Macro Insight
Shifting from Beta to Alpha
 
 

Macro Insight

Shifting from Beta to Alpha

 

Built for Change: Shifting From Beta to Alpha

A fundamental shift is underway in fixed income. The new era of rising interest rates is causing fixed income managers across the world to rethink how they invest. Investors should consider active managers who focus on generating alpha to help drive returns and create diversification benefits from owning fixed income in a portfolio.1

In the last 10 years, sustained monetary stimulus— lower interest rates aimed at keeping economies afloat after the global financial crisis—made it easy for fixed income managers to earn returns. The systemic effect throughout the market (beta) overwhelmed contributions by idiosyncratic factors (alpha). As yields fell, bond prices across the board rose. Simply being invested in the bond market was enough to earn decent returns.

jim.caron
 
Managing Director
 
 

1. Diversification does not eliminate the risk of loss.

The views and opinions are those of the author as of the date of publication and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. The views expressed do not reflect the opinions of all investment personnel at Morgan Stanley Investment Management (MSIM) or the views of the firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

This general communication, which is not impartial, is for informational and educational purposes only, not a recommendation. Information does not address financial objectives, situation or specific needs of individual investors.

Any charts and graphs provided are for illustrative purposes only. Any performance quoted represents past performance. Past performance does not guarantee future results. All investments involve risks, including the possible loss of principal.

Prior to making any investment decision, investors should carefully review the strategy’s/product’s relevant offering document. For the complete content and important disclosures, refer to the link above.

Morgan Stanley Investment Management (Australia) Pty Limited operates under AFSL No: 314182.

Not to be shown, quoted or distributed to the public. The information shown in this website is not personal advice and does not take into account the investment objectives, financial situation or needs of any person.

Information on this website should not be considered a solicitation to buy, an offer to sell or a recommendation for any security in any jurisdiction where such an offer, solicitation or recommendation would be unlawful or unauthorized. In addition, investments may not be made via this website.

Past performance of any product described on this site is not a reliable indication of future performance.


Privacy & Cookies    •    Terms of Use

©  Morgan Stanley | Investment Management (Australia) Pty Limited ACN 122040037