Europe, Australasia, Far East (EAFE)

What Is Europe, Australasia, Far East (EAFE)?

Europe, Australasia, and the Far East are the most developed geographical areas of the world outside the United States and Canada. These regions are ordinarily alluded to by the abbreviation EAFE, and a wide range of exchange-traded funds (ETFs) and mutual funds center their efforts around investing in companies in these regions.

Grasping Europe, Australasia, Far East (EAFE)

Europe, Australasia, and the Far East address probably the most useful and productive regions in the world, making them well known places for investors to park their capital.

Morgan Stanley Capital International (MSCI) made a stock market index known as the MSCI EAFE to capture the performance of large-and mid-capitalization companies in the EAFE region. The MSCI EAFE is the most established international stock index, having been calculated since December 21, 1969, and is the most normally involved benchmark for foreign stock funds in the United States.

The index covers roughly 85% of the free float-adjusted market capitalization of every one of the countries remembered for the index and incorporates stocks from 21 developed markets outside the U.S. furthermore, Canada. As of April 2022, the index tracks the equity performance of 825 companies, over half of which operate in the financial, consumer, industrial, and healthcare sectors.

As the basis for index-linked and index-following ETFs and mutual funds, the EAFE index is the most ordinarily involved index for developed international equity products. Past the different funds accessible to investors in view of this index, the ICE Futures Exchange and the Chicago Board Options Exchange (CBOE) are licensed to list futures contracts on this index.

EAFE companies to a great extent affect the global financial system. As per MSCI.com, there are more than $2.2 trillion in ETF assets that are benchmarked to the MSCI Equity Index family globally as of April 2022.

EAFE Region Constituents

European countries are the most addressed in the MSCI EAFE Index and comprise of Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The index additionally includes five countries from Australasia (Australia, Hong Kong, Japan, New Zealand, and Singapore), and one from the Middle East (Israel.)

The MSCI EAFE consolidates all the very countries that are addressed by MSCI World, minus Canada and the U.S.

Notwithstanding the MSCI EAFE Index, MSCI has the MSCI EAFE IMI Index and the MSCI EAFE All-Cap Index.

The EAFE IMI Index tracks the performance of large-, mid-, and small-capitalization companies. As of April 2022, it has 3,179 constituents and covers around the vast majority of the free float-adjusted market capitalization in every country. The MSCI EAFE All-Cap Index, then again, tracks large-, mid-, small-, and miniature capitalization companies and has 8,143 constituents.

Features

• The MSCI EAFE indexes are much of the time utilized in the financial industry to compare the performance of the United States to the remainder of the developed world.
• Europe, Australasia, and the Far East are the most developed geographical areas of the world outside the United States and Canada.
• MSCI EAFE is the most seasoned international stock index, having been calculated since December 21, 1969, and is the most usually involved benchmark for foreign stock funds in the United States.
• Notwithstanding the MSCI EAFE Index, MSCI has the MSCI EAFE IMI Index and the MSCI EAFE All-Cap Index.
• Morgan Stanley Capital International (MSCI) made a stock market index known as the MSCI EAFE to capture the performance of large-and mid-capitalization companies in the EAFE region.