description iShares MSCI EAFE ETF (EFA) Overview
EFA offers broad exposure to developed markets outside of North America, including Europe, Australasia, and the Far East. It provides a valuable diversification tool for U.S.-centric portfolios, reducing overall risk and potentially enhancing returns.
EFAs relatively low expense ratio and high liquidity make it an attractive option for investors seeking international equity exposure. Its a strong choice for those wanting to participate in the growth of global economies beyond the U.S.
help iShares MSCI EAFE ETF (EFA) FAQ
What does the iShares MSCI EAFE ETF hold?
EFA tracks developed-market stocks outside the United States and Canada. Its index exposure includes Europe, Australasia, and Far East markets such as Japan, the United Kingdom, France, Switzerland, and Australia.
Does EFA include emerging markets?
No, EFA is focused on developed international markets. Investors who want emerging-market exposure usually look at funds tied to indexes such as MSCI Emerging Markets instead.
How is EFA different from IEFA?
Both are iShares international developed-market ETFs, but IEFA is the lower-cost core version and includes broader exposure in many portfolios. EFA is older and heavily traded, which can matter for liquidity-focused traders.
Can EFA reduce a U.S.-heavy portfolio's concentration?
Yes, EFA can add non-U.S. developed-market exposure to a portfolio dominated by the S&P 500 or Nasdaq stocks. It also adds currency exposure because the underlying companies trade in currencies such as yen, euro, pound, and Swiss franc.
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