IShares Core MSCI EAFE ETF IEFA is a market-cap weighted portfolio of nearly all the stocks in the developed international market. Its razor-thin fee and broad diversification make it one of the more appealing international stock funds available.

The fund tracks the MSCI EAFE Investable Market Index. It targets small-, mid-, and large-cap stocks from 21 overseas developed markets, encompassing 99% of the investable market. The final portfolio weights its holdings by market capitalization. Market-cap weighting is an efficient way to size holdings because it harnesses the market's consensus opinion of each stock's relative value. Stocks that grow in size take up a larger share of the portfolio, while shrinking companies that may be struggling will have less importance.

Diversification is a strength of this portfolio, thanks to the expanded scope of its target index. This fund holds almost 3,000 names, with its 10 largest positions accounting for only 13% of assets. By comparison, the narrower MSCI EAFE Index holds about 800 stocks and excludes the small-cap segment. Some of this fund’s largest holdings are European multinationals like Nestle, Shell, and LVMH Moet Hennessy Louis Vuitton.

Emerging-markets stocks are a small part of the opportunity set that this fund misses. While they usually constitute less than 10% of competitors in the foreign large-blend Morningstar Category, this fund is not positioned to reap the rewards should they perform well. However, their omission has been a buoy to fund performance lately as stocks from emerging markets have struggled in recent years. 

Low fees also contribute to strong category-relative performance. In the 10 years through September 2023, this fund outpaced the average peer by 74 basis points annually. Volatility was slightly higher, but risk-adjusted returns also looked favorable relative to the category average.

Analyst Rating

Broadly diversified foreign stock fund.

Analyst

Zachary Evens

ASML Hld

National Energy Services Reunited

Moelis

Shell PLC

AstraZeneca

Novan

SAP SE

Rogers

TotalEnergies SE

BHP Billiton

The fund captures nearly all of the overseas developed market while effectively keeping a lid on turnover. It earns an Above Average Process Pillar rating.

Above Average

Process

BlackRock's industry-leading technology, global footprint, and extensive supporting cast earn an Above Average People Pillar rating. The team employs BlackRock's Aladdin platform to fulfill much of its portfolio management tasks, and global trading desks allow traders to conduct foreign transactions in a cost-effective way.

The iShares index equity team has endured some internal turnover at the top over the past few years. But index-tracking performance should remain tight, thanks to heavily automated processes, a large team of seasoned professionals, and several long-tenured managers who remain at the helm. Amy Whitelaw left the team in February 2023. Paul Whitehead replaced Alan Mason as a manager in January 2022, when Mason left to focus on the firm's customized institutional indexing capabilities. The broader index equity group, co-headed by Jennifer Hsui and Paul Whitehead, will continue to oversee iShares equity ETFs.

These managers interact with a wider team of traders and managers around the globe to execute the fund's day-to-day operations. The larger number of managers also limits the impact of personnel turnover when it does occur.

People

BlackRock offers compelling options across asset classes and vehicles. It earns an Above Average rating for Parent. 
The firm’s approximately USD 8 trillion in assets under management, as of Sept. 30, 2022, gives it unparalleled scale and influence. It is a market-leading index fund provider globally, and its iShares exchange-traded fund franchise offers a low-cost lineup of core funds that investors can use to build a well-diversified portfolio for dirt cheap. The firm can be more adventurous in its ETF launches than some peers, so not everything it launches is appropriate for the masses. As a result, it is likely to have more ETF closures than peers that stick to the basic building blocks.  
The firm’s active fixed-income and multi-asset efforts also stand out as some of the best in the industry. Those benefit from BlackRock’s commitment to building a first-class risk management system via its Aladdin analytics software. The software is also available for sale to other firms and has proved to be a popular option for competitors, a testament to its usefulness. 
More recently, the firm has shifted its focus to ESG offerings and incorporating ESG across its investment lineup, leading to a political backlash in the United States.
BlackRock isn’t the best at everything it tries to do, but retail investors, financial advisors, and large institutions could all build robust portfolios using BlackRock’s products.

Parent

iShares Core MSCI EAFE ETF

IEFA tracks a market-cap-weighted index of developed-market stocks in Europe, Australasia and the Far East, and excludes North America. It covers about 98% of investable markets.

iShares Core U.S. Aggregate Bond ETF

Pacer US Cash Cows 100 ETF

iShares MSCI Japan ETF

Vanguard S&P 500 ETF

Overall, ETFs pulled in $20.6 billion in capital last month, taking year-to-date inflows to $196.4 billion.

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During LSEG Lipper's fund flows week that ended March 6, investors were overall net purchasers of fund assets for the third week in four, adding a net $27.3 billion. All 10 spot bitcoin ETFs reported net inflows of $1.9 billion, marking the seventh straight weekly inflow since these launched. Conventional taxable-fixed income funds realized a weekly inflow of $500 million - marking their tenth consecutive weekly inflow.

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iShares Core MSCI EAFE ETF offers diversification and potential growth through investing in stocks from Europe, Australasia, and Far East regions. EAFE stocks provide access to world-class companies in sectors underrepresented in the U.S. and have higher dividend yields. IEFA offers a balanced portfolio with low expense ratio, making it a cost-effective option for diversified exposure to developed markets outside North America.

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iShares MSCI Taiwan ETF

iShares MSCI Water Management Multisector ETF

Vanguard Mega Cap Growth ETF

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Vanguard Growth ETF

Communication Services Select Sector SPDR Fund

Technology Select Sector SPDR Fund

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iShares Core MSCI EAFE ETF provides exposure to developed markets across Europe, Australia, Asia, and the Far East. The fund is well-diversified and has a balanced sector exposure, reducing risk but therefore also admittedly the potential for alpha. Nevertheless, IEFA appears undervalued on the basis of discounted cash-flow valuation approach, suggesting it is a good long-term hold.

IEFA: An Undervalued Non-U.S. Equity Fund

IEFA is a large and efficient ex-US/Canada developed markets index fund. Though it charges a low expense ratio, investors can find even cheaper funds. If you are looking for a methodology that emphasizes value or yield performance, there are also some alternatives for you to consider.

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Equities market, particularly US large tech names, have outperformed this year despite concerns about high interest rates. International equities, such as iShares Core MSCI EAFE ETF, are often overlooked but could be a good option for portfolio diversification. iShares Core MSCI EAFE ETF has a diversified portfolio and has performed similarly to its peers, but underperformed US and European markets.

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Overall, ETFs pulled in $18.1 billion in capital last week, taking the year-to-date inflows to $169.2 billion.

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Investors were overall net purchasers of fund assets for the sixth week in seven, adding a net of $22.4 billion. Money market funds, taxable-bond funds, and tax-exempt bond funds attracted new capital, while equity funds suffered outflows. U.S. broad-based equity indices reported positive returns, with the Russell 2000 experiencing its highest weekly return since May 20, 2020.

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We are heavily underweight the U.S. right now. We have 0% U.S. stocks in our portfolio. IEFA captures this view with an ex-U.S. approach to the developed market large-cap space.

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ALPS International Sector Dividend Dogs ETF

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iShares MSCI Intl Quality Factor ETF

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iShares Silver Trust

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United States Oil Fund LP

Despite Volatility, Markets Post Gains in Q1 Despite bank failures and uncertainty regarding monetary policy and interest rates, equities posted gains in Q1 as the Nasdaq 100 Index was up nearly 17%, notching its best quarter since the second quarter of 2020. US growth stocks were among the best performers (+9.

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VettaFi's head of research Todd Rosenbluth discussed fixed income and international equity on this bonus “ETF of the Week” podcast with Chuck Jaffe of “Money Life.

ETF of the Week BONUS: Todd Rosenbluth on Fixed Income and International Equity ETFs

IEFA offers low cost ex. US and Canada exposure to developed markets, resulting in EU-heavy portfolio. Mild weather may have saved Europe for now, but the energy crisis is far from solved.

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IEFA focuses on Europe, Asia, Australia and the Far East, but with no China, which is a good start. These markets are pretty cheap right now, and an outsized allocation in the portfolio is to financials.

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Investors poured in more than $43 billion into money market funds last week. However, we may witness outflows from cash-like ETFs ahead as January Effect may boost the asset generation in high-beta ones.

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Investors were overall net sellers of fund assets (including those of conventional funds and ETFs) for the first week in three, withdrawing a net $12.5 billion for Refinitiv Lipper's fund-flows week ended October 6, 2021.

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IEFA invests in international developed markets; markets outside of the United States and Canada. Analysts are currently expecting strong earnings growth rates over the next few years, but even lower-than-expected growth rates should support a higher market price than the prevailing IEFA share price.

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iShares MSCI EAFE Small-Cap ETF

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For the second month running, mutual fund investors were net sellers of fund assets, redeeming $15.0 billion from conventional funds for July.

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Financial Select Sector SPDR Fund

Fund investors were net purchasers of equity funds (+$2.0 billion), tax-exempt fixed income funds (+$1.2 billion), and taxable bond funds (+$320 million) while being net sellers of money market funds (-$1.4 billion) for the week. Early in the fund-flows week, U.S. stocks lost some ground as investors evaluated the rise in COVID-19 cases and after Amazon reported Q2 earnings that missed analyst expectations.

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The month of July was moderately upbeat for the S&P500. The month marked the sixth straight monthly gains.

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News for iShares Core MSCI EAFE ETF ETF (IEFA)