What is the MSCI EAFE Index?


Quick Answer

The EAFE Index is an index that Morgan Stanley Capital International created to serve as a benchmark for the performance of major stock markets in Europe, Australia and Southeast Asia. EAFE is an acronym for Europe, Australasia and the Far East. It is broadly recognized as the leading benchmark that American investors use to analyze the performance of international equities, according to the MSCI.

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Full Answer

The MSCI EAFE Index is made up of equities from 21 developed countries, excluding those from the United States and Canada. The following are the 21 member countries of the MSCI EAFE Index as of 2015, states the MSCI.

  • Australia
  • Austria
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Hong Kong
  • Ireland
  • Israel
  • Italy
  • Japan
  • Netherlands
  • New Zealand
  • Norway
  • Portugal
  • Singapore
  • Spain
  • Sweden
  • Switzerland
  • United Kingdom
  • The EAFE index is a market-capitalization index, which means that the weight of securities is based on the amount of the company's market capital. About 70 percent of the largest equities will make up the large cap index, the largest 85 percent the EAFE Standard and the largest 99 percent will compose the MSCI Investable Market Index. The index has been calculated and used since December 31, 1969, which makes it the oldest international stock index.

    Among the international equity benchmarks that the MSCI EAFE Index provide include data that support asset allocation, performance measurement and distribution, research and investment product development. Learn more about Investing

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