Morgan Stanley launches lowest‑fee staked Ethereum and Solana ETFs

Morgan Stanley Investment Management debuted two spot exchange‑traded products—MSSE for Ethereum and MSOL for Solana—on July 28, each carrying a 0.14% annual expense ratio and integrating staking from day one, a move that undercuts every existing U.S. Ether and Solana ETF on cost and yield potential.

Fee and staking structure

Both trusts opened with 50,000 shares and roughly $1 million of seed capital, establishing the lowest fee benchmark in their categories; the previous floor was the 0.15% charge applied by Grayscale’s Ether products [1]. The funds stake through Figment, Galaxy Blockchain Infrastructure, and Coinbase Canada, with the staking providers retaining 5% of gross rewards while Morgan Stanley’s 0.14% fee applies separately to net asset value [1]. Approximately 95% of staking rewards are expected to flow to shareholders after validator and operational costs, according to the prospectus and Figment’s statements [2][3].

Allocation and operational details

MSSE plans to stake between 50% and 80% of its ETH holdings, capping staking at 80%, whereas MSOL intends to stake up to 100% of its SOL assets [1][3]. The Ethereum trust faces a validator activation queue of about 2.71 million ETH as of July 6, translating to an estimated 47‑day wait for queued ether that earns no rewards, while Solana bonding periods are two to three days [1]. Holders will receive staking payouts as monthly cash distributions, with a minimum quarterly schedule, funded by token sales rather than direct token holdings [1].

Market impact and competitive landscape

Morgan Stanley’s entry follows its earlier Bitcoin Trust, which grew from $34 million at launch to $381 million in just 99 days, representing 2.7% of the firm’s $14 billion ETF suite [1]. With roughly 16,000 advisers overseeing $9.3 trillion, the bank’s new products give its extensive advisory network direct exposure to proof‑of‑stake assets without requiring clients to manage wallets or validator nodes [1]. The launch arrives as Bitcoin ETFs have already driven fee compression, and the 0.14% expense ratio is poised to pressure competing Ether and Solana products to lower costs or add features such as staking [2].

What to watch

• Validator queue length – Ethereum’s 2.71 million ETH queue (≈ 47 days) could affect the timing of reward distributions for MSSE.
• Staking reward pass‑through – Confirmation that ~95% of rewards reach shareholders will be visible in the first quarterly distribution.
• Price reaction – Ethereum is trading about 61% below its August 2025 peak, and Solana is 75% under its January 2025 high; any significant price moves may test the attractiveness of the low‑fee, staking‑enabled trusts [1].

Morgan Stanley’s low‑cost, staking‑enabled ETFs set a new benchmark for alt‑coin ETFs, but the ultimate test will be whether adviser networks allocate enough capital to overcome the current drawdowns in Ether and Solana prices.