With ETF assets on a tear, Morgan Stanley has filed the paperwork to introduce its line of own exchange-traded products. It put in two applications for its first passive and active ETFs with the SEC in early-June. The firm declined to comment on the matter and to share any timeline on the introduction of these products.
ETF assets have grown rapidly in recent years. They stood at $2.1 trillion in late 2015, up from $1 trillion five years ago, according to PwC. In a recent survey of asset managers, PwC said 75% predict global ETF assets would increase to $5 trillion by 2020 due to their expanding use in global markets, growing acceptance by more types of investors and the emergence of a wider variety of investment strategies.
With investors’ growing preference for ETFs and regulatory pressure for firms to lower fees, Morgan Stanley — which has over 15,800 financial advisors and $2 trillion in wealth-management assets — could benefit from the product launch. “ETF share [of the total mutual fund market] in the US is 15% today, but we think it could eventually reach 40-60% over the next 10 years,” Credit Suisse analyst Craig Siegenthaler explained in a recent note.