Global Balanced Income Strategy

Global Balanced Income Strategy

Global Balanced Income Strategy


The Morgan Stanley Global Balanced Income (GBI) Strategy follows a top-down global asset allocation approach, investing in equities, fixed income, commodity-linked investments and cash, within a clearly-defined, risk-controlled framework. It aims to provide capital growth over time, while actively managing total portfolio risk, which we define in terms of volatility or value-at-risk (VaR).

The feature that distinguishes this Strategy from others managed by the Portfolio Solutions Group is that it targets an attractive, stable income of 4%1 per annum. In pursuit of this goal, the team sells put options on major equity indexes to help enhance the Strategy’s income generation.

Investment Approach

The Income Generation Process Should Be Independent of the Asset Allocation Process
Portfolio managers should not be driven into asset classes they find unattractive, simply to meet an income objective.

Risk Exposures Must Be Intentional
Investing in a diversified2 set of global asset classes, taking only systematic risks that we expect to be rewarded, is the best way to deliver the optimal return for the risk taken.

Anticipating Volatility Is Crucial
Only by anticipating volatility can we manage a portfolio’s broad asset mix to meet our volatility target.

Tactical Asset Allocation Can Add Value
Allocation within asset classes - e.g. between regions or high-quality and lower-quality securities - can add value.

Flexibility Improves Outcomes
A flexible approach – in terms of asset weights and implementation – is the optimal way to meet our objectives.

Innovative Approach to Income
  • The Strategy aims to provide an attractive, consistent stream of income. Asset allocation and income generation processes are separate. As a result, we are not forced to skew our portfolios towards asset classes that generate attractive income.
Process Built for Income Generation
  • We have identified what we believe to be the optimal strategy for income generation, through selling put options3 whilst maintaining the portfolio’s desired risk/return characteristics, and have embedded this into the process.
Volatility-Targeting Process to Provide a Stable Risk Profile
  • Flexible asset allocation process enables dynamic positioning adjustment, to maintain a stable risk profile.
An Academically Rigorous Approach, Applied in a Real World Setting
  • Grounded in portfolio theory with enhanced application of efficient frontier analysis.
  • Combines a fundamental flexible investment approach with the advantages of quantitative implementation tools.
Dynamic Positioning To Capture Current Opportunities
  • Flexibility to move nimbly between assets, to potentially benefit from compelling tactical opportunities for additional alpha. 
  • Rebalancing as market conditions warrant, at which time the broad asset mix consistent with the portfolio’s target volatility or dynamic “proxy” portfolio is redefined.
Risk-targeted Investment Process

The Portfolio Solutions Group employs a differentiated volatility-targeting investment approach that seeks to harness the power of risk.

As market conditions warrant, the team dynamically adjusts the portfolio's mix of equities, fixed income, commodity-linked assets and cash, to align with the agreed risk target on an ongoing basis. We typically adjust the broad asset mix 1-2 times each month, based on anticipated event risks. However, in extreme markets we may need to adjust positions more frequently, to maintain a stable risk profile.

Within the four broad asset classes, we determine preferences across regions and sub-asset classes and make tactical adjustments to the portfolio. Tactical positions are determined through the analysis of three factors: Fundamental Dynamics, Valuations and Sentiment.

In addition to yields from traditional asset classes, the GBI Strategy sells put options with the goal of enhancing income. Together, these two income sources are expected to produce 5%1 in annual income. By including the sale of put options in the process, investors can benefit from a differentiated source of income that is not dependent on the prevailing yield environment.

The Portfolio Solutions Group's risk-targeted asset allocation process is consistently applied to all GBaR portfolios, but tailored to client-specific guidelines and objectives. All GBaR portfolios are managed according to the following 3-stage investment process, whilst stage 4 enables us to help enhance income for portfolios that target this.

Portfolio Managers  
Rui De Figueiredo
Rui De Figueiredo
Head and CIO of the Solutions & Multi-Asset Group
26 years industry experience
Ryan Meredith
Ryan Meredith
Head of Portfolio Solutions Group
25 years industry experience
Jim Caron
Jim Caron
Chief Investment Officer
32 years industry experience
Damon Wu
Damon Wu
Portfolio Manager
17 years industry experience

Team members may be subject to change at any time without notice.

Effective 1 November 2023, Andrew Harmstone became an advisor to the Strategy. 

Effective 1 November 2023, Rui De Figueiredo, Ryan Meredith, Jim Caron and Damon Wu are the Strategy’s Lead Portfolio Managers, forming the Investment Committee.









This is a Marketing Communication.

金融商品取引業者 関東財務局長(金商)第410号


プライバシー・ステートメント    •    利用条件    •    オフィス所在地    •    日本におけるモルガン・スタンレー

©  Morgan Stanley. All rights reserved.