Bloomberg Surveillance · Tuesday, September 8, 2026
Jim Caron, CIO of Cross Asset Solutions at Morgan Stanley Investment Management, explained that the primary driver for multi-asset portfolio returns is nominal GDP growth. He noted that strong top-line growth in the U.S. is supporting earnings and equity markets, but higher nominal GDP also pressures bond yields, leading to a rotation from bonds to equities within diversified portfolios.
“So the top story for me in terms of how we look at multi-asset portfolios is what's going to drive returns. And what's driving returns right now is really factors that align very closely with nominal GDP growth, right? So effectively, what we're getting is a lot of great top line growth in the U.S.”
“This is why the equity markets are holding up really, really well. But now I've only told you half the story. The other half of the story is what's going on in bonds. Well, good nominal growth doesn't necessarily distribute itself evenly.”
“So what we are focusing on at Morgan Stanley Investment Management is we are focusing on ways that we can think about generating higher returns without taking excessive risk and what the weight and what the mix between fixed income and equity ought to be.”