MSLC vs. PAPI

Last updated Jun 24, 2026

MSLC (Morgan Stanley Pathway Large Cap Equity ETF) and PAPI (Parametric Equity Premium Income ETF) are both exchange-traded funds - MSLC is a Large Cap Blend Equities fund actively managed by Morgan Stanley, while PAPI is a Derivative Income fund actively managed by Morgan Stanley. Both are actively managed. Over the past year, MSLC returned 19.11% vs 12.01% for PAPI. At a 0.44 correlation, their price movements are largely independent. MSLC charges 0.39%/yr vs 0.29%/yr for PAPI.

Performance

MSLC vs. PAPI - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Morgan Stanley Pathway Large Cap Equity ETF (MSLC) and Parametric Equity Premium Income ETF (PAPI). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

The year-to-date returns for both investments are quite close, with MSLC having a 6.31% return and PAPI slightly higher at 6.57%.

MSLC

• 1D: -1.16%
• 1M: -1.23%
• YTD: 6.31%
• 6M: 5.41%
• 1Y: 19.11%
• 3Y*: —
• 5Y*: —
• 10Y*: —

PAPI

• 1D: 0.45%
• 1M: 0.17%
• YTD: 6.57%
• 6M: 5.93%
• 1Y: 12.01%
• 3Y*: —
• 5Y*: —
• 10Y*: —

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

MSLC vs. PAPI - Yearly Performance Comparison

	2026 (YTD)	2025	2024
MSLC Morgan Stanley Pathway Large Cap Equity ETF	6.31%	15.68%	-3.29%
PAPI Parametric Equity Premium Income ETF	6.57%	6.33%	-4.14%

Correlation

The correlation between MSLC and PAPI is 0.32, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.32
Correlation (All Time) Calculated using the full available price history since Dec 9, 2024	0.44

The correlation between MSLC and PAPI shifts across timeframes, from 0.32 (1 year) to 0.44 (all time), reflecting how their relationship changes across market environments.

Return for Risk

MSLC vs. PAPI — Risk / Return Rank

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

MSLC

MSLC Risk / Return Rank: 49
MSLC Sharpe Ratio Rank: 49
MSLC Sortino Ratio Rank: 47
MSLC Omega Ratio Rank: 47
MSLC Calmar Ratio Rank: 45
MSLC Martin Ratio Rank: 55

PAPI

PAPI Risk / Return Rank: 34
PAPI Sharpe Ratio Rank: 33
PAPI Sortino Ratio Rank: 35
PAPI Omega Ratio Rank: 31
PAPI Calmar Ratio Rank: 37
PAPI Martin Ratio Rank: 32

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.

MSLC vs. PAPI - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Morgan Stanley Pathway Large Cap Equity ETF (MSLC) and Parametric Equity Premium Income ETF (PAPI). 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.

	MSLC	PAPI	Difference
Sharpe ratio: Return per unit of total volatility	1.56	1.15	+0.41
Sortino ratio: Return per unit of downside risk	2.16	1.74	+0.42
Omega ratio: Gain probability vs. loss probability	1.28	1.20	+0.08
Calmar ratio: Return relative to maximum drawdown	2.06	1.76	+0.30
Martin ratio: Return relative to average drawdown	8.83	4.42	+4.41

MSLC vs. PAPI - Sharpe Ratio Comparison

The current MSLC Sharpe Ratio is 1.56, which is higher than the PAPI Sharpe Ratio of 1.15. The chart below compares the historical Sharpe Ratios of MSLC and PAPI, 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

MSLC vs. PAPI - Drawdown Comparison

The maximum MSLC drawdown since its inception was -17.86%, which is greater than PAPI's maximum drawdown of -14.27%. Use the drawdown chart below to compare losses from any high point for MSLC and PAPI.

Drawdown Indicators

	MSLC	PAPI	Difference
Max Drawdown Largest peak-to-trough decline	-17.86%	-14.27%	-3.59%
Max Drawdown (1Y) Largest decline over 1 year	-9.31%	-6.86%	-2.45%
Current Drawdown Current decline from peak	-2.87%	-4.37%	+1.50%
Average Drawdown Average peak-to-trough decline	-2.44%	-2.77%	+0.33%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.17%	2.72%	-0.55%

Volatility

MSLC vs. PAPI - Volatility Comparison

Morgan Stanley Pathway Large Cap Equity ETF (MSLC) has a higher volatility of 4.59% compared to Parametric Equity Premium Income ETF (PAPI) at 2.68%. This indicates that MSLC's price experiences larger fluctuations and is considered to be riskier than PAPI based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	MSLC	PAPI	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.59%	2.68%	+1.91%
Volatility (6M) Calculated over the trailing 6-month period	9.66%	7.05%	+2.61%
Volatility (1Y) Calculated over the trailing 1-year period	12.33%	10.55%	+1.78%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.15%	11.73%	+5.42%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.15%	11.73%	+5.42%

MSLC vs. PAPI - Expense Ratio Comparison

MSLC has a 0.39% expense ratio, which is higher than PAPI's 0.29% expense ratio.

Dividends

MSLC vs. PAPI - Dividend Comparison

MSLC's dividend yield for the trailing twelve months is around 2.02%, less than PAPI's 7.56% yield.

Position	TTM	2025	2024	2023
MSLC Morgan Stanley Pathway Large Cap Equity ETF	2.02%	2.15%	0.00%	0.00%
PAPI Parametric Equity Premium Income ETF	7.56%	7.59%	7.07%	1.45%

Frequently Asked Questions

Can I hold both MSLC and PAPI in my portfolio?

MSLC and PAPI have a correlation of 0.32, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, MSLC or PAPI?

MSLC has higher volatility (4.59%) compared to PAPI (2.68%). In terms of maximum drawdown, MSLC dropped -17.86% vs PAPI's -14.27%.

Which ETF is better, MSLC or PAPI?

On 1-year performance, MSLC leads with 19.11% vs 12.01% for PAPI. On fees, PAPI is cheaper at 0.29% per year. On volatility, PAPI has been the lower-risk option at 2.68%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, MSLC or PAPI?

Over the 1-year period, MSLC has performed better with a 19.11% return vs 12.01%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, MSLC or PAPI?

PAPI is cheaper with a 0.29% expense ratio, compared with 0.39% for MSLC.

Which ETF pays a higher dividend yield, MSLC or PAPI?

PAPI has the higher dividend yield at 7.56%, compared with 2.02% for MSLC.

What is the main difference between MSLC and PAPI?

MSLC is categorized as Large Cap Blend Equities, while PAPI is Derivative Income. Their fees differ too: 0.39% for MSLC and 0.29% for PAPI.

Which has better risk-adjusted returns?

MSLC currently has the higher Sharpe Ratio (1.56 vs 1.15), 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.