1. U.S. Treasury Aggregate; IG: Bloomberg Barclays Corporate Index; HY: Bloomberg Barclays Corporate High Yield Index.
2. Date: As of December 13, 2016.
3. As of December 13, 2016.
4. Moody’s Investors Service, as of December 13, 2016.
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Forecasts and/or estimates provided herein are subject to change and may not actually come to pass. Information regarding expected market returns and market outlooks is based on the research, analysis and opinions of the authors. These conclusions are speculative in nature, may not come to pass and are not intended to predict the future performance of any specific Morgan Stanley Investment Management product.
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Charts and graphs provided herein are for illustrative purposes only. . Past performance is no guarantee of future results.
There is no assurance that a Portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the Portfolio will decline and that the value of Portfolio shares may therefore be less than what you paid for them. Accordingly, you can lose money investing in this Portfolio. Please be aware that this Portfolio may be subject to certain additional risks. Fixed-income securities are subject to the ability of an issuer to make timely principal and interest payments (credit risk), changes in interest rates (interest-rate risk), the creditworthiness of the issuer and general market liquidity (market risk). In the current rising interest-rate environment, bond prices may fall and may result in periods of volatility and increased portfolio redemptions. Longer-term securities may be more sensitive to interest rate changes. In a declining interest-rate environment, the portfolio may generate less income. High yield securities (“junk bonds”) are lower rated securities that may have a higher degree of credit and liquidity risk. Public bank loans are subject to liquidity risk and the credit risks of lower rated securities. In general, equity securities’ values also fluctuate in response to activities specific to a company. The strategy may invest in restricted and illiquid securities, which may be difficult for the strategy to sell at a reasonable price. (Liquidity Risk). Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks. Distressed and defaulted securities are speculative and involve substantial risks in addition to the risks of investing in junk bonds. The Portfolio will generally not receive interest payments on the distressed securities and the principal may also be at risk. These securities may present a substantial risk of default or may be in default at the time of investment, requiring the portfolio to incur additional costs. Preferred securities are subject to interest rate risk and generally decreases in value if interest rates rise and increase in value if interest rates fall. Mezzanine investments are subordinated debt securities, thus they carry the risk that the issuer will not be able to meet its obligations and they may lose value. Foreign securities are subject to currency, political, economic and market risks. The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed countries. In general, ' values also fluctuate in response to activities specific to a company. The strategy may invest in, which may be difficult for the strategy to sell at a reasonable price. (Liquidity Risk).
The Bloomberg Barclays U.S. Corporate High Yield Index measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody's, Fitch, and S&P is Ba1/BB+/BB+ or below. The Index excludes emerging market debt.
The Bloomberg Barclays Pan-European High Yield Index covers the universe of fixed-rate, sub-investment-grade debt denominated in euros or other European currencies (except Swiss francs). This index includes only euro-and sterling-denominated bonds, because no issues in the other European currencies now meet all the index requirements. To be included, the bonds must be rated high-yield (Ba1/BB+ or lower) by at least two of the following ratings agencies: Moody’s, S&P, Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must be high-yield. Bonds must have at least one year to maturity and an outstanding par value of at least EUR50 million. The index does not include non-rated bonds, and it excludes debt from entities in countries that are designated as emerging markets.
The JP Morgan Emerging Markets Bond Index Global (EMBI Global) tracks total returns for traded external debt instruments in the emerging markets, and is an expanded version of the EMBI+. As with the EMBI+, the EMBI Global includes US dollar-denominated Brady bonds, loans, and Eurobonds with an outstanding face value of at least $500 million.
The Bloomberg Barclays Mortgage Index covers the mortgage backed pass-through securities of Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). This Index is the Mortgage Backed Securities Fixed Rate component of the Barclays U.S. Aggregate Index.
The Bloomberg Barclays U.S. Corporate Index is a broad-based benchmark that measures the investment grade, fixed-rate, taxable, corporate bond market.
The Bloomberg Barclays U.S. Treasury Index includes public obligations of the U.S. Treasury.
The Bloomberg Barclays Euro Aggregate Corporate Bond Index measures the investment grade, euro-denominated, fixed-rate bond market of corporate issues. This index is the corporate bond component of the Bloomberg Barclays Euro Aggregate Bond Index.
The indexes are unmanaged and do not include any expenses, fees or sales charges. It is not possible to invest directly in an index. Any index referred to herein is the intellectual property (including registered trademarks) of the applicable licensor. Any product based on an index is in no way sponsored, endorsed, sold or promoted by the applicable licensor and it shall not have any liability with respect thereto.
Chart Source: U.S. High Yield refers to the Bloomberg Barclays U.S. Corporate High Yield Index. European High Yield refers to the Bloomberg Barclays Pan-European High Yield Index. Emerging Markets Sovereigns refer to the JP Morgan EMBIG Index. U.S. Mortgages refers to the Bloomberg Barclays US Mortgage-Backed Sectors Index. U.S. Investment Grade refers to the Bloomberg Barclays Corporate Index. US Treasuries Aggregate refers to the Barclays US Treasuries Aggregate Index. European Investment Grade refers to the Bloomberg Barclays Euro Aggregate Corporate Index.
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