Banking Giant Morgan Stanley Prepares to Step into ETF Market

Market analysts seem to be excited about Morgan Stanley entering the ETF space.

Wall Street banking giant Morgan Stanley is looking to enter the ETF market this year. In its continued push into asset management, Morgan Stanley will be launching its exchange-traded fund (ETF) platform in 2022.

Daniel Simkowitz, Morgan Stanley’s head of investment management confirmed the same in a memo released earlier this week. The memo reads:

“A first class ETF platform will further enable us to match our world class investment capabilities with the diverse set of investment vehicles our clients increasingly demand. Multi-asset ETF platform that covers active and systematic strategies will also complement our leadership in separately managed accounts … The distinguished mutual fund history at MSIM and Eaton Vance and our private fund platform.”

To execute this project, Morgan Stanley has hired two big veterans – Anthony Rochte from Goldman Sachs and Allyson Wallace from BlackRock. The memo also mentions that Mr. Rochte will join as the global head of ETFs while Ms. Wallace will join as the global head of ETF capital markets for the platform. The first ETF product from Morgan Stanley shall go live within a year’s time.

As of December 31st, 2021, Morgan Stanley Investment Management manages $1.6 trillion in assets under management.  Mr. Rochte holds a sound experience in the ETF market. At Goldman Sachs, he serves as co-head of its Private Bank Select business. Before that, he worked on building Fidelity’s ETF business.

On the other hand, Ms. Wallace has serves as global head of income products for the iShares ETF business. “Under Tony and Ally’s leadership, we will develop a robust ETF platform that supports ETFs across businesses, asset classes, jurisdictions and brands,” Simkowitz added.

Market Analysts Give Thumbs Up to the ETF Plans of Morgan Stanley

Market analysts seem to be excited about Morgan Stanley entering the ETF space. In an email to Pensions and Investments publication, Ben Johnson, director of global exchange-traded fund research for Morningstar wrote:

“ETFs are the last box that Morgan Stanley has yet to stamp on the large-scale asset manager bingo card. It already has a mutual fund franchise, has long offered separately managed accounts, and acquired direct indexing capabilities when it brought Eaton Vance/Parametric into the fold.”

Mr. Jhonson also expressed excitement in seeing how Morgan Stanley “picks its spots” to build its ETF lineup. “For example, I’m not sure if some of their stock pickers would be comfortable with the format – especially if capacity is a concern,” he said.

Morgan Stanley has also shown some interest recently in the crypto space. It published a report earlier this year expressing its views on Bitcoin.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.