfolio and a total value of $7.69 million.

Key Position Increases

The portfolio also saw increases in several key positions:

  • Constellation Brands Inc (NYSE:STZ) saw an addition of 146,491 shares, bringing the total to 259,405 shares. This adjustment represents a significant 129.74% increase in share count, impacting the current portfolio by 1.38%, with a total value of $66.74 million.

  • Haleon PLC (LSE:HLN) had an additional 7,838,938 shares, bringing the total to 12,822,923. This adjustment represents a significant 157.28% increase in share count, with a total value of 52.17 million.

Summary of Sold Out Positions

The fund completely exited its position in:

  • Veralto Corp (NYSE:VLTO), selling all 164,652 shares, which resulted in a -0.5% impact on the portfolio.

Key Position Reductions

Significant reductions were made in several stocks, including:

  • Heineken NV (XAMS:HEIA) was reduced by 506,396 shares, resulting in an -80.22% decrease in shares and a -1.67% impact on the portfolio. The stock traded at an average price of 91.98 during the quarter and has returned -15.50% over the past three months and -11.68% year-to-date.

  • Philip Morris International Inc (NYSE:PM) was reduced by 339,386 shares, resulting in a -38.21% reduction in shares and a -1.06% impact on the portfolio. The stock traded at an average price of $97.77 during the quarter and has returned 21.64% over the past three months and 30.63% year-to-date.

Portfolio Overview

As of the second quarter of 2024, MS Global Franchise Portfolio (Trades, Portfolio)'s portfolio included 40 stocks. The top holdings were 8.86% in Microsoft Corp (NASDAQ:MSFT), 6.81% in SAP SE (XTER:SAP), 5.88% in Visa Inc (NYSE:V), 5.09% in Accenture PLC (NYSE:ACN), and 4.48% in Intercontinental Exchange Inc (NYSE:ICE). The holdings are mainly concentrated in 7 of all the 11 industries: Technology, Healthcare, Financial Services, Consumer Defensive, Industrials, Consumer Cyclical, and Communication Services.