Western Asset Diversified Income Fund WDI

Competitive advantage analysis · financial-services

Asset Management Specialized
Overall moat score
61/100
Moderate

Ranked against 174 peers in Asset Management

Key strengths

  • Premium Fee Margins Fee margin quality is strong (score 0.72).
  • Lean Compensation Structure Compensation discipline is strong (cost efficiency score 0.72).

Key risks

  • AUM Retention Risk Revenue stickiness is low (stability score 0.10).
  • Volatile Capital Returns Return volatility is elevated (score 0.30).

The dashed ring is the peer median. Defense scores are percentile ranks against peers, so 50 is roughly the typical company in this group.

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Fee Revenue Quality

Strong
79
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Signals, strengths and risks for Fee Revenue Quality

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Signals, strengths and risks for Client Retention & Revenue Stickiness

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Signals, strengths and risks for Compensation Discipline

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Signals, strengths and risks for Capital Efficiency

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Signals, strengths and risks for Earnings Quality & Cash Conversion

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Signals, strengths and risks for Balance Sheet Strength

Where WDI ranks in Asset Management

Western Asset Diversified Income Fund ranks #40 of 173 scored companies in Asset Management by moat score — the top 23%. The widest moat in the group is Sound Point Meridian Capital Inc (SPMC) at 77/100.

# Company Moat score Rating
36 MSC Income Fund, Inc. MSIF 62/100 Moderate
37 Raymond James Financial, Inc. RJF 62/100 Moderate
38 Sprott Inc. SII 62/100 Moderate
39 Oaktree Specialty Lending Corpo OCSL 62/100 Moderate
40 Western Asset Diversified Income Fund WDI 61/100 Moderate
41 WhiteHorse Finance, Inc. WHF 61/100 Moderate
42 Federated Hermes, Inc. FHI 61/100 Moderate
43 New Mountain Finance Corporatio NMFC 61/100 Moderate
44 SRH Total Return Fund, Inc. STEW 61/100 Moderate

See every Asset Management & Capital Markets company ranked by moat score →

How WDI scores on the Asset Management Specialized defenses

Fee Revenue Quality

Score 79 · 20% of the moat score

Fee revenue quality is the ability to charge above the industry's falling average and keep charging it.

Client Retention & Revenue Stickiness

Score 44 · 18% of the moat score

Assets under management leave far more easily than they arrive, and the fee leaves with them.

Compensation Discipline

Score 69 · 18% of the moat score

Compensation is the largest expense in asset management and the one that decides whether a good year ever reaches shareholders.

Capital Efficiency

Score 46 · 20% of the moat score

Asset managers are asset-light: with little capital employed, a healthy business should earn a very high return on equity, and a merely average one is a real warning.

Earnings Quality & Cash Conversion

Score 59 · 14% of the moat score

Reported profits here can be flattered by performance fees, seed-capital gains and consolidated fund accounting, none of which recur reliably.

Balance Sheet Strength

Score 76 · 10% of the moat score

Because the business needs so little capital, an asset manager carrying meaningful debt has usually borrowed to buy another manager or to fund distributions.

How each Asset Management Specialized defense is measured, in full →

Understanding WDI's moat

What is Western Asset Diversified Income Fund's moat score?

Western Asset Diversified Income Fund (WDI) scores 61 out of 100 on the StatsAlpha Moat Map, which rates its competitive advantage as moderate. It ranks #40 of 173 scored companies in Asset Management, the top 23%. The score is a weighted composite of 6 competitive defenses, each measured against industry peers of 174 companies in Asset Management. Its strongest defense is Fee Revenue Quality (79/100) and its weakest is Client Retention & Revenue Stickiness (44/100).

How does Western Asset Diversified Income Fund compare with other Asset Management companies?

Western Asset Diversified Income Fund ranks #40 of 173 scored companies in Asset Management by moat score. The widest moat in Asset Management is Sound Point Meridian Capital Inc (SPMC) at 77/100. The companies ranked closest are Oaktree Specialty Lending Corpo (OCSL) at 62 just above it and WhiteHorse Finance, Inc. (WHF) at 61 just below it.

How is the moat score calculated?

Each company is scored with an industry-specific template — Asset Management Specialized in this case, chosen because the defenses that matter to a bank are not the ones that matter to a software company. Every defense combines several financial signals, and each signal is measured as a percentile against a peer group of 174 companies in Asset Management. The defenses are then weighted to produce the overall score out of 100.

Why is Western Asset Diversified Income Fund scored with the Asset Management Specialized template?

An asset manager owns almost nothing. It charges a fee on someone else's money, pays much of that fee out in compensation, and keeps the remainder — so its economics turn on the fee rate it can defend, whether client money stays, and how much revenue survives the bonus pool. The Asset Management template scores those questions rather than the balance sheet, which in this industry is largely beside the point.

Which competitive defenses are measured for Western Asset Diversified Income Fund?

The Asset Management Specialized template measures 6 defenses, and WDI scores: Fee Revenue Quality (79), Client Retention & Revenue Stickiness (44), Compensation Discipline (69), Capital Efficiency (46), Earnings Quality & Cash Conversion (59), Balance Sheet Strength (76). Each is scored independently as a percentile against peers, so a company can be strong on one and weak on another — the overall score reflects how those defenses are weighted for this industry.

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