MSD vs SPY
MSD vs SPY
Morgan Stanley Emerging Markets Debt Fund Inc. vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | MSD | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 1.19% | 0.09% | |
| AUM | - | $789.1B | |
| Dividend Yield | 7.66% | 1.01% | |
| Holdings | 358 | 505 | |
| YTD Return | +2.36% | +9.93% | |
| 1Y Return | +5.66% | +19.50% | |
| 3Y Return (annualized) | +15.09% | +19.33% | |
| 5Y Return (annualized) | +3.91% | +12.82% | |
| Volatility (annualized) | 18.4% | 15.3% | |
| Max Drawdown | -66.0% | -56.5% | |
| Fund Family | Morgan Stanley Investment Management | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Jul 23, 1993 | Jan 22, 1993 |
MSD vs SPY Performance
Morgan Stanley Emerging Markets Debt Fund Inc. (MSD) is a ETF from Morgan Stanley Investment Management and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year MSD returned +5.66% while SPY returned +19.50%. Year to date, MSD is up 2.36% versus a gain of 9.93% for SPY.
Over three years, MSD compounded at +15.09% per year against +19.33% for SPY; over five years the annualized figures are +3.91% and +12.82% respectively. Across the full 31-year window we track, SPY has the edge at +8.74% annualized vs -0.28%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
MSD has been the more volatile fund, with annualized monthly volatility of 18.4% compared with 15.3% for SPY. 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 -56.5% for SPY. 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 0.51. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MSD charges 1.19% per year while SPY charges 0.09%. On a $10,000 position that is $119 vs $9 annually, a gap of $110 per year that compounds over a long holding period. On income, MSD currently yields 7.66% against 1.01% for SPY.
Holdings Overlap
MSD and SPY share 0 holdings out of 556 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 SPY?
MSD has an expense ratio of 1.19% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $110 per year of difference.
Which performed better, MSD or SPY?
Over the past year MSD returned +5.66% vs +19.50% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (31 years), MSD annualized -0.28% vs +8.74% for SPY. Past performance does not guarantee future results.
Which is riskier, MSD or SPY?
MSD has been the more volatile fund at 18.4% annualized versus 15.3% for SPY. Worst drawdown: MSD -66.0% vs SPY -56.5%.
Should I hold both MSD and SPY?
MSD and SPY have a monthly-return correlation of 0.51, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MSD and SPY?
MSD and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 556 unique securities.
Which pays a higher dividend, MSD or SPY?
MSD yields 7.66% while SPY yields 1.01%, so MSD currently pays the higher dividend yield.
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