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Morgan Stanley Investment Management (MSIM) is exploring an entry into the rapidly growing European ETF market with its own in-house strategies, ETF Stream understands.
MSIM, the asset management arm of Morgan Stanley, laid the foundation for an expansion into European ETFs in October 2024 when it registered the Morgan Stanley ETF ICAV with the Central Bank of Ireland (CBI).
European ETF Expansion
The first ETF to launch via the platform will be the Garnet US Treasury Bond 1-3 Year UCITS ETF (GUS1), a short-dated U.S. government bond fund that received the regulator's green light in February.
According to a person familiar with the matter, GUS1 will launch in response to targeted client demand and is not part of the broader range of in-house strategies the firm is considering bringing to the European market.
MSIM entered the US market in January 2023, and its 17-strong U.S. ETF range houses $4.8 billion in assets under management, according to data from Trackinsight.
The suite encompasses fixed income, equity and option-based ETFs—all managed by subsidiaries Calvert, Parametric and Eaton Vance.
Not Too Late
The firm has contemplated entering Europe’s ETF market on a number of occasions over the last two decades, but to-date, it has not used the ETF wrapper to deliver its own strategies.
Deborah Fuhr, founder of ETFGI and former head of investment strategies at Morgan Stanley, previously said the firm was within touching distance of launching Europe's first ETFs in the year 2000.
“If Morgan Stanley had entered the ETF industry when I was still working there—when they were thinking about it back in 2000—with a family of real ETFs, we would have been the largest manager of ETFs in Europe,” Fuhr told ETF Stream.
“We had a set of ETFs ready to go, a marketing campaign and regional products, which would have launched in the first round. We even had these little cardboard single-use cameras to give away, with ‘instant exposure in a single clip’ as a campaign tag.”
Global ETF Platform in the Works
However, a number of UCITS ETFs have come to market via the firm’s FundLogic platform—part of MSIM but distinct from its in-house products—including six smart beta ETFs, which closed last year, and a recently launched covered call strategy issued by Montrose, a subsidiary of Swedish financial services group Carnegie.
The Montrose Global Monthly Dividend MSCI World UCITS ETF (MONTDIV) is listed on the Stockholm Stock Exchange and Morgan Stanley serves as a market maker for the product, ETF Stream understands. A second Montrose ETF is expected to launch via the FundLogic platform as early as this month.