MSD vs VYM
MSD vs VYM
Morgan Stanley Emerging Markets Debt Fund Inc. vs Vanguard High Dividend Yield ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | MSD | VYM | Winner |
|---|---|---|---|
| Expense Ratio | 1.19% | 0.04% | |
| AUM | - | $79.0B | |
| Dividend Yield | 7.66% | 2.86% | |
| Holdings | 358 | 568 | |
| YTD Return | +3.34% | +15.20% | |
| 1Y Return | +7.36% | +25.56% | |
| 3Y Return (annualized) | +15.64% | +17.86% | |
| 5Y Return (annualized) | +4.13% | +12.35% | |
| Volatility (annualized) | 18.4% | 14.6% | |
| Max Drawdown | -66.0% | -58.8% | |
| Fund Family | Morgan Stanley Investment Management | Vanguard (US) | |
| Category | Fixed Income | Equity | |
| Inception | Jul 23, 1993 | Nov 10, 2006 |
MSD vs VYM Performance
Morgan Stanley Emerging Markets Debt Fund Inc. (MSD) is a ETF from Morgan Stanley Investment Management and Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US). Over the past year MSD returned +7.36% while VYM returned +25.56%. Year to date, MSD is up 3.34% versus a gain of 15.20% for VYM.
Over three years, MSD compounded at +15.64% per year against +17.86% for VYM; over five years the annualized figures are +4.13% and +12.35% respectively. Across the full 20-year window we track, VYM has the edge at +7.05% annualized vs -0.25%. 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 14.6% for VYM. 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 -58.8% for VYM. 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 0.57. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MSD charges 1.19% per year while VYM charges 0.04%. On a $10,000 position that is $119 vs $4 annually, a gap of $115 per year that compounds over a long holding period. On income, MSD currently yields 7.66% against 2.86% for VYM.
Holdings Overlap
MSD and VYM share 0 holdings out of 611 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 VYM?
MSD has an expense ratio of 1.19% while VYM charges 0.04%. VYM is the cheaper option. On a $10,000 investment, that is $115 per year of difference.
Which performed better, MSD or VYM?
Over the past year MSD returned +7.36% vs +25.56% for VYM, so VYM leads on 1-year performance. Over the longest common window we track (20 years), MSD annualized -0.25% vs +7.05% for VYM. Past performance does not guarantee future results.
Which is riskier, MSD or VYM?
MSD has been the more volatile fund at 18.4% annualized versus 14.6% for VYM. Worst drawdown: MSD -66.0% vs VYM -58.8%.
Should I hold both MSD and VYM?
MSD and VYM have a monthly-return correlation of 0.57, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MSD and VYM?
MSD and VYM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 611 unique securities.
Which pays a higher dividend, MSD or VYM?
MSD yields 7.66% while VYM yields 2.86%, so MSD currently pays the higher dividend yield.
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