Morgan Stanley plans to convert $10B in mutual funds to ETFs

Morgan Stanley Investment Management announced on September 16, 2026, plans to convert eight municipal bond mutual funds into ETFs. The funds held nearly $10 billion in assets under management as of August 31, 2026. Seven of the mutual funds will reorganize into newly created, actively managed ETFs, while one fund will merge into the existing Eaton Vance Short Duration Municipal Income ETF.

The Board of Trustees of the funds has approved the move, which remains subject to shareholder approval and customary closing conditions. All eight municipal mutual funds carry 4- or 5-star Morningstar ratings and have operated for more than 15 years. The firm plans to file a combined proxy statement and prospectus on Form N-14 with the SEC.

Morgan Stanley previously converted five fixed income mutual funds into ETFs in March 2024. Among them, Eaton Vance Total Return Bond ETF expanded from $363 million to over $6 billion as of August 31, 2026, while Eaton Vance Short Duration Municipal Income ETF more than tripled its assets.

Since launching its ETF platform in 2023, the asset manager has expanded to more than $16 billion in assets under management across 22 products. Overall, Morgan Stanley Investment Management managed or supervised $2 trillion in assets as of June 30, 2026, employing more than 1,300 investment professionals globally.