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Today the Morgan Stanley Institute for Sustainable Investing announced the Inclusive Growth Opportunities Index, a report and interactive tool for investors to explore technology-based opportunities that support inclusive economic growth – the first in a body of work that the Institute will produce to help drive private capital toward reducing inequality.

The Institute, with The Economist Intelligence Unit, developed this first of its kind index to offer investors an analytic tool on inclusive growth across four themes. The Index ranks 20 countries with compelling investment opportunities that enhance access to finance, education and healthcare, and reduce gender disparities. The opportunities can be analyzed and customized to investors’ specific interests and areas of impact.

Economic growth over the past several decades has led to advances in income, wealth and education for many across the globe. However not everyone has benefitted, and for some, the impacts have been negative. “As we seek to achieve an inclusive economy that encourages broad-based participation in the benefits of economic growth, there are many compelling opportunities for investors to achieve attractive financial returns while also solving some of the most critical societal problems,” said Audrey Choi, CEO of the Morgan Stanley Institute for Sustainable Investing.

All markets in the study present opportunities to drive inclusive growth through technology investments across four pillars of inclusion – finance, healthcare, education and gender. The report sheds light on several key findings:

• In the least developed markets, technology provides significant leapfrog potential, but investment impact is tempered by weak digital literacy and a lack of basic services, like energy, clean water and sanitation.
• More developed markets like Brazil and the United States display some of the highest levels of inequality, not just in income but also in terms of the cost of housing, healthcare and education.
• The United States experiences more income inequality than the U.K., the Netherlands or Australia, and is most similar to countries like China, Argentina and Turkey when it comes to the difference between the rich and the poor.
• Digital divides remain prevalent, even in advanced economies, such as Australia where around 40% of low-income people lack broadband access because of the cost. ¹ In Cuba only 6% of households have internet access, despite a well-educated population with a high level of technical ability.²

The Inclusive Growth Opportunities Index deepens understanding of the strength and character of investment opportunities connected to inclusive growth. It ranks 20 countries and comprises more than 150 metrics combined into 50 indicators, organized across six categories to identify investment opportunities in technology-based solutions to inclusive growth challenges.

“The analysis shows how technology can be used to improve opportunities for everyone and create a more inclusive society,” said Samantha Grenville, Senior Consultant at The Economist Intelligence Unit. “The Index provides data-driven insights that put investment considerations in the context of financial, healthcare and education needs as well as gender equity.”

The Economist Intelligence Unit worked closely with the Institute for Sustainable Investing and a panel of experts to develop the analytic framework, undertaking extensive research to develop the Index and rate and rank the countries. The Index is housed in an interactive dashboard tool that allows users to customize the parameters to reflect specific priorities and interests (e.g., risk appetite or regional focus), enabling users to develop unique and actionable intelligence.

This is the first of a two-part study with the Economist Intelligence Unit that seeks to equip investors with data-driven tools on major societal issues. Climate change mitigation will be addressed in a separate, forthcoming index and report covering the same 20 countries.

To explore the Inclusive Growth Opportunities Index in detail, click here.

The Morgan Stanley Institute for Sustainable Investing

The Morgan Stanley Institute for Sustainable Investing builds scalable finance solutions that seek to deliver competitive financial returns while driving positive environmental and social impact. The Institute creates innovative financial products, thoughtful insights and capacity building programs that help maximize capital to create a more sustainable future. For more information about the Morgan Stanley Institute for Sustainable Investing, visit www.morganstanley.com/sustainableinvesting.

Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, wealth management and investment management services. With offices in more than 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

The Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. As the world's leading provider of country intelligence, The Economist Intelligence Unit helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information about the Economist Intelligence Unit can be found at www.eiu.com or follow us on www.twitter.com/theeiu.

Disclosures:

The material contained in the Inclusive Growth Opportunities Index (“Index”) was developed by the Economic Intelligence Unit with input from the Morgan Stanley Institute for Sustainable Investing. The data contained herein may be obtained from a variety of sources and may be subject to change. Morgan Stanley and its affiliates disclaim any and all liability for the information, including without limitation, any express or implied representations or warranties for information or errors contained in, or omissions from, the information. Morgan Stanley and its affiliates, employees and officers shall not be liable for any loss or liability suffered by you resulting from the provision to you of the information or your use or reliance in any way on the information. References to Economic Intelligence Unit and/or third parties contained herein should not be considered a solicitation on behalf of or an endorsement of those entities by Morgan Stanley.

The information and/or projections generated by the Index regarding the likelihood of various outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Since the future cannot be forecast, actual results will vary from the information shown for the future, including estimates and assumptions. It is possible that these variations may be material. The degree of uncertainty normally increases with the length of the future period covered. As a result, Morgan Stanley cannot give any assurances that any estimates, assumptions or other aspects of the following analyses will prove correct. They are subject to actual known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those shown.

The Technology for Inclusive Growth Index is new and first of its kind without prior historical information or performance and may not be suitable for all investors. It should not be assumed that any transactions or holdings discussed were or will prove to be profitable. In general, indices are unmanaged. An investor cannot invest directly in an index. The index is shown for illustrative purposes only and does not represent the performance of any specific investment or strategy.

This material was published on May 18, 2017 and has been prepared for informational purposes only and 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 and is not a Research Report as defined under FINRA regulations. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. LLC (collectively, "Morgan Stanley"), Members SIPC, recommend that recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of the transaction. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.

This material contains forward looking statements and there can be no guarantee that they will come to pass. Information contained herein is based on data from multiple sources and Morgan Stanley makes no representation as to the accuracy or completeness of data from sources outside of Morgan Stanley. References to third parties contained herein should not be considered a solicitation on behalf of or an endorsement of those entities by Morgan Stanley.

International investing entails greater risk, as well as greater potential rewards compared to U.S. investing and may not be suitable for all investors. These risks include political and economic uncertainties of foreign countries as well as the risk of currency fluctuations. These risks are magnified in countries with emerging markets, since these countries may have relatively unstable governments and less established markets and economics. In addition, the securities markets of many of the emerging markets are substantially smaller, less developed, less liquid and more volatile than the securities of the U.S. and other more developed countries.

Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

© 2017 Morgan Stanley & Co LLC and Morgan Stanley Smith Barney LLC, members SIPC.

CRC 1800194 5/2017

¹ CCI (2014) Digital Futures Report.” Available at: http://apo.org.au/resource/cci-digital-futures-2014-internet-australia.

² Economist Intelligence Unit 2016 Calculations based on International Telecommunications Union (ITU) Data

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