The MSCI EAFE Index is a

stock market index In finance, a stock index, or stock market index, is an Index (economics), index that measures the performance of a stock market, or of a subset of a stock market. It helps investors compare current stock price levels with past prices to calcul ...

that is designed to measure the equity market performance of

developed market In investing, a developed market is a country that is most developed in terms of its economy and capital markets. The country must be high income, but this also includes openness to foreign ownership, ease of capital movement, and efficiency of m ...

s outside of the U.S. & Canada. It is maintained by MSCI Inc., a provider of investment decision support tools; the EAFE acronym stands for Europe, Australasia and Far East. The index is market-capitalization weighted (meaning that the weight of securities is based on their respective market capitalizations). It first ranks each stock in the investable universe from largest to smallest by market capitalization. The largest 70% will compose the MSCI EAFE Large Cap (new index), the largest 85% will compose the MSCI EAFE Standard, and the largest 99% will compose the MSCI Investable Market index (IMI). The 71st to 85th percentiles represent the MSCI EAFE Mid Cap, and the 85th to 99th percentiles represent the MSCI EAFE Small Cap. The index includes a selection of stocks from 21

s, but excludes those from the U.S. and Canada. The index has been calculated since 31 December 1969, making it the oldest truly international stock index. It is probably the most common benchmark for foreign stock funds in the U.S.

Countries

The MSCI EAFE index includes stocks of around 700 companies from these countries: These are the same countries and regions as for

MSCI World The MSCI World is a widely followed global stock market index that tracks the performance of around 1,500 large and mid-cap companies across 23 developed countries. It is maintained by MSCI, formerly Morgan Stanley Capital International, and is ...

except without the U.S. and Canada. Africa and South America are not represented.

Greece Greece, officially the Hellenic Republic, is a country in Southeast Europe. Located on the southern tip of the Balkan peninsula, it shares land borders with Albania to the northwest, North Macedonia and Bulgaria to the north, and Turkey to th ...

was part of this index from May 2001, when MSCI upgraded Greece from emerging market to developed market, to November 2013 when MSCI downgraded Greece from developed to emerging market. Israel joined this index in May 2010 when MSCI upgraded Israel from emerging market to developed market.

Investing

{{Tone, section, date=November 2023 Many managers of North American international stock funds use the EAFE as a performance benchmark. For example, Thrift Savings Plan's international fund (I Fund) tracks the net version of this index. The iShares MSCI EAFE Index fund is based on the standard index.iShares page for iShares MSCI EAFE
/ref> EFA is the fourth-largest ETF in the world. They also have iShares MSCI EAFE Small-Cap which has just the small caps. iShares Core MSCI EAFE fund uses the "IMI" version of the index. This fund is similar to EFA but its portfolio represents nearly all of each country's investable market capitalization, while EFA only covers the top 85%, which excludes most small-cap stocks. The TIAA International Equity Index Fund is also based on the EAFE index. Vanguard has the mutual fund Vanguard Developed Markets Index Inv and the Vanguard FTSE Developed Markets ETF; these funds previously used the MSCI EAFE, but now use the FTSE Developed All Cap ex US Index, which is very similar but includes South Korea and Canada, and includes exposure to small-cap stocks.

References

Global stock market indices Morgan Stanley

Countries

Investing

See also

References