MSTMX vs. WDI

Last updated Jun 4, 2026

MSTMX (Morningstar Multisector Bond Fund) and WDI (Western Asset Diversified Income Fund) are both Multisector Bonds funds. Over the past 3 years, MSTMX returned 7.97%/yr vs 13.68%/yr for WDI. At a 0.40 correlation, their price movements are largely independent. MSTMX charges 0.58%/yr vs 1.73%/yr for WDI.

Performance

MSTMX vs. WDI - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Morningstar Multisector Bond Fund (MSTMX) and Western Asset Diversified Income Fund (WDI). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, MSTMX achieves a 1.80% return, which is significantly higher than WDI's 1.58% return.

MSTMX

• 1D: 0.21%
• 1M: 1.09%
• YTD: 1.80%
• 6M: 2.23%
• 1Y: 8.04%
• 3Y*: 7.97%
• 5Y*: 1.95%
• 10Y*: —

WDI

• 1D: -0.59%
• 1M: -2.23%
• YTD: 1.58%
• 6M: -0.30%
• 1Y: 2.75%
• 3Y*: 13.68%
• 5Y*: —
• 10Y*: —

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

MSTMX vs. WDI - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021
MSTMX Morningstar Multisector Bond Fund	1.80%	10.03%	4.60%	10.77%	-13.11%	-2.23%
WDI Western Asset Diversified Income Fund	1.58%	10.64%	13.88%	25.11%	-23.30%	-5.66%

Correlation

The correlation between MSTMX and WDI 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 (3Y) Calculated over the trailing 3-year period	0.37
Correlation (All Time) Calculated using the full available price history since Jun 28, 2021	0.40

Return for Risk

MSTMX vs. WDI — Risk / Return Rank

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

MSTMX

MSTMX Risk / Return Rank: 57
MSTMX Sharpe Ratio Rank: 62
MSTMX Sortino Ratio Rank: 63
MSTMX Omega Ratio Rank: 70
MSTMX Calmar Ratio Rank: 44
MSTMX Martin Ratio Rank: 44

WDI

WDI Risk / Return Rank: 4
WDI Sharpe Ratio Rank: 4
WDI Sortino Ratio Rank: 4
WDI Omega Ratio Rank: 4
WDI Calmar Ratio Rank: 4
WDI Martin Ratio Rank: 4

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.

MSTMX vs. WDI - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Morningstar Multisector Bond Fund (MSTMX) and Western Asset Diversified Income Fund (WDI). 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.

	MSTMX	WDI	Difference
Sharpe ratio Return per unit of total volatility	2.31	0.30	+2.02
Sortino ratio Return per unit of downside risk	3.32	0.48	+2.85
Omega ratio Gain probability vs. loss probability	1.47	1.06	+0.41
Calmar ratio Return relative to maximum drawdown	2.53	0.33	+2.20
Martin ratio Return relative to average drawdown	9.31	0.83	+8.48
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

MSTMX vs. WDI - Sharpe Ratio Comparison

The current MSTMX Sharpe Ratio is 2.31, which is higher than the WDI Sharpe Ratio of 0.30. The chart below compares the historical Sharpe Ratios of MSTMX and WDI, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	MSTMX	WDI	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.31	0.30	+2.02
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.37	—	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.60	0.23	+0.37

Drawdowns

MSTMX vs. WDI - Drawdown Comparison

The maximum MSTMX drawdown since its inception was -21.37%, smaller than the maximum WDI drawdown of -32.45%. Use the drawdown chart below to compare losses from any high point for MSTMX and WDI.

Drawdown Indicators

	MSTMX	WDI	Difference
Max Drawdown Largest peak-to-trough decline	-21.37%	-32.45%	+11.08%
Max Drawdown (1Y) Largest decline over 1 year	-4.09%	-8.47%	+4.38%
Max Drawdown (3Y) Largest decline over 3 years	-5.79%	-14.14%	+8.35%
Max Drawdown (5Y) Largest decline over 5 years	-21.37%	—	—
Current Drawdown Current decline from peak	-0.33%	-3.49%	+3.16%
Average Drawdown Average peak-to-trough decline	-5.01%	-10.41%	+5.40%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.12%	3.31%	-2.19%

Volatility

MSTMX vs. WDI - Volatility Comparison

The current volatility for Morningstar Multisector Bond Fund (MSTMX) is 1.49%, while Western Asset Diversified Income Fund (WDI) has a volatility of 3.39%. This indicates that MSTMX experiences smaller price fluctuations and is considered to be less risky than WDI based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	MSTMX	WDI	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.49%	3.39%	-1.90%
Volatility (6M) Calculated over the trailing 6-month period	3.46%	7.71%	-4.25%
Volatility (1Y) Calculated over the trailing 1-year period	4.50%	9.30%	-4.80%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	5.50%	12.97%	-7.47%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	5.78%	12.97%	-7.19%

MSTMX vs. WDI - Expense Ratio Comparison

MSTMX has a 0.58% expense ratio, which is lower than WDI's 1.73% expense ratio.

Dividends

MSTMX vs. WDI - Dividend Comparison

MSTMX's dividend yield for the trailing twelve months is around 4.22%, less than WDI's 13.27% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018
MSTMX Morningstar Multisector Bond Fund	4.22%	4.00%	6.01%	5.26%	1.42%	4.17%	2.68%	6.18%	0.37%
WDI Western Asset Diversified Income Fund	13.27%	13.98%	12.32%	11.45%	11.40%	3.19%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both MSTMX and WDI in my portfolio?

MSTMX and WDI 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, MSTMX or WDI?

WDI has higher volatility (3.39%) compared to MSTMX (1.49%). In terms of maximum drawdown, MSTMX dropped -21.37% vs WDI's -32.45%.

Which has better risk-adjusted returns?

MSTMX currently has the higher Sharpe Ratio (2.31 vs 0.30), 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.