As Yields collapse, Fixed Income No Longer Diversifier

Fixed income, the stalwart of diversification in portfolios, may no longer fill this role. In a video, “How to Find Diversification,” Morgan Stanley equity analyst Michael Cyprys and strategist Andrew Sheets note a very different market environment for fixed income as a diversifier and openly search for new diversification tools in a world of negative interest rates.

Fixed income has had an amazing run as an investment and it is about to end

The traditional 60%/40% portfolio theory included the largest percentage to stocks but a respectable 40% to what was considered the portfolio “diversifier,” fixed income.

Investors should recognize just...