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Global Fixed Income Bulletin
June 16, 2021

Where Did Volatility Go?

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June 16, 2021

Where Did Volatility Go?

Global Fixed Income Bulletin

Where Did Volatility Go?

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June 16, 2021


May proved to be a relatively quiet month, despite some large data surprises. U.S. employment and inflation data both surprised: employment to the downside (by a very wide margin) and inflation on the upside (the biggest surprise in several decades). As these two variables remain front and center for the Fed, investors are obviously interested in them. Unfortunately, the data is so confusing, distorted by re-openings, supply side constraints, both on the labor and raw material front, and varying vaccination rates, it is difficult to extract a signal or message from them. So, all in all, the market was not irrational to shrug them off and continue with the same constructive narrative as earlier this year: strong growth; moving to herd immunity; overheating goods (and housing) market; rapid growth in nominal incomes; commitments in most major countries to keep both fiscal and monetary policy easy. But volatility will not remain suppressed forever! Eventually data will become cleaner and point to either faster than expected growth and inflation or the opposite.


It is not surprising, then, that most developed market bond yields were slightly lower to unchanged in the month.  Interestingly, despite strong real economic data (except for the U.S. jobs report) and higher than expected inflation, real yields fell again. A notable exception to this story were interest rates in New Zealand, which rose sharply following comments at the Reserve Bank of New Zealand’s (RBNZ) May meeting around tightening monetary policy. The Fed maintained its view that elevated inflation prints are transitory, and will revert back to “normal” levels over time. The Bank of England (BoE) kept interest rates steady and slowed the pace of asset purchases. The ECB delivered a dovish tone, signaling there would be no major change to policy at the June meeting.  However, the situation in emerging markets is vastly different. By and large emerging markets (EM) central banks are becoming more hawkish, either raising rates or adjusting forward guidance tighter. Turkey, Brazil, Russia raised rates. Hungary, Czech and Poland are slowly moving in that direction.

Credit market volatility also remained well contained, with U.S. credit slightly outperforming Euro. Again, nothing happened in May to shake the market out of its view that credit remains attractive despite demanding valuations (at least by historical standards). Compression in spreads between higher and lower quality issuers continues, but it is getting late in the game. It will be increasingly difficult for lower quality securities to significantly outperform higher quality ones. It also must be mentioned that index composition does change over time, in some cases quite substantially. The Bloomberg Barclays U.S. Corporate High Yield Index is at its highest credit quality in over a decade as the BB bucket has grown substantially due to downgrades while a number of CCC-rated companies have defaulted and left the index (particularly on the energy front). On the other hand, investment grades (IG), represented by the Bloomberg Barclays U.S Corporate Index, has the lowest average credit quality in over a decade as more companies were downgraded to BBB by design or by accident (e.g., the pandemic wreaking havoc with companies’ balance sheets). This makes current HY valuations less high than they appear but IG worse compared to historical levels. 

The bottom line is that an investment strategy focused on a continuation of low nominal (and in particular real) yields, strong growth (in output and incomes), rising vaccination rates, and stable policy remains intact. While it is difficult to believe that global developed market yields will not go higher, today is not the day for it to happen. Both credit spreads and government yields look like they are settling into a summer range awaiting clarity on the data and policy front.  In the interim, full steam ahead with a focus on credit sensitive assets (relative to risk free ones), in terms of corporate credit, selective emerging markets and securitized credit. Oh, and by the way, higher inflation, and easy Fed is not -- in our opinion -- a recipe for dollar strength.

Display 1: Asset Performance Year-to-Date

Note: USD-based performance. Source: Bloomberg. Data as of May 31, 2021. The indexes are provided for illustrative purposes only and are not meant to depict the performance of a specific investment. Past performance is no guarantee of future results. See below for index definitions.

Display 2: Currency Monthly Changes Versus U.S. Dollar

Note: Positive change means appreciation of the currency against the USD. Source: Bloomberg. Data as of May 31, 2021.

Display 3: Major Monthly Changes in 10-Year Yields and Spreads

Source: Bloomberg, JPMorgan. Data as of May 31, 2021.


Fixed Income Outlook

Sometimes it is difficult to not sound like a broken record and this time is one of them.  Not much changed in May with regard to understanding the medium term investment outlook and thus little reason to adjust investment strategy.   The future looks as clear as can be with regards to growth - likely to be strong - and very murky when it comes to inflation - it’s going up, but for how long and by how much?   There was no change in views from policymakers about current stances of policy, but data is sufficiently robust in the U.S. that discussions of tapering are sure to start this summer, but that could be July, August or September.  It is still all very data dependent and subject to qualitative interpretation.  For example, is 500k job gains on average over the first half of the year good enough to count as a “string” per Chairman Powell’s dictum?  Or does he have another number in mind?  I guess we will know when we know!  What that means is that the data is likely to have to be overwhelmingly favorable for the Fed (and ECB, BoJ, BoE, etc.) to take the risk of tightening, or just running a less accommodative, but still accommodative, policy.

The performance of government bonds is understandable from one perspective but not from another.  On the one hand, data is sufficiently murky with regard to “true” medium term strength of the economy (something one needs to know to value longer term yields) so that it is dangerous to be very confident that current strength will continue long enough to break the back of secular stagnation and get forward U.S. yields over 2.5%.  On the other hand, real yields are negative all along the yield curve.  This does not look right from a medium term perspective, especially with growth dynamics worldwide looking so good, not just for this year but for the next few years.  While we are inflation optimists (inflation will not run away to higher levels), inflation is likely to be higher for the next few years than it was in the 2018/2019 period.   This should push nominal yields higher.  The Fed will (we hope) be able to push the real Fed funds rate at least back to zero, at some point.  The same type of analysis holds for most DM economies.  But, given Fed’s FAIT (flexible average inflation target) strategy, policy rate normalization should take a few years.  This means that it will be difficult for the U.S. Treasury 10-year yield to surpass 2%.  As we’ve seen in recent months, the 1.75% barrier has held.  So, the bottom line is that we should be cautious on interest rate risk, but, unless valuations get very rich again, do not get too bearish.

Inflation remains high on investors watch list.  And rightfully so.  Unfortunately, there is so much volatility in economies that it is difficult to sort signal from noise.  For example, a U.S. nonfarm payroll employment report which varied from 300k to 1 million would not look surprising.  The various forces at work in the labor market are sometimes working at cross purposes, e.g., extended/high unemployment benefits could keep workers sidelined even as labour demand rebounds as the economy re-opens. Encouraging people to return to work, wage data has been very strong and we do know that rising wages is a necessary condition for higher inflation to take hold.  This is worrisome.  But we are likely to have to wait until September/October when excess benefits roll off, children go back to school, and vaccination rates are even higher to know if labor supply will fully re-engage.  In addition, product and commodity prices have rocketed higher due to supply bottlenecks.  On the other hand, service sector inflation remains subdued as social distancing measures remain in place and the output gap is thought to be large. There is also the statistical issue of how to correctly calculate inflation for sectors where normal services have been severely constrained and consumption patterns have shifted (but possibly only temporarily). An opening up of the economy, and a surge in pent-up demand, could lead to a surge in prices, but it is uncertain how sustained such an increase will be. We are expecting the current inflation spike to be temporary but, as always, things need to be monitored.  Policymakers are likely to act as if it is temporary and not troubling for at least the next few months.  That said, several central banks in some smaller developed countries (Canada, New Zealand, Czech) have hinted they will be reigning in accommodation in the next year, sooner than expected, and some BoE MPC members have suggested rate hikes could be warranted in the UK next year.  Several emerging market central banks have already begun to tighten, being more concerned than DM central banks typically are about higher inflation weakening their currencies.  The good news is that tightening of policy is already discounted in most of these countries’ yield curves.  But, easing has globally ended.  The end game is upon us but it is likely to be a very, very long game.

Cyclical assets should remain well supported in this environment: low real yields, FAIT, vaccination roll outs still ongoing, and strong nominal income growth.  Despite their having demanding valuations, maintaining a below average credit quality portfolio still looks correct.  Emerging markets should also begin to catch up to developed economies in the second half of the year and their strong May performance should carry on. However, the spread or return compression between higher and lower rated high yield bonds looks nearly complete.  Down in quality moves into CCC rated bonds, for example, are likely to lead to much smaller capital gains opportunities going forward.  That said, the economic environment is so good, defaults should fall over the next 12 months (indeed, it looks like we are likely to be in a credit upgrade cycle), so remaining overweight lower quality bonds still makes sense to capture the additional yield.  Significant risk taking should be confined to idiosyncratic opportunities where risk premiums are elevated (there are still some of those!)  The danger, of course, being that this usually only occurs when something goes wrong and risks have risen. Good research; bottom-up analysis remains key.  The very varied performance amongst emerging market countries attests to that.

Developed Market (DM) Rate/Foreign Currency (FX)

Monthly Review

In May, most developed market bond yields were slightly lower to unchanged, as incoming economic data continued to be strong and inflation concerns remained topical.  A notable exception were interest rates in New Zealand, as rates rose sharply following comments at the RBNZ’s May meeting around tightening interest rate policy. The Fed maintained its view that elevated inflation prints are transitory and will revert back to “normal” levels over time. The Bank of England (BoE) kept interest rates steady but slowed the pace of asset purchases and some MPC members suggested rate hikes are possible in 2022. The ECB delivered a dovish tone, signaling there would be no major change to policy at the June meeting.


Recent data and information flow continue to imply 2021 economic growth will be very strong.  Falling infection rates, vaccine rollouts, strong efficacy results, massive U.S. fiscal stimulus, high savings rates, economic re-openings and dovish central banks are buttressing a very positive outlook for economies. With the $1.9 trillion support/stimulus package being implemented, U.S. fiscal policy is on a trajectory to significantly improve 2021/2022 growth globally, not just in the U.S. 

While we do not expect a dramatic sell-off in government bond markets, we think the risk is skewed to yields rising, as valuations are still rich relative to history and there is potential for additional term premia to be priced across the yield curve. The current surge in inflation is expected to be transitory but there is a risk it becomes more persistent due to higher wages and inflation expectations. The fact that real yields remain close to all-time lows suggests financial conditions remain very accommodative.

Emerging Market (EM) Rate/FX

Monthly Review

EM debt returns were positive in May, across the board, i.e., in both local and hard currency bonds. From a sector perspective, companies in the Infrastructure, Oil & Gas, Industrials, Pulp & Paper led the market, while those in the Financial, Utilities, TMT, and Transport sectors underperformed.


We remain constructive on EM Fixed Income assets on the back of continued stability in UST yields, a steady movement towards reopening in developed markets, and a pickup in vaccination rates in several EM economies. However, setbacks in the fight against COVID could render several EM economies vulnerable to new virus strains, weighing on growth and already fragile fiscal accounts. More generally, a delayed transition to fiscal consolidation may prompt the market to demand higher risk premiums in EM fixed income. Domestic political risks, such as upcoming elections in several Latin American economies, could also negatively impact asset prices.


Monthly Review

Credit spreads over the month were a touch wider in Euro IG and tighter in U.S. IG. Credit markets benefitted from slightly higher equities and lower volatility in the month. The main support in the market was continued central bank messaging that it was too early to consider reducing the policy report, despite inflation data coming in above expectations. Commodity prices also continued to rally with oil leading as demand expectations rose.

Market Outlook

We see credit being supported by expectations of an economic rebound in 2021 as well as continued positive support from monetary and fiscal policy as rates stay accommodative and QE strong. We expect continued strength with a potential price overshoot in the first half of the year, with a correction in the second half as M&A increases, questions are asked over the level of QE in 2022, and as fear of missing out buying activity turns to fear of owning valuations that look historically expensive.

Securitized Products

Monthly Review

May was a very quiet month in terms of both market activity and market volatility. Interest rates remained range-bound despite volatile economic data. Agency MBS spreads drifted slightly wider as whispers of potential tapering of the Federal Reserve’s (Fed) MBS purchases became more frequent. U.S. Non-agency residential mortgage-backed securities (RMBS), Commercial mortgage-backed securities (CMBS), and U.S. asset-backed securities (ABS) spreads were essentially unchanged in May.


We continue to have a positive outlook on residential and consumer credit sectors and a more cautious view on CMBS. We believe agency MBS now looks expensive on a historical level basis and a risk-adjusted basis. U.S. non-agency RMBS still offer reasonably attractive relative value. U.S. ABS continues to have mixed outlook, with traditional consumer ABS (credit cards and auto loans) looking relatively expensive while the more COVID challenged ABS sectors continue to offer much greater recovery potential. CMBS valuations remain very idiosyncratic, with some attractive value opportunities and some potential credit problems as well. Hotels and shopping centers have been severely impacted by the pandemic, and remain vulnerable to high levels of defaults. 



Diversification neither assures a profit nor guarantees against loss in a declining market.

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. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in a portfolio. 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 a rising interest-rate environment, bond prices may fall and may result in periods of volatility and increased portfolio redemptions. In a declining interest-rate environment, the portfolio may generate less income. Longer-term securities may be more sensitive to interest rate changes. Certain U.S. government securities purchased by the strategy, such as those issued by Fannie Mae and Freddie Mac, are not backed by the full faith and credit of the U.S. It is possible that these issuers will not have the funds to meet their payment obligations in the future. Public bank loans are subject to liquidity risk and the credit risks of lower-rated securities. High-yield securities (junk bonds) are lower-rated securities that may have a higher degree of credit and liquidity risk. Sovereign debt securities are subject to default risk. Mortgage- and asset-backed securities are sensitive to early prepayment risk and a higher risk of default, and may be hard to value and difficult to sell (liquidity risk). They are also subject to credit, market and interest rate risks. The currency market is highly volatile. Prices in these markets are influenced by, among other things, changing supply and demand for a particular currency; trade; fiscal, money and domestic or foreign exchange control programs and policies; and changes in domestic and foreign interest rates. Investments in foreign markets entail special risks such as currency, political, economic and market risks. The risks of investing in emerging market countries are greater than the risks generally associated with foreign investments. Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, and correlation and market risks. Restricted and illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). Due to the possibility that prepayments will alter the cash flows on collateralized mortgage obligations (CMOs), it is not possible to determine in advance their final maturity date or average life. In addition, if the collateral securing the CMOs or any third-party guarantees are insufficient to make payments, the portfolio could sustain a loss.

The Global Fixed Income team follows a seamless process with a global outlook. They seek to identify and capture the potential value in situations where the market's implied forecasts are extreme.
Featured Fund


R* is the real short term interest rate that would occur when the economy is at equilibrium, meaning that unemployment is at the neutral rate and inflation is at the target rate. Basis point: One basis point = 0.01%.


The indexes shown in this report are not meant to depict the performance of any specific investment, and the indexes shown do not include any expenses, fees or sales charges, which would lower performance. The indexes shown are unmanaged and should not be considered an investment. It is not possible to invest directly in an index.

The Bloomberg Barclays Euro Aggregate Corporate Index (Bloomberg Barclays Euro IG Corporate) is an index designed to reflect the performance of the euro-denominated investment-grade corporate bond market.

The Bloomberg Barclays Global Aggregate Corporate Index is the corporate component of the Barclays Global Aggregate index, which provides a broad-based measure of the global investment-grade fixed income markets.

The Bloomberg Barclays U.S. Corporate Index (Bloomberg Barclays U.S. IG Corp) is a broad-based benchmark that measures the investment-grade, fixed-rate, taxable corporate bond market.

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 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. Corporate Index is a broad-based benchmark that measures the investment grade, fixed-rate, taxable, corporate bond market.

The Bloomberg Barclays U.S. Mortgage Backed Securities (MBS) Index tracks agency mortgage-backed pass-through securities (both fixed-rate and hybrid ARM) guaranteed by Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC). The index is constructed by grouping individual TBA-deliverable MBS pools into aggregates or generics based on program, coupon and vintage. Introduced in 1985, the GNMA, FHLMC and FNMA fixed-rate indexes for 30- and 15-year securities were backdated to January 1976, May 1977 and November 1982, respectively. In April 2007, agency hybrid adjustable-rate mortgage (ARM) pass-through securities were added to the index.

Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.

Euro vs. USD—Euro total return versus U.S. dollar.

German 10YR bonds—Germany Benchmark 10-Year Datastream Government Index; Japan 10YR government bonds —Japan Benchmark 10-Year Datastream Government Index; and 10YR U.S. Treasury—U.S. Benchmark 10-Year Datastream Government Index.

The ICE BofAML European Currency High-Yield Constrained Index (ICE BofAML Euro HY constrained) is designed to track the performance of euro- and British pound sterling-denominated below investment-grade corporate debt publicly issued in the eurobond, sterling

The ICE BofAML U.S. Mortgage-Backed Securities (ICE BofAML U.S. Mortgage Master) Index tracks the performance of U.S. dollar-denominated, fixed-rate and hybrid residential mortgage pass-through securities publicly issued by U.S. agencies in the U.S. domestic market.

The ICE BofAML U.S. High Yield Master II Constrained Index (ICE BofAML U.S. High Yield) is a market value-weighted index of all domestic and Yankee high-yield bonds, including deferred-interest bonds and payment-in-kind securities. Its securities have maturities of one year or more and a credit rating lower than BBB-/Baa3, but are not in default.

The ISM Manufacturing Index is based on surveys of more than 300 manufacturing firms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment, production inventories, new orders and supplier deliveries. A composite diffusion index is created that monitors conditions in national manufacturing based on the data from these surveys.

Italy 10-Year Government Bonds—Italy Benchmark 10-Year Datastream Government Index.

The JP Morgan CEMBI Broad Diversified Index is a global, liquid corporate emerging markets benchmark that tracks U.S.-denominated corporate bonds issued by emerging markets entities.

The JPMorgan Government Bond Index—emerging markets (JPM local EM debt) tracks local currency bonds issued by emerging market governments. The index is positioned as the investable benchmark that includes only those countries that are accessible by most of the international investor base (excludes China and India as of September 2013).

The JPMorgan Government Bond Index Emerging Markets (JPM External EM Debt) tracks local currency bonds issued by emerging market governments. The index is positioned as the investable benchmark that includes only those countries that are accessible by most of the international investor base (excludes China and India as of September 2013).

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 U.S. dollar-denominated Brady bonds, loans and eurobonds with an outstanding face value of at least $500 million.

The JP Morgan GBI-EM Global Diversified Index is a market-capitalization weighted, liquid global benchmark for U.S.-dollar corporate emerging market bonds representing Asia, Latin America, Europe and the Middle East/Africa.

JPY vs. USD—Japanese yen total return versus U.S. dollar.

The National Association of Realtors Home Affordability Index compares the median income to the cost of the median home.

The Nikkei 225 Index (Japan Nikkei 225) is a price-weighted index of Japan’s top 225 blue-chip companies on the Tokyo Stock Exchange.

The MSCI AC Asia ex-Japan Index (MSCI Asia ex-Japan) captures large- and mid-cap representation across two of three developed markets countries (excluding Japan) and eight emerging markets countries in Asia.

The MSCI All Country World Index (ACWI, MSCI global equities) is a free float-adjusted market capitalization weighted index designed to measure the equity market performance of developed and emerging markets. The term "free float" represents the portion of shares outstanding that are deemed to be available for purchase in the public equity markets by investors. The performance of the Index is listed in U.S. dollars and assumes reinvestment of net dividends.

MSCI Emerging Markets Index (MSCI emerging equities) captures large- and mid-cap representation across 23 emerging markets (EM) countries.

The MSCI World Index (MSCI developed equities) captures large and mid-cap representation across 23 developed market (DM) countries.

Purchasing Managers Index (PMI) is an indicator of the economic health of the manufacturing sector.

The Russell 2000® Index is an index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index.

The S&P 500® Index (U.S. S&P 500) measures the performance of the large-cap segment of the U.S. equities market, covering approximately 75 percent of the U.S. equities market. The index includes 500 leading companies in leading industries of the U.S. economy.

The S&P/LSTA U.S. Leveraged Loan 100 Index (S&P/LSTA Leveraged Loan Index) is designed to reflect the performance of the largest facilities in the leveraged loan market.

The S&P GSCI Copper Index (Copper), a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark for investment performance in the copper commodity market.

The S&P GSCI Softs (GSCI soft commodities) Index is a sub-index of the S&P GSCI that measures the performance of only the soft commodities, weighted on a world production basis. In 2012, the S&P GSCI Softs Index included the following commodities: coffee, sugar, cocoa and cotton.

Spain 10-Year Government Bonds—Spain Benchmark 10-Year Datastream Government Index.

The Thomson Reuters Convertible Global Focus USD Hedged Index is a market weighted index with a minimum size for inclusion of $500 million (U.S.), 200 million euro (Europe), 22 billion yen, and $275 million (Other) of convertible bonds with an equity link.

U.K. 10YR government bonds—U.K. Benchmark 10-Year Datastream Government Index. For the following Datastream government bond indexes, benchmark indexes are based on single bonds. The bond chosen for each series is the most representative bond available for the given maturity band at each point in time. Benchmarks are selected according to the accepted conventions within each market. Generally, the benchmark bond is the latest issue within the given maturity band; consideration is also given to yield, liquidity, issue size and coupon.

The U.S. Dollar Index (DXY) is an index of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners’ currencies.

The Chicago Board Options Exchange (CBOE) Market Volatility (VIX) Index shows the market’s expectation of 30-day volatility.


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There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. Prior to investing, investors should carefully review the strategy’s / product’s relevant offering document. There are important differences in how the strategy is carried out in each of the investment vehicles.

A separately managed account may not be appropriate for all investors.

Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing.

The views and opinions are those of the author or the investment team as of the date of preparation of this material and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date of publication. The views expressed do not reflect the opinions of all investment teams 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.

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.

Certain information herein is based on data obtained from third party sources believed to be reliable. However, we have not verified this information, and we make no representations whatsoever as to its accuracy or completeness.

This communication is not a product of Morgan Stanley’s Research Department and should not be regarded as a research recommendation. The information contained herein has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This material is a general communication, which is not impartial and has been prepared solely for informational and educational purposes and does not constitute an offer or a recommendation to buy or sell any particular security or to adopt any specific investment strategy. All investments involve risks, including the possible loss of principal. The information herein has not been based on a consideration of any individual investor circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. To that end, investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.

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.

MSIM has not authorised financial intermediaries to use and to distribute this document, unless such use and distribution is made in accordance with applicable law and regulation. Additionally, financial intermediaries are required to satisfy themselves that the information in this document is appropriate for any person to whom they provide this document in view of that person’s circumstances and purpose. MSIM shall not be liable for, and accepts no liability for, the use or misuse of this document by any such financial intermediary.

This document may be translated into other languages. Where such a translation is made this English version remains definitive. If there are any discrepancies between the English version and any version of this document in another language, the English version shall prevail.

The whole or any part of this work may not be directly or indirectly reproduced, copied, modified, used to create a derivative work, performed, displayed, published, posted, licensed, framed, distributed, or transmitted or any of its contents disclosed to third parties without MSIM’s express written consent. The work may not be linked to unless such hyperlink is for personal and non-commercial use. All information contained herein is proprietary and is protected under copyright law.

Morgan Stanley Investment Management is the asset management division of Morgan Stanley.


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