MSLC vs. RAFE

Last updated Jul 15, 2026

MSLC (Morgan Stanley Pathway Large Cap Equity ETF) and RAFE (PIMCO RAFI ESG U.S. ETF) are both Large Cap Blend Equities funds. MSLC is actively managed, while RAFE is passively managed. Over the past year, MSLC returned 17.43% vs 27.32% for RAFE. Their correlation of 0.85 suggests significant overlap in exposure. MSLC charges 0.39%/yr vs 0.30%/yr for RAFE.

Performance

MSLC vs. RAFE - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Morgan Stanley Pathway Large Cap Equity ETF (MSLC) and PIMCO RAFI ESG U.S. ETF (RAFE). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, MSLC achieves a 8.99% return, which is significantly lower than RAFE's 15.05% return.

MSLC

• 1D: 0.32%
• 1M: 1.75%
• 6M: 7.05%
• YTD: 8.99%
• 1Y: 17.43%
• 3Y*: —
• 5Y*: —
• 10Y*: —

RAFE

• 1D: -0.56%
• 1M: 1.02%
• 6M: 13.19%
• YTD: 15.05%
• 1Y: 27.32%
• 3Y*: 18.54%
• 5Y*: 11.38%
• 10Y*: —

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

MSLC vs. RAFE - Yearly Performance Comparison

	2026 (YTD)	2025	2024
MSLC Morgan Stanley Pathway Large Cap Equity ETF	8.99%	15.68%	-3.29%
RAFE PIMCO RAFI ESG U.S. ETF	15.05%	17.60%	-3.94%

Correlation

The correlation between MSLC and RAFE is 0.83, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.83
Correlation (All Time) Calculated using the full available price history since Dec 9, 2024	0.85

The correlation between MSLC and RAFE has been stable across timeframes, ranging from 0.83 to 0.85 - a consistent structural relationship.

Return for Risk

MSLC vs. RAFE — Risk / Return Rank

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

MSLC

MSLC Risk / Return Rank: 51
MSLC Sharpe Ratio Rank: 51
MSLC Sortino Ratio Rank: 49
MSLC Omega Ratio Rank: 50
MSLC Calmar Ratio Rank: 46
MSLC Martin Ratio Rank: 57

RAFE

RAFE Risk / Return Rank: 88
RAFE Sharpe Ratio Rank: 91
RAFE Sortino Ratio Rank: 91
RAFE Omega Ratio Rank: 88
RAFE Calmar Ratio Rank: 85
RAFE Martin Ratio Rank: 87

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. RAFE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Morgan Stanley Pathway Large Cap Equity ETF (MSLC) and PIMCO RAFI ESG U.S. ETF (RAFE). 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	RAFE	Difference
Sharpe ratio: Return per unit of total volatility	1.42	2.42	-1.00
Sortino ratio: Return per unit of downside risk	1.99	3.39	-1.40
Omega ratio: Gain probability vs. loss probability	1.26	1.43	-0.18
Calmar ratio: Return relative to maximum drawdown	1.88	3.68	-1.80
Martin ratio: Return relative to average drawdown	7.93	14.34	-6.41

MSLC vs. RAFE - Sharpe Ratio Comparison

The current MSLC Sharpe Ratio is 1.42, which is lower than the RAFE Sharpe Ratio of 2.42. The chart below compares the historical Sharpe Ratios of MSLC and RAFE, 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. RAFE - Drawdown Comparison

The maximum MSLC drawdown since its inception was -17.86%, smaller than the maximum RAFE drawdown of -35.74%. Use the drawdown chart below to compare losses from any high point for MSLC and RAFE.

Drawdown Indicators

	MSLC	RAFE	Difference
Max Drawdown Largest peak-to-trough decline	-17.86%	-35.74%	+17.88%
Max Drawdown (1Y) Largest decline over 1 year	-9.31%	-7.46%	-1.85%
Max Drawdown (3Y) Largest decline over 3 years	—	-16.36%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-24.28%	—
Current Drawdown Current decline from peak	-0.42%	-0.62%	+0.20%
Average Drawdown Average peak-to-trough decline	-2.40%	-6.12%	+3.72%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.20%	1.91%	+0.29%

Volatility

MSLC vs. RAFE - Volatility Comparison

Morgan Stanley Pathway Large Cap Equity ETF (MSLC) has a higher volatility of 3.38% compared to PIMCO RAFI ESG U.S. ETF (RAFE) at 2.40%. This indicates that MSLC's price experiences larger fluctuations and is considered to be riskier than RAFE based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	MSLC	RAFE	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.38%	2.40%	+0.98%
Volatility (6M) Calculated over the trailing 6-month period	9.68%	8.61%	+1.07%
Volatility (1Y) Calculated over the trailing 1-year period	12.29%	11.34%	+0.95%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.92%	15.07%	+1.85%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.92%	19.32%	-2.40%

MSLC vs. RAFE - Expense Ratio Comparison

MSLC has a 0.39% expense ratio, which is higher than RAFE's 0.30% expense ratio.

Dividends

MSLC vs. RAFE - Dividend Comparison

MSLC's dividend yield for the trailing twelve months is around 1.97%, more than RAFE's 1.50% yield.

Position	TTM	2025	2024	2023	2022	2021	2020
MSLC Morgan Stanley Pathway Large Cap Equity ETF	1.97%	2.15%	0.00%	0.00%	0.00%	0.00%	0.00%
RAFE PIMCO RAFI ESG U.S. ETF	1.50%	1.67%	1.79%	1.81%	2.22%	1.42%	2.36%

Frequently Asked Questions

Can I hold both MSLC and RAFE in my portfolio?

MSLC and RAFE have a correlation of 0.83, 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 RAFE?

MSLC has higher volatility (3.38%) compared to RAFE (2.40%). In terms of maximum drawdown, MSLC dropped -17.86% vs RAFE's -35.74%.

Which ETF is better, MSLC or RAFE?

On 1-year performance, RAFE leads with 27.32% vs 17.43% for MSLC. On fees, RAFE is cheaper at 0.30% per year. On volatility, RAFE has been the lower-risk option at 2.40%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, MSLC or RAFE?

Over the 1-year period, RAFE has performed better with a 27.32% return vs 17.43%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, MSLC or RAFE?

RAFE is cheaper with a 0.30% expense ratio, compared with 0.39% for MSLC.

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

MSLC has the higher dividend yield at 1.97%, compared with 1.50% for RAFE.

What is the main difference between MSLC and RAFE?

They also come from different issuers: Morgan Stanley and PIMCO. Their fees differ too: 0.39% for MSLC and 0.30% for RAFE.

Which has better risk-adjusted returns?

RAFE currently has the higher Sharpe Ratio (2.42 vs 1.42), 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.