Morgan Stanley Makes Historic ETF Comeback With Six New Funds

Three decades after helping give birth to the ETF industry, Morgan Stanley is officially back in the game in what could be a milestone moment for the investing world.

Six new products from the James Gorman-led firm began trading Wednesday, offering socially conscious strategies that target US and international equities and fixed income. They’re set to be the first of many from the bank, as they form the basis of a new ETF platform in its investment management unit.

Morgan Stanley’s arrival could be a game-changer for the $6.9 trillion US ETF arena. It was one of a tiny handful of major financial institutions with no industry presence after the capitulation of holdouts like Capital Group and Dimensional Fund Advisors over the past three years. More significantly, it commands about $5.5 trillion of assets across its wealth and investment management divisions — including hundreds of billions in existing ETFs.

The possibility that Morgan Stanley could ultimately redeploy some of those assets to its own funds raises the prospect of it rapidly becoming a major disruptive force in the industry.

“This is the first step in a series of launches,” Anthony Rochte, Morgan Stanley’s global head of ETFs, said by phone. “While we’re focusing on the US, we’re certainly working on a parallel launch in Europe down the road.”

The new products are the Calvert International Responsible Index ETF (ticker CVIE), the Calvert US Large-Cap Core Responsible Index ETF (CVLC), the Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF (CDEI), the Calvert US Mid-Cap Core Responsible Index ETF (CVMC), the Calvert US Select Equity ETF (CVSE), and the Calvert Ultra-Short Investment Grade ETF (CVSB).

Calvert, a heavyweight in environmental, social and governance investing, was acquired by Morgan Stanley in the bank’s purchase of Eaton Vance Corp., which closed in 2021.

Learn more: Bloomberg