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March 29, 2024 at 02:18 PM
What You Need to Know
- The mutual funds that began trading on March 25 are the Eaton Vance Total Return Bond ETF (ticker EVTR) and the Eaton Vance Short Duration Municipal Income ETF (EVSM).
- Fidelity, DFA, JPMorgan and others have switched billions of dollars between the two fund types over the past three years.
Morgan Stanley’s exchange-traded lineup now holds more than $1 billion thanks to the firm’s first-ever mutual-fund conversions.
The issuer is flipping two fixed-income mutual funds — one that follows a total return bond strategy and one focused on short-duration municipal debt — into ETFs, the company said in a statement on March 25. That brings Morgan Stanley’s total ETF lineup to 14 funds.
The conversions come as Morgan Stanley seeks to expand its footprint in the increasingly competitive $9 trillion ETF market. While Morgan Stanley was an early supporter of the industry three decades ago, the firm didn’t launch its own products until last year.
It has since created ETFs under a handful of Morgan Stanley’s brands, including Calvert, Parametric, and Eaton Vance. Monday’s new converts show Morgan Stanley’s deepening commitment to active, fixed-income ETFs, according to the firm’s global head of ETFs.
“We’re very focused on some of these industry trends, and the two major ones are fully transparent ETFs and the acceleration of fixed-income,” Morgan Stanley’s Anthony Rochte said in a phone interview. “We thought long and hard about which mutual funds are we going to convert, and which brand will we use.”
