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Morgan Stanley to launch platform for exchange traded funds
The first ETF could be launched this year
Morgan Stanley gets reinforcement for the ETF area
Financial news site InvestmentNews reports that Morgan Stanley is expanding its business to launch an exchange-traded fund platform. The major US bank plans to launch its first ETFs later this year.
Memo from Morgan Stanley Managing Director Daniel Simkowitz
According to InvestmentNews, the plans were announced internally in a memo by Morgan Stanley Managing Director Daniel Simkowitz at the end of March. “A world-class ETF platform will also allow us to match our world-class investment opportunities with the diverse investment vehicles that our clients are increasingly demanding,” the news site said in part in the memo. “A multi-asset ETF platform covering active and systematic strategies will also complement our leadership in separately managed accounts, Parametrics’ leadership in customization, the distinguished history of mutual funds at MSIM and Eaton Vance, and our existing one.” private fund platform with over $200 billion in alternative capital for clients,” said Simkowitz.
Morgan Stanley gets reinforcement for the ETF area
InvestmentNews reports that the new initiative will be led by newcomers Anthony Rochete as Global Head of ETFs and Allyson Wallace as Global Head of ETFs Capital Markets. Rochte, who joins from Goldman Sachs, has over 18 years of experience in the ETF space, including “responsible for establishing and leading Fidelity’s corporate-wide ETF business while serving as an executive in the mutual fund and ETF board of SelectCo”, as can be seen from his LinkedIn profile. Wallace, who joined Morgan Stanley from BlackRock, brings fixed income expertise and is proposing a diverse, multi-asset ETF setup, reports InvestmentNews, citing the memo from Morgan Stanley managing director Daniel Simkowitz.
Rochete: Focus on “Building a World-Class ETF Platform”
Rochte emphasized that the ETF platform will be comprehensive, including “multi-jurisdiction, multi-asset class and multi-brand”. The focus is “on building a world-class ETF platform that enables us to coordinate investment capacities,” InvestmentNews quotes the Morgan Stanley newcomer as saying. “It’s driven by customer demand.”
Morgan Stanley sales manager Jacques Chappuis also believes that the migration to the ETF area gives customers what they want. Referring to the strategies on the new platform, he explained that the funds would likely mirror existing strategies that are already offered as separately managed accounts and mutual funds. “You’re probably going to see these strategies that we’ve already put into the new shell, first in the US with the intention of rolling them out globally,” Chappuis said.
Chappuis is not concerned that the new ETF platform could cannibalize Morgan Stanley’s mutual fund business. “We would expect there might be some customers who would like this [ETF-] “When that’s the case, it shows that we serve our clients better by providing them with a vehicle they prefer, and that’s what we’re trying to do.”
Morgan Stanley has ‘perks of familiarity’
According to InvestmentNews, ETF Trends research director Todd Rosenbluth explained that the growing appeal of ETFs, particularly among financial advisors, is being driven by liquidity, transparency and lower fees. Morgan Stanley is one of a few large money management firms that has not yet entered the ETF space. But even if Morgan Stanley is now following suit a little later, according to Rosenbluth, there is still room for newcomers and the ETF space is still on an uptrend. “It’s kind of surprising that they’re doing it now because by this point, a lot of money managers have already dipped their toes into the ETF space,” Rosenbluth said. “But it’s relatively early days for active ETFs and there’s still plenty of room for growth.” In addition, Rosenbluth sees “benefits of familiarity” with Morgan Stanley. “Money managers with a strong following will have a head start in the ETF space,” Rosenbluth said.
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