Built for Change

Today's bond market requires a new mindset. More than ever, generating competitive returns will require the flexibility to extract value from alpha sources across global fixed income markets.

The Beginning of a New Era

The beta
avalanche is ending

Since 1989, 95% of fixed income returns have been derived from declining yields. That is set to change.

Fixed income remains
a portfolio diversifier

In our view, skilled active management will be crucial to producing positive returns and creating diversification benefits.

A new era requires
a focus on alpha

Now, more than ever, you should consider strategies with the latitude to produce alpha through duration positioning, credit analysis, yield curve exposure and security selection.

Seismic Shift:
Moving from Beta to Alpha

This chart is for illustrative purposes only.

Fixed Income Solutions

Actively managed public and private
strategies that span the globe

Global Fixed Income

Active managers with the skill and flexibility to extract value from an infinite number of alpha sources across global fixed income markets.

Global Liquidity

Aims to meet clients' unique cash and working capital needs through a broad range of money market funds and customized separate account solutions.

Alternative Investments

We are a leading provider of alternative investment strategies with expertise that spans across private credit, private equity, hedge funds and real asset solutions.

How We're Adapting to
the Changing Markets

Learn More

MEDIA APPEARANCE
Shifting From Beta to Alpha
Jim Caron
 
A fundamental shift is underway in fixed income, making active choices around duration, credit and yield curve positioning more important than ever. This new era requires a new mindset.
MACRO INSIGHT
Fixed Income: From the Fed to Blockchain
September 2018
 
Portfolio Managers from across our Global Fixed Income, Liquidity Solutions and Private Debt Teams offer their perspectives on the current fixed income environment.
Investment Insight
Solutions Brochure
Learn more about our active fixed income offerings.

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IMPORTANT DISCLOSURES
Past performance is no guarantee of future results.The fixed income returns referred to in the video, unless otherwise noted, are those of representative indices and are not meant to depict the performance of a specific investment.

RISK CONSIDERATIONS
Diversification does not eliminate the risk of loss.

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 fund will decline and that the value of fund 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. Investing involves risks including the possible loss of principal.

Fixed income securitiesare 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. Mortgage- and asset-backed securitiesare 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. Certain U.S. government securitiespurchased 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. High yield securities (“junk bonds”) are lower rated securities that may have a higher degree of credit and liquidity risk. Public bank loansare subject to liquidity risk and the credit risks of lower rated securities. 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. Sovereign debt securitiesare subject to default 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. Restricted and illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk).

The views, opinions, forecasts and estimates expressed are those of the portfolio manager as of the date presented and are subject to change at any time due to market, economic or other conditions. 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 portfolio managers 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 and are not intended to predict the future performance of any specific Morgan Stanley Investment Management product.

This material is a general communication, which is not impartial and all information provided 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. 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.

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.

Please consider the investment objective, risks, charges and expenses of the fund carefully before investing. The prospectus contains this and other information about the fund. To obtain a prospectus, download one at morganstanley.com/im or call 1-800-548-7786. Please read the prospectus carefully before investing.

Morgan Stanley Distribution, Inc. serves as the distributor for Morgan Stanley funds.

NOT FDIC INSURED | OFFER NO BANK GUARANTEE | MAY LOSE VALUE | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT A DEPOSIT

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

All information contained herein is proprietary and is protected under copyright law.