Morgan Stanley shakes up its global dividend portfolio
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Morgan Stanley is making some moves in its model for income-focused investors. 
It is adding two new positions with Rio Tinto (NYSE:RIO) and Smith & Nephew (SNN), swapping out Amgen (AMGN) and the iShares MSCI Hong Kong ETF (EWH).
"We are adding a position in Rio Tinto for three reasons: 1) Chinaâs high likelihood of announcing a stimulus should support commodity demand; 2) RIO has a best-in-class balance sheet and underappreciated earnings power; and 3) RIO trades at an attractive valuation, offering a current spot free-cash-flow yield of 9%," strategist Kevin Demers wrote in a note.
"We are adding a position in Smith & Nephew for three reasons: 1) self-help potential; 2) elective procedure volume recovery; and 3) attractive valuation," Demers said.
"EWH has high exposure to Chinese financials; we are replacing it with a materials & mining company with high exposure to China, which could benefit from any easing conducted by the Chinese government to help stimulate Chinaâs economy, and ultimately from a rebound in global economic growth," he added.
Amgen is being removed as Morgan Stanley is no longer able to provide a rating on that particular stock (it did not say exactly why).
In addition to those moves, Morgan Stanley is increasing weights in TotalEnergies (TTE) and the WisdomTree Emerging Markets High Dividend ETF (DEM) and cutting the weight in Novartis (NVS).
The entire portfolio stands at:
Communication Services
Verizon (VZ)
Consumer Staples 

Diageo (DEO)
Coca-Cola (KO)
PepsiCo (PEP)
Procter & Gamble (PG)
Philip Morris (PM)
Unilever (UL)

Energy 
TotalEnergies (TTE)
Financials 

BlackRock (BLK)
JPMorgan Chase (JPM)
UBS (UBS)

Healthcare

AbbVie (ABBV)
CVS Health (CVS)
J&J (JNJ)
Medtronic (MDT)
Merck (MRK)
Novartis (NVS)
Pfizer (PFE)
Smith & Nephew (SNN)

Industrials 

Lockheed Martin (LMT)
Northrop Grumman (NOC)
RELX (RELX)

Info Tech 

Cisco Systems (CSCO)
IBM (IBM)
Qualcomm (QCOM)
SAP (SAP)
Taiwan Semi (TSM)

Materials 

Air Products & Chemicals (APD)
Rio Tinto (RIO)

Real Estate 

Crown Castle (CCI)
Realty Income (O)

Utilities 

American Electric Power (AEP)
Exelon (EXC)

Funds

WisdomTree Emerging Markets High Dividend ETF (DEM)
iShares MSCI Europe Financials ETF (EUFN)
iShares MSCI South Korea ETF (EWY)

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