MSD vs QQQ
MSD vs QQQ
Morgan Stanley Emerging Markets Debt Fund Inc. vs Invesco QQQ Trust, Series 1
Quick Verdict
QQQ has a lower expense ratio. QQQ delivered stronger 1-year returns. QQQ offers more diversification with 103 holdings.
Side-by-Side Comparison
| Metric | MSD | QQQ | Winner |
|---|---|---|---|
| Expense Ratio | 1.19% | 0.18% | |
| AUM | - | $455.8B | |
| Dividend Yield | 7.66% | 0.41% | |
| Holdings | 358 | 108 | |
| YTD Return | +3.06% | +14.45% | |
| 1Y Return | +6.82% | +24.70% | |
| 3Y Return (annualized) | +15.53% | +24.19% | |
| 5Y Return (annualized) | +4.05% | +14.49% | |
| Volatility (annualized) | 18.4% | 30.6% | |
| Max Drawdown | -66.0% | -83.0% | |
| Fund Family | Morgan Stanley Investment Management | Invesco (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 23, 1993 | Mar 10, 1999 |
MSD vs QQQ Performance
Morgan Stanley Emerging Markets Debt Fund Inc. (MSD) is a ETF from Morgan Stanley Investment Management and Invesco QQQ Trust, Series 1 (QQQ) is a ETF from Invesco (US). Over the past year MSD returned +6.82% while QQQ returned +24.70%. Year to date, MSD is up 3.06% versus a gain of 14.45% for QQQ.
Over three years, MSD compounded at +15.53% per year against +24.19% for QQQ; over five years the annualized figures are +4.05% and +14.49% respectively. Across the full 27-year window we track, QQQ has the edge at +12.98% annualized vs -0.26%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
QQQ has been the more volatile fund, with annualized monthly volatility of 30.6% compared with 18.4% for MSD. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -66.0% for MSD and -83.0% for QQQ. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.37. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MSD charges 1.19% per year while QQQ charges 0.18%. On a $10,000 position that is $119 vs $18 annually, a gap of $101 per year that compounds over a long holding period. On income, MSD currently yields 7.66% against 0.41% for QQQ.
Holdings Overlap
MSD and QQQ share 0 holdings out of 156 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MSD or QQQ?
MSD has an expense ratio of 1.19% while QQQ charges 0.18%. QQQ is the cheaper option. On a $10,000 investment, that is $101 per year of difference.
Which performed better, MSD or QQQ?
Over the past year MSD returned +6.82% vs +24.70% for QQQ, so QQQ leads on 1-year performance. Over the longest common window we track (27 years), MSD annualized -0.26% vs +12.98% for QQQ. Past performance does not guarantee future results.
Which is riskier, MSD or QQQ?
QQQ has been the more volatile fund at 30.6% annualized versus 18.4% for MSD. Worst drawdown: MSD -66.0% vs QQQ -83.0%.
Should I hold both MSD and QQQ?
MSD and QQQ have a monthly-return correlation of 0.37, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MSD and QQQ?
MSD and QQQ share 0 common holdings with a 0.0% weight overlap. Combined, they hold 156 unique securities.
Which pays a higher dividend, MSD or QQQ?
MSD yields 7.66% while QQQ yields 0.41%, so MSD currently pays the higher dividend yield.
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