Morgan Stanley has touted a European expansion following its entry into the US ETF market.
The €1.23 trillion US asset management giant, which this month launched its first range of ETFs in the US, plans to create a global, cross-asset-class ETF platform, global head of ETFs Anthony Roche told the Financial Times.
Morgan Stanley already has a small foothold in the European ETF market through its alternatives and systematic investment firm Sundlogic, including five multi-sector ETFs in collaboration with Scientific Beta.
But the launch of a European offering may not come until 2024, Roche said.
In the US, a new lineup of six ETFs was launched under Morgan Stanley’s ESG-focused Calvert brand. These include the actively managed Calvert US Select Equity ETF (CVSE) and the Calvert Ultra-Short Investment Grade ETF (CVSB), as well as a range of four ESG-themed passive products.
Morgan Stanley has a turbulent history within the European ETF space. It developed the ETF-like Optimised Portfolios As Listed Securities (OPALS) in 1993, but the proposed conversion to ETFs never materialised.
Three years later, it developed the World Equity Benchmark Series ETFs alongside Barclays Global Investors (BGI), which then bought out Morgan Stanley’s stake in 2000. The business was rebranded to iShares and sold to asset management titan BlackRock.
iShares is now the world’s largest ETF issuer, with over $3 trillion in assets globally.
In 2009, Morgan Stanley backed Source – a London-based ETF outfit founded by former Morgan Stanley and Goldman Sachs staffers. The business was then sold to Invesco in 2017.
The European ETF space has seen new entrants in recent months. In September 2022, AXA Investment Managers entered the market with the launch of a platform focused on active thematic ETFs. It launched two inaugural strategies – AXA IM ACT Biodiversity Equity Ucits ETF (ABIU) and the AXA IM ACT Climate Equity Ucits ETF (ACLE)
Earlier in February, Investilinx joined the European market with the launch of two active ETFs – the Investlinx Capital Appreciation Ucits ETF (LINXC) and the Investlinx Balanced Income Ucits ETF (LINXB).
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