Morgan Stanley Files for 5 ETFs, Continuing Its ETF Revival

Firm expanding ETF platform it launched in February after a three-decade hiatus.

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Finance Reporter
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Reviewed by: Lisa Barr
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Edited by: Ron Day

Morgan Stanley, a once seminal player in pioneering the ETF industry in the 1990s, filed for five ETFs Monday as the asset management giant builds out its revamped exchange-traded fund platform.  

The firm plans to roll out three new bond funds under the Eaton Vance brand and two equity ETFs under Parametric, according to filings with the SEC. The products under the Eaton Vance brand include an ultra-short income ETF, a high yield ETF and an intermediate municipal income ETF. A hedged equity ETF and a dividend premium income ETF would launch under Parametric. 

The five additions to the firm’s ETF portfolio follow the firm’s ongoing strategy to incorporate ETF products into its investment platform. Both Eaton Vance and Parametric became subsidiaries of Morgan Stanley Investment Management when the firm acquired Eaton Vance in 2021. 

Asset Management Giant 

After developing and then selling the World Equity Benchmark in 1996, which eventually became iShares, Morgan Stanley bowed out of the ETF race for decades—becoming one of the only asset management giants without a significant ETF portfolio. The firm made headlines when it announced it was making a comeback into the industry this February, rolling out six ESG-themed ETFs.  

Those six ETFs, which include the Calvert International Responsible Index ETF (CVIE) and the Calvert US Large-Cap Diversity Equity and Inclusion Index ETF (CDEI), have brought in about $400 million in total assets under management since launching.  

Yet the firm still has a lot of catching up to do. “[Morgan Stanley] missed a great opportunity to jump into ETFs at an earlier stage. They now face an uphill battle to take market share from well-established incumbents,” said Bryan Armour, Morningstar analyst. 

Dan Simkowitz, head of Morgan Stanley Investment Management, said the launch was the “first step” in the firm’s development of its ETF platform when the company debuted the funds in February.  

The company’s choice to now focus on three fixed income products comes as bond ETFs have been seeing increasingly popularity among investors, according to a recent report in Cerulli Edge. Inflation fears and high yield opportunities have been a boon to the assets.  

“We have seen significant client demand for active fixed income products,” said a spokesperson from Morgan Stanly Investment Management.  

Armour noted that the firm’s fixed income ETFs will face high competition in a crowded market. Yet the firm’s wealth presence where they control investment could help the firm differentiate itself.  

“This level of ‘bring your own assets’ could be a game-changer for Morgan Stanley affiliated ETFs,” said Armour. 

 

Contact Lucy Brewster at [email protected] or on Twitter at @lucyrbrewster 

Lucy Brewster is a finance reporter at etf.com covering asset managers, emerging technologies, and regulation. She hosts etf.com webinars and appears on Exchange Traded Fridays, etf.com’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.