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.
Explaining ‘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.
Further Reading
- Finite-time singularity in the dynamics of the world population, economic and financial indices – www.sciencedirect.com [PDF]
- Global financial markets and the risk premium on US equity – www.sciencedirect.com [PDF]
- Study of memory effects in international market indices – www.sciencedirect.com [PDF]
- Do precious metals shine? An investment perspective – www.tandfonline.com [PDF]
- Active versus Passive Strategies for EAFE and the S&P 500 – jpm.pm-research.com [PDF]
- ADR characteristics and performance in international and global indexes – link.springer.com [PDF]
- Analysis of the geographical diversification of financial instruments – www.ceeol.com [PDF]
- Global economic activity as an explicator of emerging market equity returns – www.sciencedirect.com [PDF]
- The performance of value and growth portfolios in East Asia before the Asian financial crisis – www.sciencedirect.com [PDF]
