Morgan Stanley Reaches $1B ETF Milestone

The issuer completed its first mutual fund to ETF conversions on Monday.

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Finance Reporter
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Reviewed by: etf.com Staff
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Edited by: James Rubin

Morgan Stanley Investment Management, the asset management giant that released its first exchange-traded product in early 2023, surpassed $1 billion in assets under management in its ETF business with the conversion of two mutual funds on Monday. 

The new products started trading as the Eaton Vance Total Return Bond ETF (EVTR) and the Eaton Vance Short Duration Municipal Income ETF (EVSM), according to a press release. The asset manager now has 14 ETFs on its platform. 

“Surpassing $1 billion in assets under management demonstrates the strong demand for accessing our differentiated investment capabilities in the ETF wrapper,” said Anthony Rochte, global head of ETFS at Morgan Stanley in a statement.

While Morgan Stanley was involved in the unveiling of some of the first ETFs ever, the firm only decided to enter the ETF business as an issuer last year. Since then, it has largely increased assets in its ETFs by starting new funds. 

While the firm is playing catch-up with ETF behemoths like Vanguard and other mid-tier asset managers, its resources and connections with financial advisors could give the firm a boost, according to analysts.

ETF conversions are a popular tactic to move investors to the lower cost, more liquid ETF structure while maintaining the investment strategy of the mutual fund. Since the first mutual fund conversion in 2021, about $60 billion in assets have been moved from mutual funds to ETFs. J.P. Morgan Asset Management and Dimensional Fund Advisors are two issuers leading the mutual fund conversions.

EVTR, EVSM Expense Ratios

Morgan Stanley flipped EVTR and EVSM from its flagship mutual funds, the MSIFT Core Plus Fixed Income Portfolio and the MSIFT Short Duration Municipal Income Portfolio. According to etf.com, the two bond funds have over $700 million in assets. EVTR has an expense ratio of 0.32%, while EVSM has a fee of 0.19%.

The firm has released ETFs through its brands Eaton Vance, Calvert, and Parametric. Its largest fund is currently the $286 million Calvert US Large-Cap core Responsible Index ETF (CVLC).

Morgan Stanley has also filed with the SEC for exemptive relief to offer ETF share classes of its mutual funds. If the agency approves the conversion, it could unleash billions of new assets into the ETF industry, which recently crossed the $9 trillion milestone.

Contact Lucy Brewster at [email protected].

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.