EAFE Index

What is the 'EAFE Index'

The EAFE Index is an index created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia. This international index has been in existence for more than 30 years.

BREAKING DOWN 'EAFE Index'

As of February 2007, equities from the Japanese stock markets made up around 25% of the index, of which Japan is the largest index component.

Many investors use the S&P 500 as a benchmark to assess the performance of an investment portfolio. This is an appropriate benchmark for American stocks. The EAFE index is often used as a benchmark for the performance of an investor's international equity investments.

RELATED TERMS
  1. Europe, Australasia, Far East - ...

    An acronym referring to the geographical area that includes these ...
  2. MSCI ACWI - All Country World Index

    A market capitalization weighted index designed to provide a ...
  3. Morgan Stanley Capital International ...

    A market-capitalization-weighted index maintained by Morgan Stanley ...
  4. MSCI EMU Index

    A market capitalization weighted index maintained by Morgan Stanley ...
  5. World Equity Benchmark Series - ...

    A type of international fund traded on the American Stock Exchange ...
  6. MSCI All Country World Commodity ...

    A market capitalization weighted index designed by Morgan Stanley ...
Related Articles
  1. ETFs & Mutual Funds

    The 3 Best ETFs to Short International Equities (EFZ, EFU)

    Discover the international equities asset class, and learn about three different ETFs you can use to get varying amounts of short exposure to it.
  2. ETFs & Mutual Funds

    MKRAX: International Funds That Limit Downside Volatility

    Discover the international mutual funds that can hedge currency risk, limit downside volatility in bear markets and capture gains in bull markets.
  3. ETFs & Mutual Funds

    SCZ: iShares MSCI EAFE Small-Cap ETF

    Read an in-depth analysis of the iShares MSCI EAFE Small-Cap Fund, a well-managed exchange-traded fund that tracks small-cap international stocks.
  4. ETFs & Mutual Funds

    The 4 Best International Equity Index Mutual Funds

    Discover the top four mutual funds that invest in international equities by using a passive investment approach and following foreign stock indexes.
  5. ETFs & Mutual Funds

    Benchmark To Show Winning Returns

    You can't win if you don't keep score. Read on to learn how to measure your returns.
  6. Managing Wealth

    Dollar Cost Averaging Case Study: Emerging Markets Stocks (GS, EEM)

    Take a look at how a hypothetical dollar-cost average investment of $100 per month into the MSCI Emerging Markets Index would perform between 2001 and 2015.
  7. ETFs & Mutual Funds

    Top 3 ETFs Tracking the MSCI World Index (URTH, VT)

    Morgan Stanley's Capital International World Index top three ETFs that can give you access to the investments it tracks...
  8. ETFs & Mutual Funds

    What's a Benchmark?

    A benchmark is a standard investors choose to gauge the performance of their portfolios.
  9. Investing

    What's a Market Index?

    A market index combines several stocks to create one aggregate value that’s used to measure a market’s or sector’s performance.
  10. ETFs & Mutual Funds

    3 International (EAFE) ETFs for Bull and Bear Markets (EFAV, QEFA)

    Discover three international EAFE exchange-traded funds (ETFs) that are screened to limit volatility in bear markets and capture gains in bull markets.
RELATED FAQS
  1. What are the pros and cons of using the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
  2. Which benchmarks / indexes track the automotive sector?

    Explore some of the major benchmark equity indexes worldwide that analysts and investors use to track the performance of ... Read Answer >>
  3. What are the main benchmarks that track the performance of the utilities sector?

    Learn about the main benchmarks that track the performance of the utilities sector, such as the Dow Jones Industrial Average ... Read Answer >>
  4. What should I use as a benchmark for my small-cap stock portfolio?

    When creating a stock portfolio, it is important to have a benchmark against which you can compare your returns. Comparing ... Read Answer >>
  5. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
  6. Why do index funds tend to have low expense ratios?

    Understand what an index fund is and why the nature of index funds causes them to have lower expense ratios than more actively ... Read Answer >>
Hot Definitions
  1. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  2. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  3. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  4. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  5. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  6. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
Trading Center