The EAFE Index, or the Morgan Stanley Capital International Europe, Australasia, and Far East Index, is a stock market index that tracks the performance of developed markets outside of the United States and Canada. It is a widely used benchmark for international stock market performance and is composed of over 900 stocks from 21 countries.
Importance of the EAFE Index
The EAFE Index is an important tool for investors who are looking to diversify their portfolios and gain exposure to international markets. It provides a broad overview of the performance of developed markets outside of the United States and Canada, and can be used to compare the performance of different countries and regions. Additionally, the EAFE Index is often used as a benchmark for international stock market performance, and can be used to measure the performance of international mutual funds and exchange-traded funds (ETFs).
Example of the EAFE Index
As of April 2021, the EAFE Index was composed of 902 stocks from 21 countries. The largest countries represented in the index were Japan (37.2%), the United Kingdom (17.2%), and France (10.2%). The index was up 8.2% year-to-date, and had a total market capitalization of $14.3 trillion.
Table of EAFE Index
Country Weight (%) Japan 37.2 United Kingdom 17.2 France 10.2 Germany 8.2 Switzerland 6.2 Netherlands 4.7 Hong Kong 4.3 Australia 3.7 Sweden 2.7 Spain 2.6 Italy 2.4 Other Countries 14.3
Key Takeaways
- The EAFE Index is a stock market index that tracks the performance of developed markets outside of the United States and Canada.
- It is composed of over 900 stocks from 21 countries and is a widely used benchmark for international stock market performance.
- The EAFE Index is an important tool for investors who are looking to diversify their portfolios and gain exposure to international markets.
- The largest countries represented in the index are Japan, the United Kingdom, and France.
Conclusion
The EAFE Index is an important tool for investors who are looking to diversify their portfolios and gain exposure to international markets. It provides a broad overview of the performance of developed markets outside of the United States and Canada, and can be used to compare the performance of different countries and regions. Additionally, the EAFE Index is often used as a benchmark for international stock market performance, and can be used to measure the performance of international mutual funds and exchange-traded funds (ETFs).
