The AI trade made Morgan Stanley's wealthiest clients a lot of money. Now the firm wants them to start looking beyond it. Kathleen Entwistle, managing director and private wealth advisor at M
The AI trade made Morgan Stanley's wealthiest clients a lot of money. Now the firm wants them to start looking beyond it.
Kathleen Entwistle, managing director and private wealth advisor at Morgan Stanley Private Wealth Management, appeared on CNBC's Fast Money on May 26 to lay out where she is positioning high net worth clients as equities push higher.
"The market has been on a tear for sure," she said. "You just have to be mindful and just a little bit careful about where you're going."
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Entwistle said her clients are happy but not complacent. The AI trade has paid off, but chasing it at current valuations requires a different kind of discipline.
For diversification, she said the firm is moving clients into real assets, energy, infrastructure, and digital, while pulling back on bond duration in response to shifting signals in the interest rate market. She is also keeping exposure to U.S. and emerging markets and beginning to dip into small cap.
The rate picture is part of the reason. Entwistle said Fed futures are signaling that cuts may not be coming, and that a rate increase is no longer off the table.
"It's time to consider adding some serious commodities and real assets into the portfolio," she said. "A sleeve of it."
Energy, in particular, is where Entwistle is leaning. She argued the sector holds its value regardless of what broader markets do in an inflationary environment, making it useful precisely because it does not move with everything else.
For clients looking to reduce correlation, Entwistle said the firm is also bringing more evergreen alternative structures into portfolios, private equity, private credit, and infrastructure, as non-correlated diversifiers at a point in the market cycle where traditional allocations are stretched.
The most striking part of her thesis was the reframing of infrastructure itself.
"Back in the day, infrastructure was tunnels and bridges and roads," she said. "Today, it's communication towers and digital and things like that."
Her concern is supply. Data centres are multiplying, demand for energy to power them is outpacing what the grid can deliver, and the gap between the two represents an investment window that is still open, but not for long. "We want to invest in the scarcity before it becomes too expensive," she said.
On April 8, Morgan Stanley launched its own spot Bitcoin ETF, ticker MSBT, on NYSE Arca, becoming the first major U.S. bank to issue a crypto product under its own name.
The fund charges 0.14%, which was the lowest fee in the market at launch. The firm also has plans to introduce retail crypto spot trading through E*Trade in the first half of 2026, according to Bloomberg.
