EMD vs. MSD

Last updated Jul 14, 2026

EMD (Western Asset Emerging Markets Debt Fund Inc) is Emerging Markets Bonds fund managed by Franklin Templeton, while MSD (Morgan Stanley Emerging Markets Debt Fund, Inc.) is a stock. Over the past 10 years, EMD returned 5.72%/yr vs 4.98%/yr for MSD. A 0.51 correlation means they provide meaningful diversification when combined.

Performance

EMD vs. MSD - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Western Asset Emerging Markets Debt Fund Inc (EMD) and Morgan Stanley Emerging Markets Debt Fund, Inc. (MSD). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, EMD achieves a 5.49% return, which is significantly higher than MSD's 2.43% return. Over the past 10 years, EMD has outperformed MSD with an annualized return of 5.72%, while MSD has yielded a comparatively lower 4.98% annualized return.

EMD

• 1D: -0.56%
• 1M: 1.47%
• 6M: 2.41%
• YTD: 5.49%
• 1Y: 17.14%
• 3Y*: 19.08%
• 5Y*: 5.17%
• 10Y*: 5.72%

MSD

• 1D: -0.41%
• 1M: 2.21%
• 6M: 1.33%
• YTD: 2.43%
• 1Y: 4.42%
• 3Y*: 15.29%
• 5Y*: 4.06%
• 10Y*: 4.98%

*Multi-year figures are annualized to reflect compound growth (CAGR)

EMD vs. MSD - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
EMD Western Asset Emerging Markets Debt Fund Inc	5.49%	23.41%	16.23%	12.23%	-20.78%	-0.32%	7.03%	26.62%	-13.70%	14.29%
MSD Morgan Stanley Emerging Markets Debt Fund, Inc.	2.43%	5.58%	24.92%	19.14%	-22.10%	2.20%	0.73%	24.38%	-12.31%	16.33%

Correlation

The correlation between EMD and MSD is 0.51, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.51
Correlation (3Y) Calculated over the trailing 3-year period	0.50
Correlation (5Y) Calculated over the trailing 5-year period	0.53
Correlation (10Y) Calculated over the trailing 10-year period	0.55
Correlation (All Time) Calculated using the full available price history since Dec 2, 2003	0.51

The correlation between EMD and MSD has been stable across timeframes, ranging from 0.50 to 0.55 - a consistent structural relationship.

Return for Risk

EMD vs. MSD — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

EMD

EMD Risk / Return Rank: 32
EMD Sharpe Ratio Rank: 38
EMD Sortino Ratio Rank: 37
EMD Omega Ratio Rank: 34
EMD Calmar Ratio Rank: 22
EMD Martin Ratio Rank: 29

MSD

MSD Risk / Return Rank: 55
MSD Sharpe Ratio Rank: 61
MSD Sortino Ratio Rank: 51
MSD Omega Ratio Rank: 51
MSD Calmar Ratio Rank: 56
MSD Martin Ratio Rank: 58

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

EMD vs. MSD - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Western Asset Emerging Markets Debt Fund Inc (EMD) and Morgan Stanley Emerging Markets Debt Fund, Inc. (MSD). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	EMD	MSD	Difference
Sharpe ratio: Return per unit of total volatility	1.36	0.44	+0.92
Sortino ratio: Return per unit of downside risk	1.94	0.66	+1.28
Omega ratio: Gain probability vs. loss probability	1.24	1.08	+0.15
Calmar ratio: Return relative to maximum drawdown	1.29	0.42	+0.87
Martin ratio: Return relative to average drawdown	5.11	1.16	+3.94

EMD vs. MSD - Sharpe Ratio Comparison

The current EMD Sharpe Ratio is 1.36, which is higher than the MSD Sharpe Ratio of 0.44. The chart below compares the historical Sharpe Ratios of EMD and MSD, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

EMD vs. MSD - Drawdown Comparison

The maximum EMD drawdown since its inception was -48.26%, smaller than the maximum MSD drawdown of -58.51%. Use the drawdown chart below to compare losses from any high point for EMD and MSD.

Drawdown Indicators

	EMD	MSD	Difference
Max Drawdown Largest peak-to-trough decline	-48.26%	-58.51%	+10.25%
Max Drawdown (1Y) Largest decline over 1 year	-13.33%	-10.59%	-2.74%
Max Drawdown (3Y) Largest decline over 3 years	-13.33%	-12.84%	-0.49%
Max Drawdown (5Y) Largest decline over 5 years	-40.43%	-33.89%	-6.54%
Max Drawdown (10Y) Largest decline over 10 years	-46.44%	-37.50%	-8.94%
Current Drawdown Current decline from peak	-1.62%	-4.54%	+2.92%
Average Drawdown Average peak-to-trough decline	-8.76%	-11.28%	+2.52%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.37%	3.81%	-0.44%

Volatility

EMD vs. MSD - Volatility Comparison

Western Asset Emerging Markets Debt Fund Inc (EMD) has a higher volatility of 3.28% compared to Morgan Stanley Emerging Markets Debt Fund, Inc. (MSD) at 1.81%. This indicates that EMD's price experiences larger fluctuations and is considered to be riskier than MSD based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	EMD	MSD	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.28%	1.81%	+1.47%
Volatility (6M) Calculated over the trailing 6-month period	10.40%	8.22%	+2.18%
Volatility (1Y) Calculated over the trailing 1-year period	12.67%	10.09%	+2.58%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.26%	14.06%	+2.20%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	18.37%	14.72%	+3.65%

Dividends

EMD vs. MSD - Dividend Comparison

EMD's dividend yield for the trailing twelve months is around 10.72%, more than MSD's 8.39% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
EMD Western Asset Emerging Markets Debt Fund Inc	10.72%	10.44%	10.57%	9.97%	11.09%	8.44%	8.45%	8.41%	9.76%	7.78%	9.99%	9.54%
MSD Morgan Stanley Emerging Markets Debt Fund, Inc.	8.39%	9.88%	11.88%	10.90%	7.34%	4.99%	4.67%	5.37%	6.56%	5.81%	6.87%	7.03%

Frequently Asked Questions

Can I hold both EMD and MSD in my portfolio?

EMD and MSD have a correlation of 0.51, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, EMD or MSD?

EMD has higher volatility (3.28%) compared to MSD (1.81%). In terms of maximum drawdown, EMD dropped -48.26% vs MSD's -58.51%.

Which has better risk-adjusted returns?

EMD currently has the higher Sharpe Ratio (1.36 vs 0.44), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.