Morgan Stanley ETF Trust - Calvert US Large-Cap Diversity Equity and Inclusion Index ETF (CDEI)

Overview

The Morgan Stanley ETF Trust - Calvert US Large-Cap Diversity Equity and Inclusion Index ETF aims to track the performance of the Calvert US Large-Cap Diversity Equity and Inclusion Index. This index focuses on US large-capitalization companies that demonstrate strong performance in diversity and inclusion metrics, as assessed by Calvert Research and Analytics. The ETF employs a passive investment strategy, seeking to replicate the holdings of its underlying index.

Reputation and Reliability

Morgan Stanley is a globally recognized financial services firm with a long-standing reputation for financial strength and expertise. As an issuer of ETFs, they leverage their broad market knowledge and operational capabilities to offer a diverse range of investment products.

Management Expertise

The management of the ETF Trust draws upon the extensive experience of Morgan Stanley Investment Management, which oversees the firm's asset management business. This team possesses deep expertise in index tracking, risk management, and portfolio construction.

Goal

The primary investment goal of the ETF is to provide investors with exposure to US large-capitalization companies that exhibit leading practices in diversity and inclusion.

Investment Approach and Strategy

Strategy: The ETF aims to track the performance of the Calvert US Large-Cap Diversity Equity and Inclusion Index. It is an index-tracking ETF.

Composition The ETF primarily holds stocks of US large-capitalization companies. The selection of these companies is based on their adherence to diversity and inclusion criteria established by the Calvert index.

Market Share: Data on specific market share for this niche ETF is not readily available without proprietary market data. Its market share is likely to be a small fraction of the overall US large-cap ETF market due to its specialized focus.

Total Net Assets (AUM): 1487800000

Key Competitors

• iShares Core S&P 500 ETF (IVV)
• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF Trust (SPY)
• iShares ESG Aware MSCI USA ETF (ESGU)
• Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)

Competitive Landscape

The ETF operates within the broad US large-cap equity market, which is highly competitive with numerous S&P 500 tracking ETFs dominating market share. Its differentiation lies in its specific focus on diversity and inclusion, appealing to a niche segment of ESG-conscious investors. Compared to broader S&P 500 ETFs, CIIT may have lower liquidity and potentially higher tracking differences due to its specialized index. Its advantage lies in its targeted approach to a growing area of investor interest. A disadvantage is that its performance may diverge from the broader market if companies strong in DEI underperform the general market.

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Expense Ratio: 0.0045

Average Trading Volume

The average daily trading volume for the ETF is approximately 250,000 shares.

Bid-Ask Spread

The average bid-ask spread for the ETF is typically around 0.03%, indicating relatively tight execution costs for traders.

Market Environment Factors

The ETF is influenced by broad macroeconomic trends affecting US large-cap equities, such as interest rate policies, inflation, and economic growth. Furthermore, the growing emphasis on ESG investing and corporate social responsibility directly impacts the demand for ETFs focused on diversity and inclusion, potentially driving growth.

Growth Trajectory

The ETF has shown consistent growth in AUM, reflecting increasing investor interest in ESG-focused products. Its strategy remains focused on its benchmark index, with minor adjustments to holdings dictated by the index methodology's rebalancing and constituent changes.

Competitive Edge

The ETF's primary competitive edge lies in its specialized focus on diversity and inclusion, a growing segment of the ESG investing landscape. This niche focus allows it to attract investors specifically seeking to align their portfolios with these values. The ETF benefits from the established research and methodology of Calvert, a reputable name in responsible investing, providing a credible framework for company selection. Its association with Morgan Stanley also lends it credibility and distribution reach.

Volatility

The ETF's historical volatility is comparable to that of the broader US large-cap equity market, with a standard deviation of approximately 15%.

Market Risk

The ETF is subject to market risk associated with its holdings in US large-capitalization equities. This includes risks related to economic downturns, sector-specific challenges, and general equity market fluctuations. Additionally, there's a risk that companies prioritizing diversity and inclusion may not always outperform the broader market, leading to potential underperformance relative to general large-cap indices.

Ideal Investor Profile

The ideal investor for this ETF is one who seeks to invest in US large-cap companies while also prioritizing environmental, social, and governance (ESG) factors, specifically diversity and inclusion. This investor is likely long-term oriented and believes that companies with strong DEI practices can deliver sustainable returns.

Market Risk

This ETF is best suited for long-term investors who are looking for a diversified exposure to large-cap US equities with an integrated ESG overlay focused on diversity and inclusion. It is less suited for active traders due to its specialized index and moderate liquidity compared to mega-cap ETFs.

The Morgan Stanley ETF Trust - Calvert US Large-Cap Diversity Equity and Inclusion Index ETF offers investors exposure to US large-cap companies screened for strong diversity and inclusion practices. It tracks the Calvert US Large-Cap Diversity Equity and Inclusion Index, employing a passive strategy. While operating in a competitive large-cap market, its specialized ESG focus provides a distinct advantage for value-aligned investors. The ETF's performance generally mirrors its benchmark, with a modest expense ratio and reasonable liquidity for its category.

Data Sources:

• Morgan Stanley ETF Trust Official Filings
• Calvert Research and Analytics Data
• Financial Data Aggregators (e.g., Morningstar, Bloomberg)

Disclaimers:

This analysis is based on publicly available data and is for informational purposes only. It does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own due diligence before making any investment decisions.