Executive Summary
Morgan Stanley's Chief Cross-Asset Strategist projects the US equity risk premium has compressed to just 2%, while emerging markets show negative 1% risk premiums. This structural shift fundamentally alters portfolio construction mathematics. The efficient frontier has flattened, meaning additional risk no longer translates proportionally to additional return. Traditional 60-40 portfolios face a decade of 6% annual returns versus historical 9% averages. However, the quality transformation of equ...
Key Investment Opportunity
European and Japanese Equity Outperformance
Morgan Stanley projects 8% annual returns for European and Japanese equities versus 6.8% for S&P 500, suggesting relative value opportunity in international developed markets
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