Morgan Stanley’s Latest Product Addresses Single Stock Risk

Morgan Stanley Wealth Management’s Global Investment Office (GIO) has launched the Equity Vulnerability Score, a proprietary tool that can help clients and the financial advisors who serve them measure and rank the susceptibility of U.S. stocks to potential future drops in value.

The firm says its new tool could help provide insights for investors, and especially for those who hold concentrated equity positions, which Morgan Stanley defines as five or fewer stocks making up more than 30% of the risk in a portfolio.

The Equity Vulnerability Score can help flag the likelihood that a stock may soon drop in value and can also be used to complement Morgan Stanley’s existing Tactical Equity Framework, which helps identify short-term opportunities to seek overall stronger performance.

“As a leader in both equity compensation and in providing guidance to founders, early-stage investors, and executives of publicly traded companies, we see this is a significant and often overlooked challenge for many of the clients our Advisors serve,” said Steve Edwards, senior investment strategist of Morgan Stanley Wealth Management. “And while it is natural to have an emotional attachment to a stock that you’ve watched grow over time, it can also pose an outsized risk. Morgan Stanley Wealth Management has been unwavering in helping to address this issue, and the vulnerability score puts another arrow in our quiver to continue to do just that.”