TDF vs. TEI

Last updated Jun 23, 2026

TDF (Templeton Dragon Fund Inc.) and TEI (Templeton Emerging Markets Income Fund) are both mutual funds - TDF is a China Equities fund managed by Franklin Templeton Investments, while TEI is a Emerging Markets Bonds fund managed by Franklin Templeton Investments. Over the past 10 years, TDF returned 5.03%/yr vs 5.14%/yr for TEI. At a 0.27 correlation, their price movements are largely independent.

Performance

TDF vs. TEI - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Templeton Dragon Fund Inc. (TDF) and Templeton Emerging Markets Income Fund (TEI). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, TDF achieves a -2.73% return, which is significantly lower than TEI's 5.66% return. Both investments have delivered pretty close results over the past 10 years, with TDF having a 5.03% annualized return and TEI not far ahead at 5.14%.

TDF

• 1D: 1.50%
• 1M: -1.18%
• YTD: -2.73%
• 6M: -3.92%
• 1Y: 14.90%
• 3Y*: 8.64%
• 5Y*: -8.68%
• 10Y*: 5.03%

TEI

• 1D: 0.00%
• 1M: 5.12%
• YTD: 5.66%
• 6M: 8.52%
• 1Y: 27.60%
• 3Y*: 21.31%
• 5Y*: 8.19%
• 10Y*: 5.14%

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

TDF vs. TEI - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
TDF Templeton Dragon Fund Inc.	-2.73%	37.70%	5.44%	-20.06%	-32.93%	-18.02%	52.98%	27.97%	-11.80%	42.09%
TEI Templeton Emerging Markets Income Fund	5.66%	45.41%	11.77%	3.78%	-15.49%	3.48%	-9.06%	3.51%	-6.20%	8.09%

Correlation

The correlation between TDF and TEI is 0.26, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.26
Correlation (3Y) Calculated over the trailing 3-year period	0.26
Correlation (5Y) Calculated over the trailing 5-year period	0.25
Correlation (10Y) Calculated over the trailing 10-year period	0.25
Correlation (All Time) Calculated using the full available price history since Feb 15, 1995	0.27

Return for Risk

TDF vs. TEI — Risk / Return Rank

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

TDF

TDF Risk / Return Rank: 11
TDF Sharpe Ratio Rank: 11
TDF Sortino Ratio Rank: 11
TDF Omega Ratio Rank: 11
TDF Calmar Ratio Rank: 12
TDF Martin Ratio Rank: 10

TEI

TEI Risk / Return Rank: 36
TEI Sharpe Ratio Rank: 43
TEI Sortino Ratio Rank: 38
TEI Omega Ratio Rank: 40
TEI Calmar Ratio Rank: 29
TEI Martin Ratio Rank: 28

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.

TDF vs. TEI - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Templeton Dragon Fund Inc. (TDF) and Templeton Emerging Markets Income Fund (TEI). 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.

	TDF	TEI	Difference
Sharpe ratio: Return per unit of total volatility	0.81	1.77	-0.96
Sortino ratio: Return per unit of downside risk	1.28	2.40	-1.12
Omega ratio: Gain probability vs. loss probability	1.16	1.31	-0.16
Calmar ratio: Return relative to maximum drawdown	1.07	1.91	-0.84
Martin ratio: Return relative to average drawdown	2.74	6.14	-3.40

TDF vs. TEI - Sharpe Ratio Comparison

The current TDF Sharpe Ratio is 0.81, which is lower than the TEI Sharpe Ratio of 1.77. The chart below compares the historical Sharpe Ratios of TDF and TEI, 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

TDF vs. TEI - Drawdown Comparison

The maximum TDF drawdown since its inception was -68.15%, which is greater than TEI's maximum drawdown of -51.50%. Use the drawdown chart below to compare losses from any high point for TDF and TEI.

Drawdown Indicators

	TDF	TEI	Difference
Max Drawdown Largest peak-to-trough decline	-68.15%	-51.50%	-16.65%
Max Drawdown (1Y) Largest decline over 1 year	-13.95%	-14.49%	+0.54%
Max Drawdown (3Y) Largest decline over 3 years	-28.25%	-14.79%	-13.46%
Max Drawdown (5Y) Largest decline over 5 years	-61.85%	-39.74%	-22.11%
Max Drawdown (10Y) Largest decline over 10 years	-66.87%	-43.83%	-23.04%
Current Drawdown Current decline from peak	-47.19%	-3.20%	-43.99%
Average Drawdown Average peak-to-trough decline	-22.60%	-10.75%	-11.85%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.45%	4.51%	+0.94%

Volatility

TDF vs. TEI - Volatility Comparison

Templeton Dragon Fund Inc. (TDF) has a higher volatility of 6.14% compared to Templeton Emerging Markets Income Fund (TEI) at 3.83%. This indicates that TDF's price experiences larger fluctuations and is considered to be riskier than TEI based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	TDF	TEI	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.14%	3.83%	+2.31%
Volatility (6M) Calculated over the trailing 6-month period	13.48%	12.26%	+1.22%
Volatility (1Y) Calculated over the trailing 1-year period	18.42%	15.65%	+2.77%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	27.25%	19.44%	+7.81%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.98%	17.57%	+6.41%

Dividends

TDF vs. TEI - Dividend Comparison

TDF's dividend yield for the trailing twelve months is around 2.76%, less than TEI's 12.60% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
TDF Templeton Dragon Fund Inc.	2.76%	3.55%	1.36%	0.00%	12.73%	14.13%	24.72%	10.75%	12.43%	7.95%	10.34%	22.49%
TEI Templeton Emerging Markets Income Fund	12.60%	13.57%	11.11%	11.09%	11.88%	10.44%	7.34%	8.51%	9.27%	5.56%	7.33%	8.24%

Frequently Asked Questions

Can I hold both TDF and TEI in my portfolio?

TDF and TEI have a correlation of 0.26, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, TDF or TEI?

TDF has higher volatility (6.14%) compared to TEI (3.83%). In terms of maximum drawdown, TDF dropped -68.15% vs TEI's -51.50%.

Which has better risk-adjusted returns?

TEI currently has the higher Sharpe Ratio (1.77 vs 0.81), 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.