- Last Ratings Update:03/31/2016
- Price as of 03/31/2016 :$14.52
- Net Assets:$504.07 Million
- Peer Rank:27 of 81
- Investment Rating:C-
We rate Western Asset Emerging Market Debt at C-. Positive factors that influence this rating include a low price volatility and low expense structure. The fund invests approximately 99% of its assets in bonds and may be considered for investors seeking an Emerging Market Income strategy.
POSITIVES AND RISKS
Total return ranks well below peers over the last three years. The Western Asset Emerging Market Debt has returned an annual rate of 6.62% since inception. More recently, the fund has generated a total return of 2.57% in the last five years, -4.14% in the last three years, and 0.83% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 39% of them. It has also outpaced 24% of its competitors on a three year basis and 65% of them over the last year for the period ending 3/31/2016. On a year to date basis, ESD has returned 7.68%.
Downside risk has been above average. ESD has a draw down risk of -39.01%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 15.6%. This fund has had moderate volatility in its monthly performance over the last 36 months. As of 3/31/2016, the fund was trading at a price of $14.52, which is 0.4% below its 52-week high of $14.58 and 6.1% above its 52-week low of $13.69.
High expense ratio hinders performance. On total assets of $504.07 million, ESD maintains a high expense ratio compared to its Emerging Market Income peers of 1.33% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As ESD is a closed end fund, it has no front end or back end load.
Manager lacks tenure and performance record lags managerial peers. Substandard fund managers tend to be replaced, so a long tenure is usually a good sign that a fund is achieving its objectives. The Western Asset Emerging Market Debt has been managed by S. Kenneth Leech for only 2 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than just 36% of other fund managers.
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