WS Investor
16 Sep 2026, 14:30
Morgan Stanley Plans to Convert Nearly $10 Billion of Municipal Mutual Funds Into ETFs
Morgan Stanley (NYSE: MS) announced plans to convert eight municipal bond mutual funds representing nearly $10 billion in assets into seven newly created ETFs and one existing ETF, significantly expanding its presence in the fast-growing actively managed ETF market. The proposed conversions remain subject to shareholder approval and other closing conditions.
The initiative reflects growing investor demand for actively managed municipal bond ETFs, which combine professional portfolio management with the liquidity, transparency and accessibility of the ETF structure. The proposed products would give Morgan Stanley Investment Management exposure across different municipal bond maturities, income profiles and credit segments.
Morgan Stanley has already seen significant growth from earlier mutual-fund conversions. The Eaton Vance Total Return Bond ETF has expanded from $363 million at its March 2024 conversion to more than $6 billion, while the Eaton Vance Short Duration Municipal Income ETF has more than tripled its assets.
The move would further scale Morgan Stanley’s ETF business, which has grown to more than $16 billion in assets across 22 ETF and ETP products since launching in 2023. The broader investment-management operation oversees or manages approximately $2 trillion in assets.
Morgan Stanley (NYSE: MS) announced plans to convert eight municipal bond mutual funds representing nearly $10 billion in assets into seven newly created ETFs and one existing ETF, significantly expanding its presence in the fast-growing actively managed ETF market. The proposed conversions remain subject to shareholder approval and other closing conditions.
The initiative reflects growing investor demand for actively managed municipal bond ETFs, which combine professional portfolio management with the liquidity, transparency and accessibility of the ETF structure. The proposed products would give Morgan Stanley Investment Management exposure across different municipal bond maturities, income profiles and credit segments.
Morgan Stanley has already seen significant growth from earlier mutual-fund conversions. The Eaton Vance Total Return Bond ETF has expanded from $363 million at its March 2024 conversion to more than $6 billion, while the Eaton Vance Short Duration Municipal Income ETF has more than tripled its assets.
The move would further scale Morgan Stanley’s ETF business, which has grown to more than $16 billion in assets across 22 ETF and ETP products since launching in 2023. The broader investment-management operation oversees or manages approximately $2 trillion in assets.
