Morgan Stanley’s
Europe, Australia and Far East Index is probably the most well know of the international indexes. Better known as EAFE, the index
covers 21 foreign countries and 1,200 common stocks. You can own the
index by buying an EAFE fund such as the Merrill Lynch International
Index or iShares MSCI EAFE Index (EFA). The version of EAFE commonly used in the investment community weights
countries on the size of their stock markets. This forces an EAFE fund
to allocate 49% of its assets to Japan and the U.K.
Carl Delfeld is head of ChartwellETFadvisor.com and writes for Forbes. His recent contribution outlines a strategy for you to create your own international index by using country and region ETFs.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.