Multi-Asset-Class Income Has Become a Bond Story

Global AI-related capital spending has been forecast to exceed USD 1 trillion in 2026,¹ led by U.S. hyperscalers, funding the buildout by issuing equity² and tapping the debt markets. That has reduced the cash U.S. companies return through dividends and buybacks over the last few years. On the other hand, since the 2022 interest-rate reset, the amount of cash the bond sleeve pays has been rising. An income-focused investor, such as a wealth manager’s client, an insurance general account or a pension paying benefits all converge on working to determine how much cash a multi-asset-class allocation generates, and from which sleeve. We put the equity and fixed-income sleeves on a like-for-like cash basis to calculate what a multi-asset-class allocation pays to see how this may work for investors.

With U.S. companies routing a larger share of their operating cash flow into AI-related capex, total yield — dividends plus net buybacks — has been declining since 2024. It stood at 1.25% for the MSCI USA IMI™ Index in July 2026, the 15th percentile for the sample period since 2005. The dividend yield now sits at the bottom of its range, and net buybacks spent three months of 2026 in negative territory before turning marginally positive. A dividend arrives as cash while a buyback is spendable only if the holder sells a pro-rata slice, so the two are not interchangeable for an investor funding a distribution. 

Payout has slipped in developed markets outside the U.S. as well, though from a much higher base: The MSCI World ex USA IMI™ paid 3.33% in July 2026, more than twice the U.S. figure. Emerging markets look higher on dividends alone, though the MSCI Emerging Markets IMI has been in net issuance for almost the whole sample period, so dilution offsets much of it.

Even within the U.S., shareholder yield is not low everywhere. The compression sits with the sectors building AI capacity. Information technology and communication services accounted for 43.5% of index market capitalization, yielded 0.28% and were in net issuance, while the other 56.5% of the index still yielded 1.99%. Information technology alone has fallen from 4.15% in 2014 to 0.44% year to date, turning negative in June 2026, placing it in the 7th percentile of its own record.

A dividend tilt captures this total-yield dispersion within MSCI USA IMI Index sectors. MSCI USA IMI High Dividend Yield Index, for example, paid 4.12% in July 2026, more than three times the broad index, though it has also drifted down from roughly 4.6% in 2023 to 3.6% YTD through July 31, 2026.

Regional, sector and factor tilt therefore each carry an income consequence, separate from any view on relative returns.

A bond’s coupon is fixed at issuance. Subsequent moves in yields, however, change the price, not the cash the bond pays. An index therefore reflects the coupons of the vintages it holds. Through the near-zero policy rate years after the 2008 global financial crisis, new deals entered the MSCI USD Investment Grade (IG) Corporate Bond Index at a lower coupon than the ones they replaced, bottoming at 2.37% coupon in 2021.

Credit issued from 2022 onward, however, carries a 5.13% average coupon against 3.88% on the paper it replaced in MSCI USD IG Corporate Bond Index, and Treasurys had 3.89% against 2.17% in MSCI US Government Bond index. Current yield,³ the cash the bond sleeve pays, has risen every year since 2021, credit from 3.17% to 4.96% and governments from 1.67% to 3.64% in July 2026. With roughly 66% of Treasury-par and 56% of credit-par now issued since 2022, the government sleeve has re-based more completely, and with the balance still on old coupons the reset is unfinished.

Yield to worst (YTW) has been above current yield since 2022, having spent most of the previous decade below it. Both sleeves trade at a discount, near 92 for credit and 91 for governments, which reflects the low-coupon bonds still in the index, and the cash the sleeves pay keeps rising as those bonds mature and get replaced.

An asset owner with an obligation to fund, whether a pension paying benefits, an insurer or a wealth advisor’s client drawing an income, needs the cash yield of the whole allocation rather than of each sleeve. We calculated that for the U.S. on two definitions for equity, income only (dividends) and total cash (dividends plus net buybacks), with current yield for bonds.

At a hypothetical 60/30/10 mix of equity, government bonds and credit, the income-only cash yield was 2.28% in July 2026. The 40% held in bonds contributed 1.59 percentage points, or roughly 70% of the total. Adding net buybacks lifts the blend’s cash yield to 2.34% and leaves the bond share near 68%, though only the dividend component arrives as spendable cash.

The 70% bond share is the highest reading over the past two decades, against a long-run average of 54.5%, and equity’s share sits at its lowest on the income-only definition across every mix we analyzed. The path is a round trip rather than a break. Bonds led on income in the mid-2000s, equity took the lead through the low-rate decade as coupons collapsed and dividends held up, and bonds have taken it back since 2022.

A dividend tilt lifts the cash yield, but the bond sleeve’s contribution has still been rising. The same mix built with MSCI USA IMI High Dividend Yield index yields 3.17% on income only, with bonds at 50% of the cash, up from about 38% in 2011.

The compression in U.S. equity shareholder yield, driven largely by AI-related capital spending and the retreat in buybacks, has coincided with a coupon reset that is still working through fixed income. Together they have changed where a balanced allocation’s cash comes from. With bonds supplying close to 70% of multi-asset cash from 40% of the capital, sleeve composition, rate regimes, credit risk and payout policy increasingly shape what an allocation distributes as much as what it returns.

Measured on a like-for-like cash basis, the equity and bond split remains the largest lever over cash generation, at three to four times the gap for a cap-weighted equity sleeve and closer to twice for a dividend-tilted one. How the equity sleeve is built is the next lever, though regional and dividend tilts carry return and risk consequences different from a cap-weighted allocation. As the coupon reset continues to run and payout stays tied to AI capital intensity, a cash-aware allocation may offer investors a clearer link between spending policy and the income a portfolio actually generates.