Phase-shifted pulse-width modulation (PS-PWM) has long been adopted as a salient modulation strategy for modular multilevel converters (MMCs). Regarding the design of PS-PWM for MMCs, various degrees of freedom including the phase-shift angles between carriers of different submodules (SMs) and converter arms have been extensively studied. However, very little attention has been paid to the phase displacement between the carriers and the fundamental reference waveform. This article investigates the effect of the carrier-to-fundamental phase displacement (CtF-PD) on the performance of PS-PWM applied to an MMC. Through theoretical double Fourier analysis and simplified numerical emulation (SNE) tests considering a wide range of scenarios, it is revealed that the CtF-PD can have a significant impact on the harmonic performance of the MMC under certain conditions. Utilizing this effect, the conventional PS-PWM for MMCs can be better designed with greatly reduced switching frequency/losses, while maintaining or enhancing the harmonic performance thus also reducing the AC filtering requirement. Simulation and experimental results are provided for validations. Design procedures and implementation issues of the proposed enhanced PS-PWM are also described and discussed