HOPES for Concentrated Equity: A Multi-Strategy Approach

Morgan Stanley

Lisa Shalett

Research

24 Pages

Morgan Stanley’s white paper on derisking concentrated public equity positions walks through the options an investor has. Their HOPES Framework shares five potential courses of action that investors can take.

Key Takeaways

Concentration redefines risk: A few holdings can drive most portfolio volatility, even when the dollar weight feels manageable.
Behavior blocks action: Taxes plus inertia and regret aversion often keep investors stuck in a default hold posture.
Portfolio of solutions: Combining multiple strategies can reduce drawdown vulnerability while improving post tax risk adjusted returns.
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