Morgan Stanley has launched new Exchange Traded Products (ETPs) for Ethereum (ETH) and Solana (SOL) on NYSE Arca, featuring an expense ratio of 0.14%. This pricing positions them as the most cost-effective options in the U.S. market for these digital assets. The new offerings, the Morgan Stanley Ethereum Trust (MSSE) and the Morgan Stanley Solana Trust (MSOL), also include provisions for staking rewards to be passed on to shareholders.
Competitive Pricing and Market Position
The 0.14% expense ratio undercuts all comparable ETH and SOL products currently available in the U.S. This pricing strategy is notably lower than previous benchmarks, such as Grayscale’s Mini Ethereum Trust at 0.15% and Franklin Templeton’s SOEZ, the cheapest SOL fund at 0.19%. According to Bloomberg ETF analyst Eric Balchunas, this pricing makes the new Morgan Stanley funds the cheapest in both the U.S. and globally.
Staking Rewards Mechanism
Both the MSSE and MSOL trusts will stake a portion of their holdings to generate rewards, which will then be distributed to shareholders. Morgan Stanley Investment Management (MSIM) has stated that it may not retain any of these staking rewards for itself. The registration documents indicate staking targets of 50% to 80% for ETH holdings and up to 100% for SOL holdings. These staking operations will be managed through partnerships with Figment, Galaxy, and Coinbase Canada, with provider service fees capped at 5%.
Regulatory Framework for Staking
This ability for ETPs to stake assets and pass rewards to investors without incurring separate tax charges is facilitated by IRS and Treasury Revenue Procedure 2025-31, published in November. This safe harbor guidance outlines specific conditions that must be met, including the use of a third-party custodian for private keys, an independent staking provider, and SEC approval of disclosures.
Product Details and Broader Strategy
The MSSE tracks the CoinDesk Ether Benchmark 4 PM NY Settlement Rate, while the MSOL tracks the CoinDesk Solana Benchmark. MSIM serves as the delegated sponsor for both trusts, with Foreside Fund Services acting as the marketing agent.
These launches follow Morgan Stanley’s earlier entry into the digital asset ETP market with the Morgan Stanley Bitcoin Trust (MSBT). The MSBT, which opened earlier this year, saw $34 million in first-day volume and held over $381 million in assets under management as of July 16. The MSBT also carries a 0.14% fee.
Ally Wallace, Global Head of ETFs at MSIM, noted the growth of the firm’s ETF and ETP suite, which now exceeds $14 billion in assets under management. This suite comprises 22 products, including these three digital asset ETPs.
The introduction of these competitively priced ETPs with staking rewards signifies Morgan Stanley’s expanding commitment to the digital asset investment landscape, offering investors new and potentially more cost-effective avenues for exposure to major cryptocurrencies.
Why This Matters
The materials describe a narrow update: Morgan Stanley launched the Morgan Stanley Ethereum Trust (MSSE) and the Morgan Stanley Solana Trust (MSOL) on NYSE Arca on July 28, featuring an expense ratio of 0. The 0.14% expense ratio undercuts every rival ETH and SOL product on the US market.
Broader Context
Source materials place the factual news in this context: The investment banking giant has begun trading for the Morgan Stanley Ethereum Trust (MSSE) and the Morgan Stanley Solana Trust (MSOL) on NYSE Arca on July 28.
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