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EAFE
Definition
The acronym EAFE means "Europe and Australasia, Far East Equity" Index. This index is maintained and compiled by the MSCI "Morgan Stanley Capital International" group.
Using the term EAFE :
The EAFE is the best known benchmark for money managers that focus on the international markets. This index does not include the United States or Canada and therefore is international from the perspective of these investors.
Pay Special Attention To :
This index is carefully created by the MSCI team and has high liquidity. There are several products which track this index such as mutual funds and exchange traded funds. If you are considering a product that invests internationally, check the performance against the EAFE. If the product does not out perform the index in most years, you might want to consider a simple index tracking product to save on fees instead of paying active management fees.
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Related terms
MSCI , Benchmark
