Morgan Stanley Investment Management announced the conversion of its Morgan Stanley Income Opportunities Fund into the Eaton Vance Income Opportunities ETF, which will trade on NYSE Arca under the ticker XAGG. The move, completed on November 10, 2025, replaces a $1.2 billion mutual fund with an ETF that carries a 0.55% expense ratio—roughly 0.15 percentage points lower than the 0.70% ratio of the former fund—providing investors with a more cost‑efficient vehicle.
The new ETF maintains the same investment mandate: to generate a high level of current income while pursuing total‑return upside through a diversified, multi‑sector allocation across global fixed‑income markets. Management highlighted that the strategy will target a mix of high‑yield corporate bonds, investment‑grade sovereign debt, and mortgage‑backed securities, with a focus on issuers that offer attractive risk‑adjusted returns in a low‑interest‑rate environment.
Morgan Stanley’s CEO Ally Wallace said the launch “marks another milestone in the expansion of our ETF platform and our commitment to offering investors best‑in‑class, actively‑managed fixed‑income strategies in the ETF structure.” The conversion follows the firm’s March 2021 acquisition of Eaton Vance, which added $7 billion in assets and a robust fixed‑income team. By converting the fund to an ETF, Morgan Stanley can capture fee‑based flows from investors who prefer the liquidity and lower costs of ETFs, thereby accelerating the growth of its fee‑based income.
The ETF’s launch is part of a broader industry trend of mutual‑fund conversions. As of October 31, 2025, Morgan Stanley’s ETF platform had grown to 18 funds, including 11 active fixed‑income ETFs, and had amassed more than $9 billion in assets. The Eaton Vance Income Opportunities ETF adds a new product that can attract investors seeking a multi‑sector, income‑focused strategy without the higher expense ratios typically associated with mutual funds.
Andrew Szczurowski, co‑head of Morgan Stanley’s mortgage and securitized investment team and lead portfolio manager for the ETF, noted that the strategy’s “multisector approach allows us to navigate the shifting market and take advantage of emerging opportunities across geographies, sectors and the yield curve.” The firm expects the ETF to provide a higher yield than comparable passive fixed‑income ETFs while maintaining a competitive expense ratio.
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