MSIM Adds Latest Strategy, Eaton Vance High Income Municipal, to $4.7 Billion ETF Platform

Rhea-AI Summary

Morgan Stanley Investment Management (MSIM) has launched its latest ETF, Eaton Vance High Income Municipal (EVYM), expanding its ETF platform to $4.7 billion in assets across 17 strategies. The new high-yield municipal strategy, listed on Nasdaq, marks MSIM's eighth active fixed income ETF.

EVYM aims to provide high current income exempt from regular federal income tax by investing at least 80% of its net assets in municipal obligations. The platform has attracted significant interest, with over $600 million in asset flows to fixed income ETFs since the start of the year.

MSIM's ETF platform, launched in early 2023, now comprises:

• 8 Eaton Vance-branded fixed income strategies
• 3 Parametric-branded equity- and options-based strategies
• 6 Calvert-branded ETFs

Positive

• ETF platform growth to $4.7B in assets since 2023 launch
• $600M+ in fixed income ETF inflows YTD
• Platform expansion with 17 diverse ETF strategies

Negative

• None.

Insights

Financial Analyst

Morgan Stanley Investment Management's launch of the Eaton Vance High Income Municipal ETF (EVYM) represents strategic expansion of their ETF business, which has grown impressively to $4.7 billion in assets since its 2023 inception. With $600 million in asset flows to their fixed income ETFs since early 2024, MSIM is clearly seeing strong client demand in this segment.

This launch marks their eighth active fixed income ETF, complementing a platform that now includes 17 total strategies across three branded families. The municipal focus targets the tax-efficiency needs of high-net-worth investors, positioning MSIM competitively in the high-yield municipal bond space.

From a business perspective, this represents MSIM's continued execution on building a comprehensive ETF lineup, leveraging their established fixed income capabilities while adapting to the structural shift toward ETFs in investor portfolios. The strong asset growth in a relatively short period indicates effective product-market fit and distribution capabilities.

While positive for MSIM's asset management business line, this single product launch is not material enough to significantly impact Morgan Stanley's overall financial performance given the firm's $208 billion market capitalization and diversified business model spanning investment banking, wealth management, and asset management.

NEW YORK--(BUSINESS WIRE)-- Morgan Stanley Investment Management (“MSIM”) today announced the launch of its latest ETF, Eaton Vance High Income Municipal (Ticker: “EVYM”), a high yield municipal strategy. Since the introduction of MSIM’s first ETFs in 2023, the platform has grown to $4.7 billion in ETF assets with 17 total strategies that span asset classes and themes. Listed on the Nasdaq, the latest addition to the platform is the eighth active fixed Income ETF brought to market.

“The MSIM ETF platform continues to strongly resonate with both institutional and retail investors as evidenced by growth to $4.7 billion in assets since its inception,” said Brian Weinstein, Head of Global Markets at MSIM. “We have seen significant demand for our active fixed income ETFs with over $600 million in asset flows since the beginning of the year and our latest product, EVYM, enhances our ability to meet client demand across the full spectrum of active fixed income investments. We are pleased to be able to meet our clients’ needs for a broad range of ETF strategies and remain focused on building a comprehensive platform that makes use of MSIM’s distinct capabilities.”

EVYM seeks to provide high current income exempt from regular federal income tax by investing at least 80% of its net assets in municipal obligations, the interest on which is exempt from regular federal income tax.

“With this latest product, we are pleased to be able to provide access to our deep experience in the municipals space and differentiated investment approach for new and existing clients,” said William Delahunty, Managing Director and Municipals portfolio manager at MSIM. “EVYM brings together our team’s extensive experience and knowledge in the Municipals space with the in-demand ETF structure, and reflects investors’ strong preference for tax-efficiencies, custom fixed income exposures and lower cost vehicles.”

MSIM’s ETF platform is comprised of 17 total products including eight Eaton Vance-branded fixed income strategies, three Parametric-branded equity- and options-based strategies, and six Calvert-branded ETFs. Launched in early 2023, the platform has grown to $4.7 billion in assets.

About Morgan Stanley Investment Management
Morgan Stanley Investment Management, together with its investment advisory affiliates, has more than 1,400 investment professionals around the world and $1.7 trillion in assets under management or supervision as of December 31, 2024. Morgan Stanley Investment Management strives to provide outstanding long-term investment performance, service, and a comprehensive suite of investment management solutions to a diverse client base, which includes governments, institutions, corporations and individuals worldwide. For further information about Morgan Stanley Investment Management, please visit www.morganstanley.com/im.

About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

Please consider the investment objective, risks, charges and expenses of the fund carefully before investing. The prospectus contains this and other information about the fund. To obtain a prospectus (which includes the applicable fund's current fees and expenses, if different from those in effect as of the date of this material), download one at eatonvance.com or contact your financial professional. Please read the prospectus carefully before investing.

Risk Considerations: Fixed-income securities are subject to the ability of an issuer to make timely principal and interest payments (credit risk), changes in interest rates (interest-rate risk), the creditworthiness of the issuer and general market liquidity (market risk). In a rising interest-rate environment, bond prices may fall and may result in periods of volatility and increased portfolio redemptions. In a declining interest-rate environment, the portfolio may generate less income. Longer-term securities may be more sensitive to interest rate changes. High yield securities (“junk bonds”) are lower rated securities that may have a higher degree of credit and liquidity risk. Preferred securities are subject to interest rate risk and generally decreases in value if interest rates rise and increase in value if interest rates fall. Foreign securities are subject to currency, political, economic and market risks. Certain U.S. government securities purchased by the portfolio, such as those issued by Fannie Mae and Freddie Mac, are not backed by the full faith and credit of the U.S. It is possible that these issuers will not have the funds to meet their payment obligations in the future. By investing in municipal obligations, the Fund may be susceptible to political, economic, regulatory or other factors affecting their issuers. While interest earned on municipal securities is generally not subject to federal income tax, any interest earned on taxable municipal securities is fully taxable at the federal level and may be subject to state and/or local income tax. Residual Interest Bonds. The Fund may enter into residual interest bond transactions, which expose the Fund to leverage and greater risk than an investment in a fixed-rate municipal bond. . Illiquid securities may be more difficult to sell and value than publicly traded securities (liquidity risk). Derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks. By investing in investment company securities, the portfolio is subject to the underlying risks of that investment company's portfolio securities. In addition to the Portfolio's fees and expenses, the Portfolio generally would bear its share of the investment company's fees and expenses. Active Management Risk. In pursuing the Fund’s investment objective, the Adviser has considerable leeway in deciding which investments to buy, hold or sell on a day-to-day basis, and which trading strategies to use. For example, the Adviser, in its discretion, may determine to use some permitted trading strategies while not using others. The success or failure of such decisions will affect the Fund’s performance. New Fund Risk. A new portfolio's performance may not represent how the portfolio is expected to or may perform in the long term. In addition, there is a limited operating history for investors to evaluate and the portfolio may not attract sufficient assets to achieve investment and trading efficiencies. Participant Concentration Risk. The Portfolio has a limited number of intermediaries that act as authorized participants and none of these authorized participants is or will be obligated to engage in creation or redemption transactions. As a result, shares may trade at a discount to net asset value (“NAV”) and possibly face trading halts and/or delisting. Trading Risk. The market prices of Shares are expected to fluctuate, in some cases materially, in response to changes in the Portfolio's NAV, the intra-day value of holdings, and supply and demand for Shares. The Adviser cannot predict whether Shares will trade above, below or at their NAV. Buying or selling Shares in the secondary market may require paying brokerage commissions or other charges imposed by brokers.

Eaton Vance, Parametric and Calvert are part of Morgan Stanley Investment Management, the asset management division of Morgan Stanley. Morgan Stanley Investment Management Inc. is the adviser to the ETFs. Parametric Portfolio Associates LLC is the subadviser to the Parametric ETFs.

ETFs are distributed by Foreside Fund Services LLC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250304264476/en/

Media Contact: Lauren Bellmare

Lauren.Bellmare@MorganStanley.com

Source: Morgan Stanley Investment Management

FAQ

What is the size of Morgan Stanley Investment Management's (MS) ETF platform in 2024?

MSIM's ETF platform has grown to $4.7 billion in assets across 17 strategies.

How much has MSIM's fixed income ETFs attracted in asset flows since the beginning of the year?

MSIM's active fixed income ETFs have attracted over $600 million in asset flows since the beginning of the year.

What is the investment objective of MSIM's new EVYM ETF?

EVYM seeks to provide high current income exempt from regular federal income tax by investing at least 80% of its net assets in municipal obligations.

How many ETF strategies does Morgan Stanley (MS) currently offer across its platform?

MSIM offers 17 total ETF strategies, including 8 Eaton Vance fixed income, 3 Parametric equity/options, and 6 Calvert ETFs.