Morgan Stanley Investment Management, which launched its ETF platform in February 2023, has filed an application with the Securities and Exchange Commission for exemptive relief to offer ETF share classes of its mutual funds.
"Applicants request an Order that would permit a Fund to offer a class of exchange-traded shares … in addition to classes of shares that are not exchange-traded," according to a Jan. 29 filing with the SEC by Morgan Stanley Institutional Fund Trust and MSIM.
The trust and MSIM filed the application "because they believe that the ability of a Fund to offer both Mutual Fund Shares and ETF Shares could be beneficial to the Fund and to shareholders of each type of class," the filing said.
"Applicants continue to see demand for ETFs to help investors meet their distinct financial goals and look for opportunities to grow their lineup with innovative strategies that offer choice, value, and new opportunities to help meet the evolving needs of investors," the filing said. "Applicants are committed to providing customers choice in the investment products they offer."
An MSIM spokeswoman confirmed the filing but declined to comment further.
MSIM's filing comes after similar ones by other industry players. In February 2023, Perpetual US Services, which does business as PGIA, announced the filing of an exemptive application with the SEC seeking an order that would permit PGIA and its affiliated U.S. investment advisers to establish an ETF multishare-class structure of their respective mutual funds.
"The Application seeks relief to permit the creation and operation of an actively managed, exchange-traded share class ("ETF Class") of an open-end, management investment company that is not exchange-traded ("Mutual Fund")," PGIA's filing said.
The PGIA filing came just months before the May 2023 expiration of a patent held by Vanguard Group. Starting in 2000, Vanguard began operating index-based ETFs as share classes of its index-based mutual funds in accordance with an order from the SEC that was "substantially similar to the one sought by Applicant," PGIA's filing said.
Dimensional Fund Advisors filed its application for exemptive relief in July, while Fidelity Investments filed in October.
As of Dec. 31, MSIM, the asset management arm of Morgan Stanley, had about $1.5 trillion in total assets under management.
