Tuesday, July 29, 2014

ETF Focus: International Developed Markets

Friday, March 15th, 2013

By Tom Lydon:

Global stock markets have shown a tighter correlation with U.S. stocks in the years following the credit crisis. However, the diversification benefits of overseas investing cannot be emphasized enough.

Emerging market investing has been written about frequently, but the need for other developed markets exposure is necessary for proper asset allocation. The iShares MSCI EAFE Index (EFA) has interesting benefits, proving a developed market strategy should not be ignored.

“Europe includes some of the largest developed markets outside North America. While nearly 65% of EFA’s portfolio is held in European stocks, which may increase volatility in the near term, a recovery in Europe may offset weakness elsewhere. Japan represents the fund’s second-largest market exposure. Overall, companies based in these regions generate a larger portion of their earnings and revenue from emerging markets than their counterparts in the U.S.,” Alex Bryan wrote for Morningstar.

EFA has a high

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