Following a period of relative calm in the markets over the summer, Morgan Stanley Investment Management has suggested that current conditions may warrant more active portfolio management. The firm cites rising term premia, increased political volatility, and shifts in central bank leadership as key factors shaping the fixed income landscape.
Morgan Stanley’s Broad Markets Fixed Income team brings together expertise from various single-sector research and trading teams to identify what they consider to be strong opportunities within fixed income. All data referenced in their recent communication is current as of November 14, 2024.
The company emphasizes risk considerations for investors, stating: "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." The statement also notes that market values can change daily due to economic events such as natural disasters, health crises, terrorism, conflicts, or social unrest.
Additional risks associated with fixed-income securities are outlined by Morgan Stanley Investment Management. These include credit risk related to issuers' ability to make payments on time, interest rate risk due to changes in rates affecting bond prices and potential volatility or redemptions, as well as liquidity concerns particularly with mortgage- and asset-backed securities.
The firm further clarifies: "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."
Morgan Stanley advises potential investors to carefully review objectives, risks, and fees before investing. A minimum asset level is required for certain strategies. They recommend consulting independent legal and financial advisors before making any decisions.
The company also points out that views expressed reflect those of its authors or investment team at the time of preparation and could change without notice based on evolving economic or market conditions.
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