Morgan Stanley Investment Management has released its latest edition of "The BEAT" for July 2025, providing insights into the current investment environment. The Portfolio Solutions Group, part of Morgan Stanley, offers a comprehensive multi-asset business across various asset strategies and types. These include traditional and alternative investments through solutions that range from fully liquid public assets to private portfolios.
The report highlights several risk considerations associated with portfolio investments. It notes that there is no assurance a portfolio will achieve its investment objectives and emphasizes market risks, including the potential decline in market values due to economic events or other factors like natural disasters or social unrest. The text also points out that asset allocation does not protect against losses but helps spread risk across different asset classes.
Investments in foreign markets are subject to additional risks such as currency fluctuations and political instability, with emerging markets posing greater risks than developed countries. Fixed-income securities face credit and interest rate risks, while mortgage- and asset-backed securities are sensitive to prepayment risk and default. The report warns that certain U.S. government securities may not be backed by the full faith of the United States.
Real estate investment trusts (REITs) carry risks similar to direct real estate ownership, affected by management skills and tax law changes. Derivative instruments can increase losses significantly and impact performance negatively.
The document stresses that past performance is no guarantee of future results, urging investors to consider their ability to invest long-term during market downturns. Separate accounts may not suit all investors due to potential discrepancies with index performance.
Morgan Stanley advises investors to seek independent legal and financial advice before making any decisions, noting that this material should not be construed as tax or legal advice. Charts included are for illustrative purposes only.
Eaton Vance is part of Morgan Stanley Investment Management, which operates globally under various regulated entities in regions such as EMEA, Middle East, U.S., Latin America, Asia Pacific, Australia, and Japan.