Under the shadow of geopolitical tensions, Morgan Stanley's investment management director is calling out to clients: Increase liquidity and shorten duration!

Ben Huneke, head of investment management at Morgan Stanley, said that amidst ongoing geopolitical uncertainty disturbing the markets, he is advising clients to adopt a more conservative investment strategy. Huneke stated in an interview that in the backdrop of extreme market volatility, the institution has advised investors to increase liquidity and reduce portfolio duration. Huneke is responsible for managing $1.9 trillion in assets. Huneke said, "Market volatility is too high. We have suggested to clients that they may want to be more conservative, hold more liquid assets, and possibly shorten the duration of their portfolios. However, in such a rapidly changing situation, it is difficult to make tactical moves." Despite the strong earnings outlook for 2026, recent events have clouded the prospects, according to Huneke. He admitted that predicting outcomes has become exceptionally difficult given the wide range of possible scenarios, particularly regarding the situation in Iran. Despite the uncertainty, Huneke has identified investment opportunities in the software sector, especially in private credit. He mentioned that concerns about the impact of artificial intelligence on software companies may be overstated. Huneke stated, "We do not believe that there will be a large-scale extinction event in the software industry." He added that institutional clients are increasingly viewing the current environment as an opportunity to allocate to private credit.