During an ugly week for domestic and international equities, we curiously saw some creation activity (asset inflows) in iShares MSCI EAFE (NYSEArca: EFA). The exchange traded fund finished last week at its lowest levels since the summer of August of 2010.
At least $3 billion flowed into the ETF during the week on very heavy volumes, as institutional investors may be using the recent sell-off as a buying opportunity for equities based in Europe, Asia, and the Far East, as the index methodology of EFA is designed to track.
Currently, top holdings in EFA are Nestle SA, HSBC Holdings, Vodafone Group, BHP Billiton, and Novartis AG and the fund itself has garnered over $35 billion in assets under management.
Peers in the EAFE based ETF group that portfolio managers will likely want to pay attention to when looking for exposure to these international names include iShares MSCI EAFE Value (NYSEArca: EFV) and iShares MSCI EAFE Growth (NYSEArca: EFV), which isolate the growth and value names within EAFE for those looking to tilt their portfolio towards either side of the growth/value equation.
Rydex MSCI EAFE Equal Weight (NYSEArca: EWEF) takes the MSCI EAFE index and weights the components equally as opposed to a market capitalization weighted methodology like EFA.
WisdomTree DEFA (NYSEArca: DWM) isolates EAFE based equities that are top dividend payers and weights the index accordingly.
Finally, Vanguard offers an alternative that also tracks the MSCI EAFE, Vangaurd Europe Pacific ETF (NYSEArca: VEA), which has also been very successful in the space, raising over $6 billion in assets since inception.
iShares MSCI EAFE
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