The underlying investment process for the funds will mirror that of the existing Global Balanced Risk Control (GBaR) strategy, which seeks to maintain a stable risk profile. The funds are the first in the GBaR range to incorporate environmental, social and governance factors.

The Global Balanced Fund will target a volatility range of 4 to 10 per cent, while the Global Balanced Defensive Fund will have a lower target volatility range of 2 to 6 per cent. Both funds will be managed by Andrew Harmstone, managing director and lead portfolio manager, and Manfred Hui, global head of client coverage. Both are based in London.

“The new funds will be based on our established GBaR process, which in our view is the most effective way for investors to participate in rising markets whilst providing strong downside protection,” said Harmstone.

“We expect the integration of ESG considerations into the process to further improve potential returns and enhance risk management.”

Registered in Luxembourg, the funds are not yet widely available for sale and are awaiting registration in various markets, the firm said.

Morgan Stanley Investment Management had $406 billion in assets under management or supervision as of 30 June 2016.