MutualFundWire.com: Morgan Stanley Builds 5 Free MFs, But ...
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Tuesday, April 15, 2025

Morgan Stanley Builds 5 Free MFs, But ...


Another discount brokerage, this time one within a money center bank, launching a mutual fund suite that comes with no loads and no expense ratios. The new funds will exclusively be offered to self-directed investors, not financial advisors.

Yesterday (April 14), Chad Turner, head of wealth management platforms at Morgan Stanley [profile], and Vince Lumia, head of wealth management client segments, unveiled the debut of five E*Trade index funds, all solely available in self-directed accounts from Morgan Stanley's E*Trade (so don't expect Morgan Stanley's own wirehouse FAs to use the funds). Morgan Stanley Investment Management Inc. serves as investment advisor and administrator to all five new funds.

The new funds are:
  • the E*Trade No Fee International Index Fund (ETISX), designed to track the Solactive GBS Developed Markets ex United States Large & Mid Cap USD Index NTR;
  • the E*Trade No Fee Large Cap Index Fund (ETLGX), designed to track the Solactive GBS United States 500 Index;
  • the E*Trade No Fee Municipal Bond Index Fund (ETMUX), designed to track the Bloomberg Municipal Managed Money Intermediate (1-17 Year) Index;
  • the E*Trade No Fee Total Market Index Fund (ETTOX), designed to track the Solactive United States 3000 Index; and
  • the E*Trade No Fee U.S. Bond Index Fund (ETBOX), designed to track the Bloomberg U.S. Government Credit Bond Index.

    • All five funds come in a single share class, one that charges no loads and no expense ratio and comes with no minimum initial investment.

    The three equity funds (ETTOX, ETLGX, and ETISX) are all powered by the same two PMs, managing directors Jennifer Mihara and Gordon Wotherspoon. Those three funds' index provider is Solactive AG.

    Bloomberg Index Services Limited (BISL) serves as index provider to the two fixed income funds, ETMUX and ETBOX. ETBOX's PM team includes: Brian Barney, managing director; and Dan Codreanu, executive director. ETMUX's PM team includes: Devin Cooch, executive director; Alison Wagner, executive director; and Barney.

    "This marks another chapter in E*TRADE’s storied history of bringing innovative products and services to self-directed investors," Turner states. "The barriers of entry to investing have never been lower and with these index funds, clients have access to the broader market with a 0% expense ratio ... They can put more of their dollars to work with management fees off the table."

    Lumia puts the launch of the five E*Trade No Fee funds in the context of E*Trade being "fully integrated" into Morgan Stanley's wealth management business.

    "The reality is, we are only beginning to unlock the power of what we can build and deliver to our clients through this critical channel," Lumia states.

    ETBOX, ETISX, ETLGX, ETMUX, and ETTOX are all series of E*Trade Trust. The new funds' other service providers include:
  • Dechert LLP as counsel;
  • Ernst & Young LLP as independent accounting firm;
  • Morgan Stanley Distribution, Inc. as distributor and principal underwriter;
  • SS&C Global Investor and Distribution Solutions, Inc. (SS&C GIDS) as dividend disbursing agent and transfer agent; and
  • State Street Bank and Trust Company as custodian, securities lending agent, and sub-administrator.


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    Printed from: MFWire.com/story.asp?s=69784

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