Morgan Stanley China A Share Fund, Inc. Announces Advisory Fee Reduction and Update on Performance-Related Conditional Tender Offer
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 01 2025
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Should l Buy CAF?
Source: Newsfilter
Fee Reduction Announcement: Morgan Stanley Investment Management will lower the annual advisory fee for the Morgan Stanley China A Share Fund from 1.25% to 1.15%, effective July 1, 2025.
Tender Offer Status: The conditions for a conditional tender offer have not been met, so no tender offer will occur at this time; performance has exceeded the benchmark index, and future assessments will be made every five years starting July 1, 2025.
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Analyst Views on CAF
Wall Street analysts forecast CAF stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CAF is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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0 Sell
Current: 17.932
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Current: 17.932
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About CAF
Morgan Stanley China A Share Fund, Inc. (the Fund) is a non-diversified, closed-end management investment company. The Fund's investment objective is to seek capital growth. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in A-shares of Chinese companies listed on the Shanghai and Shenzhen Stock Exchanges. The Fund also invests in warrants or other strategic transactions. The Fund also invests up to 20% of its assets in other types of investments, including B-shares of companies listed on the Shanghai and Shenzhen Stock Exchanges, H-shares of companies incorporated in mainland China and listed on the Hong Kong Stock Exchange, shares of red chip companies with controlling Chinese shareholders that are incorporated outside mainland China and listed on the Hong Kong Stock Exchange and other exchanges. The Fund's investment adviser is Morgan Stanley Investment Management Inc. and its sub-advisor is Morgan Stanley Investment Management Company.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Reaction: On Tuesday, the Shanghai Composite fell 0.3% to around 4,100, while the Shenzhen Component dropped 1.7% to 14,050, indicating cautious investor sentiment influenced by the unchanged interest rates and economic outlook.
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See More
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- Uncertain Income Source: The dividend amount may partially be a return of capital according to federal tax regulations, with final determinations made after the end of 2025, which could impact investors' tax planning and return expectations.
- Asset Management Scale: As of September 30, 2025, Morgan Stanley Investment Management oversees $1.8 trillion in assets, highlighting its significant strength and market influence in the global investment management sector.
- Commitment to Investor Services: Morgan Stanley Investment Management is dedicated to providing outstanding long-term investment performance and a comprehensive suite of investment management solutions to a diverse client base, enhancing its position in the competitive financial services market.
See More
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- Repurchase Program Initiation: The Morgan Stanley China A Share Fund's Board has approved a cash tender offer to repurchase up to 20% of its outstanding shares at 98.5% of NAV, set to commence on March 3, 2026, and end on March 31, 2026, unless shares are trading at a premium.
- Conditional Tender Offer Policy Change: The Fund has shortened the measurement period for its performance-related conditional tender offer policy from five years to three years, allowing for a tender of up to 25% of shares if performance underperforms the MSCI China A Onshore Index, enhancing investor appeal.
- Ongoing Repurchase Program: As of October 31, 2025, the Fund has repurchased 664,960 shares at an average discount of -17.87%, demonstrating its commitment to enhancing shareholder value, with plans to suspend market purchases during the tender offer period.
- Clear Investment Strategy: The Fund aims to invest at least 80% of its assets in Chinese A-shares under normal circumstances, reflecting its long-term commitment to the Chinese market and its goal of creating value through capital growth.
See More
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- 2026 Cash Tender Offer Plan: The Board of the Morgan Stanley China A Share Fund has approved a cash tender offer to repurchase up to 20% of its outstanding shares at 98.5% of the net asset value, set to commence on March 3, 2026, and end on March 31, 2026, unless the shares are trading above NAV.
- Conditional Tender Offer Policy Change: The Fund has shortened the measurement period for its performance-related conditional tender offer policy from five years to three years, allowing for a tender of up to 25% of shares if performance underperforms the MSCI China A Onshore Index, enhancing investor appeal.
- Repurchase Program Execution: From January 1 to October 31, 2025, the Fund repurchased 302,038 shares at an average discount of -16.57%, demonstrating its ongoing commitment to enhancing shareholder value, with a total of 664,960 shares repurchased since inception at an average discount of -17.87%.
- Market Reaction Expectations: The implementation of this repurchase plan is expected to boost investor confidence, particularly amid market volatility, by providing an opportunity to repurchase shares at a discount, potentially attracting more investor interest in the Fund.
See More
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Chinese Stock Market Rally
- Investment Encouragement: Two major Wall Street banks are advising investors to capitalize on the current surge in Chinese stocks, highlighting a significant increase in the CSI 300 index, which has risen by 14% in 2025.
- Market Size: China's stock market boasts a total capitalization of approximately $11 trillion, making it the second-largest globally, trailing only behind the United States.
See More
Morgan Stanley China A Share Fund, Inc. Announces Advisory Fee Reduction and Update on Performance-Related Conditional Tender Offer
Fee Reduction Announcement: Morgan Stanley Investment Management will lower the annual advisory fee for the Morgan Stanley China A Share Fund from 1.25% to 1.15%, effective July 1, 2025.
Tender Offer Status: The conditions for a conditional tender offer have not been met, so no tender offer will occur at this time; performance has exceeded the benchmark index, and future assessments will be made every five years starting July 1, 2025.
See More
